Celebrity who underreported taxes by expensing '300 million won luxury clothes' faces billion-won tax penalty

Multiple Photos Wearing Expensive Clothes and Accessories on SNS
Accepted National Tax Service Decision and Paid Full Amount of Additional Taxes

A top star who evaded taxes by 'expensing' billions of won worth of clothing costs was fined billions of won by the National Tax Service.

According to an SBS report on the 19th, the National Tax Service recently imposed a billion-won tax surcharge on celebrity A.

The National Tax Service judged that about 300 million won, which is over 90% of the clothing expenses reported by A, were personal expenditures unrelated to entertainment activities such as modeling.

A top star who evaded taxes by 'expensing' hundreds of millions of won spent on clothing was fined over a hundred million won by the National Tax Service.
[Photo by Pixabay]

According to the National Tax Service investigation, there were suspicious parts in A’s tax filing details. In particular, A’s side claimed to have spent about 3 million won on clothing for a photo shoot in May 2019, but the place where the same amount was charged by credit card that day was a watch company.

A is a top star who frequently attends high-end brand events, and many photos of him wearing expensive clothes and accessories are posted on his SNS.

A’s side argued, "Due to the nature of being an advertising model, even if there is no official event, we have no choice but to always wear expensive clothing for the image presented to the public," and "The clothes were not purchased for personal satisfaction." However, the National Tax Service did not accept A’s claim.

A is known to have accepted the National Tax Service’s decision and paid the full amount of the surcharged tax.

National Tax Service Monitors Celebrities, YouTubers, Webtoon Artists, etc.

Meanwhile, since early this year, tax evasion suspicions have been continuously raised not only for actors and singers working in the entertainment industry but also for webtoon artists. Around March, the National Tax Service launched tax investigations targeting 84 individuals, including celebrities, athletes, YouTubers, and webtoon artists, who earn high incomes based on their popularity and social influence but have not fulfilled their tax obligations. The scale ranges from as little as 100 million won to as much as 10 billion won.

At that time, the National Tax Service did not specify the individuals subject to the tax investigation. However, it presented a case of a popular artist suspected of evading value-added tax by reporting taxable supply of copyrighted works as tax-exempt sales.

A National Tax Service official explained, "The owner, a popular artist, fabricated that family members actually worked despite not working and embezzled corporate funds by accounting for fictitious labor costs," adding, "The owner led a luxurious and extravagant lifestyle, flaunting on SNS by privately using expensive luxury goods purchased with the corporate card and supercars bought under the corporation’s name."