K-Pop Star Cha Eun-woo Faces $13.62 Million Tax Evasion Allegation in South Korea

K-pop idol and actor Cha Eun-woo has been hit with a tax evasion allegation, with the National Tax Service of South Korea demanding over 20 billion won (approximately $13.62 million) in unpaid taxes.

According to reports on the 22nd, the National Tax Service has issued a notice to Cha Eun-woo regarding the tax claim, which stems from an audit conducted before his military enlistment in July last year. Cha Eun-woo's representatives have contested the decision and have filed for a 'pre-assessment review,' with the outcome still pending.

The controversy involves a company, referred to as Company A, established by Cha Eun-woo's mother, and his current agency, Fantagio. Both entities had entered into a service contract to support Cha Eun-woo's entertainment activities, with income being divided among Fantagio, Company A, and Cha Eun-woo.

However, the National Tax Service has identified Company A as a 'paper company' that did not provide substantial services for Cha Eun-woo's entertainment activities. The agency claims that this was a tactic to reduce income tax by utilizing a non-existent entity. Furthermore, it is alleged that Cha Eun-woo's side benefited from a corporate tax rate more than 20 percentage points lower than the income tax rate.

Cha Eun-woo is currently serving in the military as part of the Army's military band since his enlistment in July last year. His agency, Fantagio, is in the process of preparing an official statement.

Reported by Yeji Ryu, TenAsia ryuperstar@tenasia.co.kr