[26.01.22] Cha Eun-woo Faces 20 Billion Won Tax Evasion Allegations

Cha Eun-woo Faces 20 Billion Won Tax Evasion Allegations…Agency Says “Not Finalized”

📍Dispute Over Tax Assessment Under Review, Mother-Founded Company at Center of Controversy

Cha Eun-woo, a member of ASTRO and an active actor, has become embroiled in allegations of tax evasion involving more than 20 billion won, prompting his agency Fantagio to issue an official statement pledging to actively explain the matter.

Cha Eun-woo is suspected of evading 20 billion won in taxes by establishing Fairper Company.

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🔹 Agency: “Legal Interpretation Issue, Not Finalized”
Fantagio stated on the 22nd, “The key issue is whether the corporation established by Cha Eun-woo’s mother qualifies as a taxable entity.” The agency emphasized that the matter has not yet been finalized or officially notified.

It added, “We will actively present our explanation through lawful procedures regarding issues of legal interpretation and application,” and said that both the artist and tax representatives will cooperate fully to resolve the matter promptly.

🔹 Intensive Tax Investigation Conducted Last Year
Cha Eun-woo reportedly underwent an intensive tax investigation by the Seoul Regional Tax Office’s Investigation Division 4 last year. The investigation took place prior to his military enlistment in July, and the National Tax Service notified him of an additional tax assessment totaling approximately 20 billion won.

Cha’s side has filed a pre-assessment review request and is currently awaiting the outcome.

🔹 Allegations Over Mother-Founded Company
The National Tax Service focused on the structure in which Cha Eun-woo’s income was distributed among Fantagio, Company A founded by his mother, and Cha himself after Company A signed a service contract with Fantagio.

The tax authorities reportedly concluded that Company A was a paper company with no substantial business activities, allegedly established to reduce income tax liability by applying a lower corporate tax rate instead of the personal income tax rate of up to 45 percent.

As a result, Fantagio was also subjected to an additional tax assessment of 8.2 billion won in September last year for allegedly processing false tax invoices related to Company A.

🔹 Cha’s Side Rebuts Paper Company Claim
Cha’s representatives countered that frequent changes in Fantagio’s management led his mother to establish a company to protect her son’s career and directly operate management services.

They asserted that Company A is not a shell company but a legitimately registered entertainment management business under Korea’s Popular Culture and Arts Industry Act.

The tax authorities reportedly concluded that profits generated by Company A ultimately accrued to Cha Eun-woo, resulting in unpaid income tax exceeding 20 billion won.

🔹 Currently Serving in the Military
Cha Eun-woo enlisted in the Army Military Band last July and is currently serving with the Ministry of National Defense Support Unit. The National Tax Service reportedly delayed notifying him of the investigation results until his military service was underway at his request.

As the tax assessment has not been finalized, the outcome will depend on the results of the ongoing review process.

One-line summary : Cha Eun-woo faces allegations of tax evasion exceeding 20 billion won, while his agency says the assessment has not been finalized and will be contested.