With YG Entertainment under investigation, there are speculations that the National Tax Service’s final goal is toward Yang Hyun Suk. The NTS is currently investigating on suspicions that YG Entertainment had not reported its label artists’ overseas income properly. There are investigations on offshore tax evasion through foreign currency exchange, and also on suspicions that YG Entertainment had created a paper company for their concert income.
Not only so, but the NTS will be investigating on whether the income distribution to the celebrities in the label is transparent, and will be checking if the amount that YG Entertainment reported as fees and the amount that the label artist reported as income will match, meaning each artist under the label will be under investigation as well.
Insiders in the industry predict that YG Entertainment will have to pay tens of billions of KRW (~8.8 million USD) in additional taxes. An insider said, “Most people thought that the additional taxes paid through the 2008 investigation was too little. As the industry has grown, the additional taxes must have also grown.” In 2008, YG Entertainment had to pay 2.8 billion KRW (~2.4 million USD), and some managers had to even go through prosecution investigations because of tax evasion.
The label told The Fact, “We got preliminary notice from the mid-sized business regular tax inspection investigation team 2, and we are undergoing regular tax inspection. As it is a normal, regular tax inspection, we will comply diligently.“
A regular tax inspection is a scheduled tax inspection, not a tax inspection that occurs because evasion has been suspected.