South Korean Actress Kim Ji Won Accused of Tax Evasion in $4.6 Million Property Purchase

Kim Ji Won, a 32-year-old acclaimed South Korean actress known for her roles in popular television dramas, has been accused of tax evasion in connection with the purchase of a $4.6 million property in Seoul's affluent Gangnam district in 2021. The allegations stem from the actress's use of a company called Jiwon Entertainment Co. Ltd to facilitate the acquisition, where she holds the positions of sole representative and employee.

The property in question, which includes a basement and five floors above ground with four floors currently leased, was reportedly financed through a loan covering 55% of the cost. The registered location of Jiwon Entertainment is on the fourth and fifth floors of the purchased building, leading to accusations that it was a 'ghost company' established to evade tax debts.

Under South Korean law, companies receive a tax exemption for acquisitions made more than five years after their incorporation. Kim's company was founded in March 2016, just five years before the property purchase in June 2021, sparking allegations that the actress deliberately timed the establishment of Jiwon Entertainment to exploit this tax break.

Why this matters: The practice of creating 'ghost companies' to take advantage of tax exemptions on commercial real estate investments is not uncommon among individuals in South Korea. This high-profile case involving a well-known actress has brought renewed scrutiny to the issue, potentially prompting a closer examination of tax laws and enforcement measures.

Kim's management agency has declined to confirm the matter, stating that it pertains to the personal affairs of the artist. In a brief statement, the agency said, "Confirming the matter is difficult as it concerns the artist's personal affairs." The actress has not publicly commented on the allegations.

The accusations against Kim Ji Won have sparked discussions about the use of 'ghost companies' and tax loopholes in South Korea's real estate market. While the practice is not illegal per se, it has raised questions about the fairness and integrity of the tax system. As the investigation progresses, the case is likely to generate further public interest and potential calls for reforms to close such tax exemption loopholes.

Key Takeaways

• Acclaimed South Korean actress Kim Ji Won accused of tax evasion over $4.6M property
• Allegations stem from using a company to facilitate the property acquisition
• Company was founded just 5 years before the purchase, exploiting tax exemption laws
• Practice of 'ghost companies' to evade taxes common in South Korea's real estate
• Case sparks discussions on tax loopholes and calls for reforms to close them