[1] Criteria for the interpretation of laws and regulations on tax reduction and exemption requirements

[2] Whether the interpretation of Article 157 (4) 1 of the former Enforcement Decree of the Income Tax Act, which is a requirement for non-taxation or exemption of capital gains tax on stocks, etc., includes “the case where a person does not own the relevant stocks as of the end of the immediately preceding business year and thereafter owns 3/10 or more by acquiring the stocks, etc.”

[3] The case holding that in calculating capital gains tax on the Defendant’s stocks, etc., the court below erred by misapprehending the legal principles on the timing of acquisition of stocks transferred to the court below, which calculated capital gains tax evasion by applying the tax rate of a corporation other than small and medium enterprises, and applying the capital gains tax rate erroneously

[1] The interpretation of tax laws shall be interpreted in accordance with the provisions of the law, unless there are special circumstances, in light of the principle of no taxation without the law, or the requirement of tax exemption or tax exemption, and the expanded interpretation or analogical interpretation without reasonable grounds is not allowed. In particular, it accords with the principle of fair taxation to strictly interpret that the provision of tax exemption or exemption is clearly considered as a preferential provision.

[2] Article 94 (1) 3 (a) of the former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005) provides that only the income accrued from the transfer of major shareholders as prescribed by the Presidential Decree in relation to the stocks of a stock-listed corporation under the former Securities and Exchange Act (repealed by Article 2 of the Addenda to the Financial Investment Services and Capital Markets Act, Act No. 8635 of Aug. 3, 2007) shall be subject to capital gains tax in consideration of the ratio of stocks owned, the total market value thereof, and so forth. Article 157 (4) 1 of the former Enforcement Decree of the same Act (amended by Presidential Decree No. 21301 of Feb. 4, 2009) provides that the stock-listed corporation shall be subject to capital gains tax at least 3/100 of the total amount of stocks of the corporation as of the end of the business year immediately preceding the date of acquisition of the stocks shall be subject to capital gains tax for the transfer of 3/10/1/100 or more of stocks.

[3] In calculating capital gains tax on the Defendant’s stocks, etc., the case holding that the court below erred in calculating capital gains tax evasion by applying the tax rate of a corporation other than a small or medium enterprise to calculate capital gains tax on the transfer by first in first in first in first in order provided by exceptional methods of “where the time of acquisition of transferred assets is unclear” under Article 162(5) of the Enforcement Decree of the Income Tax Act, and that the court below erred in applying the income tax evasion rate

[1] Article 18 of the Framework Act on National Taxes / [2] Article 94 (1) 3 (a) of the former Income Tax Act (Amended by Act No. 7837, Dec. 31, 2005); Article 157 (4) 1 of the former Enforcement Decree of the Income Tax Act (Amended by Presidential Decree No. 21301, Feb. 4, 2009) / [3] Article 8 of the former Act on the Aggravated Punishment, etc. of Specific Crimes (Amended by Act No. 9919, Jan. 1, 2010); Article 9 (1) of the former Punishment of Tax Evaders Act (Amended by Act No. 9919, Jan. 1, 2010); Article 104 (1) 11 of the Income Tax Act; Articles 162 (5) and 167-8 of the Enforcement Decree of the Income Tax Act

[1] Supreme Court Decision 97Nu20090 Decided March 27, 1998 (Gong1998Sang, 1247), Supreme Court Decision 2003Du7392 Decided May 28, 2004 (Gong2004Ha, 1096), Supreme Court Decision 2007Du9884 Decided October 26, 2007 (Gong2007Ha, 1847), Supreme Court Decision 2006Du8969 Decided February 15, 2008

Defendant 1 and four others

Defendant 1 and two others and the Prosecutor

Law Firm Don, et al.

Seoul High Court Decision 2009No2487 decided January 8, 2010

The part of the lower judgment against Defendant 1 is reversed, and that part of the case is remanded to the Seoul High Court. Defendant 2 and 3’s appeals and prosecutor’s appeals are all dismissed.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed by Defendant 1).

