Defendant 1 shall be punished by imprisonment with prison labor for a period of one and half years.

Of the facts charged against Defendant 1, each of the violation of the Punishment of Tax Evaders Act due to the evasion of corporate tax in 2005 and corporate tax in 2006 shall be acquitted.

2. Defendant 2 Company and Prosecutor’s appeal are dismissed, respectively.

A. Defendants

(1) misunderstanding of facts or misapprehension of legal principles

Of the conviction portion of the lower judgment, the lower court recognized that Defendant 1’s purchase cost on the oil tax invoice purchased from Defendant 2 Co., Ltd. or Nonindicted Co. 1 Co., Ltd. was evaded corporate tax by falsely reporting as if it were actual purchase cost, and ② the purchase cost necessary for calculating the evaded tax amount is calculated based on the presumption calculation by the National Tax Service, i.e., the purchase cost publicly notified by the National Tax Service. However, Defendant 1’s tax base return is the actual amount and only the purchase cost is different from the actual purchase cost. However, it is true that Defendant 2 Co., Ltd. or Nonindicted Co. 1 purchased the oil corresponding to the oil supply due to the lack of such purchase cost and filed a tax invoice as purchase cost, and thus, it did not constitute an unlawful act of tax evasion under Article 20 subparag. 14 of the former Enforcement Decree of the Income Tax Act (amended by Act No. 919, Jan. 1, 2010; hereinafter the same shall apply).

(2) Unreasonable sentencing

The sentencing of the lower court (Defendant 1: 2 years of imprisonment, and Defendant 2: fine of KRW 1 billion) is too unreasonable.

(b) Prosecutors;

With respect to the non-guilty portion of the judgment of the court below, i.e., the payment of an amount equivalent to approximately 13% of the value of supply under the pretext of value-added tax and commission whenever Defendant 1 purchases false tax invoices from the data, and the court below consistently stated that most companies that issued the false tax invoices to the above Defendant filed a return of the tax amount calculated including the value of supply on the relevant tax invoices as the output tax amount, and some companies were found not guilty on the grounds that there was no evidence to prove that there would be a decrease in national tax revenues by receiving the input tax deduction under the false tax invoices. However, in principle, the court below held that the purchase of false tax invoices from the data and the deduction of the input tax amount based on the false tax invoices constitutes the crime of tax evasion (see Supreme Court Decision 2005Do4736, Sept. 30, 2005). In addition, even if following the judgment of the court below, there were no evidence to view that some companies that issued the false tax invoices to Defendant 1 were liable for the return of the value of value-added tax under the tax return.

Therefore, the judgment of the court below is erroneous in the misapprehension of legal principles as to the establishment of a crime of tax evasion.

2. Determination

A. Judgment on the misunderstanding of facts or misapprehension of legal principles concerning the part concerning Defendant 2’s corporate tax evasion

(1) Whether it falls under the "Fraud and other unlawful act"

Article 9(1) of the former Punishment of Tax Evaders Act (amended by Act No. 7467, Jun. 29, 2006; Act No. 7467, Nov. 29, 2007) refers to a deceptive scheme or other affirmative act that makes it impossible to impose and collect taxes or makes it considerably difficult to do so, and it does not constitute a mere failure to file a tax return under the tax law or a false tax return without accompanying any other act (see, e.g., Supreme Court Decisions 2004Do817, Jun. 29, 2006; 2007Do7467, Nov. 29, 2007). Considering the evidence duly adopted and examined by the court below, in relation to Defendant 2, Defendant 1 purchased a false tax invoice from the data, and disguised oil equivalent to the amount of the tax invoice supplied under the false tax invoice was actually purchased, and even in reporting the corporate tax base of Defendant 2, it constitutes an active purchase price (the actual purchase price) which was determined as a false or false tax return.

Therefore, Defendant 1’s act constitutes a case where the tax evasion is conducted by fraud or other unlawful act, and the Defendants’ assertion disputing this is without merit.

(2) The legality of calculating the presumption of the evaded tax amount

(A) Justifiableness of the lower judgment

The court below reasoned that in the crime of evading tax, if the defendants evade tax by falsely preparing or concealing account books and other documents concerning revenue and expenditure or by increasing expenses, it cannot be found that there is a clear evidence to acknowledge only one item of revenue or expenditure, which is the basis for calculating the amount of evaded tax, so if such a method can be generally acceptable, objective and reasonable, and if the result is highly probable, it is permissible to estimate that the above method should be generally acceptable (see Supreme Court Decision 2004Do7141, May 12, 2005). The court below adopted and examined evidence that the National Tax Service's determination of the amount of income of each corporation operated by the defendants 1 constitutes "when there is no necessary account books or documentary evidence or material part thereof," and thus, it is hard to find that there is a high probability that the above defendants' purchase and sale of oil constitutes an additional standard expense rate under the proviso to Article 6 (3) of the Corporate Tax Act and Article 104 (1) of the Enforcement Decree of the same Act, which provides that the above defendants' purchase and sale method should be conducted within the above 104 subparagraph 1 of the above.

