Tax service says Cha Eun-woo on the hook for $13M evaded through shell company

Singer and actor Cha Eun-woo has been accused of evading taxes worth 20 billion won ($13.6 million) by establishing a paper company under his mother's name.

Singer and actor Cha Eun-woo poses for photos during the opening of Swiss luxury watch brand Audemars Piguet’s Asia-Pacific flagship store in the Seongsu-dong neighborhood of Seongdong District, eastern Seoul, on Nov. 22, 2024. [NEWS1]

Singer and actor Cha Eun-woo has been accused of evading taxes worth 20 billion won ($13.6 million) by establishing a paper company under his mother's name.

Cha was subject to an investigation by the NTS Seoul Regional Office in the spring of 2025 on suspicion of tax evasion, according to an exclusive report by local outlet Edaily on Thursday.

He reportedly signed a subcontractor contract with a company founded by his mother, thereby splitting his gains between himself, his agency Fantagio and the company founded by his mother, surnamed Choi.

The NTS concluded that the subcontractor did not provide any real services and was merely a paper company that diverted Cha's income to the corporation so that it would instead be taxed at a corporate rate, more than 20 percentage points lower than the 45 percent for personal income taxes.

The notice stems from a tax audit conducted before Cha enlisted for his mandatory military service in July 2025. He has appealed the decision to the NTS and is currently waiting for the results of a pre-taxation review he requested to contest the NTS decision, according to reports.

Actor and singer Cha Eun-woo emcees the APEC summit gala dinner at the Lahan Select hotel in Gyeongju, North Gyeongsang, on Oct. 31, 2025. [YONHAP]

Fantagio was slapped with an additional tax bill of 8.2 billion won in August of last year by the NTS Seoul Regional Office for this reason. The NTS determined that the company had processed “false tax invoices” issued by the shell company, and imposed additional taxes including value-added tax. Fantagio also requested a pre-taxation review, but the outcome did not change.

After separately summoning Choi and Cha for questioning, the NTS concluded that the benefits the corporation reaped ultimately flowed back to Cha, and that he had failed to pay more than 20 billion won in income tax. At Cha’s request, the NTS is said to have waited until he completed his enlistment procedures before sending him the formal notice of the audit results.

Fantagio did not deny the allegations but only stated that the matter has not been declared final by the authorities.

"No final decision or tax bill has been issued yet," said the agency in a press release on Thursday, following the media report. "We plan to fully explain our position on how the law should be interpreted and applied, following all proper legal procedures."

"Cha will continue to faithfully fulfill his tax filing and other legal obligations as a responsible citizen," added the agency.

BY KIM MIN-YOUNG [kim.minyoung5@joongang.co.kr]