7 high-income YouTubers fined 1 billion won for tax evasion

Kim Myung-gyu, a ballerino turned YouTuber live streams on his online channel. Korea Times file

By Kim Hyun-bin

The government has fined seven popular YouTubers a total of 1 billion won ($836,000) for filing false income tax returns in attempt to evade paying an aggregate total of 4.5 billion won due in taxation, according to a lawmaker, Thursday.

Rep. Kim Chung-woo of the ruling Democratic Party of Korea revealed data received from the National Tax Service (NTS), which included information on an investigation into high-income YouTubers who attempted to evade taxes from last year to this September

According to the NTS, out of the seven high-income earners, one was discovered last year and six this year.

The data shows, the seven downplayed their income and tried to dodge taxes by failing to report their earnings from advertising endorsements and sponsors.

This marks the first time the government has revealed popular YouTubers' incomes and amount of tax evaded.

According to Google Korea, the number of Korean YouTube channels with over 100,000 subscribers has rapidly been increasing from 367 in 2015 to 674 in 2016 and 1,275 in 2017.

There are scores of YouTubers and influencers, who rake in a large amount of money from advertising endorsements, sponsors and the sales of their own products and goods via their social network platforms. However, the government has struggled to deal with the fairly new industry and how to tax them as most influencers underreport their income.

Local YouTubers have largely two ways to submit their taxes. One is to pay through a multi-channel network (MCN), which is an organization that works with video platforms and offers assistance to a channel owner in exchange for a percentage of the ad revenue; the other is to voluntarily report their income.

The MCN is relatively easier for the government to keep track of as users are required to submit withholding tax forms, but most YouTubers choose the latter, which allows them to underreport their earnings, making it difficult for the government to figure out their total income.

Since last month, the NTS has been operating a new industry code for Youtubers and influencers and says it will be able to figure out the income of one-person online broadcasters and YouTubers starting next May, after compiling their general income tax information.

"Even though the NTS implemented a new industry code there are still too many loopholes. We need to strengthen measures to reduce blind areas," Kim said.

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