Cho Jae-2014-west-4314 ( December 17, 2015)

Whether the funds in this case are honorariums (bebert) or investment funds, and whether the funds in this case are lost as illegal income.

The instant money constitutes a honorarium received from an overseas language training agent, and it cannot be deemed that the Plaintiff’s income is not realized solely on the ground that the Plaintiff voluntarily returned the illegal income, which is not an investment money, to the extent that the Plaintiff received from the overseas language training agent.

Article 14 of the Framework Act on National Taxes and Article 21 of the Income Tax Act

Revocation of disposition imposing global income tax

Jeonn 00

00. Head of tax office

on October 14, 2017

on October 28, 2017

1. The plaintiff's claim is dismissed.

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

On October 8, 2013, the head of the tax office having jurisdiction over Defendant ○○ Tax Office’s imposition of the global income taxx (including additional taxes; hereinafter the same shall apply), the global income taxx (including additional taxes; hereinafter the same shall apply), the global income taxx for the year 201, and the global income taxx for the year 2012, respectively, shall be revoked.

1. Details of the disposition;

A. The Plaintiff is the president of bB University, located in 00do 00.

(b)The plaintiff, a tax haven, shall be US$ 1,00 (referred to US dollars in the currency expressed in US dollars unless otherwise mentioned). The nominal shareholder (Nomine) is a corporation, a nominal holding company, and the representative, a corporation, and a beneficial owner, a beneficial owner, was the plaintiff on June 5, 2007, establishing CC cC and October 21, 2008.

C. BB University paid students’ overseas language training expenses to E-e tour Co., Ltd. (hereinafter referred to as eee),ff travel Co., Ltd., gggg tourers, etc., and the above travel agencies paid some of them to hhhhh of the language training course in 00 and 3 of the language training course agency in Australia.

drawee.

addressee

Date of transaction

Amount of money (USD)

1

Hhh

dd)

February 27, 2010

X.x

2

March 11, 2010

X.x

3

August 23, 2010

X.x

4

August 23, 2010

X.x

5

April 13, 2011

X.x

6

c c

September 25, 2011

X.x

7

September 25, 2012

X.x

Sub-committees

X.x

1

iii

dd)

January 20, 2012

X.x

2

c c

January 25, 2012

X.x

Sub-committees

X.x

(d)hhh and C have remitted the following amounts to the accounts of CC and Dd (hereinafter referred to as "the instant amount"):

E. The Defendant, on October 8, 2013, deemed that the instant amount transferred to the respective accounts of hhh and c and ddd, was paid to the Plaintiff as the price for the selection of an agency for foreign language training at bB University from the Republic of Korea, and calculated the xx (2010), xx, xx (201 year), and xx (2012 year), converted to each of the above amounts in Korean won, including the Plaintiff’s other income for each taxable year. On October 8, 2013, the Defendant again calculated the global income tax xx (including the additional tax for underreporting, additional tax for underreporting, additional tax for underreporting, and additional tax for underreporting), xx (including additional tax for underreporting, additional tax for underreporting), xx (including additional tax for underreporting, and xx) that reverts to the Plaintiff in global income tax year 2012 (hereinafter referred to as “additional and additional tax for underreporting”).

F. The Plaintiff, who was dissatisfied with the instant disposition, filed an objection on January 9, 2014, and the Defendant maintained the initial disposition after re-investigation conducted on April 24, 2014 by the National Tax Examination Committee. The Plaintiff filed an appeal with the Tax Tribunal on August 5, 2014, and the Tax Tribunal dismissed the Plaintiff’s claim on December 17, 2015.

Facts without dispute over the basis of recognition, Gap evidence 1, 2, 5, Eul evidence 1, 3, and 5 (including each number; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff received investment from the AA and the BB of Australia in 00, which became aware of through the foreign language training program of the BB University, and agreed to implement international education projects including the establishment of foreign branches of BB University. In that process, AA made an agreement to set up and transfer cc and d c and d d d d d , a government-invested enterprise that only performs the role of receiving and keeping the investment funds in BB as each investment entity, and that of performing the role of receiving and keeping the investment funds in BB. The amount of this case was concluded with the hhh and c and d c and d d d d , respectively, and thus, it is unlawful for the Plaintiff to impose tax on the Plaintiff’s income in view of the Plaintiff’s income.

