Renowned South Korean actor Yoo Yeon-seok, celebrated for his roles in When The Phone Rings and Hospital Playlist, has found himself at the center of a significant tax controversy recently.
The National Tax Service (NTS) initially imposed a staggering tax liability of approximately 7 billion KRW (around $4.8 million). However, on April 10, 2025, Allkpop reported that after Yoo filed an official objection and the NTS conducted further investigations, this amount was considerably reduced to 3 billion KRW (approximately $2.3 million).
The complexity of this tax situation originated from the establishment of Yoo Yeon-seok’s personal agency, Forever Entertainment. This agency was formed to oversee various facets of his entertainment career, including the creation and production of YouTube content as well as ventures in the food and beverage sector.
As part of its investigation, the NTS carried out an exhaustive audit of Forever Entertainment’s financial activities over the preceding five years. This process ultimately resulted in the considerable tax charge imposed on the actor.
Understanding Yoo Yeon-seok’s Tax Dispute
The crux of the tax dispute lies in the contrasting interpretations of tax obligations by Yoo Yeon-seok’s tax advisors and the NTS. According to reports from GMA Network, the NTS categorized the income from Forever Entertainment as personal earnings, thus subjecting it to personal income tax rates.
Conversely, Yoo’s representatives asserted that the income generated was corporate income, warranting a different tax treatment. This fundamental disagreement triggered the initial substantial tax bill.
In a response to the findings by the NTS, the actor’s management agency, King Kong by Starship, released an official statement. They noted that the dispute arose from “differences in opinions on the interpretation and application of the tax law between tax agents and tax authorities.”
“This issue stems from differences in opinions on the interpretation and application of the tax law between tax agents and tax authorities, and is awaiting notification from tax authorities after a pre-taxation review. It is not currently finalized and notified, and issues related to legal interpretation and application will be actively explained in accordance with due process.”
The agency further elaborated on Yoo Yeon-seok’s commitment to fulfilling his tax responsibilities:
“Yoo Yeon-seok has made fulfilling his tax obligations with integrity, and as a member of the people, he will continue to thoroughly comply with relevant laws and procedures and fulfill his responsibilities.”
As reported by Korea JoongAng Daily, Yoo Yeon-seok initiated a pre-assessment review in January 2025 to contest the NTS’s original assessment, a process designed to allow taxpayers to challenge tax authority decisions through an internal and external committee evaluation.
Yoo’s team actively pursued this avenue, seeking to address what they believed to be an unjust assessment. Their efforts led to a favorable outcome when the NTS reconsidered its position and agreed to adjust the tax assessment from the initial 7 billion KRW down to 3 billion KRW.
Yoo Yeon-seok’s tax predicament highlights a broader trend within the South Korean entertainment industry, where various celebrities have faced similar scrutiny. For instance, actress Lee Ha-nee also found herself under investigation and accrued an additional 6 billion KRW in tax liabilities, citing comparable issues in the interpretation of tax laws.
This situation underscores the complexities surrounding tax regulations in South Korea and the unique challenges faced by those in the entertainment sector.