Everything appeared to be planned.
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ASTRO Cha Eunwoo‘s meticulous tax evasion strategy was shared by Korean media.
According to an exclusive report from Sports Kyunghyang, Cha Eunwoo’s alleged tax evasion was carefully planned by both him and his mother. Cha Eunwoo’s mother established Cha’s Gallery in 2019 and Cha Eunwoo is listed as an internal director. However, his mother changed the organizational structure and company name to D ANY LLC in September 2024.
ASTRO’s Cha Eunwoo Accused Of Tax Evasion Totaling Up To $13.7 Million USD
The issue with the company reorganization is due to the location of the company’s registration and status. When originally formed, the company was a one-person agency registered in Gimpo. However, it was changed to a limited liability company, or LLC, and also relocated its business address to the same address as an eel restaurant on Ganghwa Island in Incheon, which is run by Cha Eunwoo’s parents.
One issue that was brought up with these changes was that by transitioning the company from a one-person agency to a LLC, Cha Eunwoo and his mother would avoid regulatory audits, since LLCs are not subject to them. Another issue is that LLCs have no legal obligation to publicly disclose financial statements, making it difficult to identify tax evasion.
In addition, the relocation of the company’s address from Gimpo to Ganghwa Island is being noted for being an intentional and strategic move to avoid taxes. Under Korea’s Capital Region Planning Act, Ganghwa Island is classified as an area designated for growth management, meaning companies established there can avoid taxes when acquiring real estate. D ANY LLC added real estate leasing to its list of business operations, suggesting they were looking to take advantage of this. The company is also accused of running D ANY LLC as a paper company, since the address is the same as his parents’ eel restaurant.
Based on these findings, the National Tax Service deduced that Cha Eunwoo diverted his income to D ANY LLC, due to its much lower tax rate. Normally, he would have to pay the highest income tax rate of 45%. With this, the National Tax Service served him a notice for ₩20.0 billion KRW (about $13.7 million USD). This would be the largest tax evasion case in Korean Entertainment history, and the 6th highest in the world. Fan Bingbing’s famous tax evasion case of 2018 totaled ₩144 billion KRW (about $98.4 million USD), while Zheng Shuang [₩54.0 billion KRW (about $36.9 million USD)], Cristiano Ronaldo [₩28.0 billion KRW (about $19.1 million USD)], Willie Nelson [₩22.0 billion KRW (about $15.0 million USD)], and Shakira [₩21.0 billion KRW (about $14.3 million USD)] are the only known celebrities with higher tax evasion fines than him.
Cha Eunwoo’s agency stated that they are still investigating the case, and will release a statement through their legal counsel once they are done verifying the information in the case.
Source: Sports Kyunghyang