Cha Eun Woo has filed an appeal with South Korea’s National Tax Service after paying approximately 13 billion won (about $9 million) in additional taxes following a tax investigation.
EDAILY reported on August 2nd that Cha Eun Woo submitted the appeal to the Tax Tribunal early last month, arguing that the tax assessment imposed by the National Tax Service was unfair. The appeal was filed shortly before the 90-day deadline following his receipt of the tax notice.
His agency, Fantagio, confirmed the filing, stating, “Cha Eun Woo has submitted a tax appeal through the proper legal process to receive a fair judgment. Since this matter is currently under review, it is difficult to comment on specific details.”
The tax controversy first emerged in January following reports that Cha Eun Woo was investigated by the Seoul Regional National Tax Service’s Investigation Bureau 4 over alleged tax issues involving a corporation registered under his mother’s name.
The company, which was solely owned by his mother and served as the only agency managing his entertainment activities, was reportedly deemed by the National Tax Service to be a “ghost company” that did not provide actual business services. As a result, authorities issued a tax assessment estimated at around 20 billion won ($14 million).
Cha Eun Woo’s side previously requested a pre-assessment review to challenge the tax decision, but the request was rejected. After adjustments, including deductions related to double taxation, he ultimately paid approximately 13 billion won ($9 million) in additional taxes in full.
While serving in the military, Cha Eun Woo addressed the controversy in April after completing the payment. In a social media post, he wrote that he had established the corporation to create a more stable foundation for his career but admitted, “There were parts of the process that were not carefully reviewed enough. The responsibility lies with me, not my family or my company.”
The statement appeared to bring the controversy to an end at that time. However, his latest appeal has reopened the dispute.
A tax appeal is an administrative process that allows taxpayers to challenge a tax assessment if they believe it was incorrectly imposed. By filing the appeal, Cha Eun Woo is seeking to have the National Tax Service’s decision reviewed and potentially overturned.
Experts believe his decision to pay the taxes first and appeal later may have been intended to avoid additional late-payment penalties. In South Korea, unpaid taxes can accumulate daily penalties of 0.022% (8% annually), meaning unpaid taxes of 13 billion won ($9 million) could result in millions of won in additional charges each day.
Reactions from tax experts have been mixed. One industry official said, “Filing an appeal is a legitimate right of taxpayers. Even after paying the taxes, a person can still challenge the assessment if they have sufficient evidence to prove it was unfair.”
Another official, however, criticized the move, saying, “Could this disappoint the public and fans who have faithfully paid their taxes? It also seems inconsistent with his previous apology.”
The Tax Tribunal’s final decision is expected after Cha Eun Woo completes his military service in January next year. Based on recent statistics, tax cases involving disputed amounts between 10 billion and 20 billion won ($7 million to $14 million) typically take about a year or longer to resolve.
If the Tax Tribunal rules in Cha Eun Woo’s favor, he could receive a refund of the taxes he paid. If the appeal is rejected, he may pursue further legal action through an administrative lawsuit.
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