Korean star Cha Eun-woo in trouble for alleged tax evasion

Tax-related allegations against a star in South Korea do not only mean legal trouble. They also directly affect his popularity. The country's popular singer and actor Cha Eun-woo is now facing that reality. The South Korean National Tax Service (NTS) is investigating the member of the K-pop band Astro for alleged tax evasion of about 200 billion won (about $13.7 million). Although no criminal charges have been filed against him yet, the controversy has already had a strong impact on the commercial market.

According to the NTS's allegations, a part of Cha Eun-woo's entertainment income was shown through a company registered in the name of her mother. Investigators believe that the company had no real business activities, but existed only on paper. Through this, corporate income was shown instead of personal income, so that relatively low taxes had to be paid. Tax officials estimate that more than 20 billion won in taxes were underpaid in this way.

Further doubts have arisen about the way the income was distributed. According to the tax office, Cha Eun-woo's income was reported in three parts—her agency Fantagio, a company registered in her mother's name, and her personal income. This is claimed to have reduced the total tax rate by more than 20 percent. If this assessment is upheld, the actual amount of income could be more than 100 billion won, which has sparked a major controversy in the Korean entertainment industry.

Even without a legal ruling, commercial reactions have begun. Several banks, cosmetics, and healthcare brands are quietly pulling her ads or renegotiating contracts. Cha Eun-woo's agency, on the other hand, denies all allegations and claims that the company is legitimate and that they will fight the legal battle. Cha Eun-woo himself could not speak out in this controversy as he is currently in military training.

Source: Gulf News