ASTRO's Cha Eun-woo Faces Massive Tax Evasion Allegations Over Real Estate Purchases

Actor Cha Eun-woo, formerly of the group ASTRO, is under scrutiny for allegedly purchasing substantial real estate through a family-owned corporation and facing a hefty tax penalty.

On October 8, MBC's investigative program 'Straight' reported on the real estate acquisitions and tax evasion allegations involving a one-person agency established by Cha Eun-woo's mother, Ms. Choi.

According to the broadcast, the corporation purchased land measuring 14,973 square meters (approximately 4,500 pyeong) and a building in Buleun-myeon, Ganghwa-gun, Incheon, for 1.75 billion won in July 2020. Of the total purchase price, 800 million won was financed through a corporate loan. In February of the following year, the corporation acquired an additional 2,069 square meters (approximately 1,230 pyeong) of land for 1.1 billion won. Over five years, the corporation amassed a total of 5,700 pyeong of real estate, equivalent to three soccer fields.

The purchased property includes a building that served as the registered headquarters of the corporation and was operated as a charcoal-grilled eel restaurant by Cha Eun-woo's parents until recently. According to local residents, the restaurant's interior was demolished about six months ago for remodeling, and there is no evidence of the agency conducting business activities.

Established in 2019, the corporation is wholly owned by Cha Eun-woo, with his mother as the CEO, and Cha Eun-woo, his younger brother, and his father listed as directors, forming a typical family-run company.

Recently, the Seoul Regional Tax Office's Investigation Bureau 4 imposed a tax penalty of approximately 20 billion won on Cha Eun-woo. This is reportedly the largest tax penalty in the entertainment industry. The National Tax Service suspects that the corporation was used to avoid taxes during the income settlement process with his agency, Fantagio. By using a paper company, Cha Eun-woo allegedly sought to benefit from a corporate tax rate more than 20 percentage points lower than the maximum individual income tax rate of 45-49.5%. The tax authorities found no evidence of the corporation providing actual management services to Fantagio or Cha Eun-woo.

As the controversy grew, Cha Eun-woo issued an apology on social media, stating, "I sincerely apologize and am deeply reflecting on my actions." However, he has contested the tax authority's decision and has hired a major law firm to file a 'pre-assessment review' and is awaiting the outcome.

In response, Cha Eun-woo's representatives stated, "Due to the frequent changes in Fantagio's leadership, there was significant anxiety about the stability of his entertainment activities, leading his mother to manage the business directly." They emphasized that the corporation is a legitimately registered entity in the cultural and arts planning industry and not a paper company. Fantagio also supported this claim, stating, "Cha Eun-woo's mother has been performing management duties to support his entertainment activities, and we are proceeding with the necessary procedures to receive a lawful judgment based on supporting evidence." They added, "This is not a finalized or notified matter," and "We plan to actively clarify the issues related to the interpretation and application of the law through appropriate procedures."