Defendant

An authorized pen (prosecution), last resort to trial (public trial)

Attorney Soh Young-young et al.

Defendant shall be punished by imprisonment with prison labor of one year and six months, and fine of 900,000,000 won.

When the defendant fails to pay the above fine, the defendant shall be confined in a workhouse for the period converted into one day.

The defendant shall be ordered to pay an amount equivalent to the above fine by provisional payment.

The Defendant is the representative director of Nonindicted Co. 2, which produces plastic products for vehicles located in Busan Metropolitan City ( Address 1 omitted), and is the actual operator of Nonindicted Co. 1, which produces plastic raw materials, such as automobile goods in Daegu ( Address 2 omitted), and is the representative of ○○○○○○ in Daegu ( Address 3 omitted).

1. Violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (State 1);

No one shall issue or be issued a tax invoice under the Value-Added Tax Act without supplying any goods or service.

On or around February 15, 2017, the Defendant issued an electronic tax invoice of KRW 236,90,000, as if he/she had not supplied goods or services to Nonindicted Co. 2 in the office of the said Nonindicted Co. 3 on or around February 15, 2017, as if he/she supplied the supply price of goods or services equivalent to KRW 236,90,000, in spite of the fact that he/she had not supplied goods or services to Nonindicted Co. 3, the Defendant was issued an electronic tax invoice of KRW 236,90,00,00 from January 31, 2017 to December 31, 2017, and was issued a false tax invoice of KRW 1 through 9,11,14,16, and 18, 24 through 7, 111 through 13, 15,18, and 1 through 7, 5) in the list of crimes (5).

2. Violation of the Punishment of Tax Evaders Act;

(a) Issuance and non-issuance of tax invoices by false entry of supply values;

No person liable to prepare and issue a tax invoice under the Value-Added Tax Act shall issue a tax invoice without issuing it or with a false entry.

around March 14, 2017, the Defendant issued an electronic tax invoice of KRW 201,880,000, which states the excessive supply value of KRW 180,000,00 in supply of synthetic resin at the office of Nonindicted Co. 2, Ltd. (hereinafter referred to as “Nonindicted Co. 3”) around March 14, 201, and issued 11 copies of the tax invoice stating an excessive total of KRW 1,425,805,840, as shown in the attached Table of Crimes (3) from around that time to December 31, 2017, and did not issue a tax invoice of KRW 284,961,080, which states the excessive supply value, as shown in the attached Table of Crimes (3).

(b) Receiving a false tax invoice stating the value of supply;

No tax invoice shall be issued by a person who shall be issued a tax invoice under the Value-Added Tax Act in collusion with another person.

On January 31, 2017, the Defendant, in collusion with Nonindicted Co. 4’s office, received synthetic resin raw materials from Nonindicted Co. 2 and received them, issued one electronic tax invoice of KRW 174,149,375, which entered an excessive amount of KRW 30,38,075, compared to the actual supply price, as well as six copies of the tax invoice stating an excessive amount of KRW 231,417,09, as shown in the attached list of crimes (4) from around that time to August 31, 2017, as shown in the attached list of crimes (4).

1. Defendant's legal statement;

1. Each written accusation;

1. A report on the completion of investigation into relevant data and a written investigation;

1. Tax invoices, each electronic tax invoice;

1. Investigation report (Submission, etc. of revised tax invoices, including Nonindicted 5, etc. for reference), investigation report (report on hearing Nonindicted 3’s regular statement of phone director) and investigation report (Submission, etc. of revised tax invoices, including Nonindicted 7, etc. for reference)

1. Article relevant to the facts constituting an offense and the selection of punishment;

Article 8-2 (1) 1 and (2) of the Act on the Aggravated Punishment, etc. of Specific Crimes, Article 10 (3) 1 of the former Punishment of Tax Evaders Act (amended by Act No. 16108, Dec. 31, 2018; hereinafter the same shall apply), Article 10 (3) 1 of the former Punishment of Tax Evaders Act (the issuance and receipt of false tax invoices; comprehensive imposition of imprisonment and fines as necessary); Article 10 (1) 1 of the former Punishment of Tax Evaders Act (the issuance of false tax invoices and the issuance of tax invoices; the choice of imprisonment); Article 10 (2) 1 of the former Punishment of Tax Evaders Act (the receipt of false tax invoices; and the selection of imprisonment)

1. Aggravation for concurrent crimes;

Articles 37 (former part), 38 (1) 2, and 50 of the Criminal Act [Aggravation of concurrent crimes provided for in the Act on the Aggravated Punishment, etc. of Specific Crimes (Issuance, etc. of False Tax Invoice) against which the punishment for each imprisonment is largest]

1. Discretionary mitigation;

Articles 53, 55(1)3, and 55(1)6 of the Criminal Act (The following consideration of favorable circumstances among the reasons for sentencing):

