Seocho 2012west 1583 ( October 04, 2013)

Where profits are not entered in the account book, special circumstances about the omission of sales shall have the burden of proof for the plaintiff.

Where a corporation fails to record the transfer price in the account book even after transferring its assets, the transfer price shall be leaked out of the company, except in extenuating circumstances, and special circumstances to deem that it is not leaked from the company shall be proved by the corporation's party who asserts it.

Article 67 of the Corporate Tax Act

2014Guhap5057 Revocation of Disposition of Imposing corporate tax, etc.

AAA et al. and one other

Head of the District Tax Office and one other

August 28, 2015

September 11, 2015

1. All of the claims by the plaintiff Samsung AA against the defendant Samsung Head of Samsung Tax Office and the claims by the plaintiff Cho Jae-B against the defendant Cho Jae-B are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On December 6, 2006, the Plaintiff YeAA (hereinafter referred to as the “Plaintiff”) acquired the beneficial rights worth KRW 27 billion (hereinafter referred to as the “beneficial rights of this case”) based on three copies of the real estate security trust agreement entered into between the CC Construction Co., Ltd. (hereinafter referred to as “CC Construction”) and the EE Real Estate Trust Co., Ltd. (hereinafter referred to as “EE Real Estate Trust”) on three copies of the certificate of beneficial rights (limited to the certificate of beneficial rights issued by EE Real Estate Trust in accordance with the real estate security trust agreement). On May 21, 2008, the said acquisition price was changed to KRW 12 billion (hereinafter referred to as “the acquisition contract of this case”).

B.CC Construction received from EE real estate trust the EE real estate auction procedure related to the right to benefit of this case (U.S. District Court Decision 2007Mota 19968, Apr. 16, 2008, the EE real estate trust received 27 billion won as the preferential right holder, among the money distributed on April 16, 2008.

C. The Plaintiff Company received the total amount of KRW 24 billion fromCC Construction, KRW 5 billion on May 21, 2008, KRW 15 billion on the 22th of the same month, and KRW 4 billion on the 28th of the same month from each Plaintiff’s financial account in the name of each Plaintiff company (the amount calculated by deducting the amount of beneficial interest under the instant acquisition agreement from KRW 27 billion, which is the unpaid acquisition amount; hereinafter “the instant profit”).

D. The director of the Seoul Regional Tax Office, from December 9, 201 to January 8, 2012, conducted a general corporate tax investigation on the Plaintiff Company, and notified the Defendants of the results of the tax investigation on the following grounds: (a) Plaintiff ChoB (hereinafter “Plaintiff”) who is the representative of the Plaintiff Company (hereinafter “Plaintiff”) disclosed the profit margin of 15 billion won from the above profit margin to the private investment fund, etc. for personal use as investment fund, etc.; (b) thereby including the above amount in gross income and disposing of it as the representative’s bonus.

E. Defendant Samsung Tax Office’s corporate tax for the business year 2008 for the Plaintiff Company on February 1, 2012

"5,821,727,480 won, and the director of the regional tax office of the regional tax office of the defendant, on February 20, 2012, notified the plaintiff of the correction and notification of 4,935,853,710 won of the global income tax for the year 2008 (hereinafter "the disposition of imposition of the corporate tax in this case", and "the disposition of imposition of the global income tax in this case" is "the disposition of imposition of the global income tax in this case", and each of the above dispositions is "the disposition of imposition of the global income tax in this case", and "each of the above dispositions in this case". The plaintiffs filed an appeal with each Tax Tribunal on March 19, 2012 and received a decision of dismissal on October 4, 2013.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 3 (including branch numbers for those with additional numbers; hereinafter the same shall apply), Eul evidence Nos. 2, 4, 5, and 7, the purport of the whole pleadings

2. Determination on the defense prior to the merits

A. The Defendant asserts to the effect that the part of the claim for revocation of the disposition of global income tax in the instant lawsuit is unlawful, since the instant disposition of global income tax was based on the disposition of income following the correction of the Plaintiff Company’s corporate tax, it is not subject to an appeal litigation separately from the notice of change of income amount, and that the aforementioned disposition of global income tax was not subject to the prior trial procedure.

B. It is reasonable to view the instant global income tax disposition as a new disposition imposing a direct tax liability on the Plaintiff’s individual instead of a tax payment notice as a collection disposition following the failure to comply with the notice of change in the amount of income to the Plaintiff Company.

In addition, as seen earlier, the Plaintiff filed a request for a judgment with the Tax Tribunal on the imposition of global income tax in this case and received a decision of dismissal, the Defendant’s assertion on this part is without merit.

3. Whether the instant disposition is lawful

A. As to the disposition of imposition of corporate tax of this case

1) The plaintiff company's assertion

The Plaintiff Company merely omitted the acquisition of the instant beneficial right certificate and the acquisition of the instant revenue on the account book, and did not use any method actively, and did not change the name of the instant beneficial right in accordance with the terms and conditions of the instant acquisition contract, and did not have any purpose of evading taxes.

