Singer-actor Cha Eun-woo, who was notified of a 20 billion won tax assessment, has retained Shin & Kim LLC and filed a pre-assessment review. A pre-assessment review refers to a taxpayer objecting to a disposition before the assessment stage.
According to legal sources on the 26th, Cha Eun-woo recently applied to the National Tax Service for a pre-assessment review. Shin & Kim LLC's tax specialty team decided to represent Cha and take on the case.
Shin & Kim LLC strengthened its expertise in taxes last year by hiring former Seoul Regional Tax Service Commissioner Lim Sung-bin. Earlier in 2022, it launched the Tax Criminal Investigation Response Center and brought on numerous former prosecutors with extensive experience in tax cases.
The Investigation Bureau 4 of the Seoul Regional Tax Service conducted an intensive tax audit of Cha Eun-woo last year and then notified him of an additional income tax assessment exceeding 20 billion won. It is a record high for a celebrity tax assessment.
Cha Eun-woo is said to have settled revenue separately with D-Any, a corporation established by his mother, Ms. Choi, and the National Tax Service is taking issue with this. For high-earning entertainers, settling as an individual results in an income tax of up to 45%, but routing through a corporation can reduce the corporate tax rate by more than 20 percentage points. The National Tax Service suspects D-Any is a paper company established for tax avoidance.
Cha Eun-woo's side, however, says the corporation in question is a duly registered company in the popular culture and arts planning business. They say the reason for establishing the corporation was that the CEO of his agency, Fantagio, changed multiple times, so his mother set up a management company herself to ensure stable entertainment activities.