车银优因涉“个人公司”安排面临约200亿韩元税务评估

Singer and actor Cha Eun-woo of boy group ASTRO has been notified by South Korea’s National Tax Service (NTS) of a tax assessment exceeding 20 billion KRW, related to alleged income tax evasion. The amount is reportedly one of the largest ever imposed on a celebrity. The notice stems from the results of a tax audit conducted before Cha enlisted in the military in July last year. Cha’s side has filed a pre-assessment review request, formally disputing the NTS’s decision, and is currently awaiting the outcome.

Tax Allegations and Investigation Findings

According to exclusive reporting, Cha underwent an intensive investigation last spring by the Seoul Regional Tax Office’s Investigation Division 4. The alleged scheme mirrors recent cases involving celebrities accused of reducing taxes through so-called “one-person agencies.” In such arrangements, an artist or a family member establishes a separate company that signs service contracts with the original management agency, allowing income to be split and taxed at a lower corporate rate rather than a higher personal income tax rate.

In Cha’s case, authorities allege that a corporation established by his mother was inserted between Cha and his agency Fantagio. Fantagio reportedly entered into a service agreement with the mother-run company to support Cha’s entertainment activities, after which income from Cha’s work was distributed among Fantagio, the corporation, and Cha himself. The NTS concluded that the company did not provide substantive services and functioned as a paper entity, allegedly created to reduce income tax obligations that could reach up to 45%, by shifting earnings to a corporate tax rate more than 20 percentage points lower.

Tax industry sources claimed the company’s registered address was in a location inconsistent with entertainment operations and lacked a functional office. While expenses were reportedly processed through company-owned luxury vehicles, investigators allegedly found no evidence of distinct services separate from Fantagio’s role. As a result, the NTS declined to recognize the company’s legitimacy, leading to repercussions for both Cha and Fantagio. Fantagio was reportedly hit with an 8.2 billion KRW tax assessment last August, after authorities determined it had processed false tax invoices linked to the company. Fantagio’s own appeal reportedly did not change the outcome.

Following separate questioning of Cha and his mother, the NTS concluded that the financial benefits accrued through the company ultimately flowed back to Cha, determining that more than 20 billion KRW in income tax had gone unpaid. At Cha’s request, the NTS reportedly waited until his military enlistment procedures were completed before issuing the final audit notice.

Responses from Cha Eun-woo’s Representative and Fantagio

Cha’s representatives maintain his innocence, arguing that the company was established out of concern for stability amid frequent changes in Fantagio’s leadership and to personally manage his activities. They insist, “During a period when Fantagio underwent multiple changes in its chief executive leadership, instability in entertainment activities became a growing concern. To safeguard her son’s career, his mother directly took charge of operating the management business. Company A is a formally registered enterprise in the field of popular culture and entertainment planning and management.”

If the pre-assessment review is accepted, the tax notice could be withdrawn. If rejected, Cha would be required to pay the assessed amount, though further legal avenues such as an appeal to the Tax Tribunal would remain available. His team is reportedly also considering bypassing the current review to pursue a direct appeal.

Fantagio also released an official statement, saying, “The key issue in the tax investigation concerning Cha Eun-woo is whether the corporation established by his mother qualifies as a subject of substantive taxation. This matter has not yet been finalized or officially notified, and it involves questions related to the interpretation and application of the law. We intend to actively present our explanation through appropriate legal procedures.”

The company added: “To ensure that the process is concluded as swiftly as possible, the artist and his tax representatives will cooperate in good faith. Cha Eun-woo also pledges to continue faithfully fulfilling his tax reporting obligations and legal duties as a citizen.”

It has also emerged that Cha was not the original target of the investigation. The probe reportedly began with alleged tax issues involving Namgoong Gyeon, chairman of Mirae ING and owner of Fantagio. As investigators examined a group of companies linked to Namgoong Gyeon, the mother-run corporation connected to Cha reportedly surfaced, causing the investigation to expand and ultimately include the star.

Sources: Daum

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