1. Detention in a workhouse;

Articles 70(1) and (2), and 69(2) of the Criminal Act

1. Order of provisional payment;

Article 334(1) of the Criminal Procedure Act

The Defendant and the defense counsel asserted that the instant crime was committed by issuing a false tax invoice to avoid the risk of being subject to tax investigation due to the shortage of sales revenue in the course of accounting settlement, or by issuing a financing bill upon receiving a request for financial assistance from Nonindicted Co. 3, the main trader, by supporting materials, and bypassing the corresponding amount of the tax invoice, or by issuing a tax invoice for the loan between Nonindicted Co. 2 and Nonindicted Co. 8 in order to raise the capital increase of Nonindicted Co. 1 and that the issuance of a tax invoice for the loan between Nonindicted Co. 2 and Nonindicted

However, the purpose of profit-making under Article 8-2(1) of the Act on the Aggravated Punishment, etc. of Specific Crimes is to obtain wide economic benefits (see Supreme Court Decision 2013Do5758, Sept. 24, 2014); and the purpose of extending the repayment of loans or the repayment of existing loans by a bank by creating false transaction performance (see Supreme Court Decision 2009Do13342, Feb. 11, 2010) is naturally the purpose of profit-making (see Supreme Court Decision 2009Do13342, Feb. 11, 2010). The appearance of false transaction performance made by the Defendant for the instant crime is clear that it had influenced the financial institution’s loan and discount rate, and it appears that the Defendant resolved the shortage of credit limit or assisted the customer participation in bidding. As such, since the Defendant’s crime of this case is sufficiently recognized as the purpose of profit-making

1. The scope of punishment by law;

Imprisonments for up to June 22 years and fines of up to 846,963,440 Won 2,17,408,602 won

* Calculation of Fines

1) 8,46,963,440 = Total sum of supply values in the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (issuance, etc. of False Tax Invoice) ¡¿ KRW 8,469,634,409 ¡¿ 10 per cent of the value-added tax rate ¡¿ 1/2 (Discretionary mitigation) ¡¿ 1/2 (Discretionary mitigation), and

2) KRW 2,117,408,602 = the above 8,469,634,409 x value-added tax rate x 10% x 5 times (limited to discretionary mitigation) x 1/2 (Discretionary mitigation), and forest below original level.

2. Scope of recommended sentences according to the sentencing guidelines (limited to imprisonment);

(a) Violation of the Aggravated Punishment, etc. of Specific Crimes (Delivery of False Tax Invoice);

【Determination of Punishment】

- Tax Offenses

【Special Convicted Persons】

- Reduction element: the existence of no purpose of tax evasion or the occurrence of no result of tax evasion;

【Recommendation Area and Scope of Recommendations】

- The mitigation area, one year to two years, and six months;

【General Convicts】

- Mitigation elements: No record of criminal punishment

(b) Violation of the Punishment of Tax Evaders Act: Omission of sentencing criteria;

(c) Scope of recommending punishment based on the standards for handling multiple crimes: Imprisonment with prison labor for not less than one year and six months (the crime for which the sentencing criteria are set and the crime for which no sentencing guidelines are set are concurrent crimes provided for in the former part of Article 37 of the Criminal Act, so only the lower limit of the sentencing range for the crime for

(d) Scope of the recommended sentences that are modified according to the sentencing guidelines: Imprisonment with prison labor for one year and six months through six months (in cases where the upper limit of the range of sentence recommended by the sentencing guidelines is inconsistent with the legally applicable sentencing guidelines, it shall be governed by the statutory applicable sentencing standards);

3. Sentence: Imprisonment for a year and six months, and a fine of 900,000,000 won; and

The Defendant recognized each of the instant crimes. The Defendant is an initial offender who has no record of criminal punishment. It appears that the penalty for each of the instant crimes was fully paid.

However, even though there is no actual transaction of goods or services, the Defendant issued or received a tax invoice in which the value of supply was falsely stated, and did not issue a tax invoice despite having to issue it. Such an offense by the Defendant is an anti-social crime that interferes with the legitimate exercise of the State’s right to tax collection, and disturbs tax justice and tax order, and the total value of supply is a large amount of supply. In particular, the Defendant’s issuance and receipt of tax invoices among the instant crimes was carried out between the companies operated by the Defendant, and in such a case, there is a high risk that it is easy to implement them, compared to the case where only one company was operated.

In addition, the defendant's age, character and conduct, environment, family relationship, motive and background of the crime, means and result of the crime, and the circumstances after the crime, etc. shall be determined as ordered by comprehensively taking into account all the sentencing conditions as shown in the argument in

1. Summary of the facts charged

No one shall issue or be issued a tax invoice under the Value-Added Tax Act without supplying any goods or service.

On January 31, 2017, the Defendant was issued a false tax invoice of KRW 135,100,00, as if he was supplied with goods or services equivalent to KRW 135,100,00,00, even though he was not supplied with goods or services by Nonindicted Co. 2, the Defendant was issued with one electronic tax invoice of KRW 135,10,00,00, from that time until December 31, 2017, among the list of crimes (1) in the separate sheet of crimes (1), 3, 8 through 10, 14, 19, and 8 through 10, 8 through 10, 19, and 8 through 10, as stated in the list of crimes (5).

2. Relevant principles;

Where a person who actually operates two companies receives the same false tax invoices on behalf of both companies, an act of the same operating entity in exchange for one tax invoice shall be evaluated as one act in light of social norms (see Supreme Court Decision 2012Do7172, Oct. 25, 2012, etc.).

