Cha Eun-woo Under Investigation for Massive Tax Evasion Allegations
South Korean actor and singer Cha Eun-woo, a prominent figure in the K-pop industry, has become embroiled in a significant tax controversy. The Seoul Regional National Tax Service Investigation Bureau 4 has notified him of potential additional tax liabilities exceeding 20 billion Korean won (approximately $13.6 million or £11.6 million). This case revolves around corporate structures allegedly connected to his family that may have been used to reduce tax payments.
Details of the Tax Arrangement and Corporate Network
Authorities allege that a corporation established by Cha Eun-woo's mother, initially known as Cha’s Gallery and later succeeded by other entities, was utilized in a tax arrangement. This structure reportedly allowed income from his entertainment career to be taxed at lower corporate rates instead of higher personal income tax brackets. Investigators claim the company functioned as a "paper company" with no substantive business operations, leading to underpaid taxes.
An investigation by Dispatch revealed an intricate family business network. Cha’s Gallery was established in July 2019, with Cha Eun-woo listed as CEO, his mother as internal director, and his father as finance manager. The company's official scope covered 34 diverse areas, including:
- Music production and artist management
- Concert organization and advertising
- Theme parks and food services
This unusually broad range of activities for an entertainment career raised questions about its legitimacy. The company underwent multiple relocations from Anyang to Gimpo City in 2020, then to Ganghwa Island in 2022, where Cha’s parents operate an eel restaurant.
Successor Companies and Ongoing Scrutiny
After Cha’s Gallery was dissolved in 2024, Cha’s mother reportedly established new entities, including L&C LLC and D ANY LLC, the latter described as intended for managing Cha Eun-woo’s assets. However, Dispatch noted that as of January 2026, D ANY LLC’s business address appeared unfinished and unused, with exposed walls and rusting beams. This observation further fueled suspicions about the nature of these businesses.
The investigation suggests that multiple company formations and relocations may have been intended to benefit from limited liability company structures, which typically have fewer disclosure requirements and regulatory oversight. If the alleged tax evasion amount of 20 billion won represents an avoided personal income tax rate of around 45%, the underlying income that was diverted could exceed 100 billion won, placing this case among the largest tax disputes involving an individual entertainer in South Korea.
Legal Response and Commercial Fallout
Cha Eun-woo’s legal team has contested the National Tax Service’s assessment, filing a pre-assessment review and arguing that the company under his mother’s name is a legitimate, registered entity in popular culture and arts planning. His agency, Fantagio, echoed this position, stating that "nothing has been finally confirmed or officially notified at this time" and committing to cooperating with the legal process.
The controversy has already triggered commercial consequences. Several brands associated with Cha Eun-woo, including skincare label Abib and financial promoter Shinhan Bank, have removed or hidden marketing materials featuring the star following the allegations. This response highlights how reputational issues tied to tax disputes can significantly affect corporate partnerships in the entertainment industry.
Current Status and Military Service Context
Cha Eun-woo is currently fulfilling his mandatory military service, having enlisted in July 2025, with an expected discharge scheduled for January 2027. The timing of the tax notice—issued while he is away from regular public duties—has been noted in media and social discussions. Authorities emphasize that the case is part of a formal tax audit process and remains under review.
At present, no criminal conviction has been announced. The matter centers on the interpretation of tax law and whether the corporate entities linked to Cha Eun-woo’s family should be treated as legitimate operational companies for tax purposes or as mechanisms for reducing tax liability. The outcome of this case could set important precedents for how entertainment earnings are taxed in South Korea.
