The office expenses cannot be deemed as necessary expenses, and it cannot be deemed illegal on the ground that the method of estimated investigation is not used.

Since it is difficult to recognize the costs claimed by the Plaintiff as necessary expenses corresponding to the business income and it was disposed of based on the contract, receipt, tax invoice, etc., the determination of the tax base and tax amount cannot be made by estimation

Article 80 (Determination and Correction)

2018Guhap63235 global income and lawsuit of revocation of disposition

AA

BB Director of the Tax Office

September 7, 2018

October 26, 2018

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of KRW 122,373,440 (including additional taxes) on global income for the year 2013, which the Plaintiff rendered on February 6, 2017, and the imposition of KRW 98,493,060 (including additional taxes) on global income for the year 2014 shall be revoked in entirety.1)

1. Details of the disposition;

A. The Plaintiff is a personal business entity that runs the Housing Construction and Sales Business under the name of Canada (OOO-dong O-O), DD Loans (O-O), andCC Loans (O-O), respectively. The Plaintiff filed a comprehensive income tax return for year 2013 and year 2014.

B. From January 27, 2016 to December 13, 2016, the Defendant conducted an individual integrated investigation on the Plaintiff, and confirmed the omission of revenue amount, etc., and subsequently corrected the amount of global income tax of KRW 132,949,54 (including additional tax), global income tax of KRW 104,066,754 (including additional tax) for the year 2013 to the Plaintiff on February 6, 2017.

C. (1) From January 1, 2012 to December 31, 2014, the Plaintiff asserted that “the use of personal credit cards, sales commission, donations of KRW 31,000,000 paid to the OEE Federation’s OO branch, etc. were general management expenses related to the project, and filed an objection with the director of the regional tax office on March 16, 2017.

2) The Defendant deducted the Plaintiff’s global income for the year 2014 from KRW 9,812,530,000 for donations after deducting KRW 1,000,000 for global income, and reduced KRW 5,573,692 for the imposition of global income tax for the year 2014.

3) On April 20, 2017, the commissioner of the regional tax office rendered a decision to rectify the tax base and tax amount according to the result of re-audit as to whether the Plaintiff’s amount used for the credit card in 2013 and KRW 34,902,513 correspond to the corresponding expenses on imports.

4) According to the determination of the re-audit as above, the Defendant recognized the total of KRW 14,895,70 (advertising expenses, etc.) and KRW 7,719,110 (advertising expenses, etc.) in total in 2014 as necessary expenses, and corrected the amount of KRW 3,692,358 in the disposition imposing global income tax for the year 2013 and the imposition imposing global income tax for the year 2014 (including additional taxes) (the disposition imposing global income tax for the year 2013 remaining after correction, etc. of the Plaintiff’s return as above and the Defendant’s reduction of the amount of KRW 122,373,440 (including additional taxes), and the disposition imposing global income tax for the year 2014 is 98,493,060 (including additional taxes); hereinafter referred to as “instant disposition”).

[Reasons for Recognition] Facts without dispute, entry of evidence Nos. 1 through 4, 6, 7 and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

1) The details of necessary expenses claimed by the Plaintiff in relation to global income tax for the year 2013 and the part acknowledged by the Defendant among them are as shown in the attached Table 1, and the necessary expenses alleged in relation to global income tax for the year 2014 and the part acknowledged by the Defendant among them are as listed in the attached Table 2. The Plaintiff mainly used the relevant credit card in relation to the business, and the purpose and location of the use thereof were clarified, and only the expenses incurred in the business accompanied by the head of the account ledger was claimed as necessary expenses. Accordingly, all the expenses claimed by the

2) If the Defendant is unable to believe the details of the use of credit cards submitted by the Plaintiff, there is no other method of calculating the tax base and tax amount. Therefore, the tax base and tax amount should be corrected by means of the estimation based on the standard expense rate

B. Determination

1) Whether the necessary expenses alleged by the Plaintiff are recognized

A) In 2013, F in 2014, F in 2014, and GG bank credit card usage usage (A evidence 1, 2, 3, and 3-1, 2, and 3-3) presented by the Plaintiff appears to be the credit card usage by the relevant bank. According to this, the date of use of the relevant credit card, the amount of use, the store store, etc. can be identified. The Plaintiff indicated the usage, such as 'welfare costs', 'consumable goods cost', 'vehicle maintenance cost', 'transport expense', 'transport expense'. The Plaintiff prepared the head of each account (A evidence 2-4, 3-4) by reflecting the amount of credit card usage, and prepared the credit card usage by which specific places of use of the credit card usage are indicated (A evidence 2-5, A-3-5).

B) However, in full view of the following facts and circumstances, the evidence alone presented by the Plaintiff is insufficient to recognize that the costs alleged by the Plaintiff were the business income accrued in 2013 and the necessary expenses corresponding to the business income accrued in 2014. The Plaintiff’s assertion related thereto cannot be accepted.

(1) 원고가 신용카드를 사용한 가맹점 내역에 관하여 보면, 'HHHHH, IIII칼국수, JJ시설관리공단월드컵경기장, KK텔레콤-요금납부(유), L-LLLLL 택시, MM노래연습장, NNN참숯바베큐, OO주유소, PP면옥, QQQQQ약국' 등이다. 원고는 OO OO구 OO동, OO동에서 주택신축판매업을 하였다. 그와 같은 음식점 비용, 통신비, 교통비, 주유비 등이 원고의 사업과 관련한 지출이라는 사실을 인정할 만한 다른 자료가 없다.

(2) The Defendant recognized all necessary expenses as related to the Plaintiff’s business in the course of tax investigation or the Plaintiff’s filing of the objection.

2) Whether the method of estimated investigation is applied

In principle, when the tax authorities determine and correct the tax base and amount of tax, they can exceptionally make an estimated investigation decision only when necessary account books and documentary evidence are nonexistent or important parts are insufficient or false (proviso of Article 80 (3) of the Income Tax Act and Article 143 (1) 1 of the Enforcement Decree of the Income Tax Act).

According to the entries in Eul evidence No. 4 and the purport of the entire pleadings, the defendant can recognize the fact that the disposition in this case was taken on the basis of not only the details of credit card use presented by the plaintiff, but also the contract, receipts, tax invoices, etc. Therefore, the application of standard expense rate to the plaintiff cannot be based on the estimation investigation method. Since the application of standard expense rate is also a method of calculating the amount of income in the case of estimation or correction (Article 143(3)1 (c) of the Enforcement Decree of the Income Tax Act), the standard expense rate cannot be applied

3. Conclusion

The claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

1) On February 6, 2017, the Plaintiff stated the date of disposition stated in the written complaint’s statement on the first date for pleading.