Song Hye Kyo has expressed her apologies for unintentionally evading taxes on her income earned between 2009 and 2011.
In a recently released statement she said that she deeply regrets mishandling her tax affairs.
But the biggest mistake she may have made was in trusting her accounting firm, which did not properly file her taxes. The actress did not even realize that there was a problem until she received a notice from the National Tax Service in 2012 saying that she was missing documents on tax-deductible expenses.
The lack of supporting documents for tax-deductible expenses meant that she had to pay a greater share of her taxable income, plus a sizeable penalty.
According to Seoul Tax Service, the three years of missing income tax totaled approximately $2.5 million dollars. She owed almost $800,000 for 2009, over $800,000 for 2010 and almost $1 million for 2011. Song paid the taxes that she owed in 2012 plus a penalty for late payment.
The tax evasion first became public knowledge when her name was hinted at during a confirmation hearing for a tax service officer. It was pointed out that the tax officials had investigated a prominent actress known only as “S” for three years and not the normal five.
The tax officials in question were sent to disciplinary committees. Later the same day the newspaper Dong Ilbo revealed that “S” was none other than Song Hye Kyo.
On Aug. 19 her legal firm, called The Firm, apologized for making a late statement on the issue, as it took them some time to examine their files.
Song Hye Kyo has fired the accounting firm that mishandled her taxes. She parted ways with them as soon as the investigation ended and is considering taking legal action against both the accountant who filed her taxes and the firm. The accounting firm is also currently being referred to the Ministry of Strategy and Finance for disciplinary procedures.
Her accounting firm apologized and released a statement, saying that while a portion of the work was referred to the tax accountant, the responsibility ultimately lies with the taxpayer.
The actress felt it was appropriate to voice her remorse.
“Song Hye Kyo has paid all original as well as additional taxes arising from the tax investigation two years ago,” said a statement from her legal team. “However, she is still deeply reflecting on her mistakes. In the future she will take care not to let the same thing happen again, and we ask for your understanding.”
Ironically, Song was selected as the “Exemplary Taxpayer” by her district tax office in in 2009. The honor allows the recipient to defer a tax probe for two years.
It remains to be seen whether the tax scandal will negatively affect the reception for her current film, “My Palpitating Life.”
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