“I knew it.” With these three words, actor Kim Seon Ho attempted to close the door on controversy. But instead of clarifying the issue, his explanation has only fueled criticism, with many arguing that ignorance is being used to conveniently obscure responsibility.
It was recently revealed that Kim Seon Ho received compensation for his entertainment activities through an unregistered individual agency, SH2, rather than directly as personal income. After the matter surfaced, he said he was unaware of any problems, explaining that he had replenished his income and paid additional taxes. While voluntary tax payment is the minimum expectation, the repeated insistence that he “didn’t know” raised more doubt than sympathy. To critics, it seems less like transparency and more like trying to cover the sky with the palm of your hand.
Reports indicate that Kim personally requested his former agency to transfer his earnings to SH2, a company founded in January 2024 under the name of a family member. If he truly had no understanding of business structures or tax implications, why go to the extra effort to divert payments through a separate legal entity? Both the agency and the actor would have faced additional administrative problems. The claim that he was unaware of the tax advantages of a company where income is taxed at a significantly lower rate was met with widespread scepticism.
On February 4, Kim released another statement through his current agency, Fantagio, saying he deeply regretted founding and maintaining the company for a year without fully understanding how it worked. Notably absent, however, was any explanation of what roles within the company his parents, who reportedly received monthly salaries ranging from millions of won to even higher amounts, played.
To many observers, Kim’s explanation seems less like a reflection and more like calculated ambiguity. By relying on ignorance, it appears to attempt to demonstrate a lack of intent to evade tax, potentially downplaying legal consequences such as fines or deeper investigations by the National Tax Service. While such an “I don’t know” strategy may reduce legal exposure, assuming that the public will accept it at face value appears arrogant rather than apologetic.
Under Korean tax law, income earned through individual businesses can be taxed at rates of up to 49.5%, while corporate income is taxed around 19%. Artists, often registered as individual traders, are obliged to pay almost half of their earnings in taxes. Reporting entertainment income as business income can therefore be interpreted as tax avoidance, a practice that the National Tax Service classifies as “income diversion”.
The National Tax Service has taken a tough stance on similar cases in the past. Another artist under the same label, Cha Eun Woo, was previously investigated for routing entertainment revenue through a one-man agency tied to a family-run business. That case reportedly resulted in a massive tax penalty of 20 billion won, the largest ever imposed on a Korean artist.
The fact that Kim’s former agency complied with the transfer of agreements to SH2 strongly suggests a clear and deliberate request on his part. Corporate settlement structures are not adopted randomly; they usually involve consultation with accountants or financial professionals due to their significant tax implications. However, SH2 reportedly shared the same address as Kim’s residence, with no visible office or management staff raising further doubts about whether it functioned as anything more than a paper entity.
Critics also point out that creating a company is not a spontaneous decision. It requires drafting articles of association, registering directors, opening corporate bank accounts, issuing corporate cards and establishing a tax reporting system. Despite claiming ignorance, Kim allegedly paid salaries to his parents through the company and issued company papers that suggest a detailed level of operational involvement inconsistent with his stated lack of understanding.
What further undermines his defense is the timing. SH2 remained unregistered until earlier this year, even as public scrutiny intensified over celebrities running unregistered individual agencies. Numerous cases were reported last year, followed by warnings and media coverage of potential investigations. Yet Kim made no apparent effort to adequately record or clarify his company’s purpose during that period.
Unlike other performing artists who ran individual agencies out of necessity, often with actual staff and legitimate management operations, SH2’s purpose remains unclear. The company was reportedly led and operated by Kim’s parents, with no employees who met the legal requirements for an entertainment management business. If the body had been intended to support theatrical or artistic activities, critics argue that documentation and transparency should have been provided. At present, what SH2 actually did remains unknown.
Perhaps most damning is the revelation that Kim paid her parents’ salaries through the company, only for that money to then allegedly flow back into her account. Despite repeatedly stating that he “didn’t know,” the company appears to have been actively and strategically used in several ways.
Some commentators argue that a more honest statement that acknowledged awareness of corporate tax benefits, admitted erroneous assessments, and asked for leniency after corrective action might have resonated better. Instead, Kim Seon Ho’s insistence on feigned innocence seemed to many to be excessively transparent in his intentions, leaving the public less convinced and more disillusioned than before.
Sources: Nate
