📰 Park Jaehyuk, Tax Accountant: “Cha Eunwoo 20 Billion Won: The Boundary Between Private Autonomy and the Principle of Substantive Taxation” Recently, an issue has shaken both the entertainment industry and the tax community at the same time. The National Tax Service reportedly imposed approximately 20 billion won in additional taxes on top star Cha Eunwoo. This matter is too significant to be dismissed simply as “a celebrity tax issue.” It represents a collision between the structure of income attribution for entertainers, the limitations of operating an agency through a family corporation, and the scope of the principle of substantive taxation under the Framework Act on National Taxes. — Not Concealed Income, but a Chosen Attribution Structure According to reports, Cha Eunwoo established an entertainment agency corporation operated by his family and chose a structure in which a portion of the income generated from his entertainment activities was attributed to that corporation. This is a tax planning method often considered by high-income earners, particularly when taking into account the top personal income tax rate of 45%, local income tax, and the burden of the four major social insurance contributions, which together can push the effective tax rate close to 70%. One point must be made clear at the outset. This case differs in nature from typical forms of tax evasion such as unreported revenue, borrowed-name accounts, or double bookkeeping. The issue is not that income was concealed, but rather to whom the income generated from entertainment activities should be attributed. Cha Eunwoo’s side appears to maintain that the corporation was established transparently, that his entertainment activities were managed through it, and that corporate taxes were duly paid on income attributed to the company. In principle, an individual’s choice of economic structure and the design of transaction arrangements within the bounds permitted by law fall within the realm of private autonomy. — The National Tax Service’s View: Substance Over Form However, the judgment of the National Tax Service differed. It determined that the agency corporation was merely formal in nature and that the income in question was, in substance, attributable to Cha Eunwoo personally, thereby applying the principle of substantive taxation. At this precise point, private autonomy and the principle of substantive taxation collide head-on. A key issue highlighted in the investigation was the corporation’s substantive existence. According to media reports, the registered address of the corporation was not a professional office space but a restaurant operated by the family. Questions were also raised as to whether the corporation had independent personnel or business facilities. From the tax authority’s perspective, a management corporation handling revenues worth tens of billions of won lacked the corresponding human and material infrastructure, and the actual services performed by the corporation were not clearly demonstrated. On the other hand, Cha Eunwoo’s side likely argued that his mother, as the corporation’s representative, handled schedule management, mediated transactions with agencies, and oversaw brand management, including image and portrait rights. On that basis, they may have contended that attributing a portion of the income to the corporation was justified. #CHAEUNWOO #차은우 #이동민 #チャウヌ #车银优 #ชาอึนอู #車銀優