Ji Chang-wook Hit with Multi-Billion-Won Tax Bill; Agency Denies Evasion

Actor Ji Chang-wook has been assessed a tax bill worth tens of billions of won following an unannounced audit by the National Tax Service, his agency Spring Company confirmed in an official statement, flatly denying any intentional evasion.

Spring Company issued the statement on the 2nd, opening with an apology: "We sincerely apologize for the concern this matter has caused to so many people." The agency was firm on the evasion question: "We state clearly that there was absolutely no deliberate omission of income or any improper method of tax avoidance."

The agency attributed the assessment to a dispute over how entertainment income should be classified under Korea's substance-over-form taxation principle — specifically, whether revenues from Ji's performing activities are taxable at the individual level or the corporate level. Spring Company said it submitted all relevant documents transparently during the audit and cooperated fully with investigators.

"Although there is a difference of opinion on the application of tax law, we have prioritized the faithful fulfillment of our tax obligations since his debut in 2008, complying thoroughly with all relevant statutes and procedures without any tax-related issues," the statement read. "We respect the outcome of the NTS audit, and the assessed back taxes will be paid without delay in accordance with the relevant procedures."

The agency added that it would conduct a closer review of its tax and accounting management systems to prevent a recurrence.

Field News had earlier reported exclusively that the Seoul Regional Tax Service's Investigation Bureau 2 launched the unannounced, high-intensity audit against Ji around March of this year.

Korea's substance-over-form (실질과세) principle allows tax authorities to reattribute income from a company to an individual if they determine the corporate structure was used primarily to reduce the individual's personal tax burden.

an unannounced, irregular tax audit triggered by suspected irregularities, distinct from routine scheduled audits