ASTRO’s Cha Eun Woo is gearing up for a legal battle against South Korea’s National Tax Service (NTS).
Spotv News reported on January 26th that Cha has hired SHIN & KIM LLC (Sejong), a firm known for handling high-profile cases, including the recent contract dispute involving the K-pop group NewJeans.
The controversy began after the Seoul Regional Tax Office investigated Cha’s business dealings last year. They found that Cha, his agency Fantagio, and a company set up by his mother had a business arrangement designed to reduce taxes. Fantagio signed a service contract with his mother’s company, which then distributed Cha’s income among Fantagio, his mother’s business and Cha himself.
The NTS claims that the mother’s company was a “ghost company” that provided no actual services, and that this arrangement allowed Cha to avoid paying the higher 45% individual income tax rate by using a lower corporate tax rate. The NTS has issued a back tax bill of 20 billion won ($13.6 million), the largest ever imposed on a Korean celebrity.
Cha’s legal team has filed for a “pre-assessment review” to challenge the tax decision. Fantagio is also facing an additional 8.2 billion won ($6 million) in taxes for allegedly processing fake invoices from the mother’s company. The NTS has rejected Fantagio’s appeal.
Cha, who is currently serving in the Army Band, has yet to comment publicly on the matter.
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