Cha Eun Woo under investigation for tax evasion

Actor and idol Cha Eun Woo is under investigation by Korea's National Tax Service for tax evasion. 

On January 22, it was reported that Cha Eun Woo had received a notice from the National Tax Service that he owes over 20 billion won (approx. 13.6 million USD) in additional taxes, including income tax, on charges of tax evasion. 

The notice comes from a tax audit carried out prior to Cha Eun Woo's enlistment in the military in July of last year. Cha Eun Woo's side has objected and is now waiting for the results of a pre-assessment review submitted to contest the National Tax Service's decision.

The main focus of the allegations centers on Cha Eun Woo's one-man agency, Corporation A, which authorities saw as a means to minimize income taxes. The accusations mirror a pattern seen in recent celebrity tax evasion cases involving so-called "one-man agencies." In such cases, even when a celebrity is already contracted to an established entertainment agency, they — or their family — set up a separate company that enters into a service agreement with the main agency, allowing income to be redirected in a way that reduces tax obligations.

According to the reports, Seoul Regional Tax Office's Investigation Division 4 carried out the investigation into Cha, which involves Ms. Choi, Cha Eun Woo's mother, who is reported to have established Corporation A that entered into a service contract with Fantagio for support related to his entertainment activities. Thenceforth, Cha Eun Woo's income was split between Fantagio, his one-man agency, and Cha Eun Woo himself.

The National Tax Service determined that the company in question was essentially a "paper company" that did not provide any actual services. It concluded that the corporation was used to reduce personal income tax, normally as high as 45%, by dispersing income through a corporation subject to a corporate tax rate more than 20 percentage points lower.

In response, Corporation A stated, "There was significant concern over the stability of his entertainment activities as the CEO of Fantagio changed several times, and to tackle this, [Cha Eun Woo's] mother operated the business," adding, "Corporation A is a company officially registered as a popular culture and arts planning business."

Fantagio also issued a statement, "The key issue regarding Cha Eun Woo's tax investigation is whether the corporation established by his mother actually qualifies as an entity subject to substantive taxation," adding, "This matter has not yet been determined or officially notified, and we plan to actively provide explanations in accordance with proper legal procedures regarding the points of contention related to the interpretation and application of the law."

Meanwhile, Cha Eun Woo is currently serving in the army, with his discharge expected on January 27, 2027.

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