Actor Cha Eun-woo has reportedly received the largest tax reassessment in entertainment history, prompting renewed attention on Yu Jae-seok, who had nothing to hide.
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 on charges of income tax and other tax evasion.
According to the report, the National Tax Service took issue with Cha Eun-woo's income structure: after a service contract was made between Fantagio, the B corporation established by Cha Eun-woo's mother, and his agency, revenue was divided among Fantagio, the B corporation and Cha Eun-woo personally. The National Tax Service judged the B corporation to be a paper company that did not actually provide services and concluded that Cha Eun-woo and his mother used the sham B corporation to apply a corporate tax rate more than 20% lower than the income tax rate to reduce income tax by as much as 45%.
In response, Cha Eun-woo's side said, "Whether the corporation established by Cha Eun-woo's mother is subject to substantive taxation is the main issue," and "This is not a matter that has been finally confirmed or notified. We will actively clarify the issues related to legal interpretation and application through proper procedures. We will faithfully cooperate so that the procedure can be completed promptly."
The 20 billion won reassessed to Cha Eun-woo is said to be the largest in entertainment history. In particular, because the notice of the tax investigation results containing these details was reportedly sent after waiting until enlistment was completed at Cha Eun-woo's request, suspicions of preferential treatment and allegations of evading military service have also surfaced.
The reason Yu Jae-seok is being reexamined amid the shock over Cha Eun-woo's record tax reassessment is that despite undergoing a high-intensity tax audit in 2024, no culpable issues related to tax filing errors were found. Yu Jae-seok is reported to have had no intentional tax omissions or tax evasion and to have been filing faithfully.
On the related YouTube channel "Jeolse TV," it was noted, "Entertainers are usually classified as sole proprietors and can choose one of two methods: ledger bookkeeping filing and an estimated filing called the basic expense ratio filing," highlighting Yu Jae-seok's tax payment method.
Ledger bookkeeping filing is a method in which all income and expenditures are organized through a tax accountant and expenses are processed to maximize tax savings, with the ledger prepared and filed. Expense ratio filing (estimated filing) applies a ratio set by the state, so there is no need to collect supporting documents, but it can result in paying more tax. The tax accountant said, "Most entertainers choose the ledger bookkeeping method to try to pay as little tax as possible, but in Yu Jae-seok's case he filed by estimated reporting using the basic expense ratio," adding, "Assuming an annual salary of 10 billion won, if 4 billion won in expenses are deducted leaving 6 billion won, ledger filing would result in paying about 2.7 billion won in taxes. If the basic expense ratio of 8.8% like Yu Jae-seok is applied, the taxable base is 9.12 billion won. Then you would have to pay 4.1 billion won in taxes. Some people pay 2.7 billion won and some pay 4.1 billion won, a difference of as much as 1.4 billion won."
The tax accountant cited image and the administrative process as reasons why Yu Jae-seok chose to pay as much as 1.4 billion won more. The tax accountant said, "It is meant to prevent tax controversies from the outset and maintain trust in himself while ensuring long-term income," and "It allows him to focus on his broadcasting activities without the stress of gathering supporting documents when handling taxes. There is no worry about reassessments or additional tax. Risk zero," adding, "Because he gave up expense processing, there is nothing to investigate and nothing more to find. From the tax accountant's perspective, there is nothing more to collect and refunds may even be due. Yu Jae-seok's method is not right for everyone, but in the long term it's a choice between immediate tax savings and a lifetime of trust. It seems he acted with a long-term perspective."
Meanwhile, Cha Eun-woo enlisted in July last year and is serving in the army band. He is scheduled to appear in the Netflix release The Wonder Fools this year.
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