(B) Additional determination

1) First of all, Article 104(2)3 of the former Enforcement Decree of the Corporate Tax Act provides that when a small enterprise pursuant to the provisions of Article 7(1)2(a) of the Restriction of Special Taxation Act closes its business, the method recognized and determined by the Commissioner of the National Tax Service by a reasonable method, such as the method of application mutatis mutandis of the provisions of Article 143(3)1-2 of the Enforcement Decree of the Income Tax Act, shall be applied mutatis mutandis under the above provision of the Act. Thus, it is clear that the above provision of the Act does not necessarily apply mutatis mutandis to the method of calculation by simple expense, i.e., the method of calculation by simple expense rate, but can be recognized and determined by the Commissioner of the National Tax Service. Thus, it cannot be said that the simple expense rate method does not violate

2) The Defendants’ application of simple expense rates to only the “small enterprise that has closed down business without clear suspicion of omission” is not stipulated in the statutes, but merely an administrative rule inside the National Tax Service, and thus excluding the application of simple expense rates is in violation of the principle of no taxation without law. In addition, the meaning of “small enterprise that closed business without clear suspicion of omission” should be interpreted as “small enterprise with no clear suspicion of omission” and it cannot be interpreted as “small enterprise with no clear suspicion of omission”. Thus, it is unreasonable to exclude Defendant 2 from the application of simple expense rates. However, as seen earlier, the former Enforcement Decree of the Corporate Tax Act recognizes the method of presumption calculation, which is recognized by the Commissioner of the National Tax Service as not only a simple expense rate method, but also a method other than a simple expense rate method, and as long as it is acknowledged reasonable, the issue of violation of the principle of no taxation without law can be presumed as a means of presumption if it is acknowledged that there is no reason to exclude the Defendants from the application of simple expense rate under Article 2(3) of the Enforcement Decree of the Corporate Tax Act.

3) In addition, it appears reasonable to calculate the purchase price on the basis of the price of the same duty-free oil as the oil traded by Defendant 2 Company had been supplied for a maritime vessel. On the other hand, in the case of an enterprise to which the duty-free oil was illegally distributed before and after its distribution, it could be anticipated that it would purchase the oil at the price added to the profits, expenses, etc. of the intermediate distributor rather than purchasing the oil at the initial duty-free oil. However, in this case, the Defendants did not disclose the oil at all, and it could not be confirmed that Defendant 2 Company was supplied with the oil supplier to Defendant 2 Company or that it was supplied with the duty-free oil at the final stage of its distribution. Thus, it cannot be said that there was any error in calculating the purchase price at the general duty-free oil price.

(3) Sub-decisions

Therefore, the defendants' assertion of mistake or misapprehension of legal principles as to the part of corporate tax evasion of defendant 2 corporation is without merit.

B. Determination of misconception of facts or misapprehension of legal principles as to the part on the part on the corporate tax evasion of Nonindicted Co. 1

(1) Relevant facts charged

Defendant 1:

(A) On January 20, 2006, when reporting on the confirmation of value-added tax of Nonindicted Co. 1 on the second half of 2005 in Suwon-dong, Busan-gu, Busan-do, the fact that: (a) reported on January 20, 2006 by means of submitting a false list of total tax invoices, as if he was supplied with oil equivalent to KRW 1,228,235,918 without being supplied with oil by Nonindicted Co. 2; and (b) evaded KRW 85,650,000 of the corporate tax of Nonindicted Co. 1 for the year 205 by fraud or other unlawful act upon the lapse of the due date for return; (c)

(B) On April 24, 2006, upon filing a return on the scheduled value-added tax return for the first time in 2006 by Nonindicted Co. 1 Company, Nonindicted Co. 2 filed a false return in a manner of submitting a false list of total tax invoices as if he received oil equivalent to KRW 1,697,85,001, even though he was not supplied with oil from Nonindicted Co. 2 Company, and subsequently, on March 31, 2007, upon the lapse of the time limit for filing the return on March 31, 2007, Nonindicted Co. 1 Company evaded corporate tax of KRW 147,571,00 for fraud or other unlawful act.

(2) The judgment of the court below

As stated in the above facts charged, the court below found Defendant 1 guilty on the ground that Defendant 1 evaded corporate tax of Hosan as a result of fraud or other unlawful act.

