Cha Eunwoo's side, embroiled in allegations of tax evasion in the 20 billion won range, broke its silence and issued a statement.
On the 22nd, Cha Eunwoo's agency Fantagio said, "This matter centers on whether the corporation established by Cha Eunwoo's mother is subject to substantive taxation; it is not a matter that has been finally determined and notified, and we plan to actively clarify the issues related to the interpretation and application of the law through proper procedures," and issued an official statement.
It added, "To ensure the procedure is completed promptly, the artist and the tax representative will cooperate faithfully, and Cha Eunwoo promises to continue to faithfully fulfill tax reporting and legal obligations as a member of the public."
Earlier, a media outlet reported that Cha Eunwoo was notified by the National Tax Service of a tax reassessment exceeding 20 billion won for income tax and other alleged tax evasion. This is the largest reassessment imposed on an entertainer to date.
According to the report, as a result of a tax investigation conducted before Cha Eunwoo enlisted in the military in July last year, Cha Eunwoo's side is currently awaiting the result of the "pre-taxation adequacy review" they filed in objection to the National Tax Service's decision.
Earlier, Cha Eunwoo underwent an intensive investigation last spring by the Seoul Regional Tax Service's Investigation Division 4 on allegations of tax evasion. The tax evasion allegations against Cha Eunwoo are said to have a structure similar to the suspicions of tax evasion through "one-person agencies" recently raised against many entertainers such as Sung Si Kyung and Ok Joo Hyun.
The outlet said that in Cha Eunwoo's case, his mother, Ms. Choi, set up company A between his main agency Fantagio and Cha Eunwoo. Fantagio and company A signed a service contract to support Cha Eunwoo's entertainment activities, and from that point the income Cha Eunwoo earned was reportedly divided among Fantagio, company A and Cha Eunwoo.
However, the National Tax Service judged that company A was a "paper company" that did not substantively provide services. It is reported to be viewing the situation as a scheme in which Cha Eunwoo and his mother set up a nonoperational company A and distributed income to reduce the 45% income tax burden and instead obtain a corporate tax rate more than 20 percentage points lower than the individual income tax rate.
Meanwhile, Cha Eunwoo applied to the Defense Ministry's military band in May last year, passed the final selection, and has been serving since July that year. His scheduled discharge date is Jan. 27, 2027.
The following is the full official statement from Cha Eunwoo's agency
Hello. This is Fantagio. We are issuing an official position regarding today's reports about a tax investigation involving our artist Cha Eunwoo.
This matter centers on whether the corporation established by Cha Eunwoo's mother is subject to substantive taxation; it is not a matter that has been finally determined and notified, and we plan to actively clarify the issues related to the interpretation and application of the law through proper procedures.
The artist and the tax representative will cooperate faithfully so that the procedure can be completed promptly.
Cha Eunwoo promises to continue to faithfully fulfill tax reporting and legal obligations as a member of the public.
Thank you.<
[Photo] OSEN DB
[OSEN]