MANILA, Philippines — Hallyu star Ji Chang Wook's agency has denied allegations of tax evasion after reports surfaced that he was ordered to pay billions of won following a tax audit conducted by South Korea's National Tax Service.
According to a report by online news outlet Field News on May 2, the K-drama actor underwent an irregular tax audit in March and was assessed additional taxes amounting to billions of won.
In a statement released through Korean entertainment website Soompi, Chang-wook's agency, Spring Company, clarified that there was "absolutely no intentional omission of income or tax evasion through dishonest means."
The agency apologized for causing concern but stressed that the issue stemmed from a difference in interpretation of tax laws regarding whether income earned through the actor's entertainment activities should be attributed to him personally or to his corporation under the principle of taxation based on economic substance.
Spring Company said it fully cooperated with authorities during the audit and submitted all relevant documents requested by investigators.
"During the recently conducted tax audit, our company transparently submitted all relevant materials and diligently cooperated with the investigation," the agency said.
Despite the disagreement over the interpretation of tax laws, the agency said it respects the findings of the National Tax Service and will pay the imposed tax assessment in accordance with proper procedures.
Spring Company also said that Chang-wook has "strictly adhered to all tax-related laws and procedures without any issues and has always considered the diligent fulfillment of his tax obligations a top priority ever since his debut in 2008."
The agency added that it would strengthen its tax and accounting management systems to prevent similar issues from happening in the future.
"In order to prevent a similar incident from occurring in the future, we will review our tax and accounting management systems even more closely, and we will continue to diligently fulfill our tax obligations while upholding the law and related principles," Spring Company said.
Chang-wook is known for starring in popular K-drama series such as "Healer," "The K2," "Suspicious Partner," "Backstreet Rookie," "Lovestruck in the City" and "Welcome to Samdal-ri."
Most recently, he starred alongside Jun Ji-hyun in the zombie thriller "Colony," which opened at No. 1 in Philippine cinemas and earned an estimated P20 million on its opening day.
Chang-wook is among several South Korean stars who have recently come under scrutiny over tax matters involving one-person corporations. Actors Cha Eun-woo and Kim Seon-ho have also reportedly faced similar tax probes amid growing attention on tax practices and income reporting arrangements within the entertainment industry.