Large-scale entertainment bar owner evading 5.5 billion won in taxes fined 5.1 billion won

Court Sentences Business Operator to 2 Years 6 Months Imprisonment and Fine
About 100 Female Employees and 30 Management Staff
Hidden Cash Sales Stored in Nominee Accounts
Defendant Claims "Female Employees' Service Fees Are Not My Sales"

On the 24th, the Busan District Court sentenced A, a 58-year-old owner of a nightlife establishment, who was indicted on charges including violation of the Act on the Aggravated Punishment of Specific Crimes (tax-related), to 2 years and 6 months in prison and a fine of 5.1 billion won.
[Image source=Yonhap News]

[Asia Economy Reporter Kim Bong-ju] An owner who operated two entertainment bars in Seomyeon, Busan, and evaded taxes by underreporting cash sales was sentenced to a fine of 5.1 billion KRW and imprisonment.

On the 24th, the Criminal Division 5 of the Busan District Court sentenced A (58), the owner of the entertainment bars, who was indicted for violating the Act on the Aggravated Punishment of Specific Crimes (tax evasion), to 2 years and 6 months in prison and a fine of 5.1 billion KRW.

According to the court, A operated two entertainment bars under someone else's name at a hotel in Busanjin-gu.

In 2016, although A's sales amounted to 7.1 billion KRW, he omitted 5.6 billion KRW in cash sales, evading a total of approximately 1.48 billion KRW in taxes, including about 490 million KRW in value-added tax and about 975 million KRW in individual consumption tax.

Using this method, A omitted a total of 24.7 billion KRW in sales over four years until 2019 and was eventually prosecuted for evading 5.5 billion KRW in taxes.

It was investigated that A separately stored or concealed the embezzled cash in accounts under borrowed names.

A's entertainment bars employed about 30 people including the business manager and female employee supervisors, about 10 waiters, and about 100 female employees.

In court, A argued that service charges paid to female employees should be excluded from his sales because they were not his revenue for value-added tax calculation purposes.

However, the court found that since A destroyed all sales records and did not issue cash receipts, it was impossible to determine that service charges for female employees were separately recorded in credit card sales slips.

The court stated, "Tax crimes disrupt the tax order by making it difficult for the state to impose and collect taxes, and at the same time, shift the tax burden onto ordinary citizens, thereby undermining tax justice." However, it considered factors such as the fact that the evaded tax amount was large at 5.5 billion KRW but most of it did not lead to actual profit for the defendant, some of the delinquent taxes were paid, the defendant showed remorse, and there was no prior similar offense, explaining the sentencing decision.

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