"Having run a smooth road, the 'face genius' Cha Eun-woo, blemished by allegations of 20 billion won in tax evasion…what stance will he take?"
Actor Cha Eun-woo, formerly of the group ASTRO, is embroiled in allegations of tax evasion on the order of 20 billion won, creating social repercussions beyond the entertainment industry. The controversy, raised while he is performing military service, has been called an "unprecedented amount for a celebrity" in terms of the scale of the tax bill, and it is being suggested that it could become a major turning point in his career.
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 alleged tax evasion including income tax. If the report is accurate, it would be an unusually large amount even among tax audits of celebrities.
According to the report, Cha Eun-woo underwent an intensive tax audit by the Seoul Regional Tax Service's Audit Division 4 last spring, before his enlistment. The core allegation is that despite having an original agency, he or his family established a separate corporation in their own names, entered into service contracts with the agency, and distributed income to reduce tax burdens.
In fact, company A, established by Cha Eun-woo's mother, Ms. Choi, entered into a contract with agency Fantagio to provide services supporting entertainment activities and received a portion of Cha Eun-woo's revenue. However, the National Tax Service reportedly judged that the company was a paper company that did not provide substantial services. The National Tax Service believes this avoided high income tax rates of about 45% and resulted in application of corporate tax rates around 20%.
Accordingly, the National Tax Service treated Fantagio as having processed A company's "false tax invoices," imposed about 8.2 billion won in additional assessments including value-added taxes, and after summoning and questioning Cha Eun-woo and his mother, concluded that more than 20 billion won in income tax was omitted, according to the report.
However, the National Tax Service reportedly delayed sending the tax audit result notice at Cha Eun-woo's request until his enlistment procedures were completed. Cha Eun-woo received notification of acceptance to the Army Band in May last year, enlisted on July 28 that same year, and is currently serving.
With the timing now known, some have raised so-called "military run" suspicions, asking, "Did he choose to enlist before the controversy intensified?" As a large-scale allegation on the order of 20 billion won has emerged while he is serving in the military, public attention has grown noticeably sharper.
As the controversy spread, Fantagio said in an official statement, "The core issue in this matter is whether the company established by Cha Eun-woo's mother falls under the scope of substantive taxation," and "The matter has not been finally confirmed or notified, and we will actively explain the points of legal interpretation and application through proper procedures." It also rebutted, "The company is not a paper company but a firm formally registered for popular culture and arts planning services."
However, it did not provide a separate explanation regarding the military-run suspicion, commonly called an "enlistment to evade," and Fantagio declined to comment further on related inquiries, saying, "It is difficult to confirm anything beyond the official position."
Cha Eun-woo's side has filed a petition for reassessment after receiving the National Tax Service's notice and is disputing the appropriateness of this determination. Because legal procedures are underway, the question of tax evasion and the scope of responsibility have not yet reached a final conclusion.
For Cha Eun-woo, who had walked a "smooth road" without major controversies, the current allegations of tax evasion on the order of 20 billion won are regarded as his first major scandal. As an allegation cited as an unprecedented scale for a celebrity and raised during military service, attention is focused on the result of future procedures and on what additional stance Cha Eun-woo will take.
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