Cha Eun Woo has reportedly returned to his military unit after taking a scheduled leave, amid a growing tax evasion scandal.
OSEN reported on January 26th that Cha took a break earlier this month and has now returned to duty. Having served for about six to seven months, this leave was likely a standard one.
The timing of his break has attracted attention because it coincided with news that the National Tax Service (NTS) notified him of a tax penalty of over 20 billion won ($15 million). The scandal broke just two weeks after he returned to base.
Due to his military service, Cha can’t participate in entertainment activities or make public statements. People are now watching to see if he or his agency, Fantagio, will issue an apology.
Cha Eun Woo’s return to his military unit comes amid mounting scrutiny over a tax scandal involving an alleged 20 billion won ($13.6 million) tax evasion. The National Tax Service (NTS) has accused the star of using a “paper company” to avoid paying higher taxes, which has sparked debate in both the entertainment and legal communities.
The NTS claims Cha used a company registered at his family’s eel restaurant in Ganghwa Island to channel hundreds of billions of KRW in earnings, calling it a “ghost corporation” with no real operations. However, legal experts are divided, with some arguing that setting up a company to pay a lower corporate tax rate doesn’t necessarily constitute fraud or criminal behavior.
The main question now is whether Cha’s actions were an attempt at tax avoidance or if they qualify as outright tax evasion, which could lead to criminal charges. If evidence of fraudulent practices, like paying wages to non-working relatives or manipulating books, is found, Cha could face severe consequences. A key concern is whether the Special Punishment Law will apply, given the 20 billion won involved. Under this law, if the tax evasion amount exceeds 10 billion won, it can lead to life imprisonment or at least five years in prison.
However, this would only apply if “active deceit” is proven. If it turns out to be a misunderstanding, like in Song Hye Kyo’s case, where tax errors led to underreporting, the issue may be settled with a tax payment and fines, without him getting criminal charges.
If evidence is found of record manipulation or payments to non-working relatives, similar to the case with Jang Geun Suk’s mother, the situation could change drastically. Jang’s mother was sentenced to two years and six months in prison, with a four-year suspended sentence. If similar evidence is found against Cha, criminal charges and a potential prison sentence may follow.
Cha’s agency, Fantagio, has yet to comment on the specifics but maintains that the issue is still under review. Meanwhile, both the public and legal authorities are waiting for clarification on whether this will result in just a tax bill or more serious legal action.
