Singer and actor Cha Eun-woo has reportedly been notified of a tax reassessment exceeding 20 billion won, sparking controversy, and criticism appears to be growing because he served as the official host of the welcome banquet at the APEC (Asia-Pacific Economic Cooperation) leaders' meeting — a national event — even after undergoing a tax investigation.
Earlier on the 22nd, one media outlet reported that Cha Eun-woo last year was subjected to a high-intensity investigation on suspicion of tax evasion by the Seoul Regional Tax Service's Investigation Division 4.
According to the report, Cha Eun-woo was recently notified by the National Tax Service of a tax reassessment exceeding 20 billion won on suspicion of income tax and other tax evasion. The reason given was that Cha Eun-woo shared income with a corporation A established by his mother in addition to his agency Fantagio.
The corporation A established by Cha Eun-woo's mother and his agency Fantagio signed a service contract nominally to support Cha Eun-woo's entertainment activities. Afterwards, Cha Eun-woo's earnings were divided and distributed among Fantagio, corporation A and Cha Eun-woo personally.
The National Tax Service judged that corporation A was effectively a paper company that did not provide real services. The actual address of corporation A was on Ganghwa Island, and it was found to be difficult to regard it as a place that conducts entertainment-related work. Accordingly, the National Tax Service viewed that Cha Eun-woo and his mother used the sham corporation A to reduce income tax of about 45% and applied a corporate tax rate more than 20% lower than the personal income tax rate as a trick.
In particular, controversy intensified after reports emerged that the National Tax Service, at his request while Cha Eun-woo was serving in the army band after enlisting in July last year, waited and did not send the tax investigation result notice until after his enlistment.
Amid suspicions that Cha Eun-woo's enlistment was effectively an evasive "military run," his role as host of the APEC leaders' meeting official welcome banquet in October last year came under belated scrutiny.
At the time, Cha Eun-woo, who was serving in the military, took the hosting role at the request of the presidential office, but the timing — already after he had been investigated by the National Tax Service over tax issues — became the root of the problem.
Internet users strongly criticized, saying, "Having a person under investigation for suspected tax evasion serve as the face of a national official event runs counter to public sentiment." They argued it was unfair for a person with moral controversy to serve as host at a venue meant to enhance the nation's dignity, and that Cha Eun-woo's side, which accepted the role, bears responsibility.
Meanwhile, regarding this matter Cha Eun-woo's side said, "The main issue in this case is whether the corporation established by Cha Eun-woo's mother falls under the scope of substantive taxation; this is not a matter that has been finally confirmed and notified, and we will actively explain the issues related to legal interpretation and application through proper procedures. The artist and the tax representative will sincerely cooperate so that the relevant procedures can be completed promptly."
[Photo] OSEN DB, SNS
[OSEN]