Korean 'Face Genius' Cha Eun-woo, who enlisted in the military last July, has been reported for allegedly evading over one hundred million HKD in taxes. According to Korean media, he was investigated by the Seoul Regional Tax Office last spring for tax evasion, allegedly through establishing a shell company under his mother's name. Ultimately, the tax office recovered over 20 billion KRW (approximately 55.04 million MYR) in taxes and penalties – the highest amount ever recovered from a celebrity tax evasion case.
It is reported that Cha Eun-woo’s mother established Company B, which signed a contract with Cha Eun-woo’s agency Fantagio to provide support for his entertainment career. The income from Cha Eun-woo’s activities was then split between Fantagio, Company B, and Cha Eun-woo himself. However, after investigation, the tax office believed Company B was a shell company without any actual business operations. By converting some of Cha Eun-woo’s personal earnings into company revenue, they exploited the lower corporate tax rate to avoid up to 45% in personal income tax, thus cutting the overall tax burden. During the investigation, Fantagio was also found to have falsified tax invoices, resulting in the company being pursued for several billion KRW (approximately 2.75 million MYR) in back taxes last year.
Cha Eun-woo’s side denied any involvement in tax evasion, explaining that multiple changes in Fantagio’s CEO affected the stability of his entertainment career. To protect him, his mother established Company A to directly manage his manager activities. Company A is a formally registered entertainment planning company and not a shell company. Cha Eun-woo has filed an objection to the tax office’s decision and is currently awaiting the outcome of the review.
Fantagio later issued an official statement, saying that the company, together with the artist and their tax representatives, will fully cooperate to resolve this matter as soon as possible. Cha Eun-woo also promised to continue faithfully fulfilling his tax and legal obligations as a citizen.
Source: ONCC