Is a first-time offender of small-scale tax evasion also subject to punishment for tax evasion?

Tax evasion charges must be causing you great anxiety.

In our country, taxpayers are required to report and pay certain tax amounts themselves. The law also requires that the existence of taxable income be reported to the State.

However, many people, believing that the State has no way of discovering an individual's evaded tax amount, omit the report or file a false report.

If intent to evade tax is recognized, even a first-time offender with a small amount can become subject to criminal punishment. It is established when a person commits fraud or a wrongful act to divert a tax amount and thereby obtains a refund or deduction.

Under Article 3 of the Punishment of Tax Offenses Act, a person who evades a tax or receives a refund or deduction of a tax through fraud or other improper means is subject, as punishment for tax evasion, to imprisonment for up to 2 years or a tax evasion fine of up to twice the amount of the evaded tax or the tax refunded or deducted (hereinafter referred to as the ‘evaded tax amount, etc.’).

If the evaded tax amount is 300 million won or more and that amount is 30% or more of the amount that should have been reported and paid, or if the evaded tax amount is 500 million won or more, the law provides for a fine of three times the amount or more, or for aggravated punishment such as imposing imprisonment together with the fine.

However, the special sentencing factors for the crime of tax evasion include, as a mitigating factor, 'a case where the actual gain is trivial.'

If the evaded tax amount is relatively small, a certain degree of mitigation can be expected, but a first-time tax offender cannot expect unconditional leniency.

We hope you will prepare your response to the punishment for tax evasion together with an attorney experienced in this area, and obtain a result that leaves no criminal record, such as non-referral or non-prosecution.