Seoul Central District Court 2013 Gohap54257 ( January 12, 2014)

Whether the provisions of Article 15 (1) of the Punishment of Tax Evaders Act are unconstitutional.

Article 15 (1) of the Punishment of Tax Evaders Act (Violation of the duty to issue Cash Receipts) does not clearly deviate from the legislative discretion, or infringe on the property right as prescribed in Article 23 of the Constitution against the excessive prohibition principle, and it is reasonable to impose 50% of the transaction price as an administrative fine in the case of failure to issue Cash Receipts only within a certain scope of business operators subject to the application of the principle of excessive prohibition. Thus, it is reasonable to impose

Article 15 (1) of the Punishment of Tax Evaders Act

2014Na2034025 Return of Unjust Enrichment

2014Na2034032(combined) Demanding restitution of unjust enrichment

Park AA

Korea

November 19, 2014

January 22, 2016

1. The plaintiff's appeal is dismissed.

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

the Gu Office's place of service and place of service

The judgment of the first instance shall be revoked. The defendant shall pay to the plaintiff 661,637,760 won with 20% interest per annum from the day following the delivery of a copy of the complaint of this case to the day of complete payment.

1. Basic facts

The following facts shall not be disputed between the parties, or may be acknowledged by taking into account the whole purport of the pleadings in each entry in Gap evidence of subparagraphs 1 through 4, and Eul evidence of subparagraphs 1 through 7:

(a) An overview of cash receipts systems;

1) As a part of the construction of taxation data for self-employed business operators’ tax base training, the Defendant continued to implement policies for facilitating the use of credit cards since 1999, but still small-amount transactions were settled in cash rather than credit cards and limited to the encouragement of credit card merchants due to the fee problem, and thus, cash transactions account for more than half of private consumption. Accordingly, the Defendant newly established the provisions of Articles 126-2 and 126-3 of the Restriction of Special Taxation Act on December 30, 2003 and implemented the Cash Receipt System from January 1, 2005.

2) The term "cash receipt" in the Restriction of Special Taxation Act means a receipt issued by a cash receipt merchant to a person who is supplied with goods or service by means of cash receipt issuing devices in the event that the cash receipt merchant receives the price for the supply of such goods or service (Article 126-3(4)); and the term "cash receipt business operator" means a business operator equipped with a system that approves and transmits the settlement of cash receipts, who has obtained approval from the Commissioner of the National Tax Service, and the term "cash receipt merchant" means a business operator who installs a cash receipt issuing device in a credit card terminal, etc. (Article 126-3(

3) When a cash receipt merchant supplies goods or services and receives cash in accordance with the Cash Receipt System, the details of transactions shall be transmitted to the cash receipt business operator in real time through the device with which the cash receipt issuing device is attached, if the credit card, resident registration number, cell phone number, etc., which enables consumers to identify the consumers. A cash receipt business operator shall transmit the details of cash settlement, such as the date and amount of the transactions, personal information of the traders, and personal information of the cash receipt merchant (Article 126-3(3) of the Restriction of Special Taxation Act), and the National Tax Service shall provide

4) Meanwhile, in light of the fact that it is difficult for consumers to actively request issuance of cash receipts in relation to the location of the weak, unlike other types of business, in general, the Defendant: (a) revised the Income Tax Act and the Corporate Tax Act on December 31, 2009; and (b) required to supply goods or services exceeding 300,000 won per case and to issue cash receipts, regardless of consumer’s request, if the business operator who is obligated to issue cash receipts fails to issue cash receipts, by amending the Punishment of Tax Evaders Act to ensure its effectiveness; and (c) revised the Punishment of Tax Evaders Act to impose an administrative fine provision that imposes an administrative fine equivalent to 50,000 won per case on the business operator obligated to issue cash receipts who does not issue cash receipts.

B. Imposition of an administrative fine on the plaintiff

1) The Plaintiff operated an internal clinic with the trade name, “gambax division” in the Gangnam-gu Seoul Metropolitan Government x building Xx buildings.

