Many Korean media portals on reported on January 14th that actor Jang Geun Suk paid 10 billion KRW (~$9,220,900 million USD) in tax evasion fees to the Korean National Tax Service.
He did not undergo investigation at this time because they claim that they did not find evidence of him intentionally altering his income tax reports, meaning that they judged that the omission of tens of billions of won a “simple mistake.”
Jang Geun Suk’s entertainment company said “We made adjustments to our accountant’s mistake and paid the additional fees accordingly.”
Usually, the decision on whether to investigate or not is decided by the Tax Offense Investigation Committee that is affiliated with the Korean National Tax Service, but includes external personnel. It has been revealed that the Seoul Regional Tax Service did not go through this procedure. Instead, the tax evasion case was closed after the fees were submitted in November of last year. Those affiliated with the taxation authorities said, “The investigation regarding Jang Geun Suk was conducted in top secret.”
A tax offense investigation is on a much more serious level than a regular tax evasion case. They could interrogate the tax evader, search and seize their property and make investigation compulsory. During this process, tax evaders could even be reported to the public prosecutor.
During the Korean National Tax Service tax evasion investigation process, Jang stated that he had “a lot of overseas activities, so there were a lot of mistakes and errors in his income report. They were not intentional.” The Korean National Tax Service accepted this explanation.
Mr. Jang (36), the president of the Company H that mediated Jang Geun Suk’s Chinese entertainment activity, is currently undergoing a tax offense investigation. It has been revealed that he concealed some of his income, created a false account to hide his assets while reporting his income, “committed fraud or other wrongful conduct” to evade paying hundreds of millions of KRW in taxes.
Someone affiliated with the tax evasion authorities stated, “Jang Geun Suk signed a contract with Company H, which intentionally altered their tax reports. Therefore, his earnings from China were not reported correctly and he paid 10 billion KRW in fees. It was a little strange that the National Tax Service just took Jang’s summon.”
Those called in for tax evasion last April were not called in for a tax offense investigation, but were just given a warning by the audit board. At the time, the Seoul Tax Service said, “The amount of tax evasion was insignificant,” but the audit board said to “make sure that the tax evaders do get investigated for tax offenses.”
The audit agency notified the tax evasion investigation committee to change their practice of recording minutes and final decisions without the investigation contents and reasons. One affiliated with the government said, “Tax authorities think that they just need to receive the fees. They tend to think that it’s enough that they received plenty of additional fees.”
This is a direct translation from Kookmin Ilbo.