Actor Cha Eun-woo, formerly of the group ASTRO, is embroiled in allegations of tax evasion exceeding 20 billion won, and the fallout is continuing. Particularly because he is currently serving in the military, when the controversy surfaced some have even raised so-called "military run" suspicions, splitting public opinion.
On the 22nd one outlet reported that Cha Eun-woo was notified by the National Tax Service of a tax reassessment exceeding 20 billion won for income tax and other taxes. It is an unusually large amount among reassessments imposed on entertainers.
According to the report, Cha Eun-woo underwent a high-intensity tax investigation by the Seoul Regional Tax Service's Investigation Division 4 last spring before his enlistment. Although he originally had an agency, there are allegations that he or his family set up a separate corporation in their names, signed a service contract with the agency, and reduced taxes by distributing income.
In fact, company A, established by Cha Eun-woo's mother, Ms. Choi, signed a service contract with his agency Fantagio to support entertainment activities. However, the National Tax Service reportedly judged that the company was a "paper company" that did not provide substantive services. The National Tax Service says it used this to avoid high-rate income taxes and instead receive the relatively lower corporate tax rate.
In this process the National Tax Service considered Fantagio to have processed false tax invoices from company A and imposed about 8.2 billion won in reassessments including value-added taxes, and after summoning and investigating Cha Eun-woo and his mother respectively, it concluded that more than 20 billion won in omitted income tax existed, according to the report.
However, the National Tax Service is reported not to have sent the tax investigation result notice at Cha Eun-woo's request until his enlistment procedures were completed. Cha Eun-woo received notification of acceptance into the army band last May and enlisted on July 28 of the same year and is currently serving.
As this timing became known, online users raised so-called "military run" suspicions, saying, "Did he choose to enlist to avoid controversy?" However, his agency Fantagio did not state a clear position on this.
Fantagio said in an official statement that "the core issue in this matter is whether the company established by his mother is subject to substantive taxation," and added, "This is not a matter that has been finally confirmed and notified, and we will actively explain under proper legal procedures regarding the interpretation and application of law." It also refuted that "the company is not a paper company but a business formally registered as a popular culture and arts planning company."
Cha Eun-woo's side has currently filed an administrative appeal regarding taxation and is disputing the appropriateness of the National Tax Service's judgment. Since legal procedures are ongoing, some point out that a cautious approach is needed because the tax evasion allegations and the "military run" suspicions are also at a stage where the facts have not been confirmed.
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