Defendant

Both parties

The fixed-time (prosecution), Kim Jong-Un (Trial)

Attorney Kim Young-chul

Incheon District Court Decision 2016Gohap569 Decided January 18, 2017

Seoul High Court Decision 2017No468 Decided July 19, 2017

Supreme Court Decision 2017Do12650 Decided December 28, 2017

The judgment of the court below (including the part not guilty in the grounds) shall be reversed.

The defendant shall be innocent.

The summary of the judgment against the defendant shall be published.

1. Summary of grounds for appeal;

A. Defendant

1) misunderstanding of facts and misapprehension of legal principles

A) The Defendant, who actually operates Nonindicted Co. 1 (hereinafter “Nonindicted Co. 1”) and trades with Nonindicted Co. 2 Co. 3 (hereinafter “Nonindicted Co. 2”) and Nonindicted Co. 3 (hereinafter “Nonindicted Co. 3”) and was issued a tax invoice in the form of an electronic tax invoice.

Article 10(3) of the Punishment of Tax Evaders Act and Article 8-2 of the Act on the Aggravated Punishment, etc. of Specific Crimes (hereinafter “Specific Crimes Aggravated Punishment Act”) which punishs the filing of a false list of total tax invoices by seller are punished against the act of violation. The Value-Added Tax Act is exempted from the obligation to submit a list of total tax invoices by seller when an electronic tax invoice is received. As such, as long as the Defendant was issued by Nonindicted Company 2 and Nonindicted Company 3 in the form of electronic tax invoice, so long as the purchase tax invoices from Nonindicted Company 2 and Nonindicted Company 3 were issued in the form of electronic tax invoice, the obligation to submit the list of total tax invoices by seller is exempted. Therefore, even if the Defendant submitted a false list of total tax invoices

In fact, the Defendant submitted a list of the total tax invoices by seller to the government, and did not enter the details of purchase transactions with Nonindicted Company 2 and Nonindicted Company 3, in the list of the total tax invoices by seller. The Defendant did not themselves submit the list of the total tax invoices by seller with Nonindicted Company 2 and Nonindicted Company 3 on the details of purchase transactions with Nonindicted Company 3.

B) The Defendant actually purchased and received a purchase tax invoice from Nonindicted Co. 2 and Nonindicted Co. 3. The details of transactions entered in the list of the total tax invoices by seller are all based on purchase tax invoices consistent with the actual transactional relationship. However, although the part of the purchase tax invoice issued by the Defendant, the item is differently entered in the list of “Stevisece” rather than the same, insofar as there was a real transaction, the list of the total tax invoices by seller cannot be deemed to have been entered in a false statement without the supply of goods or services.

C) Even if the Defendant purchased the “Steme Lease” as non-material in the vicinity and received a purchase tax invoice corresponding to the transaction from Nonindicted Company 2 and Nonindicted Company 3, the Defendant does not fall under the “processing Transaction” under Article 10(1) and (2) of the Punishment of Tax Evaders Act, but does not fall under the “processing Transaction” under Article 10(3) of the same Act. Furthermore, even if the Defendant made a real transaction with Nonindicted Company 2 and Nonindicted Company 3, as long as the Defendant made a real transaction, the list of the total tax invoices by seller is merely the list of the supply values by stating the list of the total tax invoices by seller, and it cannot be deemed as related to the “processing Transaction”. Thus, Article 8-2 of the Specific Crimes Aggravated Punishment

2) Unreasonable sentencing

The punishment sentenced by the court below (two years of imprisonment, a fine of 650 million won) is too unreasonable.

(b) Prosecutors;

1) misunderstanding of facts and misunderstanding of legal principles (not guilty in the original trial)

A) Based on the details of tax invoices and related books, etc., the lower court acknowledged that the Defendant traded 163,169,000 won in total on three occasions between March 26, 2013 and May 31, 2013, and found the Defendant not guilty of this part of the facts charged. However, according to the Defendant’s statement and Nonindicted 4, etc., the lower court found the Defendant and Nonindicted 3 did not have any real transaction.

B) Since the submission of a false list of total tax invoices by seller constitutes one crime on the total value of supply listed in the list of total tax invoices by seller, it cannot be determined as to whether any part of the list is removed or false. Even if a part of the list of total tax invoices by seller is included in the list of total tax invoices by seller listed in the attached list of crimes submitted by the Defendant (hereinafter “list of total tax invoices by seller”), it should be recognized as guilty on the total value of supply listed in the list of

2) Unreasonable sentencing

The sentence imposed by the court below on the defendant is too uneasible and unfair.

