Amid rising allegations of tax evasion involving ASTRO member and actor Cha Eun-woo, brands that used him as their face have begun to cut ties. The first ad cancellations began six hours after the tax evasion allegations surfaced, and financial firms have also started to distance themselves.
On the 22nd, it was reported that Cha Eun-woo underwent an intensive investigation by the Seoul Regional Tax Service in the first half of last year on suspicions of tax evasion and was notified of an income tax reassessment exceeding 20 billion won.
The tax authority raised questions about the income structure. A corporation A established by Cha Eun-woo's mother and his agency Fantagio entered into service contracts purportedly to support Cha Eun-woo's entertainment activities, and the revenue was divided among Fantagio, corporation A and Cha Eun-woo personally.
The tax authority judged that corporation A was effectively a paper company that did not provide real services. It analyzed that income that should have been attributed to an individual was dispersed to the corporation to avoid income tax rates of up to 45% and instead be subject to relatively lower corporate tax rates.
The 20 billion won income tax reassessment the tax authority notified Cha Eun-woo of is the largest known among domestic entertainers to date. It caused great shock as it ranks after Fan Bingbing (about 144 billion won), Cristiano Ronaldo (about 28 billion won), Willie Nelson (about 22 billion won) and Shakira (about 21 billion won) in global comparisons.
The shockwaves extended to movements by brands that used Cha Eun-woo as their face. On the 22nd, OSEN confirmed that Abib, which selected him as an ambassador saying, "We judged that Cha Eun-woo's transparent and clean image best expresses the brand's philosophy of 'emptied-and-filled perfection,' so we appointed him as a global ambassador," made videos 공개된 on its YouTube channel private, marking the start of distancing from Cha Eun-woo.
Following that, Shinhan Bank made Cha Eun-woo's videos and posts on its YouTube channel and social accounts private. The reason for deletion of videos and photos was not disclosed, but because the action was taken immediately after Cha Eun-woo faced tax evasion allegations, it is presumed to be a consequence of that.
In particular, Shinhan Bank had previously chosen Cha Eun-woo as a new model to replace Kim Soo-hyun, who was embroiled in the late Kim Sae-ron grooming controversy. But because Cha Eun-woo has been entangled in tax evasion allegations, it appears the bank, fearing damage to its image, made the ad videos and posts private.
Cha Eun-woo is currently serving in the military. His agency Fantagio said, "This matter centers on whether the corporation established by Cha Eun-woo's mother is subject to substantive taxation, and it is not a matter that has been finally confirmed or notified. We will actively provide explanations through proper procedures regarding disputes over legal interpretation and application. The artist and the tax representative will faithfully cooperate so that the procedure can be concluded quickly."
[OSEN]