At a time when actor Cha Eun-woo is at the heart of a tax controversy, the Korea Taxpayers’ Association (KTA) has spoken out to denounce the media treatment he is receiving and to recall a fundamental principle of law: the presumption of innocence.
Last July, the actor was subjected to an unplanned tax audit by the Seoul Regional Tax Office. The procedure resulted in a tax assessment of over 20 billion won (over 11 million euros). While this is an impressive sum, to date, no judicial decision has confirmed any infringement.
The organization was keen to clarify the difference between tax optimization and fraud. In her view, taxpayers have the right to legally reduce their tax burden, as long as no court rules that this is illegal. «Tax optimization is a right, not a crime».», KTA points out, with reference to a number of case law precedents, notably in the United States, which assert that a taxpayer can take advantage of legal provisions to reduce his or her tax burden.
Tax authorities accused of abuses
The KTA also commented on the case of a company set up in the name of Cha Eun-woo's mother, presented in certain articles as a «shell company». For the organization, this characterization is unjustified at this stage. «Using this type of term before the outcome of legal proceedings creates an irreversible prejudice», she warned, citing a legal precedent in which a company was cleared by the Supreme Court despite an initial conviction.
What's more, the KTA is sounding the alarm about leaks of information concerning the actor's tax audit. It believes that these revelations probably come from the tax authorities themselves, and is calling for an internal investigation. It points out that the disclosure of confidential tax data is illegal under South Korean law.
Finally, the association criticizes the severity of the Korean tax system, which it deems excessive and dissuasive. It claims that cumulative penalties can exceed 200 % of the initial sum, and that this contributes to tipping some taxpayers into debt or tax delinquency. «Even in cases of irregularity, the penalty must remain measured and allow a return to normal,» concludes the KTA.
In a tense media climate, this public support for Cha Eun-woo aims to restore balance to the debate, by insisting on the need to let justice take its course, without prejudice.
