ASTRO member and actor Cha Eun-woo, addressing allegations of "200 billion won tax evasion" by saying it is a "difference in legal interpretation" and actively seeking to explain himself, faces views from some in the legal community that it will be practically difficult to completely clear him of tax evasion charges.
It has been revealed that Cha Eun-woo was notified of a tax recovery exceeding 200 billion won, sparking controversy. A single-person agency A corporation, run by Cha Eun-woo's mother, signed a service contract with his main agency Fantagio, but it was judged to be a paper company that did not provide substantive services. In fact, A corporation's previous address was an eel restaurant located in Ganghwa Island, and that eel restaurant was reported to have been run by Cha Eun-woo's parents.
The National Tax Service viewed that Cha Eun-woo and his mother set up a non-substantive A corporation and distributed income to reduce income tax of up to 45%, using a trick to receive a corporate tax rate more than 20 percentage points lower than the income tax rate. Fantagio was also considered to have handled "false tax invoices" in transactions with A corporation and was billed 8.2 billion won in additional taxes including value-added taxes.
Fantagio issued an official statement saying, "The main issue in this matter is whether the corporation established by Cha Eun-woo's mother is subject to substantive taxation, and this matter has not been finally determined or notified; we will actively explain issues related to legal interpretation and application through proper procedures," and added, "The artist and the tax representative will faithfully cooperate so that the procedures can be completed promptly."
However, it became known that the National Tax Service sent the tax investigation result notice after waiting until Cha Eun-woo's enlistment was completed at his request, raising suspicions that Cha Eun-woo intentionally enlisted to avoid public criticism. In response, Cha Eun-woo issued a personal statement saying, "This was never an intentional choice to avoid this controversy. Last year, I reached a point where I could not delay military enlistment any longer, and I enlisted without completing the tax investigation procedures," he explained.
Fantagio also said, "We feel a heavy responsibility that controversy has arisen over a matter related to our company and its artists. The matter currently raised is at a stage where facts are being verified according to tax authorities' procedures, and the agency and the artist are faithfully participating in investigations within the necessary scope. If legal and administrative judgments become clear in the future, we will responsibly implement necessary measures according to the results." Meanwhile, Cha Eun-woo hired Shin & Kim LLC, one of Korea's five major law firms, and filed a pre-assessment review of taxation, and it was revealed that the firm includes a former high-ranking National Tax Service official, fueling allegations of preferential treatment for former officials.
But some experts said that even if Cha Eun-woo pursues an objection lawsuit, it will be difficult for him to completely escape allegations of tax evasion.
On the 3rd, Lim Jeong-yeop of law firm Jeonghyang told OSEN in a phone call, "I don't think (the possibility of exoneration) is likely," expressing cautious views. He analyzed that although the pre-assessment review of taxation might reduce the recovery amount, a large reduction is unlikely, and the possibility of completely escaping tax evasion charges also appears very small.
Cha Eun-woo's side said, "The main issue is whether the corporation established by Cha Eun-woo's mother is subject to substantive taxation," but they were skeptical about whether there is room for interpretation. Lawyer Lim Jeong-yeop said, "It appears taxation was imposed on the allegation that substantive income attribution belongs to Cha Eun-woo personally, and that a corporation was used formally to lower taxes by paying corporate tax instead of income tax," and added that it will by no means be easy to clear him of such allegations.
There are also various opinions about the possibility of criminal punishment for Cha Eun-woo. Lim Jeong-yeop said, "That needs to be seen a bit. If a complaint is filed with the prosecution and an investigation into tax evasion charges begins and the results are awaited, then there will be an issue. If the National Tax Service determines that there appears to be intentional tax evasion and reports it to investigative authorities, criminal matters will arise from that point," he said.
Meanwhile, the eel restaurant that was also the address of the company suspected of being a paper company run by Cha Eun-woo has been closed. Afterward, at the end of last year it moved to a location in Cheongdam-dong, Gangnam District, Seoul, leading to speculation that the store was relocated as the controversy over Cha Eun-woo's tax evasion grew. Fantagio said regarding this, "The currently operating 'Oje-yeon Cheongdam' is a completely different corporation from Ganghwa's 'Oje-yeon charcoal-grilled eel.' 'Oje-yeon Cheongdam' is operated by Fantagio M, a 100% subsidiary of Fantagio," and stated that it is unrelated to this matter.
[photo] OSEN DB
[OSEN]