[1] The meaning of "Fraud or other unlawful act" or "Fraud or other unlawful act" in the crime of tax evasion under Article 9 (1) of the former Punishment of Tax Evaders Act and Article 3 (1) of the Punishment of Tax Evaders Act

[2] Whether Article 104(2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 104(2) provides for the method of estimating the amount of evaded tax (affirmative in principle)

[1] Article 9(1) of the former Punishment of Tax Evaders Act (wholly amended by Act No. 919, Jan. 1, 2010); Article 3(1) of the Punishment of Tax Evaders Act / [2] Article 66(3) of the former Corporate Tax Act (wholly amended by Act No. 10423, Dec. 30, 2010); Article 104(1) and (2) of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 24357, Feb. 15, 2013)

[1] Supreme Court Decision 2010Do9871 Decided June 14, 2012 (2) Supreme Court Decision 2011Do527 Decided April 28, 2011 (Gong2011Sang, 1111)

Defendant

Defendant

Law Firm Sejong, Attorneys Jeong Jin-ho et al.

Chuncheon District Court Decision 2012No67 decided December 26, 2012

The appeal is dismissed.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

In the crime of tax evasion provided for in Article 9(1) of the former Punishment of Tax Evaders Act (wholly amended by Act No. 919, Jan. 1, 2010; hereinafter the same) or Article 3(1) of the Punishment of Tax Evaders Act, the term “Fraud or other unlawful act” or “Fraud or other unlawful act” refers to an act which makes it possible to evade tax and which is recognized as unlawful by social norms, i.e., a deceptive scheme which makes the imposition and collection of tax impossible or considerably difficult. Therefore, it does not constitute simply a failure to report under the tax law or making a false report without accompanying other act, but it is recognized that the imposition and collection of tax was impossible or considerably difficult (see, e.g., Supreme Court Decisions 201Do13605, Mar. 15, 2012; 2014Do6178, Jun. 18, 2012).

The court below acknowledged the fact that the defendant, while engaging in the business of developing and reselling real estate, failed to keep and keep books of account for purchase and sale, and did not issue or issue all tax invoices for the business process, and the final return of corporate tax was not made at all. The court below determined that the defendant's act constitutes an affirmative act which makes it impossible or considerably difficult to impose and collect taxes, and constitutes an unlawful act such as fraud or other unlawful act.

Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, the above determination by the court below is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles regarding “Fraud or other unlawful act” in the crime of tax evasion, or by

2. Regarding ground of appeal No. 2

Article 66(3) proviso of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter the same) provides that “Where it is impossible to calculate the amount of income by account books or other documentary evidence on the grounds prescribed by Presidential Decree, it may be estimated under the conditions as prescribed by Presidential Decree.” Article 104(1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 24357, Feb. 15, 2013; hereinafter the same) provides that “where there is no necessary account books or documentary evidence in calculating the amount of income, or there is insufficient or false material part in calculating the amount of income, the method of determining or revising the amount of income by subtracting the amount under each of the following items from the amount of income generated from business income under the former Corporate Tax Act, the method of calculating or correcting the amount of income by multiplying the amount of income generated from business by standard expense rate or rent for each item, or by multiplying the amount paid or payable by standard expense rate under Article 5(1).”

Article 104(2) of the former Enforcement Decree of the Corporate Tax Act does not stipulate the method of estimating the amount of tax to be determined in a limited manner, but rather does not include an objective and reasonable way that can be generally acceptable, and if the result is highly probable and correct, the estimation of the amount of tax to be evaded shall also be allowed. However, if the method of estimating the amount of tax is prescribed in the aforementioned Act and subordinate statutes, it is reasonable to view that such method should be applied to a specific case, unless there are special circumstances to deem it unreasonable (see Supreme Court Decision 2011Do527, Apr. 28,

The lower court, barring special circumstances, determined that the Defendant’s corporate tax evasion amount by means of standard expense rate pursuant to the above provisions of the former Enforcement Decree of the Corporate Tax Act, barring special circumstances, and that the Defendant’s estimation of the corporate tax evasion amount by means of standard expense rate is reasonable, and that the Defendant’s estimation of the corporate tax evasion amount by means of standard expense rate would lead to unreasonable consequences in the instant case where the Defendant, at the time of purchase and sale of real estate, failed to prepare books or documentary evidence.

Examining the reasoning of the judgment below in light of the above statutory provisions, legal principles, and records, the above determination by the court below is acceptable. Contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to the calculation of the amount of evaded tax, thereby affecting the conclusion

3. Conclusion

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

Justices Kim So-young (Presiding Justice)