South Korean actor and K-pop star Cha Eun-woo is under investigation for alleged tax evasion totaling 20 billion won (US$13.6 million). Multiple brands, including Shinhan Bank and skincare label Abib, have removed or sidelined advertisements featuring Cha amid the allegations.
Immediate Action & Core Facts
The National Tax Service (NTS) notified Cha of a substantial additional tax assessment after determining that a company founded by his mother functioned as a shell entity to reduce his tax burden. The investigation found that earnings were channeled through the company to lower Cha’s income tax rate by more than 20 percentage points.
Cha’s team has filed for a pre-assessment review to contest the NTS’s findings before a final decision is issued.
Deeper Dive & Context
Allegations and Investigation
The NTS’s Seoul Regional Tax Office’s Investigation Division 4, which handles major tax evasion cases, conducted an audit in July 2025. The investigation revealed that Cha’s mother established a one-person company that signed a service contract with his agency, Fantagio, to manage his entertainment activities. Tax authorities concluded that the company did not provide actual services and was a “paper company” created to reduce Cha’s tax liability.
The company’s registered address was in a remote area of Ganghwa Island, which tax authorities deemed unsuitable for entertainment-related business. Despite multiple imported cars and expenses registered under the company, no differentiated services were provided compared to Fantagio.
Brand Reactions
Several brands, including Shinhan Bank and skincare label Abib, have removed or set to private advertisements featuring Cha on their social media accounts. Wellness firm BodyFriend is reportedly considering replacing him in its promotional campaigns.
Legal and Financial Implications
The NTS concluded that the financial benefits accrued through the company ultimately went back to Cha, leading to the tax evasion allegations. Both Cha and his mother were summoned for questioning. Fantagio is also under scrutiny for processing false tax filings related to the arrangement.
Cha’s legal team has filed for a pre-assessment review, a formal procedure allowing taxpayers to contest a tax authority’s interpretation before a final decision is issued.
Broader Context
This case highlights the scrutiny faced by high-profile entertainers in South Korea regarding tax compliance. The use of shell companies to reduce tax liabilities has been a recurring issue in the entertainment industry, with authorities increasingly cracking down on such practices.