Cha Eun-woo's Tax Controversy: Unpacking the $13.7 Million Discrepancy and Ongoing Legal Dispute

Few controversies hit South Korea’s celebrity world harder than tax allegations — and now K-pop and K-drama star Cha Eun-woo finds himself at the center of one.

The ASTRO singer and actor is under scrutiny by South Korea’s National Tax Service (NTS) over an alleged 20 billion won (roughly $13.7 million) tax shortfall tied to a company registered under his mother’s name. While Cha hasn’t been criminally charged, the case has already caused commercial fallout and sparked intense public debate.

Here’s what we know so far.

According to tax authorities, the controversy revolves around a business reportedly established by Cha Eun-woo’s mother, widely reported as Cha’s Gallery, along with later successor entities.

Investigators allege the company may have been used to funnel Cha’s entertainment income in a way that allowed it to be taxed at lower corporate rates instead of the higher personal income tax brackets, which can reach 45% in South Korea.

The NTS reportedly concluded that the firm lacked real business substance — what’s known as a “paper company” — and assessed that taxes were underpaid by more than 20 billion won.

Though Cha Eun-woo is officially represented by Fantagio, authorities claim his earnings were split between Fantagio, the company under his mother’s name, and Cha himself. They argue that this setup reduced his tax burden by more than 20 percentage points.

If correct, the total income involved could exceed 100 billion won, making this one of the largest tax disputes involving an individual entertainer in South Korea.

Legally, the distinction is crucial.

Tax evasion would require proof that the company was created primarily to hide income, which could lead to criminal charges. Tax avoidance, by contrast, is a civil matter — Cha would simply need to pay the unpaid taxes, with no trial.

Nova Law Firm attorney Lee Don-Ho explained on YouTube that investigators will look at whether the company:

“Using a corporation alone does not equal tax evasion,” he noted. “The question is whether it functioned as a real business.”

Korean outlet Dispatch reported that Cha’s Gallery was founded in July 2019, with Cha Eun-woo listed as CEO, his mother as internal director, and his father handling finances.

The company’s official scope spanned 34 business areas — from artist management to music production, theme parks, and food services — an unusually broad remit for a single entertainer. By 2022, its registered address had moved to Ganghwa Island, home to Cha’s parents’ eel restaurant, a detail that fueled online speculation.

The company was dissolved in 2024, after which Cha’s mother reportedly established new entities, including D ANY LLC, allegedly to manage Cha’s assets. As recently as January 2026, the registered address appeared unfinished and unused, raising further questions.

Fantagio has strongly denied wrongdoing, stating that Cha Eun-woo filed a pre-assessment review to contest the NTS findings and that no final determination has been made. The company under his mother’s name, they say, is a legitimate cultural and arts planning entity.

“The key issue is whether this company qualifies as a valid subject of taxation,” Fantagio said, adding that Cha will continue to fulfill all legal obligations.

On January 26, while serving mandatory military service, Cha posted an apology on social media regarding the alleged 20 billion won tax shortfall.

“I will humbly accept the final judgment made by the relevant authorities and take full responsibility in accordance with the outcome,” he wrote, according to The Korea Herald. He added that he was “deeply sorry” over the controversy and vowed to “comply faithfully with all tax-related procedures going forward.”

This statement came four days after Fantagio released an initial statement clarifying that the matter had not been “finally confirmed or officially notified” and that they would “actively clarify” their position through legal channels.

Cha Eun-woo debuted with boy group ASTRO in 2016 and quickly rose to fame as one of K-drama’s leading men, starring in hits like My ID is Gangnam Beauty (2018), True Beauty (2020-2021), Island (2022-2023), and A Good Day to Be a Dog (2023-2024). He launched a solo career with the EP Entity in February 2024.

Nicknamed “Genius Face” for his looks, Cha is known for his massive fan following, boasting over 16 million Instagram followers, and is repeatedly ranked among the world’s most handsome men.