1. As to Defendant 1, 2, and 3's obstruction of tender

The crime of interference with tendering under Article 315 of the Criminal Act does not require the actual occurrence of the outcome as a crime of danger when the fairness of tendering is harmed by deceptive means, threat of force, or other means. Here, “act detrimental to the fairness of tendering” in this context means an act of causing a situation in which fair competition is likely to be impeded, that is, an act of causing an unreasonable impact on the formation of reasonable price through fair competition. It includes not only the determination of price but also the act of harming the “fair and fair competition” (see Supreme Court Decision 2006Do8070, May 31, 2007, etc.).

Examining the above legal principles, the judgment of the court below, and the evidence duly admitted by the court below in light of the records, it is reasonable to maintain the judgment of the court of first instance which found the above defendants and the co-defendants of the court below guilty of this part of the facts charged on the grounds as stated in its reasoning.

The court below did not err in the misapprehension of legal principles as to the obstruction of bidding as alleged in the grounds of appeal. In addition, according to the records, Defendant 2 did not assert the misapprehension of legal principles as to co-principals in the court below. Thus, the remaining arguments in this part of the grounds of appeal are nothing more than criticizes the adoption of evidence and fact-finding which belong to the exclusive jurisdiction of the court below as a fact-finding court, and thus do not constitute a legitimate ground

2. As to Defendant 1’s remaining grounds of appeal

(a) Evasion of global income tax on APC;

In the former Act on the Aggravated Punishment, etc. of Specific Crimes (amended by Act No. 9919, Jan. 1, 2010) and Article 9 of the former Punishment of Tax Evaders Act (amended by Act No. 9919, Jan. 1, 2010); “Fraud and other unlawful acts” means any act which makes it possible to evade taxes and which is recognized as illegal by social norms, namely, deceptive scheme or other active acts which make it impossible or considerably difficult to impose and collect taxes (see Supreme Court Decision 98Do667, Apr. 9, 199, etc.).

Examining the above legal principles, the lower court’s judgment, and the evidence duly admitted by the lower court in light of the records, it is reasonable that the lower court’s act of Defendant 1’s act in this part of the facts charged constitutes “Fraud or other unlawful act” for reasons as stated in its

The court below did not err in the misapprehension of legal principles as to the above "Fraud and other unlawful act" as alleged in the grounds of appeal. The remainder of the grounds of appeal is nothing more than to criticize the selection of evidence and fact-finding belonging to the exclusive jurisdiction of the court below, which is a fact-finding court, or there is an error of law by misapprehending legal principles as alleged in the grounds of appeal on the premise of facts different from the facts acknowledged by the court below

(b) Evasion of transfer income tax related to the trading of borrowed stocks;

(1) Whether a shareholder falls under a “large shareholder” under the Income Tax Act

In light of the principle of no taxation without law, or the requirements for tax exemption or tax exemption, the interpretation of tax laws shall be interpreted in accordance with the text of the law unless there are special circumstances. It is not allowed to expand or analogically interpret without reasonable grounds, and in particular, it accords with the principle of fair taxation (see Supreme Court Decision 2006Du8969, Feb. 15, 2008).

Article 94 (1) 3 (a) of the former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005) provides that only the income accrued from the transfer of stocks of a corporation listed in the former Securities and Exchange Act (hereinafter “stock-listed corporation”) shall be subject to capital gains tax by taking into account the ratio of stocks owned, total market value, etc. as prescribed by the Presidential Decree. Article 157 (4) 1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 21301 of Feb. 4, 2009; hereinafter “former Enforcement Decree”) delegated by stockholders shall be subject to capital gains tax in relation to the stocks of a corporation listed in the former Securities and Exchange Act (hereinafter “stock-listed corporation”). Article 157 (4) 3 (a) of the former Enforcement Decree of the Income Tax Act (amended by Act No. 21301 of Feb. 4, 2009) provides that the transfer of stocks shall be subject to capital gains tax after the acquisition date.