2) Considering the instant amount as a honorarium for the Plaintiff, the said amount was returned to the Hhhh of August 2013 and the possibility of loss of economic benefits inherent in the initial illegal income is realized. Therefore, imposing tax on the instant amount is unlawful.

B. Facts of recognition

1) The establishment of ccc, dd, and hh and the process of opening accounts, etc.

A) CC and D are corporations with no human and material facilities, and the Plaintiff visited the office of jj located in 00 to establish and take over 10 minutes. The founding entity and beneficial owners of each legal entity are all the plaintiffs, and cC have all contact related to cC through e-mail to the Plaintiff.

B) On November 23, 2009, c and D opened a bank account at point 00 of HSBC 00, the Plaintiff designated the Plaintiff as a signatory of each account and had the Plaintiff, without limitation on the amount, independently sign and operate each account.

C) Hh was established on July 9, 2007 by making the Plaintiff, its representative, and shareholders as CC, and the Plaintiff managed the Plaintiff’s deposit account in Hh’s U.S. dollars.

2) The transfer and use of funds

A) The travel agencies, who received language training expenses from the National University, have remitted the sum of x numbers from March 2008 to January 201 to hh, ② x numbers from December 6, 201, ② x numbers from December 17, 201, and x numbers from December 17, 2012 to iii, respectively.

B) From February 27, 2010 to September 25, 2012, Hh remitted the sum of USD X to the HSBC account from February 27, 2010.

C) Around January 2012, 2012, iii, in addition to the remittance of USD x in total to the HSBC account of ccc and dddd, transfers xx in the account of c and Ddd on March 22, 2013, respectively. The amount of remittance as of March 22, 2013 was returned to c and dd, May 21, 2013.

D) With respect to xx dollars remitted to hhh on February 27, 2010 to dd, and x$ remitted on March 11, 2010, DD issued to hh a written claim on June 27, 2009, for which hhh requested x USD under the name of "fee for the provision of services, such as visiting a university or college on behalf of hhh and producing slabs, etc., by means of "Avoe" (Avoe).

E) On December 25, 2012, the e-mail that BB sent to the Plaintiff on December 25, 2012, stating that “(i) the ratio of xx USD out of the total amount of x USD in 2011 was 48.5%, and “Smething” was remitted by 48.5% of the amount that should be remitted by 48.5% of the amount that should be deducted from the lodging expenses of students, which was remitted by mistake to 48.5% of the amount that should be remitted by 48.5% of the amount that should be deducted from the lodging expenses.” (ii) Of the total amount of xx in 2012, 45% of the remaining amount that was deducted from the lodging expenses of students, xx$, and other expenses was calculated as “Smething”.

F) On October 7, 2011, the Plaintiff deposited x dollars in the account of cC with the account of cC. On October 25, 2011, the Plaintiff purchased the right to use x dollars from ddd account and then released x USD from cc account and ddd account with the personal check on September 26, 2012.

3) Contents of each of the Investment Contracts made between Hh, III and C and D (hereinafter referred to as "each of the Contracts in this case").

A) Hh has drawn up an investment contract on February 1, 2010 with D and D and D and entered into an investment contract on May 28, 2013 with CC and D and D and entered into an investment contract on May 28, 2013 and entered into force on September 1, 2011. According to each of the above contracts, Hhh pays USD 200,000 to C and D in installments until January 30, 2015, and invests 4.8% of the surface interest rate issued by D and D in education-related projects at par value, and if each of the above companies obtains approval from the relevant government, it shall be converted into common shares.

B) iii) drafted an investment contract in D and D and January 5, 2012, and drafted an investment contract in CC and May 28, 2013, the validity of the contract was retroactive on January 5, 2012. The content of each of the above contract is similar to Hhh if c and D pay x x x x x x x x x x 5.4% per annum with the subscription price for convertible bonds, and excludes c and D from setting the face interest rate of convertible bonds as 5.4% per annum.

