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

Cheong-gu Office

The same shall apply to the order.

A. On March 20, 2011, the Plaintiff completed the registration of the business as “○○ Regional Housing Association”, and as “house construction business.”

B. On April 10, 2012, the ○○ Housing Association (hereinafter referred to as the “instant Housing Association”) obtained authorization for the establishment of the housing association from the Namyang City Mayor pursuant to Article 32 of the former Housing Act (amended by Act No. 12646, May 21, 2014) as the head of the association.

C. Under the premise that the Plaintiff himself/herself is an individual entrepreneur, the Plaintiff filed a comprehensive income tax for each business year from 2011 to 2015 as follows.

(unit: million won)

Year

Revenue amount

Necessary expenses

Amount of income;

Jinay

2011

132

17

115

Wage and salary income

2012

159

18

14

2013

45,457

46,140

-683

Amount of tax-free business revenue

2014

66,482

66,729

-247

2015

51,676

51,862

-186

D. On June 29, 2016, the Plaintiff reported to the Defendant nine business accounts of the instant housing association.

E. On January 9, 2017, the Defendant issued a notice of correction and notification of KRW 52,101,210 of the additional tax on global income tax in 2015 pursuant to Article 81(9)2 of the former Income Tax Act (amended by Act No. 16104, Dec. 31, 2018; hereinafter the same) on the ground that the Plaintiff failed to open a business account even though the Plaintiff had been subject to double-entry bookkeeping since 2015 (hereinafter “instant disposition”).

F. The Plaintiff, who was dissatisfied with the instant disposition, filed an objection on April 6, 2017, but was dismissed. On August 10, 2017, the Plaintiff filed an appeal with the Tax Tribunal, but was dismissed.

[Reasons for Recognition] Gap evidence Nos. 1 through 3, Eul evidence Nos. 1 through 3, 5, and 14, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The defendant asserts that the disposition of this case is lawful on the grounds of the disposition and related statutes, and the plaintiff asserts that the disposition of this case is unlawful as follows.

1) The instant housing association has an organization composed of association members, representatives, general meetings, and executive agencies under the association regulations and obtained authorization to establish the association. The income and loss arising from the instant housing association itself belongs to the instant housing association. Thus, the instant housing association constitutes “organization deemed a corporation under Article 13(1)1 of the Framework Act on National Taxes.” Therefore, the instant housing association is obligated to pay corporate tax, and cannot be deemed as bearing an obligation to report the business account of the instant housing association on the premise that the Plaintiff is an individual business entity obligated to adopt double entry system.

(B) The Defendant’s notice of global income tax return for each of the 2014 and 2015, which was sent to the Plaintiff, did not contain any item of additional tax on non-reported global income tax, and was indicated as N in the “N” on the screen of the data review on global income tax return for the year 2014 by the National Tax Service, and thus, the Plaintiff did not report the business account in the year 2015, and the instant disposition goes against the good faith principle; or (b) relevant statutes;

It is as shown in the attached Form.

C. Determination

1) Article 13(1) of the former Framework Act on National Taxes (amended by Act No. 16097, Dec. 31, 2018; hereinafter the same shall apply) and Article 13(1) of the same Act provide that "any association, foundation or other organization that is not a corporation (referring to a domestic corporation and a foreign corporation under subparagraphs 1 and 3 of Article 1 of the Corporate Tax Act; hereinafter the same shall apply) that falls under any of the following subparagraphs and does not distribute profits to its members shall be deemed a corporation and shall be subject to the application of this Act and other tax-related Acts and subordinate statutes." Article 1 provides that "any association, foundation, or other organization which is not established with permission or authorization from the competent authorities or registered with the competent authorities pursuant to Acts and subordinate statutes, which is not registered with the competent authorities," and Article 13(2) of the same Act provides that "any of its representatives or non-profit corporations shall be deemed a corporation that meets all the requirements of the following subparagraphs and thus is deemed a corporation subject to the application of this Act and tax-related Acts."

According to the above provision, if an unincorporated association becomes a "organization deemed a corporation" under Article 13 (1) of the former Framework Act on National Taxes, it shall be liable to pay corporate tax, and if it is not a "organization deemed a corporation", it shall be liable to pay income tax. If such an unincorporated association becomes a taxpayer to pay corporate tax, the members shall not be liable to pay corporate tax or income tax.

Therefore, in cases where a regional housing association which obtained authorization for establishment pursuant to Article 32 of the former Housing Act (amended by Act No. 12646, May 21, 2014; hereinafter the same) constitutes an unincorporated association and deemed a juristic person under the Framework Act on National Taxes, a regional housing association is obligated to pay corporate tax on the income accrued from the general sale of a local housing association as a profit-making business of a non-profit domestic corporation. Thus, it is unlawful to impose a comprehensive income tax on its members on the premise that its members are independent business entities and joint business entities (see Supreme Court Decision 2003Du2656, Jun. 10, 2005).

2) The instant housing association is a regional housing association established to build and supply housing sites and multi-family housing as an organization with the unique purpose of an organization called a collective housing construction, and has the representative who has the rules and organization as an executive body, and can be recognized as having the important facts confirmed and confirmed as an organization, such as the existence of the organization itself, without relation to the change following the withdrawal of the members, since the instant housing association constitutes an association which is not a juristic person (see, e.g., Supreme Court Decision 96Da39721, Jan. 24, 1997); Defendant also did not dispute on this point, since the instant housing association constitutes an association which is not a juristic person, as its members, with the overall purport of pleading in the statement of evidence Nos. 2, 2, 3, 10, 11, and 12.

Furthermore, considering the overall purport of arguments as to whether the housing association of this case distributes profits and losses to its members, the housing association of this case was decided to revise that it will belong to the association on August 7, 2015, when considering the overall purport of arguments as to whether the housing association of this case distributes profits and losses under Article 27 (2) of the original rules of the association (the term of existence, liquidation procedures and methods). According to the above facts, it is recognized that the association of this case must only distribute profits or losses to its members based on the standard supply price stipulated in the supply contract of this case, and that all profits and losses shall belong to the agency service company (including the person designated by the agency). The housing association of this case was decided to revise that the profits and losses under the above provisions should belong to the association of this case. According to the above facts, the association members should not be able to gain profits from each of the above businesses or losses due to the allocation of profits and losses to each of the members of the housing association in accordance with the supply contract of this case.

Thus, the housing association of this case is an unincorporated association which does not distribute profits to its members, and as long as the association establishment is authorized by the Namyang market pursuant to the former Housing Act, it is reasonable to view that the housing association of this case constitutes "organization deemed a corporation" under Article 13 (1) 1 of the former Framework Act on National Taxes.

Therefore, with respect to the income accrued in relation to the business of the housing association of this case, the housing association of this case is merely obligated to pay corporate tax, and the plaintiff cannot be obligated to pay income tax as an individual business operator. Thus, the disposition of this case that the plaintiff is obligated to pay double entry as an individual business operator must be revoked in an unlawful manner without examining the remaining arguments of the plaintiff.

3) Meanwhile, even though the Defendant reported the general income tax on the premise that the Plaintiff is an individual entrepreneur, it is alleged that the instant housing association is contrary to the principle of good faith that the Plaintiff claims as a corporation. However, the circumstance cited by the Defendant alone cannot be viewed as not allowing the Plaintiff’s assertion against the principle of good faith, and there is no other evidence to acknowledge it.

3. Conclusion

Therefore, the claim of this case is reasonable, and it is so decided as per Disposition.