Singer and actor Cha Eun-woo is facing allegations of tax evasion involving around 20 billion won, and signs indicate he is preparing a substantive response to the National Tax Service's decision by hiring a major law firm.
On the 26th, a Fantagio official told OSEN that they could not confirm whether Cha Eun-woo had retained a major law firm in relation to the tax evasion allegations. Rather than a clear denial, they were tight-lipped, and it appears likely that legal action will follow the National Tax Service's notice of additional tax assessment.
That day, one media outlet reported that Cha Eun-woo had appointed Shin & Kim LLC as his legal representative and was proceeding with response procedures regarding the 20 billion won in additional tax the National Tax Service had notified. Shin & Kim LLC is a major law firm counted among the country's "big five" law firms, and recently drew attention for handling the exclusive contract litigation for the girl group NewJeans.
Cha Eun-woo reportedly received an intensive tax audit last year and was notified by the National Tax Service of an additional tax assessment exceeding 20 billion won on charges including income tax for tax evasion. The National Tax Service judged that company A, established by Cha Eun-woo's mother, had entered into a service contract with agency Fantagio but was a paper company that did not provide substantive services. Accordingly, allegations have been raised that Cha Eun-woo and his mother used the company to distribute income to reduce income tax burdens of up to 45%, and that they benefited from a corporate tax rate more than 20 percentage points lower than the individual income tax rate.
In particular, the additional tax amount exceeding 20 billion won was reported as the largest tax assessed against an entertainer in the country, amplifying the fallout. However, the additional tax has not been finally confirmed. Fantagio said in an official statement on the 22nd that "the main issue is whether the company established by Cha Eun-woo's mother is subject to substantive taxation," and added "this is not a matter that has been finally determined and notified, and we will actively provide explanations according to legal procedures regarding the interpretation and application of the law."
They added, "The artist and the tax representative will cooperate faithfully so that the procedures can be concluded promptly, and Cha Eun-woo will continue to faithfully fulfill tax filing and legal obligations as a member of the public." Cha Eun-woo's side is reportedly awaiting the result of the pre-assessment review requested to contest the National Tax Service's decision.
Meanwhile, Cha Eun-woo is facing considerable aftershocks from the tax evasion allegations. Some raised suspicion of an alleged "military run" because Cha Eun-woo enlisted on July 28 last year and the tax audit notification coincided with his enlistment timing. In addition, his image has been damaged as some beauty brands and bank commercials in which Cha Eun-woo appeared as a model have been removed.
With reports of his hiring a major law firm emerging, attention is focused on whether Cha Eun-woo can overturn the National Tax Service's finding and what the conclusion of the matter will be.
[photo] OSEN DB
[OSEN]