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I am seeking advice on how to clear a charge of issuing a false tax invoice.

Tax attorney, I am at risk of being punished on a charge of issuing a false tax invoice. I run a business, and one of my long-time clients, who did not actually purchase any goods, asked me to issue a false tax invoice, saying they needed a tax invoice. Because our relationship was long-standing and under the misjudgment that it would not become a major problem, I granted the request. In this case, what punishment would I receive? Please answer whether I would be subject to a search and seizure and whether the client would also be punished.

False tax invoice

Tax attorney

Answer to Related Inquiry

Author: 정찬우

If you are charged in connection with a false tax invoice, there is a high likelihood that procedures such as a tax investigation, questioning as a reference witness, and a search and seizure will be carried out.

Afterward, you will receive a disposition of no charge, a notification disposition, or an accusation disposition, and if you receive an accusation disposition, you must then undergo an investigation on a charge of violating the Punishment of Tax Evaders Act.

The Punishment of Tax Evaders Act was enacted to enhance the effectiveness of tax law and to establish citizens' awareness of tax payment by prescribing matters related to punishment for those who violate tax law.

A tax invoice issued as if a transaction that did not actually occur had taken place, or a tax invoice inflated as if a larger amount than the actual purchase amount had been paid, becomes a false tax invoice and is subject to punishment.

If, while running a business, you have thus falsely issued and manipulated a tax invoice, you will be punished by imprisonment or a fine.

For example, if you delivered and issued a tax invoice without any actual provision of services or purchase, it appears that imprisonment for up to 3 years or a fine equivalent to up to three times the tax amount calculated by applying the value-added tax rate to the supply value will be imposed.

If you are investigated and tried for issuing a false tax invoice, you may have your sentence mitigated if you have filed an amended return or a late return, voluntarily paid most of the evaded tax amount, or if a substantial portion of the evaded tax amount has already been collected.

However, if it appears that you participated in the crime in an organized manner for the purpose of tax evasion, this becomes an aggravating factor, so you must be careful.

Such a tax evasion charge is a matter in which both the supplier and the recipient are subject to criminal punishment, and in addition to personal disadvantages, the business you operate may also suffer harm.

If you are being charged with tax evasion involving a false tax invoice, we recommend that you respond with the professional assistance of a tax attorney.