2. Determination of misconception of facts and misapprehension of legal principles as to the defendant's electronic tax invoice issuance portion and individual tax invoice list

A. Relevant legal principles

In light of the purport of introducing the electronic tax invoice system under the Value-Added Tax Act, which was amended by Act No. 9268, Dec. 26, 2008, effective January 1, 2010, the purport of introducing the electronic tax invoice system, the portion of the electronic tax invoice issued by the Commissioner of the National Tax Service for which the details of issuance are transmitted to the Commissioner of the National Tax Service is not obligated to submit the list of the total tax invoices by seller (Article 54(2) of the Value-Added Tax Act), and the submission of the list does not include any essential entry in the list of the total tax invoices under the Value-Added Tax Act (Article 21(3) and (4) of the Enforcement Rule of the Value-Added Tax Act, amended by Ordinance of the Ministry of Strategy and Finance as of March 31, 2010). Therefore, even if the list of the total tax invoices by seller was submitted without need to submit the list of the total tax invoices by seller, it is difficult to evaluate that the list is submitted by seller.

B. Summary of the facts charged in this case

The Defendant, as a de facto operator of Nonindicted Company 1 in Yeonsu-gu ( Address omitted), filed a return of value-added tax on Nonindicted Company 1 on July 25, 2012 at the Namcheon Tax Office, stating the total tax invoices in the form of sale of goods or services under the Punishment of Specific Crimes Act, and submitted to the person in charge, a false entry of the total tax invoices in an amount equivalent to KRW 2,144,795,00 in the supply value, although there was no supply of goods or services from Nonindicted Company 2, as well as a false entry of the total tax invoices in the form of sale of goods or services under the Punishment of Tax Evaders Act. From that time to October 25, 2013, the Defendant was found guilty of the Defendant’s act of purchasing the total tax invoices in the form of sale of goods or services without being issued a false entry of the total tax invoices in the form of sale of each of the Defendants’ respective tax invoices in the form of sale of goods or services under the Punishment of Tax Evaders Act.

C. Determination on specific note 3)

1) According to the evidence adopted and investigated by the lower court, ① the Defendant issued a purchase tax invoice from Nonindicted Company 2 and Nonindicted Company 3 in the form of an electronic tax invoice, and then transmitted the details of the issuance thereof to the Commissioner of the National Tax Service as prescribed in the Value-Added Tax Act; ② The aggregate tax invoice by individual purchaser of this case, which the Defendant submitted to the Government in the instant facts charged, is related to the portion of issuance of the electronic tax invoice by individual purchaser, and it is recognized that only the total number of purchasers, total number of purchases, total value of supply, and total amount of tax by individual purchaser, including Nonindicted Company 2 and Nonindicted Company 3, without entering the details of the aggregate tax invoice by individual purchaser.

2) Examining in light of the aforementioned legal principles, the Defendant’s act of submitting a list of total tax invoices by seller to the Government in the above content and form does not constitute the act of submitting a list of total tax invoices by seller under the Punishment of Tax Evaders Act and the Specific Crimes

3) Since the facts charged in this case constitute a crime, the defendant's above assertion is with merit.

3. Conclusion

The defendant's assertion of mistake of facts and misapprehension of legal principles as to the guilty part of the judgment below is justified, and since the guilty part of the judgment below and the charge of acquittal part of the reasoning are related to a single crime, the judgment of the court below (including the acquittal part of the grounds for appeal) is reversed pursuant to Article 364 (6) of the Criminal Procedure Act without examining the remaining defendant's grounds for appeal and prosecutor's argument

1. Summary of the facts charged in this case

2. The same is applicable to the Defendant’s assertion of mistake of facts and misapprehension of legal principles regarding the list of individual tax invoices issued by individual suppliers.

2. Determination

2. On the grounds as seen in paragraph (c) of the above, the judgment on the mistake of facts and misapprehension of legal principles regarding the list of total tax invoices by seller issued by the Defendant’s electronic tax invoice constitutes a case where the instant facts charged are not a crime, and thus, the judgment is acquitted under the former part of Article 325 of the Criminal Procedure Act and the summary of the judgment is publicly announced under

[Attachment]

Judges Next-ho (Presiding Judge)

Note 1) The phrase “2,144,794,00 won” as stated in the indictment is deemed to be a clerical error in the phrase “2,144,795,000 won” in light of the evidence adopted and investigated by the lower court.

Note 2) The phrase “6,408,547,00 won” as written indictment is deemed to be written in writing as “6,408,548,00 won.”

3) The guilty part of the lower judgment and the acquittal part of the reasoning are examined collectively.