Each of the above provisions excludes a stock-listed corporation from income from the transfer of its stocks, etc. in certain cases, in light of its legislative intent and contents, shall be subject to the preferential provisions stipulated in the requirements for non-taxation or reduction or exemption of capital gains tax in light of its legislative intent and contents, so determination as to whether it falls under such scope shall be made strictly in accordance with the principle of tax equity. Thus, Article 157 (4) 1 of the former Enforcement Decree includes "where a stock-listed corporation owns not less than 3/100 by acquiring more than 3/10 by acquiring more than 3/100 of stocks, etc. after the end of the immediately preceding business year." It is also reasonable to interpret the above legal principles and the entire purport of each of the above provisions. The judgment below is justifiable, and there is no error in the misapprehension of legal principles as to the interpretation of Article 157 (4) 1 of the former Enforcement Decree, as otherwise alleged in the ground of appeal.

(2) Whether the above "Fraud or other unlawful act" is applicable, etc.

Examining the relevant legal principles, the judgment of the court below, and the evidence duly admitted by the court below in light of the records, it is reasonable to affirm the judgment of the court of first instance that the act of Defendant 1’s act in this part of the facts charged constitutes “Fraud or other unlawful act.”

The allegation that there was no intention to evade tax in the grounds of appeal is merely an error of fact-finding that belongs to the exclusive authority of the lower court, which is a fact-finding court, and thus cannot be a legitimate

(3) As to the error in calculating the evaded tax amount

Article 162(5) of the Enforcement Decree of the Income Tax Act provides that “If the acquiring time of transferred asset is unclear, the asset first acquired shall be deemed to have been first transferred,” and it shall be calculated based on the first in first in first in first in order only where it is unclear of the facts.

According to the judgment of the court below and the reasoning of the court of first instance cited by the court below, in calculating the transfer income tax on the stocks, etc. of this case against the above defendant, the court below calculated the transfer margin by "first in first in first in first in first in first in in order" on the premise that the transfer time of the stocks, etc. of the above defendant constitutes an obvious case. Of that, the court below calculated the transfer income tax evasion amount on the premise that the non-indicted 1 corporation is not a small and medium enterprise to which the tax rate of 10% is applied, but rather a corporation other than a small and medium enterprise to which the tax rate of 20% or 30

However, according to the records, it is obvious that the non-indicted 1 corporation constitutes a small and medium enterprise prescribed in the above Act. Thus, the court below erred in applying the tax rate applied to a corporation other than a small and medium enterprise on the premise otherwise. Furthermore, according to the above data, it is possible for the above defendant and the securities company in charge of the stock transaction of this case to have traded by applying the "Ex Post Facto Transfer Act". In such a case, it cannot be deemed that the time of acquisition of the transferred stocks, etc. is unclear

Therefore, in calculating the transfer income tax of this case, the court below's calculation of transfer margin by first in first in first in first in first in first in first in in first in in first in order, and maintaining the first in court's determination that calculated transfer income tax evasion amount by applying 20% or 30% of the tax rate of the corporation other than small and medium enterprises to the transfer of stocks of the non-indicted 1 in second in second in second in first in order is erroneous in failing to exhaust all necessary deliberations as to the acquisition time

3. As to Defendant 2’s remaining grounds of appeal

A. The acceptance of bribe related to Defendant 1

The legal interest of the crime of bribery is the fairness of performing duties, the social trust in the performance of duties, and the impossibility of purchasing duties is not the case where there is no special solicitation to recognize the bribe of money and valuables received because the bribery does not require any solicitation or unlawful act. In addition, money and valuables are sufficient to have been received in connection with the performance of duties, and there is no need to specify the act of performance of duties. Whether certain profit received by a public official constitutes a bribe is an unjust profit with a quid pro quo relationship. Whether the bribe constitutes a bribe should be determined by considering all the circumstances such as the contents of the public official's duties, the relationship between a public official and a benefit provider, the degree of interest, the process of receiving benefits, and the timing of receiving benefits. In light of the legal interest of the crime of bribery is the process of performing duties and the social trust in the performance of duties, and it is clear that the public official received money and valuables or other benefits from the public official from the public official to the public official to the public official to the public within the scope of 90th degree of money and valuables or other benefits received from the public official (see Supreme Court Decision 2000.).

