“A net cast to catch a big fish”
1 hour ago
ASTRO member Cha Eunwoo has been making headlines after becoming embroiled in a massive scandal, alleging him of evading around ₩20.0 billion KRW (about $13.8 million USD) in taxes. Amid the scandal, a former National Tax Service (NTS) tax investigator has offered further insight, suggesting that the NTS’s initial target was not Cha Eunwoo but his management, Fantagio.
ASTRO’s Cha Eunwoo | THE FACT
Moon Bo Ra, a tax accountant who served as an investigator at the Seoul Regional Tax Office, where Cha Eunwoo’s case is being handled, uploaded a video via her YouTube channel to explain that the crux of the scandal lies in whether Cha Eunwoo’s “paper company,” reported to be involved in the distribution of Cha Eunwoo’s earnings, had substantive operations.
There is nothing inherently problematic about a structure in which profits are divided through a corporation, but the National Tax Service appears to have viewed this company—owned by Cha Eunwoo’s mother—as a paper company with no real substance.
— Moon Bo Ra
Then she added that the NTS likely followed a trail to this company while aggressively investigating Fantagio, which she referred to as the “main body.”
Tax expert Moon Bo Ra | @Taxbora/YouTube
The original target was Cha Eunwoo’s agency, Fantagio. While examining the books of Fantagio—the main body—they discovered a large sum of money flowing to what was described as an eel restaurant in Ganghwa, and the entity behind it ultimately turned out to be Cha Eunwoo. A net cast to catch a big fish ended up catching another large one. Tax audits aren’t something you can avoid just by being careful—if the tail is long, it’s bound to be stepped on.
— Moon Bo Ra
Based on the reports so far, the NTS believes that by contracting services through a separate family-run company rather than solely through Fantagio, Cha Eunwoo was able to apply a corporate tax rate more than 20 percentage points lower than the individual income tax rate, which can reach 45%.
In response, Fantagio took a protective stance, commenting, “This is not a matter that has been finally confirmed or formally notified, and we plan to actively explain our position through lawful procedures regarding issues of legal interpretation and application.”
Read more about what other experts think about Fantagio’s place in the scandal:
Did Fantagio Help ASTRO’s Cha Eunwoo Evade Taxes? Expert Weighs In