(3) Judgment of the court below

In this part of the facts charged, Defendant 1’s act of falsely entering tax invoices in filing a return or preliminary return of value-added tax, i.e., the intent of the deadline for filing a return or payment of corporate tax, and Defendant 1’s act of non-indicted 1’s corporate tax evasion by deeming that the act of non-indicted 1’s act constitutes fraud or other unlawful act. Although value-added tax and corporate tax are formally different from each other’s act of filing a return, the act of falsely stating tax invoices in this case is merely an act related to value-added tax and cannot be deemed an act of evading corporate tax. ② “Fraud or other unlawful act” in Article 9(1) of the former Punishment of Tax Evaders Act means a deceptive act that makes it impossible to impose and collect taxes or makes it considerably difficult to do so, and it cannot be seen as an active act of evading corporate tax or other unlawful act in filing a return, and thus, it cannot be seen as an act of evading corporate tax or other unlawful act in relation to non-indicted 1’s tax base or other unlawful act.

(4) The theory of lawsuit

Therefore, Defendant 1’s assertion of misunderstanding of facts or misapprehension of legal principles related to the part of corporate tax evasion of Nonindicted Company 1 is reasonable.

C. Determination on Defendant 2’s assertion of unreasonable sentencing

In full view of the following facts: (a) the evaded tax amount is a large amount; (b) there is no amount paid up to the present; (c) there is no change of circumstances after the judgment of the court below in relation to Defendant 2; and (d) overall sentencing conditions on the argument of the present case, including the financial situation, mode of operation, and motive, means and result of other crimes; and (d) the sentence imposed by the court below on Defendant 2 Co., Ltd. is judged to be within the reasonable scope; and (e) it cannot be deemed unfair

D. Determination of the Prosecutor’s assertion

In principle, it is argued by the prosecutor that the act of purchasing a false tax invoice on the tax invoice and receiving the input tax deduction based on the false tax invoice constitutes a crime of tax evasion. However, in order for the defendant to be found to have had the intent to evade tax in the event that the tax evasion had been made in purchasing false tax invoices from the data, it is necessary for the defendant to prove that there is an intention to evade tax, in addition to the awareness that the tax invoice issuer would be refunded the input tax under a false tax invoice (hereinafter referred to as the "recognition on refund"), the tax base and the amount of the value-added tax other than the amount of the output tax on the tax invoice, or the false tax invoice issuer would be exempted from the liability to pay the input tax on the tax invoice by evading the tax invoice by either filing or paying the tax invoice other than the amount of the output tax on the false tax invoice, or filing or paying the amount of the output tax on the false tax invoice, and thus, the defendant would have caused a decrease in the national tax revenue (hereinafter referred to as the "recognition on the evasion of tax evasion"). Therefore, the prosecutor must prove that the tax evasion tax return or the tax invoice.

In this case, according to the evidence duly adopted and examined by the court below, it is not sufficient to recognize that Defendant 1 was aware of the refund but there was no evidence to prove that there was the awareness of the evasion. Therefore, the court below's determination that Defendant 1 did not have the intention to evade value-added tax is just and there is no error of law by misunderstanding of facts or misunderstanding of legal principles.

3. Conclusion

Therefore, the part on Defendant 1’s violation of the Punishment of Tax Evaders Act due to the evasion of corporate tax in 2005 and the corporate tax in 2006 should be reversed. Furthermore, as long as the judgment of the court below treats each of the above crimes and the remaining guilty parts in the judgment of the court below as concurrent crimes under the former part of Article 37 of the Criminal Act and sentenced to one punishment, the entire guilty part against Defendant 1 should be reversed. Thus, without examining Defendant 1’s assertion of unfair sentencing, the judgment of the court below against Defendant 1 in accordance with Article 364(6) of the Criminal Procedure Act is reversed, and the remaining conviction part against Defendant 1 in the judgment below is reversed, and the appeal by Defendant 2 and the prosecutor is without merit, and it is so dismissed as per Disposition.

Article 9 (1) 3 of the former Punishment of Tax Evaders Act (each point of tax evasion, each choice of imprisonment with labor), Article 11-2 (4) 3 of the former Punishment of Tax Evaders Act (the submission of the aggregate table of tax invoices by false sales and by purchaser, and each choice of imprisonment with labor)

1. Aggravation for concurrent crimes;

Article 37 (Aggravation of Punishment of Tax Evaders due to Evasion of Corporate Tax in 2005 by Defendants 2 and 38 (1) 2, and Article 50 (Aggravation of Punishment of Tax Evaders Act)

Judges Kim Yong-open (Presiding Judge)