Examining the above legal principles, the judgment of the court below, and the evidence duly admitted by the court below in light of the records, it is reasonable to maintain the judgment of the court of first instance which found the defendant guilty of this part of the facts charged for the reasons

The court below did not err in the misapprehension of legal principles as to the duty relationship and intent of acquisition of bribery, as alleged in the grounds of appeal.

In addition, according to the records, since Defendant 2 did not assert the misapprehension of the legal principles as to additional collection at the court below, it is not possible to make a new assertion of such misapprehension of the legal principles, and further, Defendant 2 cannot be deemed that Defendant 2 returned the 2 billion won which he received from Defendant 1 as it is, it is justifiable to order Defendant 2 to collect additional collection amounting to the above 2 billion won. The remainder of the grounds of appeal in this part is nothing more than criticism of the adoption of evidence and fact-finding which are all the exclusive jurisdiction of the court below, and thus, it cannot be a legitimate ground of

B. The acceptance of bribe with respect to Nonindicted 2

The corroborating evidence for confessions can only be sufficient if it can be recognized that the confession of the defendant is not processed, even if the whole or essential part of the facts constituting the crime is not recognized, and it can not only be used as direct evidence, but also indirect evidence or circumstantial evidence. Further, if confessions and corroborating evidence mutually show the facts of the crime as a whole, it shall be sufficient as evidence of guilt (see Supreme Court Decision 99Do214 delivered on December 8, 200, etc.).

Examining the above legal principles and the evidence duly admitted by the court below in light of the records, it is just that the court below affirmed the judgment of the court of first instance which found Defendant 2 guilty of this part of the facts charged on the premise that there was evidence of reinforcement other than Defendant 2's confession, and there is no error of law by misapprehending the legal principles as to the rules of reinforcement

4. As to the prosecutor's grounds of appeal (defendants 2, 4, and 5)

On the premise that the prosecutor's statement made by the defendant 4 as the ground of appeal is reliable, the court below erred in finding facts as to each of the facts charged, and erred in the misapprehension of the legal principles as to functional control over an accomplice's relation, and ultimately, erred in the finding of facts by the court below.

However, unless the authority of fact-finding is beyond the bounds of the principle of free evaluation of evidence, the fact-finding authority belongs to the exclusive authority of the fact-finding court. In this case, it is not possible to find that the judgment of the court below was beyond the above limit even after comparing the judgment of the court below with the records, and the appeal is nothing more than to criticize the matters belonging to the exclusive authority of the court below, or there is an error of law in the misapprehension of legal principles as alleged in the grounds of appeal on the premise

5. Scope of reversal

The part of the judgment of the court below regarding Defendant 1's violation of the Act on the APC-related APC-related global income tax and violation of the Act on the APC Aggravated Punishment, etc. of Specific Crimes (tax) due to the evasion of capital gains tax in 2005 and the part concerning the evasion of capital gains tax due to the non-indicted 1 corporation in 2007 should be reversed. The part concerning the evasion of capital gains tax relating to non-indicted 1 corporation in 2007 is related to the comprehensive crime of violation of the Act on the APC-related global income tax in 2007 and the APC-related global crime of violation of the Act on the APC Aggravated Punishment, etc. of Specific Crimes (tax). They must be sentenced to a single punishment in relation to the remaining crimes that the court below found guilty and concurrent crimes under the former part of Article 37 of the Criminal Act. Thus, all of the judgment of the court below against Defendant 1 should be reversed (this part of the judgment of the court below did not assert the grounds of appeal as to the crime of

6. Conclusion

Therefore, the part of the lower judgment against Defendant 1 is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. Defendant 2 and 3’s appeal and prosecutor’s appeal are all dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Ahn Dai-hee (Presiding Justice)