2) On July 24, 2013, the director of the Seoul Regional Tax Office notified the Plaintiff of the imposition of a fine for negligence under Article 15(1) of the Punishment of Tax Evaders Act (hereinafter “the instant legal provision”) on the ground that the Plaintiff violated the obligation to issue cash receipts under Article 162-3(4) of the former Income Tax Act (amended by Act No. 11611, Jan. 1, 2013; hereinafter “former Income Tax Act”) with respect to the portion of income from April 1, 2010 to December 31, 2011, as described below, and the Plaintiff paid a fine for negligence of KRW 230,025,230 on August 7, 2013, which is within the period for stating the opinion.

3) In addition, the director of the Seoul Regional Tax Office, around December 2013, on the ground that the Plaintiff violated the obligation to issue cash receipts under Article 162-3(4) of the former Income Tax Act with respect to the portion of income from January 1, 2012 to December 31, 2012, as indicated below, the head of the Seoul Regional Tax Office notified the Plaintiff of the imposition of a fine for negligence under the legal provision of this case on the ground that the Plaintiff violated the obligation to issue cash receipts under Article 162-3(4) of the former Income Tax Act. Accordingly, the Plaintiff paid a fine for negligence of KRW 431,612,

(c) Related statutes;

Detailed details of the statutes related to this case shall be as shown in the attached Form.

2. Judgment on the plaintiff's claim

A. The plaintiff's assertion

1) Claim on the unconstitutionality of the legal provisions of this case

As examined below, the legal provision of this case is unconstitutional and invalid in violation of Article 23 of the Constitution, the principle of excessive prohibition, and the principle of equality under the Constitution. The Plaintiff paid the Defendant a total of 661,637,760 won (=230,025,230 won + 431,612,530 won + 431,612,530 won) upon prior notice of a fine for negligence based on the legal provision of this case, which is unconstitutional and invalid. As such, the Defendant’s prior notice of a fine for negligence based on the legal provision of this case, which is unconstitutional and invalid, was paid to the Defendant without any legal ground. Accordingly, the Defendant shall pay the Plaintiff a total of 661,63

A) Violation of the principle of excessive prohibition

(1) In comparison with the penalty tax under Article 49 of the Act on the Law of this case, the penalty tax imposed under the Income Tax Act and the Corporate Tax Act on the violation of the obligation to issue cash receipts is imposed on the amount equivalent to 5% of the transaction amount that reaches 10 times the transaction amount. In addition, the Act on the Law of this case provides that the penalty tax shall be reduced or exempted (Article 48(2) of the Framework Act on National Taxes), or the penalty tax shall be imposed on the return of modification within a given period or after the given period if it is not intentional breach of the obligation (Article 49 of the Framework Act on National Taxes). However, the Act on the Law of this case provides that the tax reduction or exemption on the fine for negligence or the limit on the fine for negligence shall not be considered in cases where the cash receipt is issued after the due date or the cash receipt is omitted due to negligence, and (3) the penalty tax shall be imposed on the amount equivalent to 10 to 20% of the calculated tax amount based on the calculated tax amount in cases of the penalty tax under the Income Tax Act and Corporate Tax Act.

(2) In the case of fines for negligence for administrative breach of duty, the amount is ordinarily more than KRW 10,00,000 or KRW 20,000,000,000, while the legal provision of this case provides that the amount of fines for negligence shall be imposed by imposing 50% of the transaction amount, and in consideration of the sales cost, most of the income from cases where cash receipts have not been issued, shall be paid as fines for negligence. In addition, even if the legislative purpose can be achieved through relaxed legislative means such as stipulating the amount of fines for negligence as 50% or less of the transaction amount, the amount of fines for negligence can be uniformly determined as 50% of the transaction amount, and it cannot be subject to sanctions corresponding to the degree of specific violation in accordance

(3) The legal provisions of this case do not differ in cases where the issuance of cash receipts was not intentionally or negligently omitted, and do not distinguish between the issuance of cash receipts and the delayed issuance of cash receipts, and do not specify whether the issuance of cash receipts was made for the purpose of tax evasion. In addition, in cases where fraud or other unlawful act was committed in the course of violating the obligation to issue cash receipts, the legal provisions of this case are punished by imprisonment or a fine under Article 3 of the Punishment of Tax Evaders Act, or both penalties and fines depending on the circumstances are imposed. In such a case, the subject of the legal provisions of this case are liable to pay fines for negligence, and thus, the subject of the legal provisions of this case

(4) In light of the fact that the tax credit corresponding to the benefits of the person performing the obligation to issue cash receipts is based on the calculated tax amount, the legal provision of this case, which is not the calculated tax amount, shall be considered as the basis for the calculation of the administrative fine. The Constitutional Court held that if the tax is imposed excessively on the unrealized profits, it may infringe on property rights due to the original erosion as a taxation by processing gains. However, the legal provision of this case, which is not the income of the enterpriser, shall be deemed as the basis for the calculation of the administrative fine, and shall not be excluded from the possibility of capital erosion.

