Seoul Administrative Court-2017-Gu Partnership-5143 ( August 25, 2017)

Cho Jae-2015-west-4589 ( October 20, 2016)

10 years of exclusion period is reasonable, and there is no procedural defect in the tax investigation.

The plaintiff's assertion that it is reasonable to apply 10 years of exclusion period of imposition as it constitutes active concealment, and that procedural investigation such as absence of grounds for selection of tax investigation, duplicate investigation, etc. is unnecessary if an employee entrusted with deposit transfers it to the plaintiff's bank account after division into his/her bank account without reporting to the head of the competent customs office.

Article 26-2 of the former Framework Act on National Taxes (Period for Excluding Imposition of National Taxes)

Article 81-4 of the former Framework Act on National Taxes (Prohibition of Abuse of Right of Tax Investigation)

2017Nu72890 Detailed global income and revocation of disposition

O KimO

○ Head of tax office

February 27, 2018

March 13, 2018

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The imposition of global income taxx,xx,xx, andxx (including additional tax) that the Defendant rendered to the Plaintiff on June 5, 2015 shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning for the court’s explanation on the instant case is that “No. 4, 2013.” No. 6 of the judgment of the court of first instance is “No. 2003. Mar. 4, 2003” and the Plaintiff’s assertion is as stated in the reasoning of the judgment of the court of first instance, except for adding the following judgments to the Plaintiff’s assertion, thereby citing it in accordance with Article 8(2) of the Administrative Litigation Act and the main text of Article

2. Additional determination

A. The plaintiff's assertion

In the course of the Plaintiff’s tax investigation of gift tax from July 8, 2014 to November 4, 2014 (hereinafter “the first tax investigation”) on the Plaintiff’s lease deposit xx,xx,xxx, andx source income, the director of the regional regional tax office conducted a tax investigation on global income tax, such as questioning and investigating the Plaintiff’s global income tax for 208 years belonging to the Plaintiff and compelling the Plaintiff to file a return for global income tax return. This is unlawful as it is against Article 81-9 of the former Framework Act on National Taxes (Amended by Act No. 1352, Dec. 15, 2015; hereinafter the same) without any grounds and is not subject to procedures such as expanding the scope of tax investigation without any grounds and notifying in writing.

Article 81-4(2) of the former Framework Act on National Taxes prohibits re-audit of the same tax item and the same taxable period. However, from January 5, 2015 to March 13, 2015, the commissioner of the SPP has conducted the Plaintiff’s personal consolidated investigation of income accrued in the year 2008 to March 13, 2015 (hereinafter referred to as “second tax investigation”) and conducted the instant disposition, and the second tax investigation constitutes an illegal duplicate investigation.In addition, Article 81-6 of the former Framework Act on National Taxes provides for the reasons for the selection of a person subject to tax investigation, and the Plaintiff does not have any such reason for the selection of a person subject to tax investigation, the second tax investigation is illegal in that sense. Therefore, the instant disposition that was made based on an illegal tax investigation is unlawful due

B. Determination

1) As to the expansion of the scope of tax investigation

Comprehensively taking account of the overall purport of arguments in the statements in Evidence Nos. 1, 5, and 3-1, 2, 19 through 33, 4, 7, 8, 9-1, and 2, the Director of the Regional Tax Office has conducted the first tax investigation with the tax items subject to investigation to verify the source of the above lease deposit as gift tax. During that process, he received the transaction details from the Plaintiff in 2008 to 2013, and notified the Plaintiff and BB of the results of the tax investigation on November 21, 2014, the Director of the Regional Tax Office notified the Plaintiff of the results of the tax investigation on the source of the relevant loan amount of KRW 0,00,00, the Director of the Regional Tax Office found the suspicion of omitting the global income tax on the income accrued to the Plaintiff through the materials secured in the first tax investigation, etc., and then requested the Plaintiff to submit the pertinent tax investigation report on the Plaintiff’s global income accrued to the Plaintiff from 208 to 2013.

According to the above facts, the first tax investigation is merely a tax item subject to the assessment of gift tax, and there was a simple question about the source of funds in the process of the investigation, and it cannot be said that the investigation of global income tax on the plaintiff's specific income was conducted (the question about the source of funds deposited in the above account, etc. is also necessary for the investigation of gift tax). In addition, even if the public official in charge of investigation recommended the voluntary report with suspicion about the omission of the plaintiff's global income tax in the process of the first tax investigation, it is merely merely an instruction on the warning that the commencement of the investigation of global income tax may be initiated, or the future procedures, and such warning or guidance cannot be deemed as a tax investigation of global income tax.Therefore, this part of the plaintiff's assertion on the premise that the investigation of global income tax was conducted in the process of

2) As to the assertion of duplicate investigation

Inasmuch as a reinvestigation prohibited under Article 81-4(2) of the former Framework Act on National Taxes is related to the same tax item and the same taxable period, insofar as it cannot be deemed that the Plaintiff’s global income tax is included in the investigation of the first tax investigation, it cannot be deemed that the second tax investigation conducted by the Plaintiff as the tax item subject to the investigation of the Plaintiff’s global income tax does not constitute an unlawful duplicate investigation

3) As to the non-existence of grounds for the selection of taxpayers

In the first tax investigation, the Defendant confirmed that the above lease deposit was derived from the Plaintiff’s funds and did not impose gift tax, but found that the Plaintiff’s global income tax on the deposit amount of a Aaa bank account was omitted through data secured in the process. Accordingly, in the second tax investigation, there was an additional investigation on the Plaintiff’s request for submission of all documents on the source of funds and expenses for the transaction details of aaa bank account and the books related to the Plaintiff’s operating company.

Ultimately, the second tax investigation is conducted on the grounds of falling under the "cases where there is clear evidence to acknowledge a suspicion of omission or omission in the details of the report" under Article 81-6 (3) 4 of the former Framework Act on National Taxes. Therefore, the second tax investigation has no reason for the plaintiff's assertion that there is a defect in the absence of a reason to select a person.

3. Conclusion

Therefore, the judgment of the first instance court is justifiable, and the plaintiff's appeal is dismissed as it is without merit.