Article 52 of the Corporate Tax Act: Denial of Wrongful Calculation

Pursuant to the Plaintiff’s expansion of the purport of the claim in the trial, the Defendant’s imposition of KRW 339,043,580 of corporate tax for the business year 2005, KRW 556,049,170 of corporate tax for the business year 2006, KRW 752,60,170 of corporate tax for the business year 2007, KRW 331,925,00 of corporate tax for the business year 2008, and KRW 203,012,310 of corporate tax for the business year 209.

2. All costs of the lawsuit shall be borne by the Defendant.

Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act shall be cited for the reasons of the judgment of the first instance.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case should be revoked because it is unlawful for the following reasons.

(1) The Plaintiff’s failure to recover the outstanding amount is different from the case of the private apartment that can recover the construction cost from the buyer as the buyer receives the contract amount, the intermediate amount, and the remainder. In the case of the leased apartment, it is due to the unique characteristics that can recover the construction cost after the completion of the lease deposit after the completion of the lease deposit. Thus, even though the 92-day period, which is the general bond collection period, is not applicable to the collection of the construction cost of the leased apartment, the Defendant deemed the object of wrongful calculation and calculation, deemed the interest rate for the recognition of the outstanding amount to be included in the calculation of earnings, and the previous or the outstanding amount to be directly related to the Plaintiff’s business, but the Defendant considered it as the temporary payment without charge and excluded the interest paid on the loan from deductible expenses.

(2) Although the transaction with the domesticCC industry’s stocks scarcity (hereinafter “CC industry”) constitutes the subject of the avoidance of wrongful calculation, the date of lending and the date of recovery should be determined in order to calculate the interest rate on the loan. The Defendant actually determined the date when 92 days have elapsed since the date of issuance of the tax invoice and invoice issued by the Plaintiff to theCC industry. However, in accordance with the provisions of the Corporate Tax Act, the time when the Plaintiff, a supplier, issued the tax invoice, “the time of issuance of the tax invoice, at the time of receipt of the national housing bond payment, at the time of receipt of the rent deposit,” but the Defendant imposed the instant disposition on the basis of the date when the Plaintiff arbitrarily written on the tax invoice and invoice. (3) According to Article 43(3) of the Enforcement Rule of the Corporate Tax Act amended as of March 30, 2009, the interest rate per share applied to the cash loan, which was 85/100 per annum, and the Defendant calculated corporate tax by applying the annual interest rate to the loan lender.

(4) Even if the period of extinctive prescription expires for both the Plaintiff, DD Distribution Stocks Pest and EE University Construction Corporation’s outstanding claims, the Defendant included the recognized interest rate on the above claims in the calculation of earnings.

(5) On December 23, 2003, when the Plaintiff reported the tax base and tax amount for the business year 2008, it did not add the revaluated difference between the land donated at FF on December 23, 2003 and the assets disposed of to the GG apartment housing reconstruction project association on November 7, 2007 to the disposal business year, and was in gross income in the business year 2008, and such corporate tax return was illegal. However, the Defendant made the instant disposition based on it.

(6) The Defendant did not state the grounds for calculation of additional tax in a tax payment notice while rendering the instant disposition.

(7) The disposition of imposing corporate tax for the business year 2008 of the instant disposition is unlawful on the grounds that the tax base and calculated tax amount are entered.

(8) The Defendant excluded the interest paid on the loan to acquire non-business assets from deductible expenses, and the Defendant’s land reduction and exemption from parking lots and land for road use among the real estate as non-business assets.

B. Determination

Since the disposition of this case is erroneous as follows, the disposition of this case cannot avoid revocation without examining the remainder of the plaintiff's remaining arguments.

(1) The Defendant’s disposition of this case by non-Inclusion of interest paid on non-business assets in the deductible expenses. However, the Defendant’s disposition of this case on the premise that the land reduction or exemption of parking lots and the land for road is not a business-free asset does not dispute all of the parties. Thus, the disposition of this case, which was conducted on the premise of the opposition, is unlawful solely

(2) According to the evidence No. 1-4, No. 5-4, No. 5-6, the corporate tax base in 2008 was 3,647,948,543, and the corporate tax rate was 796,573,728, which was stated in the ground for calculating the amount of tax when applying the corporate tax rate (25%). The tax base in 2008 cannot be calculated corporate tax; the basis for calculating the amount of tax was stated as -56,925,000, which was 407,723,728, which was 407,728 (which was not stated in the statement) without any particular ground; on the other hand, it can be recognized that the amount of tax is calculated by deducting the amount of tax from the amount of tax (which was not stated in the statement) without properly stating the tax base and the basis for calculating the amount of tax of the principal tax. Thus, the above tax disposition based on the tax disposition was unlawful (see, e.g., Supreme Court Decision 20002Nu13108.

(3) When a single tax notice imposes both the principal tax and the additional tax, the individual tax amount and the basis for calculation thereof shall be separately stated in the tax notice. In addition, where multiple kinds of additional tax are imposed, it is natural that the taxpayer can per se identify the details of each tax disposition, by stating the tax amount and the basis for calculation thereof by type. As such, if a tax payment notice includes only the total sum of additional taxes without disclosing the type thereof and the basis for calculation thereof in the tax payment notice while imposing multiple types of additional tax, such disposition is unlawful (see, e.g., Supreme Court en banc Decision 2010Du12347, Oct. 18, 2012). According to subparagraphs 5-1 through 6 of the evidence 5-2, the Defendant can be found to have not entirely stated the type of additional tax and the basis for calculation in each tax payment notice while imposing additional tax. Thus, the instant additional tax in question is unlawful as it is unlawful in the taxation notice.

3. Conclusion

If so, the plaintiff's claim is justified, and the judgment of the court of first instance differs from this conclusion, so the plaintiff's appeal is accepted and the judgment of the court of first instance is revoked, and all of the disposition of this case is revoked.