Allegations of large-scale tax evasion surrounding singer and actor Cha Eun-woo are causing widespread controversy, with a former investigator from the National Tax Service stating that he could potentially acquire a criminal record depending on the outcome of the investigation.

On January 31, the YouTube channel “CIRCLE 21” posted a video titled “200 Billion Won Is Only the Beginning: A Former National Tax Service Investigator Explains the Cha Eun-woo Tax Evasion Case in Detail.”

In the video, Jung Hae-in, Executive Director at a tax firm and former National Tax Service investigator, appeared to analyze the structure of the alleged tax evasion case involving Cha Eun-woo and approximately 20 billion KRW (around 200 billion KRW) in unreported income.

Jung explained, “Lately, there’s been a lot of talk about Cha Eun-woo. Originally, this kind of case wouldn’t be handled by Investigation Bureau 4, but by Bureau 2. There are two key differences here.” He noted, “The issue boils down to whether Cha Eun-woo declares income as an individual or through a corporation he established. There’s a big difference in tax rates: Individual income tax sits at 50%.”

He continued, “To be precise, individual income tax is 50%, while corporate tax is 20%. If someone runs their income through a corporation and pays just 20%, the National Tax Service would notice and question, ‘He should be paying 50%, so why is he only paying 20%? Isn’t there a problem?’”

Jung further explained, “Bureau 2 covers investigations of individuals, especially entertainers, typically handling cases involving income under 100 billion KRW, while larger sums are assigned to either Bureau 1 or Bureau 4 accordingly.”

He added, “Although it’s not certain, there’s a high chance that Cha Eun-woo’s earnings may exceed 100 billion KRW.”

Jung highlighted, “The root of the problem is that, although individual tax rates and corporate rates are known, the corporate entity in question does not appear to be functioning normally. I heard the registered address is a local eel restaurant and there are no employees. It seems Cha Eun-woo’s mother is listed as the CEO. Anyone would find it suspicious.”

He further remarked, “If this corporation were functioning legitimately—with other affiliated entertainers, ongoing business activities, and a real office—this situation would not have arisen.”

“Even if there were issues over distribution ratios among affiliated artists, the authorities wouldn’t take such a hard stance,” Jung stated.

He pointed out, “Here, the corporate entity’s legitimacy is entirely unrecognized. The corporation was seemingly established only to reduce the individual’s income tax, using what’s considered a ‘one-man agency’ not for operational business but merely as a shell.”

Crucially, Jung stated, “It would actually be lucky if he avoids prosecution, because Bureau 4 usually investigates with the intention to prosecute. If the prosecution determines that he committed tax evasion under the law, Cha Eun-woo could end up with a criminal record for tax fraud.”

Note “This article was translated from the original Korean version using AI assistance, and subsequently edited by a native-speaking journalist.”

Photo=MHN DB