On the 22, a tax industry insider told TENASIA, "At this stage, Cha Eun-woo's team can only submit comprehensive evidence proving that the corporation under his mother's name, referred to as Company A, conducted actual business activities." They must demonstrate how Company A supported Cha Eun-woo's entertainment activities.
The insider added, "If tax evasion is confirmed, additional penalties for underreporting and late payment will be imposed. In such cases, the penalties could add up to more than 40% of the assessed taxes, potentially pushing the total amount over 300 billion won."
According to a media report, the National Tax Service has demanded Cha Eun-woo pay over 20 billion won in taxes, including income tax. This action follows a tax audit conducted before his military enlistment in July last year.
Cha Eun-woo is accused of attempting to reduce his tax burden by establishing a separate corporation under his family's name, despite being signed with his current agency, Fantagio. Company A, founded by Cha Eun-woo's mother, reportedly entered into a service contract with Fantagio to support his entertainment activities and shared the income generated by Cha Eun-woo.
However, the National Tax Service has determined that Company A did not provide substantial services related to Cha Eun-woo's entertainment activities and labeled it a shell company. Company A is known to operate an eel restaurant in Ganghwa Island, Incheon. The tax authorities believe Cha Eun-woo attempted to evade the highest personal income tax rate of 45% by applying a corporate tax rate that is over 20 percentage points lower.
In response, Cha Eun-woo's agency, Fantagio, stated, "The main issue is whether the corporation established by Cha Eun-woo's mother is subject to actual taxation. The matter has not been finalized or officially notified, and we plan to actively clarify the legal interpretation and application through appropriate procedures."
Reported by Jung Se-yoon, TENASIA yoon@tenasia.co.kr