The reward for information on tax evasion under the Procedure for the Punishment of Tax Evaders Act is premised on the fact that the respondent is punished in violation of the Punishment of Tax Evaders Act.

In order for the person liable for tax evasion to receive a reward under the Procedure for the Punishment of Tax Evaders Act, he shall be sentenced to a fine for violation of the Punishment of Tax Evaders Act by the Commissioner of the National Tax Service, etc. against the violation of the former Procedure for the Punishment of Tax Evaders Act, or confirmed

Article 16 of the Procedure for the Punishment of Tax Evaders Act

2016Guhap467 Disposition of revoking the revocation of the non-payment of monetary rewards for tax evasion

KimA

BB Director of the Tax Office

June 13, 2017

July 11, 2017

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

In August 10, 2015, the Defendant’s disposition on the Plaintiff’s tax evasion information site payment disposition is revoked.

1. Details of the disposition;

A. On July 11, 2002, the Plaintiff submitted a report to the Defendant on tax evasion to CCC (hereinafter “CCC”) (hereinafter “instant report on tax evasion”). Accordingly, the Defendant conducted an integrated investigation into corporate tax with respect to the above company from October 14, 2002 to October 28, 2002, and confirmed the omission of sales in the business year from October 14, 2002 to the above company’s correction and notification of corporate tax and value-added tax.

B. The CCC filed a request for review with the National Tax Service regarding the above corrective measure, and reduced or corrected as follows.

C. On August 6, 2015, the Plaintiff filed an application for payment of a monetary reward for information on tax evasion with the Defendant, but the Defendant, on August 10, 2015, notified the Defendant of the payment of a monetary reward for information on tax evasion under Article 16 of the former Procedure for the Punishment of Tax Evaders Act (Amended by Act No. 9920, Jan. 1, 2010; hereinafter the same) on the ground that the instant report on tax evasion did not meet the requirements to be eligible for a monetary reward for information on tax evasion (hereinafter “instant disposition”).

D. On October 23, 2015, the Plaintiff filed an appeal with the Tax Tribunal, but was dismissed on January 22, 2016.

[Ground of recognition] Facts without dispute, Gap evidence No. 1, Eul evidence No. 3, purport of the whole pleadings

2. Relevant statutes;

It is as shown in the attached Form.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

Although the Defendant did not have any record of having been punished as a violation of the Punishment of Tax Evaders Act, it did not meet the requirements for rewarding tax evasion information under Article 16 of the former Procedure Act. However, the above provision does not premised on punishment for violation of the Punishment of Tax Evaders Act as a requirement for reward payment, but provides that a person who provided important data in calculating the amount of evaded tax or refunded or deducted tax amount of a person who violated the Punishment of Tax Evaders Act may be paid a reward. Therefore, even though the Plaintiff provided the Defendant with important information on the information on the information on tax evasion by the CCC

(b) Whether the person satisfies the requirements for the payment of tax evasion information under the former Procedure for the Punishment of Tax Evaders Act;

1) On January 31, 200, Article 6(1)1 through 8 of the former Enforcement Decree of the Procedure for the Punishment of Tax Evaders Act (amended by Presidential Decree No. 22044, Feb. 18, 2010; hereinafter the same) stipulates that a person who provides important data in calculating or punishing the evaded or refunded tax amount of a person who violates the Punishment of Tax Evaders Act (hereinafter referred to as "person who has violated the Punishment of Tax Evaders Act") may receive a reward within the scope of KRW 100,00 under the conditions as prescribed by Presidential Decree, and Article 6(1)1 through 8 of the former Enforcement Decree of the Procedure for the Punishment of Tax Evaders Act (amended by Presidential Decree No. 22044, Feb. 18, 2010; hereinafter the same) separately prescribes the criteria for calculating the amount of reward for each offense in violation of the Punishment of Tax Evaders Act. In addition, the Commissioner of the National Tax Service’s instructions enacted the timing for payment of reward, etc.

According to the relevant Acts and subordinate statutes, when a tax evasion information provider receives a reward under the former Procedure for the Punishment of Tax Evaders Act, he/she shall implement it by receiving a notification under Article 9 of the former Procedure for the Punishment of Tax Evaders Act from the Commissioner of the National Tax Service, the commissioner of a regional tax office, or the head of a tax office, or when he/she conducts a tax investigation based on the data provided and again imposes omitted taxes, he/she may not request payment of reward money under the above provisions. However, in this case, since there is no evidence that the CCC, who is the person suspected of tax evasion, was punished for violating the Punishment of Tax Evaders Act, the report of tax evasion in this case cannot be deemed to meet the requirements for payment of reward money for tax evasion information under the former Procedure

2) As to this, the Plaintiff asserts that if Article 4 of the Regulations on the Payment of Information on Tax Evasion is based on the presumption of punishment for a person suspected of tax evasion, it shall be deemed that a new payment requirement not provided in Article 16 of the former Procedure for the Punishment of Tax Evaders

In light of the provisions of Article 16 of the former Procedure for the Punishment of Tax Evaders Act and Article 6 of the Enforcement Decree of the same Act, whether to pay a reward falls under the discretionary act of the administrative agency, and the rules on the payment of a reward for tax evasion information fall under the discretionary rules established based on the exercise of discretion on the payment of a reward for tax evasion information.

In addition, as seen earlier, the former Procedure for the Punishment of Tax Evaders Act and the Enforcement Decree of the same Act provide that a person suspected of tax evasion is punished in violation of the Punishment of Tax Evaders Act. Thus, Article 4 of the former Procedure for the Punishment of Tax Evaders Regulations provides that the amount of fine or minor fine notified under Article 9 of the Procedure for the Punishment of Tax Evaders Act shall be paid, or the amount of fine, minor fine, or imprisonment has become final and conclusive by judgment, not by adding a new requirement for payment, but by clearly embodying the timing for payment within the scope of delegation. There is no evidence to deem that the standard does not conform with the Constitution or laws or does not objectively reasonable, thereby abusing discretionary power. Accordingly, the Plaintiff’s above assertion

3) In addition, the Plaintiff asserts that “CCC has evaded its tax by fraud or other unlawful act through the method of drawing up double books, but the Defendant did not file any accusation, and thus, the CCC was not punished. Nevertheless, the Defendant asserts that it was unlawful that CCC did not pay a monetary reward for tax evasion information to the Plaintiff on the ground that it did not have been punished as the Punishment of Tax Evaders Act.”

However, even according to the Plaintiff’s assertion, Article 53 of the Regulations on the Handling of Tax Offenses provides that a person whose annual amount of tax evasion by fraud or other wrongful act is not less than 200 million won shall be immediately accused under the Procedure for the Punishment of Tax Evaders Act. According to the overall purport of the statement and pleadings, the Defendant’s additional collection tax amount against CCC is recognized as not less than KRW 200 million per year. In addition, in conducting a tax investigation with respect to CCC upon receipt of the Plaintiff’s report on tax evasion, the Defendant did not convert the CCC into a tax offense investigation in consideration of all the circumstances, such as the portion of the reported amount of tax evasion and the nature of the offense, it is difficult to deem that there was any illegality. Accordingly, the Plaintiff’s above assertion has no merit.

4. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

(c)