[OSEN, by Wooyoung Jang] The advertising industry is increasingly distancing itself from Cha Eun-woo, a member of ASTRO and actor, who is under suspicion of tax evasion amounting to 20 billion won. Following sectors like beauty, finance, fashion, and education, even corporate subsidiaries are choosing to cut ties, indicating the seriousness of the matter.
According to OSEN on the 27th, SSG.com, which had appointed Cha Eun-woo as a beauty-exclusive model last year, has switched his featured videos to private on their YouTube channel. Although the reason for making them private was not disclosed, it’s inferred to be a consequence of the tax evasion allegations emerging. This step mirrors actions taken by others in the industry.
The withdrawal from advertising isn’t new concerning Cha Eun-woo. The skincare brand Abib also made his ad videos and posts private, followed by similar actions from organizations in finance, fashion, and education sectors, such as Shinhan Bank, Marithe Francois Girbaud, and Daesung My Mac. Moreover, even after Cha Eun-woo and his agency Fantagio issued a statement, SSG.com chose to make the advertisements private. Furthermore, the Ministry of National Defense, where Cha is currently serving, had the Korea Defense Network’s YouTube channel ‘KFN Plus’ switch content featuring him as a storyteller to private.
Last year, the Seoul Regional Tax Office conducted an intensive investigation into Cha Eun-woo over tax evasion allegations involving a one-person agency established by his mother. The reports indicated that Cha Eun-woo operated through a service contract with his agency Fantagio and his mother’s entity, splitting income among the agency, the personal agency, and himself.
However, the tax authorities considered his mother’s company more of a paper entity, not genuinely providing services. They believed Cha and his mother set up the corporation to allocate income and apply the corporate tax rate, which is 20% lower, to avoid the 45% income tax.
Cha Eun-woo’s side stated, “The main issue is whether the corporation established by Cha Eun-woo’s mother is the subject of actual taxation. The matter hasn’t been finalized or notified as of yet, and we plan to actively explain the issues related to the interpretation and application of the law through appropriate procedures. The artist and tax representative will cooperate sincerely to resolve this promptly.”
On the 26th, four days after the controversy erupted, Cha Eun-woo issued a statement expressing, “I sincerely apologize to everyone for causing concern and disappointment with the various issues related to me recently. This incident has made me reflect deeply on whether I have been sufficiently rigorous in fulfilling my duty to pay taxes as a citizen of the Republic of Korea.” Fantagio also added, “We will once again review our management system of artists and supplement and strengthen necessary systems to prevent similar controversies from recurring in the future.”
Furthermore, on the 27th, Fantagio released another statement affirming, “The issue raised is currently in the stage of fact-checking as per the tax authorities’ procedures, with the agency and the artist fully cooperating within the required scope. If the legal and administrative judgments become clear in the future, we will responsibly implement necessary actions based on the outcomes. We urgently request restraint from unwarranted assumptions, unverified information spread, and excessive overinterpretation of the assertions and doubts being raised by some.” /elnino8919@osen.co.kr