[2] Method and content of estimation in case of estimated taxation

[3] The meaning of "the relation ratio of expenses" under Article 69 (1) 4 (b) of the Enforcement Decree of the former Enforcement Decree of the Tax Act, and whether the expenses are limited to the total expenses (negative)

[4] The case holding that the decision of correction is lawful by calculating and correcting the "ratio of the expense between the amount of value-added tax and the amount of corporate tax of a corporation operating a restaurant and the amount of tax revenue and material expenses"

[2] In order to impose additional taxation, the method and content of the estimation must be reasonable and reasonable to reflect the actual value nearest to the truth.

[3] "The relation ratio of expenses" under Article 69 (1) 5 and 4 (b) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 14863 of Dec. 30, 1995), one of the methods of estimating estimation, refers to the ratio of expenses to other items related to expenses, and the expenses that form the basis for calculating such ratio are not necessarily limited to the total expenses.

[4] The case holding that the value-added tax shall be revised on the basis of the estimated income amount, and the estimated income amount shall be deducted from the estimated income amount by deducting the actual deductible expenses in the field from the estimated income amount, and the amount of income shall be calculated and corrected by estimation.

1. On the first ground for appeal

Article 21(2) of the former Value-Added Tax Act (amended by Act No. 4808, Dec. 22, 1994; hereinafter the same) provides that where the Government revises the tax base and the amount of tax to be paid by investigation, it shall be corrected on the basis of tax invoices, account books, and other evidence, and where it falls under any of the following subparagraphs, it shall be estimated on the basis of the tax invoices, account books, and other evidence. If there is no tax invoices, account books, or other evidence necessary for calculating the tax base under subparagraph 1 or there is no significant part, it is obvious that the contents of tax invoices, account books, and other evidence are false in light of the size of facilities, the number of employees, raw materials, commodities, products, or the market price of all kinds of charges. Article 32(3) of the former Corporate Tax Act (amended by Act No. 4804, Dec. 22, 1994; hereinafter the same shall apply) and Article 93(1) of the Enforcement Decree of the Corporate Tax Act.

According to the reasoning of the judgment below, the court below determined that while the plaintiff operated a restaurant with the name of 620, Gangnam-gu Seoul Special Metropolitan City's 620, 192 and 2 preliminary return (from July 1, 1994 to September 30, 1994) and paid the value-added tax for the business year 192 and 193, the plaintiff reported and paid the corporate tax for the business year 1992 and 193, but only the monthly revenue is recorded in the plaintiff's tax return book and there are no books or documents concerning daily revenue to support it, and that the actual revenue on the Miscellaneous book, which is the original record of the plaintiff's income from May 1, 1994 to September 30, 1994, was 1,407,729,730 won, and that the tax return amount on the 19% of the actual revenue amount under the Corporate Tax Act was 612,728,333.5% of the actual revenue amount in the tax account book or 9.9% of the actual revenue amount in the bill.

In light of the provisions of the relevant laws and regulations as seen earlier, the fact-finding and decision of the court below are justifiable, and there is no error of law in the misapprehension of facts due to the violation of the rules of evidence as otherwise alleged in the ground of appeal.

2. On the second ground for appeal

In order to impose estimated tax, the method and content of the estimation must be reasonable and reasonable to reflect the actual amount close to the truth (see, e.g., Supreme Court Decisions 94Nu15202, Jul. 30, 1996; 96Nu15756, Jun. 27, 1997); on the other hand, the proportion of expenses under Article 69(1)5 and 4(b) of the former Enforcement Decree (amended by Presidential Decree No. 14863, Dec. 30, 1995) which is one of the method of estimatinging the estimation is collectively referred to as the proportion of expenses related to other items related to the expense, and it is not necessarily limited to the total expenses.

According to the reasoning of the judgment below, the court below determined that the Defendant calculated the amount of value-added tax for the period from May 1, 1994 to September 30 of the same year with respect to the Plaintiff, 1,407,729,730 won from the Plaintiff’s actual amount of income, and the actual amount of expenses and material expenses due to the Plaintiff’s entry in a bill of exchange and Promissory Notes 776,538,254 won and the expense ratio for the Plaintiff was 1.8128; it determined that the Defendant calculated the expense ratio for the Plaintiff’s actual amount of expenses and material expenses investigated according to the bill of exchange and Promissory Notes 92 to the actual amount of expenses and material expenses, and that the amount of value-added tax for the period from February 1, 1992 to February 1, 1994 should be calculated by deducting the amount of income reported by the Plaintiff from the estimated amount of income to September 30 of the same year, and that the Plaintiff’s estimated amount of income for 19 years to the subsequent business year was found legitimate.

In light of the records and the above legal principles, the fact-finding and decision of the court below is just, and there is no error in the misapprehension of legal principles as to the method of estimating the estimation, such as the calculation of the expense ratio as otherwise alleged in the ground of appeal.

In addition, the part of the grounds of appeal purporting that the propriety of the bonus disposition against the representative of the Plaintiff and the imposition of value-added tax, corporate tax, income tax, etc. related thereto are double taxation cannot be a legitimate ground of appeal, as it is based on the premise that there is no new fact found in

3. Therefore, the appeal is dismissed, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cho Chang-hun (Presiding Justice)