Cho High Court Decision 201Do4869 (Law No. 112, 2012)

In order to assist in sales affairs of other corporations, it shall not constitute earned income in return for services provided as an accountant.

The income of this case is reasonable to see as consideration for the service provided as an accountant in order to assist the sales business of D alone, and the disposition of this case on the premise that it is an earned income is unlawful.

2012Guhap34860 global income and revocation of such disposition

Chapter AA

Samsung Head of Samsung Tax Office

March 20, 2013

April 12, 2013

1. The Defendant’s imposition of global income tax of KRW 000 (including additional tax) in 2008 against the Plaintiff on August 1, 201 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. On May 1, 2004, the Plaintiff joined BBE Co., Ltd. (hereinafter “BE”) and served as the head of the accounting team.

B.CC Hold Holdings, a Netherlands, (hereinafter referred to as “DD Holdings”) holds 100% of the shares of BB E (hereinafter referred to as “E”) and Luxembourg corporate E (hereinafter referred to as “E”) hold 100% of the shares of DD Holdings. EE decided to sell the BB E-E shares of DD Holdings around June 2007, and made the FF d. HK (hereinafter referred to as “FFFF”) take charge of sale.

C. FF around June 2007, as a manager in charge of the sale of stocks, selected GGG Hong Kong, and requested the Plaintiff to assist in the sale, which is the head of the lowest II accounting team, the head of this HH Fund, the head of the headquarters for the re-border of BBE. This H, the Plaintiff, and the Plaintiff, preparing explanation data, such as financial analysis, future financial estimates, and company introductions, delivered them to GGG Hong Kong, and contacted potential buyers. On February 30, 2008, BBE Holdings was to purchase BB EM stocks from DB Holdings, and the sale was completed. DD Holdings paid 000 won contingent remuneration for the sale to the Plaintiff on February 15, 2008 (hereinafter referred to as the “income of this case”). After that, the Plaintiff retired on February 29, 2008.

D. The Plaintiff classified the instant income as “other income” and reported and paid the global income tax.

On the other hand, the defendant calculated the income of this case on the ground that "the income of this case constitutes wage and salary income", and imposed and notified the plaintiff's global income tax of 000 won (including additional tax) in August 1, 201 (hereinafter "the disposition of this case").

E. The Plaintiff dissatisfied with the instant disposition and tried on October 24, 201, but was dismissed by the Tax Tribunal on July 20, 2012.

[Reasons for Recognition] Uncontentious Facts, Gap evidence 2, 7, 12, Eul evidence 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) Plaintiff

The Plaintiff provided labor to BBE and did not receive the instant income. The Plaintiff provided services temporarily to FF and received the instant income without an employment relationship. Accordingly, the instant income constitutes other income.

(2) Defendant

The Plaintiff was under the direction and supervision of the FFF, which is the mother of BBE, and provided BBE data, and was in economic and substantial employment relationship with a broad meaning. Therefore, the instant income constitutes wage and salary income.

(b) relevant statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) On May 1, 2004, the Plaintiff was a certified public accountant, and participated in business stabilization work after the sale and takeover of the JJ, Busan Mutual Savings and Finance Company, OOO foreign capital inducement, KK acquisition work, etc.

(2) This H was employed on April 6, 2005 and the lowest II was employed on November 1, 2005 in BB Em, and as the Plaintiff, retired on February 29, 2008.

(3) The Plaintiff, as the head of the accounting team, prepared a profit and loss statement and reported it to the general meeting of shareholders or the board of directors, and submitted every month to the FF.

(4) According to FF’s proposal, the Plaintiff prepared investment proposal containing BBE’s sales, cash flow analysis, future financial estimates (from 2006 to 2011) and delivered them to GGG Hong Kong.

(5) After the sale, DNA Holdings paid bonuses, etc. to the executives and employees of BBE as indicated in the following table. On February 15, 2008, Plaintiff D Holdings received the instant income from DD Holdings, and bonus of KRW 000 from BBE on February 21, 2008. The instant income was other income, and bonuses were imposed as earned income.

(The following table omitted):

(6) The Plaintiff has received annual salary of KRW 000 from BBE.

(7) In order to deal with the above sales business, this HH, the second, and the Plaintiff leased at their own expense an OOO hotel 812 located in Gangnam-gu Seoul Metropolitan Government OOOOOO hotel 00 from July 16, 2007 to September 14 of the same year.

(8) This H, the largest II, and the Plaintiff discussed the division of work with GGG Hong Kong employees, and the Plaintiff and the largest II, from among investment proposals, have a duty to assess the company value of BB marina through future financial estimates, and this H had a contact with potential buyers.

[Reasons for Recognition] The entry of Evidence Nos. 3 through 6. 9-1, 18, and 19-1, and the purport of the whole pleadings

D. Determination

(1) Article 20 (1) 1 (a) of the Income Tax Act (amended by Act No. 9270 of Dec. 26, 2008) provides that "the salary, salary, remuneration, remuneration, wage, wage, bonus, allowance, and other benefits of a similar nature that are received from the provision of labor as Class A earned income, and subparagraph 2 (b) provides that "the salary that is received from a foreigner in a foreign country or a foreign corporation in a foreign country" as Class B earned income. On the other hand, whether the wage and salary is subject to taxation should be determined according to its nature, not only under the pretext of the amount paid, but also under the pretext of the nature of the amount paid, and if the amount is paid regularly by establishing the contents of working conditions closely related to the provision of labor, it shall be deemed as Class B earned income (see Supreme Court Decision 2003Du4089, Apr. 15, 2005).

(2) On the basis of whether it is remuneration for work for BB E, and ① Sale: D alone, the mother company of BB E, is seeking to acquire its assets by disposing of the shares of BB E, and if it is sold at the high price of BB E, its profits shall belong to D Holdings, and if it is not attributable to BB E, it is not possible to participate in the operation of BBE after the sale of BB E, and investment proposal is used for BB E, and it is not used for BB E, and it is considered that the sales work falls within BB E, and ②. It is reasonable to view that the Plaintiff is in the position of using BB E, as the head of the accounting team, the Plaintiff is in the position to use the data inside the BB E, and that the Plaintiff is obliged to use the data as an accountant, and that the Plaintiff is not obliged to take into account that it was supplied to the Plaintiff, and that it was supplied to the Plaintiff, and that it was not directly supplied to the H, and that it was not supplied to the seller, and that it was supplied for other work.

(3) Furthermore, it is difficult to view the instant income as a consideration for work for DNA brokerage or FF, (1) the direction, supervision, and (2) the Plaintiff does not have any direction, supervision, and (3) personnel management from DNA brokerage or FF, and the Plaintiff has not agreed on the labor contract or remuneration, and (2) the instant income unilaterally set from DNA brokerage, and (3) the place of work: The Plaintiff borrows the hotel room from the hotel room with this H and the highest II, and purchases office supplies, sells them, and is not subject to restrictions on working hours, considering the fact that the Plaintiff is not subject to restrictions on working hours.

(4) Therefore, it is reasonable to see the instant income as the consideration for the service provided as an accountant to assist the sales business of D alone, and the instant disposition based on the premise that it is an earned income is unlawful.

3. Conclusion

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