Article 143 of the Enforcement Decree of the Income Tax Act: Estimation and correction

The costs of appeal are assessed against the Plaintiff.

As a result of examining all of the records of this case, the judgment of the court below, and the grounds of appeal, it is clear that the above grounds for non-trial conduct constitute grounds for appeal, the appeal shall be dismissed. It is so decided as per Disposition by the assent of

[Seoul High Court Decision 2007Nu32, 2007.05]

2. The costs of appeal shall be borne by the Plaintiff.

The imposition of global income tax of KRW 152,271,180 against the Plaintiff on July 1, 200 shall be revoked.

Article 143(1) and (3) of the Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 17032 of Dec. 29, 2000; hereinafter the same shall apply) applies the standard income rate of 23.7% to the operator of door-to-door sales under Article 143(1) and (3) of the Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 17032 of Dec. 29, 200), "157,972,80 won in the calculation table of the tax amount following the 14th 14th 2nd 14th 2nd 14th 2nd 2nd 2nd 2nd 2nd 14th 2nd 2nd 1st 2nd 2nd 3rd 4th 4th 4th 4th 4th 4th 1st 4th 4th 4th 2nd 5th 5th 2nd 5th 2nd 5th 3th 5th 2nd 2nd 3th 2nd 3th 2nd 4th .

2. Conclusion

Therefore, the judgment of the court of first instance is legitimate, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.

[Seoul Administrative Court 2005Guhap29389 ( February 7, 2007)]

Litigation costs shall be borne by the plaintiff.

A. After running the business on January 3, 1993 from the second floor of ○○○○ Building located in ○○○○-dong ○○○○○○○○○○-dong, the Plaintiff: (a) was a business operator operating the Do and retail business of healthy foods (door-to-door sales business) and reported the amount of income to KRW 208,468,331, and the amount of income to KRW 35,108,616 after calculating the amount of income according to the account book keeping at the time of filing a final return on global income tax for 201.

B. As a result of the Plaintiff’s tax investigation, the Defendant found the Plaintiff’s omission in filing a return of KRW 1,00,850,415 on the sales income, etc. from the ground of the land in 2001 and notified the Plaintiff of KRW 152,271,180 on July 1, 2004 on the global income tax for the year 201 calculated by the account book keeping and filing by the Plaintiff as to the business income from the portion attributable to the year 2001, on the ground that the Plaintiff’s failure to file a return on the amount of income from the account keeping and keeping by the account book falls under a case where the important part of the account book is insufficient or false (hereinafter “the instant disposition of imposition”).

Gu Sector

The defendant's decision and tax amount (B)

Difference (B-1)

Revenue amount

208,468,331 won

1,209,318,746 won

1,000,850,415 won

Amount of income;

35,108,616 won

287,334,134 won

252,225,518 won

Liability Tax Amount

5,701,723 won

157,972,808 won

152,271,185 won

C. The plaintiff raised an objection against the defendant on July 14, 2004, but the defendant decided to dismiss the defendant on September 2 of the same year, and the plaintiff requested a judgment with the National Tax Tribunal on November 30 of the same year, but the national tax trial was conducted.

On June 28, 2005, the Board dismissed the decision of dismissal.

[Reasons for Recognition] Facts without dispute, Gap 1 evidence, Gap 2 evidence, Eul 1-1 to 4

2. Whether the instant disposition is lawful

A. The parties' assertion

As to the Defendant’s assertion that the instant disposition was lawful on the grounds of the above disposition, the Plaintiff asserted that: (a) the sales amount by land is irrelevant to the door-to-door sales business operator under tax-related Acts and subordinate statutes; (b) the Plaintiff omitted sales amount by land in the initial return of value-added tax; and (c) the Plaintiff filed a comprehensive income tax return on the account books in the state where sales commission, etc. were not considerably omitted even though the sales amount was paid to the door-to-door sales business operator; (d) but (e) the amount of the sales amount was verified by various documentary evidence, such as deposit transaction details, etc. with the tax agent’s assistance at the time of a request for adjudgment; (b) the necessary expenses that were actually paid by the Plaintiff are merely KRW 1,171,078,000 and the necessary expenses that were actually paid by the Plaintiff were merely KRW 173,360,000,000; and (b) the necessary expenses were confirmed by the confirmation of deposit transaction and the other party’s fact of payment.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Article 80(3) of the Act and Article 143(1)1 of the Enforcement Decree of the Act provide that, in calculating the tax base, where necessary account books and documentary evidence are nonexistent or important parts are incomplete or false, the amount of income may be determined by the estimated investigation. Article 143(3)1 of the Enforcement Decree of the Act provides that, where the amount of income is estimated or revised, the amount calculated by multiplying the amount of income by the standard income rate shall be determined or revised as the amount of income.

