[1] The elements to avoid liability for the crime of tax evasion against corporate tax in a case where the amount of the public fund was disposed of as deductible expenses after excluding the public fund from the ordinary interest due to a false appropriation of expenses or an excessive appropriation of expenses

[2] Whether an act of making a false book and filing a tax return constitutes "Fraud or other unlawful act" under Article 9 (1) of the Punishment of Tax Evaders Act (affirmative)

[1] According to the Corporate Tax Act, in case where a corporation pays expenses due to the necessity of its business operation, items that can be recognized as deductible expenses and the permissible limit thereof are statutory, so long as the amount of public funds is excluded from the fixed amount of expenses by means of false appropriation of expenses or excessive appropriation, and then the amount is treated as deductible expenses, the liability for the crime of tax evasion cannot be exempted, unless it proves that it is an item that can be recognized as deductible expenses and is within the permissible limit of deductible expenses, even if the whole amount was used for the purpose of its business operation.

[2] An act of making the sales under the actual amount under the tax reporting by preparing a false account book containing less sales than the account book stating the actual transaction situation and filing a tax return thereby constitutes "Fraud or other unlawful act" under Article 9 (1) of the Punishment of Tax Evaders Act, which makes it impossible or considerably difficult to impose and collect taxes.

[1] Article 19 of the Corporate Tax Act, Article 19 of the Enforcement Decree of the Corporate Tax Act, Article 9(1)3 of the Punishment of Tax Evaders Act, Article 307 and Article 308 of the Criminal Procedure Act / [2] Article 9(1) of the Punishment of Tax Evaders Act

[1] Supreme Court Decision 87Do966 delivered on October 10, 1989 (Gong1989, 1702) Supreme Court Decision 2001Do5459 Delivered on July 26, 2002 (Gong2002Ha, 2136) / [2] Supreme Court Decision 89Do283 Delivered on September 26, 1989 (Gong1989, 1618)

Defendant 1 and three others

Defendants

Attorneys Na-soo et al.

Seoul High Court Decision 2001No3318 delivered on May 10, 2002

All appeals are dismissed.

Each defense counsel's grounds of appeal are also examined.

According to the Corporate Tax Act, the items recognized as deductible expenses and the permissible limit thereof are stipulated in cases where a corporation has disbursed expenses due to the necessity of its business operation. Thus, in cases where public funds are appropriated as deductible expenses after excluding public funds from the fixed amount of expenses by means of false appropriation of expenses or excessive appropriation, and such amount is treated as deductible expenses, even if used for the whole company's business operation, it cannot be exempted from the liability for the crime of evading tax unless it is proved that it is an item that can be recognized as deductible expenses by specifying its specific purpose and within the permissible limit of deductible expenses (see Supreme Court Decision 87Do966, Oct. 10, 1989). In addition to the books on which the actual transaction situation is entered, the act of making a false book stating less sales and filing a tax return on it constitutes "Fraud or other unlawful act under Article 9 (1) of the Punishment of Tax Evaders Act" (see Supreme Court Decision 9Do283, Sept. 26, 198).

In the same purport, the court below is justified in finding the defendants guilty of committing the crime of this case that the defendants evade tax by falsely preparing books and omitting sales and appropriating false expenses based on false evidentiary data, and there is no evidence to acknowledge that the defendants spent the items that can be recognized as losses as the reduced return amount or that the amount is within the permissible limit of deductible expenses. Thus, the court below did not err by misapprehending the legal principles as to fraud or other unlawful acts as otherwise alleged in the ground of appeal.

Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jin-hun (Presiding Justice)