What punishment applies if one is reported for tax evasion?

Tax evasion is regarded as conduct that goes beyond a mere failure to report and may shift the tax burden onto others or cause social harm.

Therefore, when a report of tax evasion is received, the National Tax Service proceeds with investigation and punishment procedures under the Punishment of Tax Evaders Act.

Under Article 3 of the Punishment of Tax Evaders Act, where a person evades tax by fraud or other improper means or improperly receives a refund or deduction, the person is generally punished by imprisonment for up to 2 years or a fine equivalent to no more than twice the amount of the evaded, refunded, or deducted tax.

In particular, where tax evasion is committed habitually, the sentence may be aggravated, and where the amount of evaded tax exceeds a certain threshold, a heavier penalty applies.

▶ Where the evaded tax is 300 million won or more, or 30% or more of the reported or paid tax

▶ Where the evaded tax is 500 million won or more

In this case, imprisonment for up to 3 years or a fine equivalent to no more than three times the amount of the evaded tax may be imposed.

In other words, because imprisonment and a fine may be imposed concurrently for tax evasion depending on the amount and whether it was repeated, if you have made your report, it is important to respond from the early stages together with an attorney specializing in tax matters.