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Cha Eun-woo Faces Massive $13.65 Million Tax Penalty, Ranking Among Global Tax Evasion Cases
On the 23, online communities and social media platforms were abuzz with posts comparing Cha Eun-woo's expected tax penalty to those of global stars. According to these posts, Cha Eun-woo's penalty ranks him sixth worldwide in terms of tax evasion cases.
Topping the list is Chinese actress Fan Bingbing, who was fined approximately 1.4 trillion won, followed by Zheng Shuang (540 billion won), soccer star Cristiano Ronaldo (240 billion won), American singer Willie Nelson (220 billion won), and pop singer Shakira (210 billion won). Cha Eun-woo's penalty is unprecedented among Korean celebrities and places him high on the global list.
Recent reports indicate that the National Tax Service (NTS) of South Korea has notified Cha Eun-woo of the tax penalty, which stems from an investigation conducted by the Seoul Regional Tax Office's Investigation Bureau 4 last year. The NTS reportedly took issue with Cha Eun-woo's use of a specific corporation to distribute his income, which they viewed as a means to reduce his tax burden.
The corporation in question was established by Cha Eun-woo's mother and has a contract with his agency, Fantagio, to support his entertainment activities. The NTS believes the corporation was used as a tool for income distribution without providing actual services, thus lowering his effective tax rate.
Cha Eun-woo's representatives have countered these claims, stating that the corporation is a legitimate entity registered for cultural and artistic planning. They argue it was set up by his family to ensure stability in his entertainment career amid management changes at his agency. They are currently contesting the NTS's decision through a tax appeal.
The tax penalty imposed on Cha Eun-woo is considered highly unusual for an individual entertainer, prompting a broader discussion in the entertainment industry about the use of corporations for tax reduction. Previously, actors Lee Ha-nee and Yoo Yeon-seok faced tax penalties in the tens of billions of won, but both attributed the issues to differences in tax interpretation.
If the allegations against Cha Eun-woo are confirmed, his tax penalty would be the largest ever imposed on a Korean celebrity. Other notable cases include Yoo Yeon-seok (approximately 70 billion won), Lee Ha-nee (60 billion won), Jo Jin-woong (11 billion won), and Lee Joon-gi (9 billion won), but Cha Eun-woo's penalty far exceeds these amounts.
Kim Se-ah, TenAsia Reporter haesmik@tenasia.co.kr
