The National Tax Service has recovered 5.56 billion won ($4.7 million) from foreign artists and performance officials for failing to report taxes. This issue has come to light as the number of foreign performances in South Korea has increased since the COVID-19 pandemic.
According to Jeong Tae-ho, a member of the National Assembly's Finance and Economy Planning Committee, the National Tax Service checked the withholding tax compliance of 110 individuals involved in foreign performances in July of last year and found 39 cases of unreported income.
The National Tax Service receives quarterly recommendations from the Video Rating Board regarding foreign performances, which are used for tax purposes. Foreign artists must obtain this recommendation to perform in South Korea or to host performances featuring foreign artists.
During the pandemic years of 2020 and 2021, the National Tax Service did not utilize this data for taxation, but as performances have increased following the transition to an endemic phase, related tax data has also risen.
The number of tax-related cases for foreign performances has surged from 682 in 2021 to 1,857 in 2022, 2,425 in 2023, and is projected to reach 2,824 in 2024, marking an increase of more than four times in three years.
From 2022 to 2024, the National Tax Service has cross-referenced performance data with foreign exchange records and payment statements to identify potential cases of unreported income. Cases where the payment for performances exceeded a certain amount without the submission of payment statements for non-residents were included in the review. Additionally, applications for three or more domestic performances with significant amounts of unreported or underreported withholding tax were also scrutinized.
Jeong emphasized the need to enhance the tax management system, given the confirmed cases of unreported income from foreign performers. He stated, "As renowned international artists continue to perform in South Korea, tax management for foreign performers' income must be conducted with greater diligence. The National Tax Service should closely monitor tax compliance to prevent repeated instances of unreported income and improve the management system."
* This article has been translated by AI.
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