C) However, each of the instant contracts was drafted without the plan to issue convertible bonds from the beginning, and in fact, the convertible bonds were issued or interest was not paid.

4) In relation to the instant case, the Plaintiff’s content on his set, etc.

A) The Plaintiff’s Trade Union stated that ① in connection with E E’s exercise, “dd” is profit-making; ② in the portion written out under the title “Portclis”, the Plaintiff’s money x, set up cc and the Plaintiff as the shareholder, and kk approves the actual ownership of the Plaintiff’s money, set up hhh and the representative at 00 US$2,077, and set the date of general meeting of shareholders as AA, set as June 30 each year, with the Plaintiff’s money 2,07, and the Plaintiff’s money hh and paid dividends to the hh to the Company of BB University and e-mail; ③ in the process of designing the transaction to hhh, the Plaintiff’s name and hh’s right is not stated in the account manager’s name and h’s right is not stated in the process of designing the account manager’s name and h’s right is stated in the account manager’s name.

B) The plaintiff entered bbb college students 674, 674, 2008 x dollars of local education expenses x$ 647 xddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddd

C) On March 11, 2010, at Hhh’s bottom of the output of the inquiry into the account, the phrase “the need to transfer the income x US$ in 2008” includes: (a) the completion of all deposit of dd 1stst of dd 1st of 2008, 2nd of 2nd of 2008, and 32% of the income x2% of 209.”

5) Tax investigation of the Plaintiff and the details of the withdrawal of the funds

A) On April 24, 2013, the first news was reported that 70 Korean nationals, through the domestic media, hold a financial account in the Burinland, a tax haven, or establishing the so-called Purincom. Around May 22, 2013, the list was first published, and the director of the regional tax office of 00 regional tax office conducted a tax investigation on the Plaintiff from May 29, 2013 to August 5, 2013.

B) On July 31, 2013, AA requested that the Plaintiff return the remainder after deducting the operating expenses of the company from the investment funds paid to CC and DD, as the Plaintiff would have to discontinue the investment relationship under the name of Hh, and BB also requested on July 22, 2013, that the Plaintiff return the amount after deducting the operating expenses from the investment funds under the name of C and Dh.

(C) On August 7, 2013, at the request of CC and Ddd, point 00 points in HSBC were issued by each of the above companies on August 12, 2013 with cC’s check of xxx numbers and xx numbers from cC’s account as the addressee. On August 12, 2013, hh Hh received from cC’s check of 00 U.S. dollars, 16, 214.70, and dx numbers from cC’s account of cC to the account holder, and then sent to each of the above companies with cC’s check of 00 U.S. dollars and dx numbers.

E) On June 5, 2014, the Plaintiff prepared a confirmation document confirming that the details of the assessment, such as the instant disposition, are other income of the Plaintiff during the re-audit following the decision of the National Tax Examination Committee.

Facts without dispute over the basis of recognition, Gap's statements, Gap's evidence 5, 6, 12, 19, 21, 22, Eul's evidence 2 through 6, and 8 through 13, and the purport of the whole pleadings.

C. Determination

1) Determination on the first argument (the nature of the instant amount)

Generally, in a lawsuit seeking the revocation of a tax imposition disposition, the burden of proving the fact of taxation requirements is a taxable person. However, in a case where it is proved that the fact of taxation requirements has been presumed in light of the empirical rule in the specific litigation process, unless it proves that the taxpayer is inappropriate to apply the empirical rule, or that there are special circumstances to exclude the application of such empirical rule in the pertinent case, it cannot be readily concluded that the pertinent tax disposition is an unlawful disposition that fails to meet the taxation requirements (see, e.g., Supreme Court Decisions 2002Du6392, Nov. 13, 2002; 2015Du60341, Jun. 10, 2016).

