Two prominent South Korean actors are facing growing public scrutiny following media reports alleging aggressive tax practices involving family-owned corporations, renewing debate over how celebrities manage income through closely held entities.
Local media reported on February 1 (local time) that actor Kim Seon-ho is under investigation for allegedly using a family-run company to reduce tax liabilities, shortly after similar allegations surfaced involving singer and actor Cha Eun-woo. Both actors are represented by Fantagio.
According to the report, Kim established a performance-planning company in January 2024, registering it at his home address in Seoul’s Yongsan district and appointing himself as chief executive. His parents reportedly served as an internal director and auditor.
The company is alleged to have paid Kim’s parents salaries amounting to tens of thousands of dollars and used corporate credit cards for personal living and entertainment expenses, despite having little or no substantive business activity. Critics have described the entity as a potential “paper company” created primarily to reduce taxes.
Fantagio denied any wrongdoing, saying the company was formed to support theater production and related activities and was not intended for tax avoidance or evasion. The agency added that the business has been effectively inactive for about a year and is currently undergoing closure procedures.
Some legal and accounting experts, however, questioned that explanation. Kim Myung-kyu, a lawyer and certified public accountant, said in a social-media post on February 2 (local time) that payments made during a period of inactivity could be classified as non-business-related expenses under South Korean tax law. He added that such spending could expose the company to broader legal risks if deemed personal use of corporate funds.
The controversy follows earlier reports that Cha Eun-woo is facing a tax reassessment of roughly $15 million, stemming from the alleged use of a family-controlled company to channel income. South Korea’s National Tax Service is reportedly examining transactions between Cha’s agency and a firm established by his mother, including service contracts and revenue-sharing arrangements.
Media reports said the firm’s registered address was listed as a family-owned eel restaurant outside Seoul, raising questions about its operational legitimacy. Authorities are said to be investigating whether income was shifted to the company to take advantage of lower corporate tax rates—generally about 10% to 20%—compared with top personal income tax rates that can reach roughly 45%.
Cha’s representatives have said they will cooperate fully with authorities and respect the outcome of any official review but have not directly addressed specific allegations related to the family-owned entity.
The cases have fueled broader debate in South Korea over the use of one-person or family-run corporations in the entertainment industry, with critics calling for clearer standards and stricter enforcement.
Whether the two actors can resolve the allegations and restore public trust remains uncertain as regulatory reviews continue.
