Cha Eun Woo could face huge financial losses if advertisers demand compensation for damages due to his tax scandal. Industry experts even predict that in the worst-case scenario, compensation could exceed 100 billion won ($69 million).
Advertising contracts often include a morality or image maintenance clause. If a celebrity damages a brand’s image, they not only have to return the modeling fee but also pay a penalty of two to three times the fee. When factoring in production costs, media penalties, and the expense of removing promotional materials from stores, the total compensation could become astronomically high. Given his global ambassador roles, if many advertisers file claims, both Cha Eun Woo and his agency could face severe financial pressure.
Meanwhile, the Korean Taxpayers’ Association defended Cha Eun Woo, stating that “tax avoidance is a taxpayer’s right.” They argued that tax avoidance is legal if done properly and falls under taxpayer rights. They also noted, “If tax avoidance is successful, it becomes tax saving, and if it fails, it becomes tax evasion.” They pointed out that it’s often unclear whether tax avoidance is legal until a Supreme Court ruling is made. The association also defended the company set up under Cha Eun Woo’s mother’s name, arguing that calling it a “paper company” goes against the principle of innocence until proven guilty.
The Taxpayers’ Association emphasized the principle of “innocent until proven guilty,” urging that Cha Eun Woo’s case should be treated with that in mind. However, doubts are growing over the possibility of intentional tax evasion. The company registered under Cha Eun Woo’s mother’s name operates an eel restaurant, not an entertainment-related business. The allegation is that income, which should have been taxed at the high rate of 45%, was funneled through the company to lower the tax burden.
Many workers who pay taxes regularly have expressed concerns over the notion that “tax avoidance is a taxpayer’s right,” feeling it creates an unfair contrast with their own tax obligations.
Online communities are filled with complaints, with users expressing their frustration: “What is life? I’m tired of working hard just to make ends meet,” “Some people can’t even make 2 million won ($1,389), while others avoid 20 billion won ($13.6 million) in taxes,” and “The celebrity culture problem is out of control.”
>> Lawyer Explains Cha Eun Woo’s $13.6 Million Tax Case: Could It Actually Lead to Criminal Charges?
In the meantime, watch trending K-dramas for free on Amasian TV and OnDemandKorea.
