This article was displayed on the ChosunBiz MoneyMove (MM) site at 11:05 a.m. on Jan. 27, 2026.
As tax evasion allegations against idol group Astro member Cha Eun-woo continue to spread by the day, it has been confirmed that Cha's alleged tax evasion was also behind his agency Fantagio being hit with a heavy tax assessment last year.
The National Tax Service determined that as Cha engaged in tax evasion, the company's profits shrank, which reduced the taxes Fantagio had to pay.
According to the capital market and entertainment industries on the 27th, part of the 8.5 billion won in back taxes Fantagio received last year arose from Cha's alleged tax evasion.
Cha signed with Fantagio through a one-person agency under his mother's name. If Cha received settlements directly as an individual, his income tax could reach as high as 45%, but by receiving settlements through a corporation, he took advantage of the corporate tax rate, which caps out at 24%. The National Tax Service deemed this conduct tax evasion and billed Cha for back taxes in the 20 billion won range.
This contract structure was unfavorable to his agency, Fantagio. When Fantagio paid Cha his settlement through the one-person agency, an additional 10% settlement amount was incurred under the name of value-added taxes. If the settlement had been made to Cha personally, VAT could have been excluded, but because a corporation was inserted, the settlement was made with VAT added. Believing the company benefited from VAT refunds and other advantages, the National Tax Service imposed back taxes under the rationale that these should be returned.
If Cha's tax evasion allegations prove true, Fantagio can seek to claim back taxes incurred because of Cha, but many expect this will be difficult given the power dynamics between the two sides. That is because Cha accounts for an outsized share at Fantagio.
According to the entertainment industry, more than half of Fantagio's revenue is said to come from its management contract with Cha. Considering the relationship between the company and Cha, many predict the company is likely to shoulder the back taxes.
An industry official said, "Given that Fantagio has taken no particular action against Cha since it received the back taxes last year, doesn't that mean the company intends to absorb the loss?"
Officials also say the contract structure between Cha and Fantagio overwhelmingly favors Cha. While the revenue generated by Cha is not small, they say there is no profit left. Fantagio operates in a way that, when Cha is cast, it sells other affiliated entertainers as a bundle.
As a result, Fantagio has been unable to escape the red. As a company with a June fiscal year-end, Fantagio posted 38 billion won in revenue from July 2024 to the end of June last year, but recorded an operating loss of about 8 billion won. In the third quarter last year, it also showed 10 billion won in revenue and an operating loss of 900 million won. With results not improving and Cha entering military service, Fantagio's share price fell into the 400 won range.
Meanwhile, Fantagio did not offer any specific position on the connection between the back taxes it received last year and Cha's alleged tax evasion. Fantagio said, "It is difficult to state a position at this time."
Before enlisting in July last year, Cha filed a "pre-assessment review" to contest the National Tax Service's decision and is currently awaiting the result.