South Korea’s entertainment industry faces its most significant tax evasion scandal as K-pop sensation Cha Eun Woo stands accused of evading approximately 20 billion won ($14 million) in income taxes. The National Tax Service alleges the singer-actor orchestrated an elaborate tax avoidance scheme involving multiple entities, including his agency Fantagio and a company registered under his mother’s name.
The investigation reveals Cha allegedly established what authorities term a ‘paper company’—a business entity with no substantial operations—registered at the same address as his parents’ eel restaurant. This arrangement purportedly enabled the transfer of income to benefit from lower corporate tax rates instead of higher personal income tax brackets.
Following Thursday’s revelations, major brands including Shinhan Bank and skincare company Abib have discreetly removed Cha’s promotional content from their social media platforms. The swift corporate response highlights the seriousness with which advertisers view the allegations against one of Korea’s most recognizable celebrities, previously celebrated for his clean public image.
Fantagio, Cha’s management label, issued a formal statement emphasizing that the tax status of the mother’s company remains officially unconfirmed. “We plan to actively clarify the matter in accordance with lawful procedures,” the agency stated, adding that Cha and his tax representatives would “cooperate diligently” to resolve the situation promptly.
The scandal has divided fans, with some defending the celebrity while others await judicial determination. Online discussions reveal significant criticism toward brands for distancing themselves before a formal verdict, with many arguing the allegations shouldn’t have been publicized prior to official confirmation.
Notably, Cha is currently fulfilling mandatory military service that began July 28, 2025, with completion expected in January 2027. The timing adds complexity to legal proceedings and public relations management surrounding the case.