Yoo Yeon-seok hit with biggest tax bill amid scrutiny over celebrity finances

Yoo Yeon-seok, the star of hit K-dramas such as the "Hospital Playlist" series and "Reply 1994," has joined a list of celebrities facing hefty tax bills.

Yoo was recently slapped with a tax bill of approximately 7 billion won ($4.8 million), reportedly the largest ever imposed on a South Korean celebrity.

In response to mounting criticism and allegations of tax evasion, Yoo's agency, KingKong by Starship Entertainment, issued a statement on Friday explaining that the tax assessment results from differences "in the way (Yoo's) tax representative and the tax authorities have interpreted and applied tax law."

The agency further noted, "This income tax assessment has not been finalized or officially notified, and we plan to actively clarify the points of contention regarding the interpretation and application of the law through proper legal procedures."

Yoo is not alone in facing scrutiny over tax issues.

In February, actress Lee Ha-nee, known for her work in "Knight Flower" and "Extreme Job," was hit with a 6 billion won tax assessment. Last year, actor Park Hee-soon underwent a tax investigation by the Seoul Regional Tax Office, resulting in an additional tax bill of approximately 800 million won.

The trend has drawn scrutiny over celebrities' use of personal corporations -- often with themselves as CEOs -- to minimize their tax liabilities.

The three celebrities each operate personal corporations despite being affiliated with other agencies — Park Hee-soon, Lee Ha-nee and Yoo Yeon-seok serve as CEOs of Twopark Playground, Hanee, and Forever Entertainment, respectively.

Under Korean law, corporations are generally taxed at lower rates than individuals, with higher thresholds for taxable income, making corporate structures more advantageous for tax purposes. Additionally, expenses related to maintenance, vehicle upkeep and other business operations can be deducted as business costs, effectively reducing the owner's taxable income.

The celebrities contend that the disputes stem from differing interpretations of tax law rather than deliberate tax evasion, with Park Hee-soon denying the allegations in an official statement, asserting that "This tax assessment arose during the process between the tax authorities and my tax representative and has no direct connection to my legal obligations as an actor."

Lee Ha-nee similarly defended her position, stating, "The additional tax resulted from a difference in perspective between the tax authorities and my tax representative, and I have paid the full amount."

Public sentiment, however, has grown increasingly critical as suspicions mount over high-profile figures allegedly avoiding billions in taxes.

Criticism has been mounting over Yoo Yeon-seok's appearance in Seoul Broadcasting System's new series "Shinyirang Law Office" (direct translation), set to premiere this August, where he plays a lawyer who punishes evil. SBS has yet to release an official statement regarding Yoo's involvement in the series.