2) Determination

A) In full view of the regulatory structure under Article 47-3 of the former Framework Act on National Taxes (amended by Act No. 9263, Dec. 26, 2008; hereinafter the same), the language and content of each subparagraph of Article 27(2) of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 22038, Feb. 18, 2010; hereinafter the same), and the legal nature of the penalty tax for underreporting, where Article 47-3(2) of the former Enforcement Decree of the Framework Act on National Taxes excessively conceals or disguises all or part of the facts that form the basis for calculating the tax base or the amount of national tax, the imposition and collection of tax is impossible or considerably difficult, and thus, more higher tax rate than the case of underreporting underreporting that is not based on the “unfair method to induce the taxpayer to faithfully report the tax base.”

In addition, Article 27(2) of the former Enforcement Decree of the Framework Act on National Taxes, which prescribes cases that can be seen as "unfair methods", stipulates that the purpose of evading national taxes, etc. is needed in order to fall under "unfair methods" under Article 27(2) of the former Enforcement Decree of the Framework Act on National Taxes, which provides that the purpose of evading national taxes, etc. is to be necessary. Therefore, the "reported return of tax base" means the return of tax base resulting from the purpose of evading national taxes, such as avoidance of accumulated tax rates, application of the provisions on losses brought forward, in cases where the return of tax base is difficult to discover the tax base through active acts, such as making it difficult to discover the taxation requirements of national taxes and fraudulent acts, or by fraudulent acts, such as forginging false facts, etc. (see Supreme Court Decision 2013Du12362, Nov. 28, 2013).

B) In light of the following facts and circumstances, it appears that the Plaintiff Company’s act of not entering the instant revenue in the account book constitutes “a deceptive scheme or other active act that significantly makes it difficult for the Plaintiff to levy and collect taxes with the intent of tax evasion, by making it difficult to find out the facts requiring taxation regarding corporate tax,” and thereby, constitutes “a deceptive scheme or other active act that significantly makes it difficult for the Plaintiff Company to impose and collect taxes with the intent of tax evasion.”

① The Plaintiff Company’s acquisition of the instant revenue in the business year 2008 shall be recorded in the account book.

In addition, corporate tax was not reported. Such entry in the account books can be seen as a false entry of account books, such as the preparation of double-entry account books under Article 27(2)1 of the former Enforcement Decree of the Framework Act on National Taxes. Accordingly, the tax authorities made it difficult for them to find out the occurrence of the profit of this case.

② The Plaintiff stated that, at the time of investigation by the tax authorities, the Plaintiff did not file a tax return due to the increase in the amount of tax than the originally expected profit (i.e., KRW 27 billion - 12 billion), which was deducted the acquisition price from the instant gains (i.e., the instant gains). The Plaintiff appears to have the purpose of avoiding excessive taxes at least at the time of omitting entry in the account book on the acquisition of the instant gains. However, in light of the fact that the Plaintiff Company did not enter the acquisition of the instant beneficial interest and the payment of the acquisition price in the account book and did not report taxes even at the time of acquisition of the instant beneficial interest in light of the fact that the Plaintiff Company did not enter the acquisition of the instant beneficial interest and the payment of the acquisition price in the account book at around 206, it is difficult to believe that the statement was made at the time of the investigation that the intent of tax avoidance was made after the occurrence

③ The Plaintiff Company’s procedure for changing the name of the beneficiary regarding the certificate of beneficial interest in the instant case

In the instant acquisition agreement, the agreement was made between the Plaintiff Company and theCC Construction. However, there is no evidence to clearly understand the grounds for the agreement.

④ The Plaintiff Company received the instant revenue from the corporate account, but attached Form 2

“The Plaintiff Company did not hold the instant marginal profits as it is by remitting 15 billion won equivalent to the instant marginal profits to the account under the Plaintiff’s name directly or through several accounts, such as the indication of the “financial flow of the instant revenues.”

C) Therefore, the disposition of imposition of the corporate tax of this case is deemed to have no error as asserted by the plaintiff company.

B. As to the instant disposition imposing global income tax

1) In a case where a corporation fails to enter the transfer proceeds in its account book even after transferring its assets, barring any special circumstance, the amount equivalent to the transfer proceeds not entered in the account book shall be deemed to have been leaked out of the company, and special circumstances to deem that the transfer proceeds are not leaked out of the company shall be proved by the legal entity claiming it (see Supreme Court Decision 2005Du2049, Dec. 21, 2006).

As seen earlier, the Plaintiff Company did not enter the instant gains in the account book, and according to the aforementioned evidence, the Plaintiff, the representative of the Plaintiff Company, actually, received the instant gains from the account in the name of the Plaintiff either directly or within a short period of time through other accounts, such as the indication of the “financial flow of the instant revenues” drawings.

Considering the above facts in light of the above legal principles, the 15 billion won portion corresponding to the gains of this case can be deemed to have been leaked out, barring special circumstances, and the gains from this case in accordance with Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 21302, Feb. 4, 2009) should be deemed to have been disposed of as the bonus of the plaintiff, who is the person to whom it belongs or the representative of the plaintiff company.

