How severe is the punishment for tax evasion? I would also like to know whether there are cases in which it can be mitigated.

Hello. This is a tax attorney at Daeryun Law LLC.

Punishment for tax evasion is carried out very strictly, not only under the Punishment of Tax Evaders Act but also under the Act on the Aggravated Punishment of Specific Crimes, depending on the scale of the evaded tax.

Where the annual evaded tax amount is 500 million won or more but less than 1 billion won, the punishment is imprisonment for a definite term of at least three years, and where it is 1 billion won or more, it may be life imprisonment or imprisonment for at least five years.

In addition, a fine of at least twice and up to five times the evaded tax amount is necessarily imposed concurrently.

However, not all cases are punished in the same way, and depending on the specific circumstances, the punishment may be mitigated or aggravated.

▶ Grounds for mitigation

• Where the actual gain is minor

• Where it is clear that only the timing of payment was delayed

• Where the conduct amounted only to constructive intent

• Where there is no record of prior criminal punishment

• Where there were unavoidable circumstances such as economic pressure

• Where the evaded tax was voluntarily paid or a willingness to pay was shown

On the other hand, in the following cases the punishment for tax evasion may be greatly aggravated, so particular caution is required.

▶ Grounds for aggravation

• Where there is a record of the same type of offense

• Where it was carried out in a planned and organized manner

• Where it involved concealment of assets or disguising of title

• Where assets were concealed or title was dispersed for the purpose of evading taxation

• Where a professional such as a certified tax accountant, a certified public accountant, or an attorney was involved in leading or assisting the offense

As such, the level of punishment for tax evasion is determined by comprehensively considering not only the scale of the tax amount but also the circumstances of the offense and the overall subsequent response.

If tax evasion is at issue, it is important, from the early stages, to organize the facts and sentencing factors through the advice of a tax attorney and to establish a response strategy.