'Tax Evasion Controversy' Yaongyi Wins Decisively at Tax Tribunal... Set to Receive Billions in Refunds

[Financial News] Kim Na-young (34), the creator of the popular webtoon 'True Beauty' and known by the pen name Yaongyi, has reportedly won her appeal against the National Tax Service (NTS) regarding a value-added tax (VAT) assessment. As a result, she is set to receive a refund amounting to billions of won.
The decision was based on the conclusion that providing webtoons in electronic file format to a platform qualifies as an 'electronic publication' exempt from VAT.
According to Weekly Chosun on the 27th, the Tax Tribunal decided in June to uphold Kim's appeal against the VAT imposed by the NTS. Kim will be refunded VAT collected from the second half of 2018 through the first half of 2022.
Previously, the Seoul Regional Tax Office conducted a comprehensive tax audit of Kim's corporation in 2023, raising issues with the provision of 'True Beauty' to the WEBTOON platform. The office argued that since WEBTOON uploaded and distributed the webtoon to users, and Kim did not report VAT on the grounds that the electronic files were exempt as electronic publications, the transactions should be subject to taxation.
The Seoul Regional Tax Office maintained that the corporation provided a 'service' in the form of a copyright license rather than the webtoon itself, and thus the transaction did not qualify for the electronic publication exemption.
However, the Tax Tribunal stated that publications issued by registered publishers, displaying the author and publisher, and assigned an International Standard Book Number (ISBN) or International Standard Serial Number (ISSN), are eligible for exemption. During the serialization of 'True Beauty,' Kim's corporation registered as a publisher, and WEBTOON assigned both ISBN and ISSN to the webtoon.
Kim's representative told Weekly Chosun, "We will continue to faithfully fulfill our tax obligations as citizens of Korea."
y27k@fnnews.com Seo Yoon-kyung Reporter