Korean media recently reported that HYBE is undergoing the first tax investigation by the National Tax Service since its inception. This is attributed to the fact that the recent economic upheavals of HYBE have been astounding.
Since before 2015, Big Hit Music and BTS seem to be going through the darkest and hardest times as they take on huge debt. Meanwhile, BTS's debut has not yet made a breakthrough that can bring positive economic prosperity to Big Hit Music.
But from 2016 onwards, miracles came to Big Hit Music and BTS. With only one group, BTS, Big Hit Music has had a huge revenue stream. BTS became one of the world's famous music groups while Big Hit Music rose to become HYBE - a leading Kpop entertainment company.
It is also because of the outstanding growth and revenue that BTS and HYBE have earned since 2016 that recently the National Tax Service has checked the tax for the first time on HYBE. Specifically, on the 17th, Korean media reported that the National Tax Service sent an investigator to the HYBE office building in Yongsan, Seoul to check the accounting records and documents.
It is known that the investigation was carried out by the 1st Investigation Bureau of the Seoul Metropolitan Government. This tax check is the first tax audit since HYBE's establishment because, from 2015 and earlier, HYBE has not made a profit in business.
Talking about this information, an HYBE official explained, "This is a routine tax audit". As of the first quarter, HYBE has 17 branches, including Big Hit Music, Pledis Entertainment, and Reverse Company, of which 9 are overseas. In April last year, it also acquired Ithaca Holdings, which owns world-class pop stars like Justin Bieber and Ariana Grande.
HYBE achieved annual sales of 1.25 trillion KRW and an operating profit of 190.2 billion KRW for the first time in the entertainment industry last year thanks to the artists' global activities. Which, profits from BTS's activities account for the majority of HYBE's revenue. In the first quarter, revenue and operating profits were 285 billion KRW and 37.1 billion KRW, respectively.
Recently, due to the misunderstanding about the BTS hiatus, HYBE's stock witnessed a sharp drop. Its market capitalization evaporated by about 2 trillion KRW in one day.
HYBE and BTS members must immediately speak up to deny it and correct that they will enter a new way of working that combines both group and solo activities. Therefore, the stock price situation of HYBE has been better saved!
