According to Korean media, at the beginning of last month, singer and actor Cha Eun Woo filed a complaint to the Tax Court, claiming that the decision to recover about 13 billion won from the Korean National Revenue Service (NTS) was inappropriate. The complaint was filed immediately before the deadline of 90 days from the date of receiving the recovery notice.
Cha Eun Woo's management company - Fantagio - said: "Cha Eun Woo has filed a request for tax proceedings in accordance with legal procedures for legal review. Because the case is still in the process of being resolved, we cannot comment in detail.
Previously, Cha Eun Woo was inspected by Investigation Bureau No. 4 of the Seoul Tax Department for suspected income tax evasion through a company named after his mother located on Ganghwa Island (Gyeonggyonggi province, South Korea), and initially received a notice of expected tax arrears of about 20 billion won.
The Tax authority believes that the one-member company founded by Cha Eun Woo's mother, in which he is the only artist, does not actually provide support services for artistic activities, so it is considered a "ghost company" and is being pursued for tax arrears.
Cha Eun Woo's side once submitted a request for reconsideration before the official recovery decision was issued, but it was not accepted.
After adjusting issues such as double taxation, the final amount of arrears was reduced to about 13 billion won, and he paid the full amount.
In early April, during his military service, Cha Eun Woo wrote through social media: "In the process of preparing to establish a company to be able to continue operating more stably amidst many changes and fluctuations, looking back, I realized that I had some things that were not fully considered. This responsibility does not belong to the family or the company but to myself".
This statement was then seen as acknowledging in reality the tax issues arising during the company's operation.
It seemed that the controversy had closed, but Cha Eun Woo's continued petition opened up a new development.
A complaint is an administrative procedure that allows taxpayers to request the cancellation of a tax arrears decision if they believe that the tax authority's tax imposition is inaccurate. This means that the "second round tax confrontation" between Cha Eun Woo and the Korean National Tax Service has begun.
Experts believe that Cha Eun Woo paying enough tax money first and then complaining is a move to avoid penalties for late payment.
According to regulations, if taxpayers do not pay taxes on time, they will have to bear a fine of 0.022% per day (equivalent to about 8%/year). With the amount of 13 billion won, the late payment fine alone exceeded 2.8 million won per day. Therefore, it is likely that he chose to pay the entire amount in advance, then spend nearly 90 days to consider before deciding to start the complaint procedure.
In tax experts, the reaction to this move is quite mixed.
An expert commented: "This is the legitimate right of taxpayers. Even after paying taxes, if there is more evidence or arguments proving that the retroactive collection is inappropriate, it is still possible to request a trial.
However, another opinion said: "This move may make people and fans who have always fulfilled their tax obligations feel disappointed. Only after public opinion calms down do they file complaints, which goes against the spirit of the previous apology notice.
According to predictions, the Tax Court is likely to issue a final conclusion after Cha Eun Woo is discharged from the army in January next year. Cases related to tax arrears of 10-20 billion won in South Korea usually take more than 1 year to reach a conclusion.
If the Tax Court issues a ruling in favor of Cha Eun Woo, he will be refunded the tax paid. In case the complaint is rejected, he still has the right to sue in the administrative court.
