In the wake of mounting allegations of tax evasion, ASTRO's Cha Eun-Woo has addressed the controversy surrounding a reported ₩20 billion (approximately Rs 126.5 crore) tax bill demanded by South Korea's National Tax Service (NTS). The popular singer and actor, currently serving his mandatory military service, took to social media on January 26 to express his remorse and offer an apology to his fans.
The allegations stem from a tax audit conducted in the first half of 2025, prior to Cha Eun-Woo's enlistment in July. Reports suggest that the NTS notified Cha Eun-Woo last year regarding the additional income taxes owed. The investigation reportedly centers around a company, referred to as "Cha's Gallery" or "A Corporation," established in October 2022 and registered under the name of Cha Eun-Woo's mother, Choi. The company's initial registration address is the same location as an eel restaurant reportedly run by Cha's parents.
According to reports, Cha Eun-Woo allegedly signed a management service contract with his mother's corporation, which allowed him to be taxed at a lower corporate tax rate instead of the higher individual income tax rate.
In his statement, Cha Eun-Woo did not explicitly deny the allegations. Instead, he stated that he would "humbly accept the final results of the tax authorities' investigation" and expressed deep remorse for causing concern among his fans and the public. Fantagio, Cha Eun-Woo's agency, stated on January 22nd that they plan to clarify issues related to legal interpretation and application through proper procedures. The agency contends that the primary issue is whether the corporation established by Cha Eun-Woo's mother qualifies as a legitimate taxable entity. They emphasized that the case has not been finalized or officially notified.
Tax law experts suggest that this case is more serious than a routine tax adjustment and could lead to criminal prosecution if intent to evade taxes is proven. The ₩20 billion figure reportedly includes not only unpaid taxes but also penalties for underreporting and interest. Under South Korean law, penalties for deliberately underreporting income or using improper methods to reduce taxes can be severe, potentially reaching 40% of the base amount, with additional charges for late payment. If the evaded tax amount is confirmed to exceed ₩10 billion, Cha Eun-Woo could face at least five years in prison, with potential fines ranging from two to five times the amount of tax evaded.
The allegations have already impacted Cha Eun-Woo's advertising deals, with brands reportedly pausing or reconsidering their partnerships with the star. The outcome of the NTS investigation and any potential legal proceedings could have significant implications for Cha Eun-Woo's career and reputation.