(5) Therefore, in full view of the aforementioned circumstances, the instant legal provision is unconstitutional as it violates Article 23 of the Constitution and the principle of excessive prohibition by excessively infringing the Plaintiff’s property right.

B) Violation of the principle of equality

The obligation to issue cash receipts is mainly imposed on consumers, taking into account the type and scale of business, and if the subject business operator does not join the cash receipt merchant, only the amount equivalent to 1% of the revenue amount is imposed (Article 81(11)1 of the Income Tax Act). On the contrary, if the subject business operator who has joined the cash receipt merchant violates the obligation to issue cash receipts, the subject business operator is subject to a fine for negligence equivalent to 50% of the unissued trading amount, and is in violation of the principle of equality.

2) Claim on delay in issuance of Cash Receipt

Even if the legal provision of this case is not unconstitutional, the provision of this case can be applied only when it is delayed to issue cash receipts for the purpose of evading tax in substance in light of the circumstances, delay period, and purpose, etc. of the delayed issuance of cash receipts. Thus, the above amount should be paid to the Plaintiff without any legal cause equivalent to the above amount of 407,296,200,000 won, which was paid by the Plaintiff to the Defendant in relation to the delayed issuance of cash receipts, and 282,680,000 won in the transaction amount in 2011 (from January to December), which was paid by the Plaintiff at the end of the year. The above amount should be paid to the Plaintiff in proportion to the amount of the delayed issuance of cash receipts which was paid by the Plaintiff to the Defendant in relation to the above delayed issuance of cash receipts x 209,120,000 won in total.

B. Determination as to whether the legal provisions of this case are unconstitutional

1) Whether the principle of excessive prohibition is violated

A) Limited fundamental rights

Article 162-3 (4) of the former Income Tax Act imposes an obligation on a business entity obligated to issue cash receipts to supply goods or services, the transaction amount of which exceeds 300,000 won per case, and to issue them in cash, even if the other party does not request the issuance of cash receipts. The legal provision of this case imposes an administrative fine in the event of a violation of the obligation to issue cash receipts, thereby restricting the Plaintiff’s freedom of occupation, which is the business entity obligated to issue cash receipts. Although the Plaintiff asserts the infringement of property rights under Article 23 of the Constitution by the imposition of administrative fines, the issue of the imposition of administrative fines and the imposition of administrative fines, as well as the imposition of administrative fines, are included in the contents when determining whether the infringement of the freedom

B) The legitimacy of legislative purpose and the suitability of the means

If cash receipts are not issued in cash in the transaction of goods or services, it is difficult for the National Tax Service to decide whether to evade tax from the standpoint of the National Tax Service, unless the business operator voluntarily makes a report on the fact of transactions. Therefore, it is the reality that the business operator has preferred settlement rather than credit cards, and the act of inducing cash settlement without issuing the actual cash receipts is significantly promoted. The legislative purpose of the legal provision of this case is to prevent tax evasion by training tax base for high-income professional business operators, etc., and to establish a fair trade order. Furthermore, the legislative purpose is to ensure that the legal provision of this case is aimed at preventing tax evasion and establishing a fair trade order by training tax base for high-income professional business operators, etc., and if the business operator of the business that is obligated to issue cash receipts supplies goods or services exceeding 300,000 won per transaction and receives the price in cash, the business operator is obligated to issue it even if the other party does not request the issuance of cash receipts, and imposing an administrative fine equivalent

C) the minimum extent of infringement

(1) The instant legal provision provides a certain amount of money for a certain high-income professional entrepreneur, etc.

