As allegations of ₩20 billion in tax evasion continue to swirl around ASTRO member and actor Cha Eun Woo, a lawyer has raised the possibility that both Cha and his mother could face prison sentences if criminal intent is established.
On YTN Radio’s January 30th broadcast Case fileAttorney Kim Jung Gi of the law firm Law & Liberty shared his legal analysis of the case. He described the alleged tax penalty as unprecedented, stating: “₩20 billion represents the largest tax assessment ever imposed on a single artist in Korea and is extraordinary even by global standards. Most celebrity tax cases involve amounts in the range of up to billions of won.”
Kim added that experts estimate that Cha Eun Woo’s total income would have to exceed ₩100 billion for the tax revaluation to reach such a level, comparing the scale to international cases involving stars such as Fan Bingbing and Cristiano Ronaldo.
According to Kim, the National Tax Service suspects that Cha Eun Woo attempted to avoid the top personal income tax rate of up to 45% by funneling earnings through a company founded by his mother, which would be taxed at a much lower corporate rate of around 20%. “In simple terms, if you earn ₩1 billion as an individual, almost half of it goes to taxes. But if you send it through a corporation, your tax burden can drop dramatically.” he explained. Authorities reportedly believe the company performed no real management functions and was primarily used as a vehicle for tax reduction.
Kim also underlined the seriousness of the investigation handled by the No. Investigation Bureau. 4 of the Seoul Regional Tax Office. “The grim reaper of the business world”, this unit is known for targeting cases of deliberate tax evasion and slush funds. “The fact that Office No. 4 is involved signals that the authorities do not see this as a simple accounting error, but as a potentially serious crime,” Kim said.
Asked whether prison is possible if intent is proven, Kim responded that under Korea’s Law on Aggravated Punishment of Specific Crimes, tax evasion exceeding ₩1 billion can result in life imprisonment or a minimum of five years in prison. He added that not only the mother, as the head of the company, but also Cha Eun Woo himself could be investigated and punished as co-conspirators, depending on who planned and approved the alleged scheme.
Kim also noted that Cha’s current military status will not exempt him from the investigation. Authorities may conduct interrogations at his military unit or while on leave, and coordination with military prosecutors is possible. If necessary, the investigations may continue even after his discharge.
Cha Eun Woo has been embroiled in controversy since January 22, after reports emerged that the National Tax Service conducted an intensive audit of alleged tax evasion through a one-man agency founded by his mother and issued a tax reassessment exceeding ₩20 billion.
Sources: Nate
