Cha Eun-woo to Contest $15 Million Tax Evasion Allegations

Cha Eun-woo, the popular singer and actor, has announced plans to actively contest allegations of tax evasion.

According to a report on the 22nd, the National Tax Service of South Korea has notified Cha Eun-woo of a tax imposition exceeding 20 billion KRW (approximately $15 million USD) related to income taxes. This follows a tax audit conducted before his military enlistment in July of last year. Cha Eun-woo's representatives have filed for a 'pre-assessment review' and are currently awaiting the outcome.

Previously, Cha Eun-woo's mother established Company A, which entered into a service contract with his current agency, Fantagio, to support his entertainment activities. The income was 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. They argue that it was a non-existent entity used to reduce income taxes. Additionally, the tax authorities claim that Cha Eun-woo's side applied a corporate tax rate more than 20 percentage points lower than the income tax rate.

In response, Fantagio released an official statement on the 22nd, stating, "The main issue is whether the corporation established by Cha Eun-woo's mother is subject to actual taxation." They added, "This matter has not been finalized or officially notified, and we plan to actively clarify the issues related to the interpretation and application of the law through appropriate procedures."

The statement continued, "The artist and tax representatives will cooperate diligently to ensure the process is concluded swiftly," adding, "Cha Eun-woo promises to continue fulfilling his tax reporting and legal obligations as a responsible citizen."

Reported by Ryu Ye-ji, TenAsia ryuperstar@tenasia.co.kr