(2) In such a method, in a case where tax invoices, books, and other evidence submitted by a taxpayer while filing a tax base and amount of tax are deemed to be unfaithful, the tax authority shall point out the illegality and conduct a field investigation by receiving new data, and even if so, the tax authority shall make a decision on the estimated tax base and amount of tax only when it is impossible to determine the tax base and amount of tax, and even if so, the tax disposition by the estimated tax investigation decision without taking such procedure is unlawful as it lacks the requirements for the estimated tax. However, in light of the fact that the reason behind taking such procedure is that the tax authority is allowed as an exception when a decision on the estimated tax base and amount of tax cannot be actually determined on the basis of the principle of the base taxation, the tax authority did not take such procedure until it is evident that the tax base and amount of tax cannot be determined on the spot investigation by stating the illegality of the tax invoice, books, and other evidence submitted by the taxpayer and submitting new data, and thus, it cannot be deemed unlawful (see Supreme Court Decision 94Nu15202 delivered on July 30,

In addition, unlike evidence submitted by a taxpayer prior to the disposition of tax imposition, the evidence submitted as evidence, unlike evidence submitted by the taxpayer, that the evidence was duly established and its content conforms to objective facts, should have a strict probative value to the extent that the tax authority and the general public can have conviction on the authenticity of the content.

(3) According to the above evidence, it is difficult for the Defendant to reverse its tax investigation on the Plaintiff’s 201, and found that the false entry rate of the Plaintiff’s revenue amount reaches 82.7%, and that the Plaintiff did not conduct an on-site investigation on the important portion of the account books kept and kept by the Plaintiff, such as income rate of 85.6%. However, it is difficult to view that the Plaintiff’s entry of the account books as the cause of the account book while conducting long-term health food sales business as the account book was prepared by the date of closing its argument, and that it is difficult to view that the Plaintiff’s entry of the account books was insufficient to prove that the amount of KRW 100,000,000,000,000 were 6,000,000,000,000,0000,000,000,000,000,000,000,000,000 won.

Therefore, the defendant's disposition of this case is legitimate.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

Related Acts and subordinate statutes

○ Decision and Correction of Article 80 of the Income Tax Act

(1) If a person liable to make a final return on the tax base pursuant to Articles 70 through 72 or 74 fails to make such return, the chief of the district tax office or the director of the regional tax office having jurisdiction over the place of tax payment shall determine the

(2) If a person who has made a final return on the tax base pursuant to Articles 70 through 72 or 74, falls under any of the following subparagraphs, the superintendent of the regional tax office having jurisdiction over the place of tax payment or the

1. Where an omission or error exists in the contents of return;

(3) Where the head of a regional tax office or the head of a regional tax office having jurisdiction over the place of tax payment determines or revises the tax base and amount of tax in the current year under paragraphs (1) and (2), he shall make it based on the books and other documentary evidence: Provided, That if it is impossible to calculate the amount of income by books and other documentary evidence for

○ Determination and Correction of Article 143 of the Enforcement Decree of the Income Tax Act

(1) The term "reasons prescribed by Presidential Decree" in the proviso to Article 80 (3) of the Act means the cases falling under any of the following subparagraphs:

1. Where necessary account books and documentary evidence are missing or important parts are incomplete or false in the calculation of the tax base;

2. Where the contents of the entry are obviously false in light of the market price, various charges, etc. of the facilities, the number of employees, raw materials, commodities, commodities, or products;

3. Where the contents of the bookkeeping are obviously false considering the quantity of raw materials used, the quantity of electricity used and other operational conditions.

(3) In case where the income amount is estimated, determined or revised under the proviso of Article 80 (3) of the Act, the method falling under each of the following subparagraphs shall be applied: Provided, That the provisions of subparagraph 1-2 shall apply only to persons subject

1. The method of determining or revising, as the relevant income amount (hereafter referred to as the "standard income amount" in this Article), the amount obtained by deducting the amount under the following items from the income amount. In this case, if the amount to be deducted exceeds the income amount, the amount in excess shall be deemed non-existent: Provided, That where the standard income amount is in excess of the amount calculated by multiplying the income amount under subparagraph 1-2 by the ratio stipulated by the Commissioner of the National Tax Service, the amount calculated by multiplying such ratio may be decided as the income amount: Provided, That where the standard income amount is in excess of the amount calculated by multiplying the ratio stipulated by the Commissioner of the National Tax Service by the ratio stipulated by the Commissioner of the National Tax Service, until December 31,

(a) Purchase costs (excluding those for fixed assets for business: hereafter the same shall apply in this Article) and rent expenses on the fixed assets for business which are paid or payable by the documentary evidences;

(b) The amount paid or payable by the relevant documentary evidence as wages and retirement benefits for employees;

(c) The amount obtained by multiplying income by standard expense rate;

1-2. The method of determining or revising as income amount the amount obtained by deducting the amount obtained by multiplying the income amount by the simple expense rate;

2. When the standard or simple expense rate has not been determined or the account books or other documentary evidence has been destroyed or lost due to natural disasters or other force majeure, the method of determining or revising the income amount by taking into account the income amount of the other businessman of the same business type in which the account books or other documentary evidence are deemed the most accurate: Provided, That where there is no other businessman of the same business type and account books, etc. have been destroyed or lost after the final return on tax base, the income amount shall be determined or corrected according to the income rate of the immediately preceding

3. Other reasonable methods recognized by the Commissioner of the National Tax Service.