Therefore, in a case where an actor issues a tax invoice in the position of a person who supplies goods and services without real transactions and is issued a tax invoice in the position of the person who is supplied with such goods and services, the establishment of a crime of violating the Act on the Aggravated Punishment, etc. of Specific Crimes (Delivery of False Tax Invoice) and the scope of fines shall be determined by aggregating the supply value stated in the tax invoice only once. On the other hand, considering the type of such act as if there exist two tax invoices in the form of issuing a tax invoice on the grounds that it is formally divided into the act of issuing a tax invoice and the act of issuing a tax invoice, and thus, the establishment of the above crime and the scope of fines shall not be determined by double calculation of the supply value stated in the tax invoice (the determination of the establishment of a crime differently as above can be seen as having a view that the supply value shall be adjusted only when determining the applicable range of fines by adding up the supply value to the total amount of fines. However, such a view is unreasonable as it clearly violates the provisions of Article 8-2 (1) of the Act

(1) There is only one tax invoice in the form of a processing transaction in which an actor issues one tax invoice and in which such tax invoice is issued, in which case only one tax invoice is actually received for each transaction.

② However, Article 8-2(1) of the Act on the Aggravated Punishment, etc. of Specific Crimes only provides that the sum of supply values entered in the tax invoice shall be the sum of supply values entered in the tax invoice, but does not separately provide for the method of calculating the sum of supply values entered in the tax invoice according to the type of

③ According to the above Supreme Court Decision 2012Do7172, the crime of violation of the Punishment of Tax Evaders Act due to issuance of the same tax invoice and the crime of violation of the Punishment of Tax Evaders Act due to receiving the same tax invoice are punished only for a crime with heavier punishment than 3 billion won, on the ground that the sum of the crimes becomes more than 3 billion won, which serves as the standard for the application of the Act on the Aggravated Punishment of Specific Crimes, is unreasonable.

④ The above provision intends to punish an aggravated punishment for giving and receiving false tax invoices on a large scale for profit-making purposes, and it also conforms to the purport of determining whether the provision is applied according to the scale of actually offered false taxation data irrespective of the type of transaction.

3. Specific determination

Of the facts charged in the instant case, in a case where a company in which the Defendant actually controlled and operated the same tax invoice is issued and received without any real transaction, only one tax invoice subject to receipt exists in each processing transaction, and the aggregate of supply values under such tax invoice is KRW 6,755,236,00. In light of the aforementioned legal principles, in calculating the “total amount of supply values, etc.,” which is the applicable standard under Article 8-2(1) of the Act on the Aggravated Punishment, etc. of Specific Crimes, the aforementioned tax invoice shall not be included doublely as KRW 6,75,236,00.

On December 28, 2017, non-indicted 1 Co., Ltd. (1) 365,305,000 on June 30, 2017; 174,200, 200 on May 31, 2017; 107, 200, 200, 200, 200, 305, 14, 109, 50, 100, 205, 205, 205, 205, 30, 205, 205, 200, 205, 205, 205, 205, 106, 306, 200, 000, 630, 306, 200, 200, 306, 300, 15, 2017

Ultimately, the phrase “total amount of supply value, etc.” under Article 8-2(1) of the Act on the Aggravated Punishment, etc. of Specific Crimes is 8,469,634,409 won (=the total amount of supply value of each tax invoice listed in the attached Table 1(1), (2), and (4) - the total amount of supply value of each tax invoice listed in the attached Table 15,224,870,409 - the total amount of supply value of the posted tax invoice 6,75,236,00 won) and there is no other evidence to prove that the supply value exceeds the above amount.

4. Conclusion

Therefore, since this part of the facts charged falls under a case where there is no proof of a crime, the acquittal should be pronounced pursuant to the latter part of Article 325 of the Criminal Procedure Act, but as long as it is found guilty of a violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (issuance of

[Attachment]

Judges Lee Jin-hoon (Presiding Judge)

1) The prosecutor prosecuted the total value of this part of supply as KRW 15,224,870,409. However, if the issuance and receipt of a single tax invoice is separately prosecuted as seen below, the prosecutor is guilty only for the part issued for the convenience of determination.

Note 2) Since the phrase “18,00,000 won” as stated in the indictment is apparent that it is a clerical error of “180,000,000 won”, it shall be corrected ex officio.

(3) Supreme Court Decision 2018No591 Decided January 10, 2019, Seoul High Court Decision 2018No138 Decided September 6, 2018, Daegu District Court Decision 2018No274 Decided December 7, 2018, Seoul Southern District Court Decision 2016No26 Decided August 31, 2017, etc.

4) As seen earlier on the grounds of sentencing, in the event that a tax invoice is issued and received between the Defendant’s business entities, the issuance of the tax invoice and the receipt of the tax invoice are more likely to be implemented than only when only one business entity is operated. However, this is merely a matter to be considered in sentencing, and there is no imbalance between the Defendant and the Defendant depending on which the Punishment of Tax Evaders Act and the Act on the Aggravated Punishment, etc. of Specific Crimes are applied.