Actor and singer Cha Eun Woo (a member of Astro group) is the focus of public opinion due to allegations of income tax evasion of up to 20 billion won (nearly 360 billion VND).
In that context, a tax expert who used to be an investigator at the Korean National Tax Department revealed shocking information: the initial target of the tax authority was actually Fantagio entertainment company (the management company of the Astro group), not Cha Eun Woo personally.
Moon Bora, a tax expert who used to work as an investigator at the Seoul Regional Tax Department (which is handling Cha Eun Woo's case), posted a video on YouTube to explain that the focus of the scandal lies in whether Cha Eun Woo's "ghost company" and his mother - who is said to be involved in income distribution - are actually operating or not.
She explained: "The structure of establishing legal entities to divide profits is not wrong. However, the National Tax Department considered Company A owned by Cha Eun Woo's mother to be a "ghost company", without substantive operations.
Next, Moon Bora emphasized: "The initial target was Fantagio, Cha Eun Woo's management company. During the review of Fantagio's books, they discovered a huge amount of money flowing into an eel restaurant in Ganghwa, and following suit, it was actually related to Cha Eun Woo".
She compared: "It's like a net intending to catch a big fish catches another giant fish. Tax investigation that is not careful will be avoided, a long tail will sooner or later be trampled on.
The case of Cha Eun Woo being notified by the National Tax Department to recover more than 20 billion won of tax has shocked public opinion. It is known that in the first half of last year, he had to undergo a high-intensity tax investigation by the Seoul Regional National Tax Department with suspicion of tax evasion.
In particular, the tax authorities believe that tax evasion was carried out through company A established by Cha Eun Woo's mother. Accordingly, Cha Eun Woo operated according to the structure: Fantagio signed a service contract to support entertainment activities with company A, and income was divided among Fantagio, company A and Cha Eun Woo personally.
The National Tax Department assessed that Company A is not suitable for performing management - entertainment nghiep vu, and believes that this is a trick to disperse income through "ghost companies" without entities.
According to tax authorities, Cha Eun Woo used a separate family company outside of Fantagio to sign a service contract, thereby applying corporate tax lower than 20% compared to personal income tax of up to 45%.
Cha Eun Woo enlisted in July last year and is currently serving in the Korean Army Army Corps.
