[26.01.23] Cha Eun-woo Tax Evasion Allegations Explained: Family Corporation and Restaurant Controversy

Cha Eun-woo Faces 20 Billion Won Tax Evasion Allegations… Controversy Expands to Family Corporation and Eel Restaurant

📍Conversion to LLC and Address Relocation Raise Suspicions… False “Favorite Restaurant” Claims Spark Backlash

ASTRO member and actor Cha Eun-woo (29, real name Lee Dong-min) has been embroiled in allegations of tax evasion totaling more than 20 billion won, with controversy expanding to the operation of a family-run corporation and claims that his parents’ restaurant was merely a “favorite dining spot.”

Cha Eun-woo (29, real name Lee Dong-min) is facing criticism for falsely introducing his parents' controversial eel restaurant as his “regular spot” while embroiled in allegations of tax evasion amounting to 20 billion won.

---

🔹 Family Corporation Restructuring and LLC Conversion
Chas Gallery, where Cha Eun-woo serves as an internal director and which was established by his mother, identified as Ms. A, was confirmed on the 23rd to have changed its organizational structure, legal status, and corporate name to The Any LLC in September 2024.

The company, previously a one-person agency registered as a joint-stock corporation with an address in Gimpo, relocated its address at the same time to an eel restaurant in Buleun-myeon, Ganghwa Island, reportedly operated by Cha Eun-woo’s parents, following its conversion into a limited liability company.

The background behind the conversion from a joint-stock corporation to an LLC has drawn attention, with speculation pointing to the avoidance of external audits. Joint-stock corporations above a certain size are subject to mandatory external audits, whereas LLCs fall outside those requirements.

Additionally, LLCs are not obligated to publicly disclose financial statements, making it difficult for outsiders to identify potential tax evasion or financial flows.

🔹 Address Relocation and Business Scope Changes
The decision to relocate the company’s address to Ganghwa has been interpreted as a strategic move for tax avoidance. Ganghwa County is classified under the Capital Region Readjustment Planning Act as a growth management zone, allowing corporations to avoid heavy acquisition and registration taxes, which can reach three times the base rate when acquiring real estate.

In fact, the corporation was found to have added “real estate leasing” to its business purposes, further fueling suspicions of tax-driven restructuring.

The fact that Cha Eun-woo’s parents’ restaurant and his one-person agency share the same address has raised additional concerns that the company may be a paper corporation, using only a registered address without an actual operational office.

Based on these findings, the National Tax Service reportedly concluded that Cha Eun-woo diverted income through a family corporation with a lower corporate tax rate to avoid the top personal income tax rate of 45 percent, issuing a tax reassessment notice of approximately 20 billion won.

This amount is considered the largest in South Korea’s entertainment industry and is ranked sixth worldwide, following cases involving Fan Bingbing, Zheng Shuang, Cristiano Ronaldo, Willie Nelson, and Shakira.

🔹 Agency Response and Legal Analysis
Fantagio, Cha Eun-woo’s agency, released an official statement on the 22nd, stating, “The key issue is whether the corporation established by Cha Eun-woo’s mother qualifies as a substantive taxable entity. This matter has not been finally confirmed or officially notified, and we will actively provide explanations through lawful procedures regarding the interpretation and application of tax laws.”

Attorney Noh Jong-eon of Law Firm Jonjae explained, “Corporate registry records show that the company changed its structure to an LLC and renamed itself on September 11, 2024. LLCs are excluded from external audit requirements under the External Audit Act, suggesting the change was made to avoid disclosure obligations.”

He added, “If disclosed, such information would have appeared on the Financial Supervisory Service’s public disclosure system, and avoiding that burden may have been a key consideration. This method is commonly used in practice to evade detection of tax violations.”

🔹 False “Favorite Restaurant” Claims
As Cha Eun-woo faces allegations of tax evasion exceeding 20 billion won, he has also come under criticism for falsely introducing his parents’ eel restaurant as merely a “favorite dining spot.”

In November 2022, JTBC’s variety program Let’s Eat GO featured the restaurant as a famous eatery in Ganghwa, emphasizing it as “Cha Eun-woo’s favorite restaurant” and claiming annual sales of 1 billion won.

The restaurant had already gained attention after Cha Eun-woo posted a visit photo on Instagram two months prior to the broadcast, leading to its reputation as a “Cha Eun-woo favorite spot.” Promotional posts on the restaurant’s social media also highlighted his visits and displayed his autographed message.

However, controversy intensified after it was confirmed that the restaurant had served as the former registered address of a corporation established by Cha Eun-woo’s mother, raising accusations of misleading promotion and concealment of family ownership.

🔹 Military Service and Future Schedule
Cha Eun-woo enlisted in July last year and is currently serving in the Army Military Band. His expected discharge date is January 27, 2027. A Netflix series starring Cha, The Wonderfuls, is scheduled for release.

One-line summary : Cha Eun-woo faces intense criticism over alleged 20 billion won tax evasion involving a family corporation and misleading claims about his parents’ restaurant.