On January 31, a video titled ₩20 Billion Is Not the End: A Former NTS Investigator Explains the Core of Cha Eun-woo’s Tax Case was uploaded to the YouTube channel CIRCLE 21 . In the video, Jung Hae-in, former NTS investigator and current executive director at Jeong Hae-in Tax Firm, offered a detailed breakdown of the controversy involving Cha Eun-woo.
According to Jung, the case centers on whether Cha Eun-woo reported his income as an individual subject to income tax or through a private corporation subject to corporate tax. “The tax rate difference is significant, income tax can reach 50%, while corporate tax is around 20%,” Jung explained. He added that the National Tax Service may have questioned why income that should have been taxed at a higher individual rate was instead processed through a corporate entity.
Jung further claimed that the corporation in question, established by Cha Eun-woo’s mother, showed signs of being a paper company, citing the absence of employees, unclear business activity, and an unusual registered address. “If this were a legitimate operating company, there would be staff, business operations, and possibly other artists,” he said, arguing that the structure appeared designed primarily to reduce tax liability.
He also noted that tax authorities had been monitoring similar arrangements in the entertainment industry for several years, suggesting Cha Eun-woo’s case only gained widespread attention due to his high public profile. Jung described the issue as falling into a gray area between tax avoidance and tax evasion, but stressed that if a corporation lacks substance, the case leans closer to evasion.
Addressing potential legal consequences, Jung warned that investigations handled by the NTS’s Fourth Bureau are typically conducted with criminal charges in mind. “If prosecutors determine this constitutes tax evasion, it could result in a criminal record,” he said, adding that cases involving amounts exceeding ₩3 billion may fall under aggravated punishment laws, potentially explaining why the case escalated to a high-level investigation.
Jung contrasted the situation with entertainers like Yoo Jae-suk, who reportedly emerged from past tax audits with no additional assessments. “From a tax investigator’s perspective, minimizing long-term risk is more important than aggressively reducing taxes,” he said.
Most notably, Jung criticized Cha Eun-woo’s public response. “If I were in his position, I would admit fault quickly, apologize, and accept responsibility,” he stated. “By hiring major law firms and disputing the case, the public perception becomes, ‘He committed tax evasion and is trying to deny it.’ That damages his image far more.”
Cha Eun-woo reportedly underwent a high-intensity investigation by the Seoul Regional Tax Office’s Fourth Bureau last year, resulting in a notice demanding over ₩20 billion in additional taxes one of the largest sums ever levied against an entertainer. Tax authorities allegedly determined that the corporation set up by his mother functioned as a shell company, enabling income to be taxed at a corporate rate roughly 20 percentage points lower than the individual income tax rate.
In response, Cha Eun-woo requested a formal review of the tax assessment through administrative procedures. His agency Fantagio stated on January 22 that the case has not been finalized and hinges on whether the corporation qualifies as a legitimate taxable entity, emphasizing that they will actively clarify the matter through legal channels.
Cha Eun-woo also addressed the controversy personally in a handwritten statement on January 26, explaining that his current military service was not an attempt to avoid scrutiny and pledging to cooperate fully with tax authorities. Fantagio later released a second statement urging the public to refrain from speculation until official conclusions are reached.
As the investigation continues, the case has sparked broader debate about tax practices among top entertainers and the balance between legal tax planning, ethical responsibility, and public trust.
Sources: Daum