Whether the business tax and income tax are subject to the business tax for arranging the lending and borrowing of money between others and receiving the introduction fee.

If a person mediates a loan of money between others, receives a loan of money, or receives the interest thereof, the person shall be subject to the income tax because it constitutes a business falling under Article 1 (1) 11 of the former Business Tax Act and Article 23 (1) 11 of the Enforcement Decree of the same Act, and each of the above income shall be subject to the income tax under Article 4 (3) (a) of the Income Tax Act.

Article 1 (1) 11 of the former Business Tax Act; Article 23 (1) 11 of the Enforcement Decree of the former Business Tax Act; Article 4 subparagraph 3 (a) of the Income Tax Act (A)

Defendant 1 and 3

Prosecutor (Attorney Park Jong-chul et al., Counsel for the defendant-appellant)

Seoul Criminal Court Decision 75No7099 delivered on March 9, 1977

The appeal is dismissed.

The grounds of appeal are examined.

1. As to the violation of the Short-Term Finance Act:

In light of the record, the fact that the Defendants received promissory notes from the obligor for provisional registration of transfer of ownership on the mortgaged real estate with an agreed interest rate of 3 months in advance while lending money is not a security for a loan for consumption, but a discount transaction of the said notes, and thus, not guilty of violation of the Short-term Finance Act. The judgment of the court of first instance that affirmed this decision is just and it is not possible to accept the decision of the court of first instance, and contrary to the legal principles, it cannot be adopted to attack the original market.

2. On the violation of the Punishment of Tax Evaders Act:

(a) Article 1(1) of the former Business Tax Act (amended by Act No. 1965, Nov. 29, 1967; Act No. 2478, Feb. 6, 197) provides that a person who runs a business falling under any of the following subparagraphs in Korea shall be liable to pay business taxes under this Act. Paragraph (2) provides that the definition and scope of business prescribed in each subparagraph of the preceding paragraph shall be prescribed by the Presidential Decree, and Article 23(1) of the former Business Tax Act (amended by Presidential Decree No. 5287, Aug. 20, 197; Presidential Decree No. 6660, May 3, 197) provides that a person who is paid remuneration for a commercial activity between others as provided for in any of the following subparagraphs, a person who carries on a financing business under subparagraph 8 of Article 111 of the Income Tax Act (amended by Act No. 1963, Feb. 6, 1973; 196) shall be subject to discount or interest under Article 16(3) of the former Business Act:

Therefore, if Defendant 4 received brokerage and referral fees for lending and borrowing of money between others as stated in the indictment, it shall be conducted as a restaurant and other business under Article 1 (1) 11 of the former Business Tax Act and Article 23 (1) 8 of the Enforcement Decree of the same Act, and if Defendant 1 and 3 make a monetary loan as stated in the indictment and received interest, it shall be conducted as such as a restaurant and other business under Article 1 (1) 11 of the former Business Tax Act and Article 23 (1) 11 of the Enforcement Decree of the same Act, it shall be deemed that each so-called "business tax" shall be imposed, and each of the above income shall be subject to income tax pursuant to Article 4 (3) (a) of the same Act.

Nevertheless, unlike the opinion of the court below, we find the Defendants not guilty of the facts charged under the premise that the so-called business tax and income tax are not subject to the so-called "business tax". The decision of the court below which rendered a decision is erroneous in the misunderstanding of the above tax laws. This is with respect to the theory that the court below erred in the misapprehension of the above tax laws.

However, the summary of the facts charged is clear in the indictment that Defendant 1 through 3 acquired interest on lending money to others, and Defendant 4 acquired the introduction fee by making good offices among others. Although the income amount and transaction amount arising from transactions are reported to the tax office, and the personal business tax and business income tax were evaded by failing to pay it in spite of payment, so it constitutes a violation of Article 9 (1) 3 of the Punishment of Tax Evaders Act. In other words, the crime of tax evasion by unlawful acts as provided in Article 9 of the Punishment of Tax Evaders Act is recognized to be unfair by social norms by the act that makes it possible to evade taxes, the imposition and collection of taxes is impossible or considerably difficult, and it does not constitute a party member solely without filing a report under the tax law (see, e.g., Supreme Court Decision 76No4078, May 10, 197). Thus, the reasons for the above facts charged by the Defendants do not constitute an active unlawful act, as alleged in the above facts charged.

Therefore, the argument on this issue is also groundless.

The appeal is dismissed for more than one reason, and it is so decided as per Disposition by the assent of all participating judges.

Justices Jeong Tae-won (Presiding Justice)