Singer and actor Cha Eun-woo is at the center of escalating controversy over alleged tax evasion amounting to over 20 billion won, allegedly conducted through a company established under his mother’s name. Fresh suspicions have emerged regarding whether strategic steps were taken in advance to facilitate such actions.

According to a January 23rd report by Sports Kyunghyang, Chas Gallery—a company founded by Cha Eun-woo’s mother and for which Cha serves as a registered executive director—underwent significant changes in 2024. The company altered its organizational structure, legal status, and name in September of that year.

Originally, this company operated as a single-artist limited liability company based in Gimpo. However, it was converted into a limited liability partnership during the same period, and its registered address was moved to an eel restaurant in Buleon-myeon, Ganghwa Island—an establishment reportedly run by Cha’s parents.

This new address is the subject of ongoing interpretation, as questions have arisen over whether it serves as a bona fide work space or is simply a registered office. Some observers point to the restructuring as an attempt to sidestep mandatory independent audits, which are required for corporations of a certain size but not for limited liability partnerships.

Crucially, such partnerships in South Korea face no obligation to publicly disclose financial statements, complicating external scrutiny of potential tax avoidance. The relocation of the company’s address to Ganghwa Island received further attention due to the Seoul Metropolitan Area Readjustment Planning Act, which classifies Ganghwa as a “growth management area.” This classification lets companies avoid paying triple the standard acquisition and registration tax, a surcharge that would otherwise apply when purchasing real estate.

Adding to suspicions, Chas Gallery reportedly amended its business objectives to include real estate leasing—raising the possibility that these steps were motivated by a desire for tax benefits.

On January 22nd, Edaily reported that Cha Eun-woo had been served with an order by the National Tax Service to pay over 20 billion won in back taxes linked to income tax evasion. This is believed to be one of the largest tax claims ever levied against a South Korean celebrity, intensifying public scrutiny. The tax authorities are said to be probing the structure of management and service contracts between Cha’s official agency, his mother’s company, and other entities.

At the core of the investigation is whether Cha’s income was inappropriately split among his official agency, his mother’s firm, and himself as an individual, without a legitimate business basis. This raises further questions about whether the company in question qualifies as a so-called “paper company,” set up only to facilitate tax evasion, which is also under investigation.

On the same day, Fantagio—Cha Eun-woo’s agency—issued an official response. The statement emphasized that the pivotal issue is whether the company established by Cha’s mother constitutes a legitimate taxable entity. Fantagio asserted, “No final decisions or notifications have been made yet, and since this is fundamentally a matter of legal interpretation and application, we will fully cooperate through appropriate legal channels to clarify the facts.”

Note “This article was translated from the original Korean version using AI assistance, and subsequently edited by a native-speaking journalist.”

Photo=MHN DB