Since an administrative order punishment, which is more weak than the administrative punishment, is required to issue cash receipts for a cash transaction, and the method of imposing sanctions, such choice itself does not violate the minimum principle of infringement. In addition, rather than applying to all cash transactions by an entrepreneur obligated to issue cash receipts, it is limited to the scope of applying only to a large cash transaction with a large amount of at least 30,000 won per transaction with a large incentive to evade tax, rather than to apply to all cash transactions by an entrepreneur obligated to issue cash receipts. Furthermore, the amount of fines for negligence is equivalent to 50% of the amount of non-issuance of cash receipts. This is determined by the amount equivalent to 35% of the amount of the global income tax on the actual 35% or 38% of the amount of the high-income professional business, and the value-added tax rate of 10% is also applicable. Considering that the amount of fines for negligence should be determined commensurate with such tax amount, it is possible to prevent the tax evasion inducement by an entrepreneur specialized

(2) As a means to secure the collection of principal tax, the form of penalty is different from that of a fine for negligence, which is an administrative order, and even if its substance is similar, it cannot be deemed that the provision on reduction or exemption of penalty tax (Article 48 of the Framework Act on National Taxes) should also be applied to a fine for negligence. This is because, in the case of mandatory issuance of cash receipts, there is little need to reduce or exempt fines depending on specific circumstances, such as additional taxes, because there are many single transactions against many unspecified consumers. Meanwhile, Article 1 of the Act on the Regulation of Violations of Public Order provides for the requirements for establishing violations of public order and the imposition, collection, and trial of fines for negligence to protect the rights and interests of the people (Article 7, 8, and 9), and Article 10 of the Enforcement Decree of the Punishment of Violations of Public Order Act provides for the requirements for the imposition of fines for negligence and the imposition, collection, and judgment of fines for negligence shall be applied to a person who has no knowledge of illegality or ability to take responsibility (Article 10).

(3) The uniform imposition rate of fines for negligence, which is 50% of the non-issuance amount of cash receipts, is set flexibly in proportion to the transaction amount without the upper limit, and thus, the amount corresponding to the profits to be earned by the business operator obliged to issue cash receipts due to non-issuance of cash receipts is more reasonable than the case where the upper limit of fines for negligence can be set. Furthermore, if the rate of fines for negligence or the amount of fines for negligence can vary depending on the discretion of the administrative agency, another problem may arise. Moreover, the act of non-issuance of cash receipts itself may not be deemed to have a big difference in the motive and manner of the violation, the circumstances and method thereof, and the degree of illegality according to the circumstances after the fact that the legal provision of this case sets the amount of fines for negligence at the uniform rate of 50% of the non-issuance amount. Therefore, it is difficult to readily conclude that the instant

(4) The legal provision of this case does not impose an administrative fine on all business operators who are obligated to issue cash receipts and violate it. In particular, it limits the scope of their business to high-amount cash transactions with high possibility of income evasion. Moreover, a business operator obligated to issue cash receipts enters credit cards, resident registration numbers, portable phone numbers, etc., which can identify consumers immediately after having conducted cash transactions in excess of a certain amount, and issued cash receipts generated in real time through a device with the device with the device to issue cash receipts. Thus, the procedure is difficult, and it does not require much time and expenses to issue cash receipts. Meanwhile, the business operator obligated to issue cash receipts may issue cash receipts in an indefinite name within five days from the date when the other party receives cash receipts if the other party does not request to issue cash receipts. In addition, it can be said that measures are prepared in cases where the issuance of cash receipts is delayed due to inevitable circumstances, such as temporary breakdown or malfunction of cash receipts, etc., even if the business operator refuses to issue cash receipts in its name.

(5) Article 3(1) of the Punishment of Tax Evaders Act provides that "Any person who evades a tax, obtains a tax refund or deduction by fraudulent or other unlawful means shall be punished by imprisonment with prison labor for not more than two years, or by a fine not exceeding twice the amount of tax evaded, or by a fine not exceeding twice the amount of tax refunded or deducted." Article 3(2) of the Punishment of Tax Evaders Act provides that "a person who commits a crime under paragraph (1) may be punished by imprisonment with prison labor and a fine may be imposed concurrently in consideration of the circumstances where the person commits a crime under paragraph (1)." However, Article 3 of the Punishment of Tax Evaders Act provides that "a person who commits a fraudulent or other unlawful act shall be punished by a fine in addition to the circumstances where the person commits a crime under paragraph (1)." However, since Article 3 of the Punishment of Tax Evaders Act provides that where a person fails to issue cash receipt by fraudulent or other unlawful means, it is different from the requirements of excessive punishment (Article 3 of the Punishment of Tax Evaders Act and Article 3 of the Punishment of Tax Evaders Act, in light of such intentional and possibility.

