SM Entertainment “National Tax Service tax investigation…2 billion won additionally charged”

Soo-man Lee, general producer of SM Entertainment. [사진 SM엔터테인먼트]

SM Entertainment, the largest entertainment agency in Korea, to which EXO and Super Junior belong, announced on the 5th that it was imposed a surcharge of 2021667 million won as a result of a tax investigation by the Seoul Regional Tax Office. This is equivalent to 3.19% of SM Entertainment’s equity capital.

SM said, “After receipt of the tax invoice, we plan to pay the additional surcharge by the end of March, the deadline for payment, and we plan to proceed with the complaint procedure later.

According to industry officials, it was confirmed that at the end of last year, investigators from the 4th Bureau of Investigation Bureau of the Seoul Regional Tax Office visited the office of SM Entertainment’s headquarters in Gangnam-gu, Seoul, and received tax information from employees.

The 4th Bureau of Investigation at the Seoul Provincial Office began a tax investigation in October of last year after seizing the suspicion of tax evasion related to SM Entertainment, and the latest investigation was completed.

Unlike regular tax investigations in relation to entertainment agencies, the 1st and 2nd Seoul Office investigations are conducted, but this time, 4 investigations dedicated to special (irregular) investigations, such as the capture of evasion charges, have launched. It is reported that the tax authorities have caught the outflow of corporate funds in the transaction between the general producer Lee Soo-man and the corporation.

According to the Electronic Disclosure System of the Financial Supervisory Service, as of September 30, last year, producer Lee Soo-man owned 18.73% of SM Entertainment and has become the largest shareholder. CEO Sungsoo Lee owns 0.04%. SM Entertainment has already received a tax audit in 2009 and 2014 on charges of tax evasion related to overseas activities of its celebrities.

Reporter Go Seok-hyun [email protected]