Singer and actor Cha Eunwoo has been reported to have received a notice of tax reassessment in the 20 billion won range, sparking controversy. In recent years, high-value reassessment cases involving entertainers have been repeatedly revealed, drawing renewed attention to tax practices across the entertainment industry.
On the 22nd, one outlet reported that Cha Eunwoo recently received a notice from the National Tax Service demanding about 20 billion won in income tax and other taxes. According to the report, the National Tax Service took issue with the structure in which Cha Eunwoo shared income with company A, a corporation established by his mother in addition to his agency Fantagio, and it was reported to have judged that the company was close to a "paper company" that did not provide substantive services.
The National Tax Service concluded that this arrangement allowed Cha Eunwoo to be taxed at the lower corporate tax rate rather than the individual income tax rate, and it was also reported that the fact the corporation's registered address is on Ganghwa Island, making it difficult to perform entertainment-related work, was used as part of the rationale.
Cha Eunwoo enlisted in the Army Band in July last year and is currently serving, and when it emerged that the National Tax Service delayed notifying results until after his enlistment, some raised suspicions of an "evading enlistment." In response, his agency Fantagio told OSEN that this issue's main point of contention is whether the corporation established by his mother falls under substantive taxation, and that "this matter has not been finally determined or notified, and we will actively clarify the legal interpretations and applications through proper procedures." It added that "Cha Eunwoo, as a member of the public, will faithfully carry out tax filings and legal obligations."
Cha Eunwoo's case is in line with recent controversies over tax investigations of entertainers. Last year, actor Lee Ha-nee was subject to an intensive tax audit by the National Tax Service and was reassessed for about 6 billion won, and Yoo Yeon-seok also received a reassessment notice for about 7 billion won. Both explained that there were differences in interpretation with tax authorities over whether revenue structures through personal corporations should be subject to corporate tax or individual income tax.
Lee Joon-gi was also reassessed for about 900 million won under a similar structure, and his agency said it was a difference in interpretation of tax law and application between the tax agent and the tax authority, arguing it was not deliberate tax evasion. Lee Joon-gi's side paid the full amount and filed a petition with the Tax Tribunal, and the hearing is currently underway.
Because many recent high-value reassessment cases involving entertainers stem from "revenue structures through personal corporations," some say it is difficult to judge tax evasion solely by the amounts involved. In fact, many entertainers have emphasized that practices that were not problematic in past regular tax audits are now being pointed out as issues.
However, it is also true that the successive high-value reassessment controversies are shaking public trust. In particular, in Cha Eunwoo's case, the scale of the reassessment has been described as record-setting, amplifying public reaction. Attention will focus on whether this matter brings any changes to tax practices across the entertainment industry depending on the Tax Tribunal's result and the National Tax Service's final judgment.
Meanwhile, Cha Eunwoo is currently serving in the military and is scheduled to have the Netflix original series "The Wonder Fools" released after his return.
[Photo] OSEN DB
[OSEN]