(6) Since the net profit is derived from the transaction amount acquired by an entrepreneur from the transaction amount that he/she acquired as profit, the transaction amount itself cannot be deemed as net profit. However, since the transaction amount received by an entrepreneur is not a simple processing profit but a money actually acquired, it cannot be deemed that the transaction amount constitutes an unrealized profit, as alleged by the Plaintiff, it is difficult to deem that the infringement of property right due to capital erosion under the instant legal provision would occur. Furthermore, insofar as there is a specific correlation between the transaction amount corresponding to the unissued cash receipt and the liability of an entrepreneur who issued cash receipts, it is difficult to view the transaction amount in determining the amount of the administrative fine.

(7) As such, in order to prevent tax evasion of high-income professional workers and to secure effectiveness, it is inevitable to impose a fine for negligence corresponding to the mandatory issuance of cash receipts in certain cases, and to diversify the methods in the timing and method of issuing cash receipts, and to provide for reduction of and exemption from fines for negligence, the legal provision of this case does not violate the minimum principle of infringement.

D) a balance of the legal interests;

The legislative purpose of the instant legal provision is to establish transparent and fair trade order and to train the tax base for the category of business with a large amount of cash transactions, such as high-income professionals. Such public interest is very significant and important. On the other hand, private interest restricted by the Plaintiff is to carry out the duty of entering the mobile phone numbers, etc. of the other party into the cash receipt issuing device and printing out and issuing cash receipts without any separate fee of 300,000 won or more. As such, the cost, time, and effort for the performance of the duty is very minor, and the fine for negligence imposed upon the breach of the duty is also equivalent to the extent that it infringes the above public interest. Ultimately, the public interest pursued by the instant legal provision is much larger than the disadvantage suffered by the business that issues cash receipts, and therefore, the balance of legal interests is recognized.

E) Sub-decision

Therefore, the legal provision of this case does not infringe the plaintiff's freedom of occupation in violation of the excessive prohibition principle.

2) Whether the principle of equality is violated

As seen earlier, the legal provision of this case provides that the "person who has become a Cash Receipt merchant" is a business operator who has become a Cash Receipt merchant, while the person who has not become a Cash Receipt merchant bears only 1% of the additional dues to become a Cash Receipt merchant (the amount of income already subscribed). However, in the event of violation of the obligation to issue a Cash Receipt merchant, the person who has not become a Cash Receipt merchant is subject to an administrative fine equivalent to 50% of the amount of non-issuance of Cash Receipt, and thus, there is a discrimination in this respect (However, since the subject was changed to a " Cash Receipt merchant when revising the Income Tax Act

However, the decision of the legislators should be respected in light of the fact that it was the early stage in which the Cash Receipt Business System was implemented at the time, and the fact that the Cash Receipt Business System should become a Cash Receipt merchant in order to issue a Cash Receipt. The decision cannot be seen as remarkably unreasonable and unfair discrimination beyond the reasonable discretion. Therefore, it does not violate the equality principle

3) Sub-determination

Therefore, the legal provision of this case does not violate the excessive prohibition principle and the principle of equality, and thus, the plaintiff's assertion that the legal provision of this case is unconstitutional is without merit.

C. Judgment on the assertion on delay in issuance of cash receipts

On the other hand, Article 162-3 (4) of the former Income Tax Act provides that the business operator who has become a Cash Receipt merchant shall supply goods or services, the transaction amount of which exceeds 30,000 won for each transaction, and issue cash receipts when he receives the price in cash. In the meaning of the phrase, it is reasonable to interpret that the business operator who is obligated to issue Cash Receipts shall issue cash receipts as being issued at the same time or immediately after the receipt of the "cash" due to the supply of goods or services by the business operator under the obligation to issue Cash Receipts. Unless the provision of this case separates the requirements and effects of the delayed issuance of Cash Receipts from the issue of Cash Receipts, in the case of delayed issuance of Cash Receipts, there is no reasonable reason to deal differently with the application of the legal provisions of this case on the basis of the existence of the purpose of tax evasion. Thus, on the other premise, the plaintiff's above assertion on the other premise has no reason to further consider without the need for further review.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is just and it is so dismissed as it is so decided as per Disposition.