Cha Eun-woo received a National Tax Service (NTS) notice to repay over 20 billion won in income taxes.
Experts warn that if intent to evade is proven, additional penalties and a prosecution referral are possible.
Authorities suspect a corporation tied to Cha’s family may be a “shell company” used to lower taxes.

What the NTS notice says

South Korea’s National Tax Service has ordered Cha Eun-woo to repay more than 20 billion won in income taxes after questioning contracts that routed earnings through a corporation established by his mother. The celebrity, now serving in the military, has not been formally charged; the notice is part of an ongoing tax investigation.

Why experts say prosecution is possible

Attorney and accountant Kim Myeong-gyu, commenting on social media, explained that the 20 billion-won figure often includes surcharges and interest on an original tax amount. If the NTS deems underreporting to be intentional, it can add a 40% penalty on the principal tax plus delinquency interest. Kim noted that 6–10 billion won of the 20 billion won may represent the penalty component — effectively a “penalty for lying” if intent is found.

Role of Investigation Division 4

The Seoul Regional NTS Investigation Division 4, which has taken up the probe, is known for pursuing cases with strong indications of deliberate evasion. Their involvement signals that investigators are treating the matter as more than a routine tax adjustment, though officials say the case remains at the suspicion stage until intent is proven.

Shell company suspicions

Authorities are scrutinizing whether the corporation tied to Cha qualifies as a legitimate business. Kim said entertainers sometimes set up single-person agencies to be taxed under corporate rates (10–20%) rather than higher personal income tax brackets (up to 45%). To qualify, a corporation should operate like a real business — with employees, an office, and independent management.

Questions have been raised about the firm’s registration details, including a reported office address linked to a family business. Such arrangements can prompt the NTS to view a company as a “shell” and revoke corporate tax benefits, triggering heavier income tax assessments and penalties.

Agency response and next steps

Cha Eun-woo’s agency, Fantagio, said it will “actively clarify the issues related to legal interpretation and application through proper procedures” and stressed that the main question is whether the corporation qualifies as a legitimate taxable entity. Fantagio also reiterated Cha’s commitment to fulfilling tax and legal responsibilities.

Attorney Kim cautioned that not every probe leads to charges; some investigations conclude without prosecution when intent cannot be proven. Still, he warned that clear traces of premeditated arrangements could result in record recoveries and potential prosecution.

What to watch

Key developments will include any formal NTS announcement of criminal referral, findings about the corporation’s structure and operations, and whether investigators can demonstrate intent to conceal earnings. Until then, the matter remains under investigation.

Note: Attorney Kim Myeong-gyu’s commentary was referenced from his social media post as cited in reporting. No formal charge has been filed at the time of publication.

Image Referance: https://www.chosun.com/english/kpop-culture-en/2026/01/26/DBDLMJXFXZHOFMUB4MJ5PAHYGE/