Although the Plaintiff asserts that the instant amount is not the Plaintiff’s income but the Plaintiff’s investment in Hh and 3, considering the facts acknowledged earlier and the overall purport of each of the evidence and arguments as a whole, the instant amount is not the investment in Hh and 3, but the Plaintiff’s overseas language training expenses for the students of cc and d c and d c through c and d d d, and it is sufficiently recognized that it was the income accrued to the Plaintiff. The Plaintiff’s assertion on this part is rejected.

A) The most essential part of each of the instant contracts, which the Plaintiff submitted as evidence, as the amount of investment in this case, is hhhhhhh and 3, investing each of the above contracts in cc and dd and acquiring x, xx, xx, and hhh and 3, an investor, upon approval from the government, shall convert the convertible bonds into common shares, and until then, the Plaintiff shall receive interest pursuant to the specified interest rate on the investment amount. However, it is recognized that the Plaintiff prepared each of the instant contracts without the plan to issue the convertible bonds from the beginning. Thus, it is difficult to view that hhhh and 3 as a normal investment contract because it is difficult to view that there was no way to guarantee the profit agreement or collection of the convertible bonds while investing in large amounts as above, and thus it is difficult to believe the remainder as well as the relevant part of the instant contracts. In particular, in case of c and dc with the Plaintiff, it appears that the aforementioned contracts have been executed as the capital prior to hh and 23h c.

B) C and D have been established and operated solely by the Plaintiff without the involvement of AA or BB, and the HSBC account of c and D c and C c, in which Hh and III remitted the instant amount, was managed independently by the Plaintiff. If Hh and C and D c, as the Plaintiff’s assertion, are an actual investor, it is difficult to understand that the Plaintiff was fully responsible for the execution of the said investment amount while investing in the business required for more than a few years, and did not take any measures to prevent the Plaintiff’s diversion of the Plaintiff’s investment amount. Indeed, in light of the fact that the Plaintiff withdraws from the said account and purchased the right to use the hhh and C d d d d d e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e.

C) Hh remitted the amount of foreign language training expenses (in 2008 and 2009, 32% of local education expenses) to DD’s account from the travel company. The Plaintiff issued a false commission claim with the amount of money to be transferred to Hh, and clearly stated that the amount of money to be transferred is “import” or “profit” in its set. iii also remitted a certain ratio (48.5% of the remaining amount after deducting the expenses in case of 2011, and 45% in case of 2012) of the students’ fish training expenses received from the travel company to Cc and D’s account.

D) The Plaintiff’s assertion that an investment was made from Hh and 3, but it was difficult to accept the Plaintiff’s allegation that the Plaintiff was unaware of the financial resources of AA and BB, the operator, or the process of making investments in Hh and 3. In addition, during the re-audit conducted by the Plaintiff against the instant disposition, the Plaintiff prepared a written confirmation that the instant amount was other income accrued to the Plaintiff, such as the content of the instant disposition.

2) Determination on the second argument (whether unlawful income has been lost)

In this case, the fact that Hh and III demanded the Plaintiff to return the investment amount on July 2013, 2013, that a check with each of the above companies was issued and sent to the registered location of Hh in the HSBC 00 at HSBC c and Dd, and that the fact that Hh and III received each of the checks was written as above.

However, unlike the case of confiscation or collection of illegal income, solely on the ground that the person to whom the illegal income does not bear the obligation of return voluntarily returns the income to the person to whom it was originally reverted, it cannot be deemed that the possibility of loss of economic benefits inherent in the illegal income has been realized and that such income has not been realized. Furthermore, the Plaintiff planned and led from the beginning the establishment and overall transactions of hh, the operation of hh is being carried out under the Plaintiff’s involvement, the time when the Plaintiff requested the return of the investment amount was under the tax investigation against the Plaintiff, and the time when hhh and 3 requested the return of the investment amount was under the tax investigation against the Plaintiff on May 21, 2013, before the tax investigation was requested for the return of the said investment amount, it is difficult to view that the amount remitted to hhh and 3 had already been returned to hh and bbbbbbb school students’ overseas schools to have been selected as an agent of the Plaintiff, which had a great influence on the Plaintiff, and the purport of the entire check and the purport of the Plaintiff’s claim for return.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.