The plaintiff company's assertion that the above marginal profit is not leaked out of the company due to special circumstances as follows, and it is reserved in the company.

2) Whether the loan was repaid to the Plaintiff

A) The plaintiff's assertion

The Company shall pay KRW 2,647,50,000 out of the initial acquisition price of the right to benefit of this case 9 billion

A loan from the Plaintiff and paid toCC Construction. Of KRW 15 billion deposited from the Plaintiff Company to the Plaintiff’s account, the above KRW 2,647,50,000, out of the total amount of KRW 15 billion, was paid as a repayment for the above loan, and thus, it should be excluded from the Plaintiff’s income amount.

B) Determination

In addition to the statements in Gap evidence Nos. 7, 12, and 16, the plaintiff added the whole purport of the pleadings.

On December 6, 2012, a sum of KRW 2,647,500,000 from the Plaintiff’s account is deposited by cashier’s checks, and it can be recognized thatCC Construction deposited KRW 9 billion from the Plaintiff Company in the name ofCC Construction on the same day. However, in light of the following circumstances known by each of the aforementioned evidence, it is insufficient to view that the Plaintiff’s lending of the said money to the Plaintiff Company solely based on the above facts alone is insufficient, and there is no other evidence to acknowledge otherwise.

① As the representative director of the Plaintiff Company, the Plaintiff took office on November 29, 2004 and frequently engaged in financial transactions with the Plaintiff Company. It is difficult to readily conclude that the Plaintiff lent the said money to the Plaintiff Company on the ground that the Plaintiff paid the money deposited from the account under the Plaintiff’s name as part of the acquisition price.

(2) A person who appears to have an agreement on interest rate of KRW 2,647,50,000,000 in a reasonable amount.

There is no fee, and there is no ground to view that there was evidence to prove the Plaintiff’s lending, such as the Plaintiff Company entered the said money in the account book as a loan, or the loan certificate is prepared between the Plaintiff and the Plaintiff Company.

③ The Plaintiff Company’s corporate tax and other related taxes reflecting the above loan to the tax authority.

There is no report or payment.

3) Whether the remaining assets remain with the Plaintiff Company’s investment funds and loans

A) The plaintiff's assertion

After receiving the instant marginal profit from the Plaintiff Company, the Plaintiff Company F (hereinafter “F”)

The amount of KRW 17.5 million and KRW 58.9 million paid to GG Co., Ltd. (hereinafter referred to as “GG”), respectively, remains as the Plaintiff’s loan bonds. As such, the amount is not leaked out, and thus should be excluded from the Plaintiff’s income amount.

B) Determination

The descriptions of Gap 4, 5, 8, 10, and 13 are alone remitted from the plaintiff's name.

In addition, it is insufficient to view that money was lent to F and GG with each of the above money, and even if the above facts are acknowledged, in light of the following circumstances that can be seen in addition to the purport of the entire arguments as seen earlier, the profit of this case was deposited into the Plaintiff’s account in the name of the Plaintiff, or even if the ownership is unclear, it can be deemed that it was reverted to the Plaintiff, the representative, and even if the Plaintiff remitted the money to F and GG for the Plaintiff, the Plaintiff’s remittance was separate from whether the above remittance was made a loan or donation to the Plaintiff, and it cannot be deemed that the profit of this case was leaked from the Plaintiff’s income, and that it was reserved in the company without being leaked from the beginning due to the following reasons. Accordingly, this part of the Plaintiff’s assertion cannot be accepted.

① The instant marginal profits were distributed into several accounts, and all of them were deposited into the Plaintiff’s account in the name of the Plaintiff.

It can be seen that the gold is mixed with other money in the account.

② The amount of the instant marginal profits received from the Plaintiff Company is specified as the amount of the gains from the Plaintiff Company.

It is more natural that the Plaintiff Company directly pays the said money to FF or GG for the instant marginal profit in the circumstance that it is difficult to view that only the said money was lent to the Plaintiff Company in light of the said payment amount, and that the Plaintiff Company cannot find the reasons for lending money to FF or GG by lending the Plaintiff’s name account.

③ In the course of the tax investigation, the Plaintiff’s savings bank, golf

Before the first date for pleading of this lawsuit, the Plaintiff raised both the acquisition price of the right to benefit of this case and argued that the instant proceeds are owned by the Plaintiff, even before the first date for pleading of this lawsuit.

4) Therefore, the instant disposition of global income tax cannot be deemed unlawful, contrary to the Plaintiff’s assertion.

5. Conclusion

Therefore, the plaintiff's claim against the defendant Samsung director of the tax office and the plaintiff's claim against the defendant Samsung director of the tax office are without merit, and all of them are dismissed. It is so decided as per Disposition.

3. Conclusion

Therefore, the plaintiff's lawsuit of this case is dismissed as it is unlawful because there is no interest in lawsuit, and the judgment of the court of first instance is dismissed for any other reason, so the judgment of the court of first instance is revoked and the lawsuit of this case is dismissed. The total cost of lawsuit is assessed against the defendant under Article 32 of the Administrative Litigation Act. It is so