Dentist Passed Income to Employees... Facing 7.4 Billion Won Penalty for 1.1 Billion Won Tax Evasion

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[Asia Economy Reporter Seongpil Cho] A famous dentist who shifted income to his hospital staff to reduce taxes has been fined a huge amount totaling 7.4 billion KRW. The tax he evaded amounts to about 1.1 billion KRW.

On the 22nd, according to the legal community, the Seoul Central District Court Criminal Division 24 (Chief Judge So Byeong-seok) sentenced dentist Yoo Mo (56), who was indicted for violating the Act on Aggravated Punishment of Specific Crimes (tax evasion) and the Tax Offenses Punishment Act, to 1 year and 6 months imprisonment with 3 years probation and a fine of 750 million KRW. The court stated, "Tax evasion crimes undermine sound commercial order and harm the law-abiding consciousness of the general public who faithfully fulfill their tax obligations, so the culpability is not light."

Yoo operated a dental clinic specializing in orthognathic surgery in Seocho-gu, Seoul, and was tried for evading comprehensive income tax for 2010-2011 by receiving medical fees through nominee accounts under employees' names and omitting cash income. Of the total income of about 5.51 billion KRW in 2010, the amount he reported to tax authorities was only about 724 million KRW, and in 2011, he reduced the reported income of about 6.56 billion KRW to about 1.48 billion KRW. Over two years, he received medical fees totaling about 9.8 billion KRW through nominee accounts under employees' names. The tax evaded by Yoo through this method was calculated to be about 1.13 billion KRW.

Yoo's tax evasion was uncovered in 2013 when a tip-off was received stating that "the hospital director receives surgery fees using nominee accounts." The tax authorities issued a notice for evaded taxes including penalties totaling 2.6 billion KRW and filed a complaint against Yoo under the Tax Offenses Punishment Act.

During the trial, Yoo's side argued that the tax amount calculated by the prosecution was excessive because deductions for labor costs and others were not applied. However, the court rejected this, judging that Yoo had fabricated major expenses during the tax evasion period and lacked objective evidence. Nevertheless, the court noted, "The defendant has paid the finalized tax amount including penalties and a fine of 4 billion KRW for failure to issue cash receipts related to omitted cash sales," and sentenced him to a fine instead of imprisonment.

If Yoo does not appeal this ruling and pays the fine (750 million KRW), the case will be closed with a total payment of about 7.35 billion KRW, including previously paid taxes (2.6 billion KRW) and fines (4 billion KRW). No appeal has been filed yet.

This content was produced with the assistance of AI translation services.