Seocho 2013west 1693 (23 April 2014)

In order to include the processing sales in the calculation of earnings, the burden of proof is against the tax authority.

The tax authorities must prove the existence of credit purchase obligations on the customer in relation to the fact that the processing sales proceeds actually accrue to the Plaintiff and the net assets increase by transferring the processed sales proceeds, and whether there was an interest from debt exemption by transferring the processed sales claims.

2014Guhap6358 Revocation of Disposition of Corporate Tax Imposition

Co. 00

00. Head of tax office

on 15, 2015

on October 29, 2015

1. The Defendant’s imposition of KRW 000 of corporate tax (including additional tax) for the business year 2008 against the Plaintiff on October 00, 200, the portion exceeding KRW 000 of the imposition disposition of corporate tax for the business year 2009 (including additional tax), the imposition disposition of KRW 000 of corporate tax for the business year 2010 (including additional tax), and the imposition disposition of KRW 000 of corporate tax for the business year 201 (including additional tax) shall be revoked, respectively.

2. The plaintiff's remaining claims are dismissed.

3. The costs of lawsuit shall be borne by the defendant.

The Defendant’s imposition of KRW 000 (including additional taxes) of corporate tax for the business year 2008 against the Plaintiff on October 00, 2000, the imposition of KRW 000 (including additional taxes) of corporate tax for the business year 2009, the imposition of KRW 000 (including additional taxes) of corporate tax for the business year 2009, the imposition of KRW 000 (including additional taxes) of corporate tax for the business year 201, and the imposition of KRW 000 of corporate tax for the business year

1. Details of the disposition;

A. 1) AAA medicine Co., Ltd. (former trade name: AAA medicine; hereinafter referred to as “AAA medicine”) was established on October 0, 190 as a company engaged in the wholesale business of drugs, etc., and BBB, which was served as the representative director of the said company on or after October 00, 200, was the substantial controlling shareholder of the said company.

2) On May 28, 2008, the said BB borrowed the name of the representative director from the CCC and established the Plaintiff, a company operating a pharmaceutical wholesale business, etc., and settled the business on September 30, 201 and May 2, 2011. The BB was the actual representative director and the controlling shareholder.

1) '00 won' written in the complaint of this case seems to be written in writing in light of Gap evidence 0 (Duty Payment Notice).

B. The Director of the Regional Tax Office: (a) conducted an integrated tax investigation into the Plaintiff’s corporate tax revenues (hereinafter “tax investigation into the instant case”) from 00.0 to 00.00,000; (b) as a result, the Plaintiff calculated the processed sales amount of KRW 00,000 from 200 to 2010; (c) received the above amount from the AA medicine (hereinafter “the above processed sales amount”); (d) for the same period, ZZ; (e) HH, etc. (hereinafter “the above processed sales amount”); and (e) for the same period, calculated the processed sales amount of KRW 100 from the above processed sales amount of KRW 10 to 200,00,000,000 from the above processed sales amount of KRW 20,000,000,000 from the above processed sales amount of KRW 10,000,000,000 from the above processed sales amount of KRW 2,00,000.0.

D. The plaintiff appealed and filed an appeal with the Tax Tribunal on October 0, 000, but was dismissed on October 0, 000.

[Recognition] Facts without dispute, Gap 1 through 9, 11 (including virtual numbers), Eul evidence 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Although the Plaintiff withdraws the processed sales price of this case from the method of appropriating it as the processing purchase price and the processing cost of this case and returned it to AA, the disposition of this case, which was included in the calculation of earnings, is unlawful without sufficiently proving that the Defendant, who bears the burden of proof of taxation requirements, actually belonged to the Plaintiff and increased the Plaintiff’s net assets.

2) The Plaintiff’s transfer of the instant processed sales claims to AA medicine on January 10, 201, but the instant disposition that was included in the calculation of earnings from the exemption of liability was unlawful, on the premise that the Plaintiff did not have any obligation more than the former at the time of the transfer of the instant processed sales claims by repaying the total amount of credit sales claims on or before January 10, 201, including KRW 00,000,000,000,000,000, which was repaid around December 29, 2009 or around 31, 2011.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

1) As to the allegation of illegality in the calculation of earnings of the processed sales price of this case

A) In a lawsuit seeking revocation on the grounds of illegality of taxation, the tax authority bears the burden of proving the legality of disposition and the existence of the tax requirement fact. Therefore, in principle, the tax authority bears the burden of proving the amount of earnings to be included in the gross income, which is the tax base of corporate tax. If a corporation issues a tax invoice to the sales office and receives the proceeds from the issuance of a false tax invoice without real transactions, barring any special circumstance, it is difficult to deem that the above amount belongs to the pertinent corporation solely on the fact that the corporation received the proceeds from the sale without real transactions. In other words, the payment of the proceeds from the processing sales by the pertinent corporation is merely a formality for the actual transaction in light of the empirical rule, so it is anticipated that the above amount will be appropriated as the processing sales office at any time and collected as the processed sales office regardless of the business year in which the processing sales occurred. Ultimately, the pertinent corporation must include the proceeds from the processing sales in gross income and the costs of the processing sales in deductible expenses, regardless of whether the processed sales are appropriated in the same business year, and it is sufficient enough that the Plaintiff's net assets should be included in the above AA sales price.

B) In light of the above facts, the Plaintiff’s disposal of the instant pharmaceutical products was difficult to view that the Plaintiff’s disposal of the instant pharmaceutical products was based on the increase in the sales revenue of the Plaintiff’s 15 through 17, 19, and No. 1 and 2, and that the Plaintiff concluded a contract to entrust the Plaintiff with the distribution of the instant pharmaceutical products around May 208. From September 22, 2008 to September 28, 2010, the Plaintiff paid 00 won out of the bank account under the Plaintiff’s name. In light of the fact that the Plaintiff’s disposal of the instant pharmaceutical products was based on the premise that “the Plaintiff’s disposal of the instant pharmaceutical products was carried out for the purpose of funding,” and that the Plaintiff’s disposal of the instant pharmaceutical products would have to be deemed to have been carried out for the purpose of collecting the total sales revenue of the instant pharmaceutical products, including the Plaintiff’s purchase of the instant pharmaceutical products, and that it would not be possible to disclose the sales revenue of the instant pharmaceutical products.

2) According to Article 15(1) and (3) of the Corporate Tax Act and Article 11 subparag. 6 of the Enforcement Decree of the same Act as to the allegation of illegality in the inclusion of gains from the transfer of processed sales claims in gross income, the reduced amount of liabilities arising from the exemption or extinguishment of liabilities (i.e., gains from debt exemption) shall be included in gross income. As seen earlier, in principle, the tax authority bears the burden of proving the profits to be included in gross income, which is the basis of determining the corporate tax base. As such, the Defendant must prove that the Plaintiff had the credit purchase liability for the AA medicine at the time of transferring the processed sales claims to the AA medicine on January 10, 201, and that the Plaintiff decreased the Plaintiff’s liabilities due to the exemption or extinguishment of the above credit purchase obligation.

(4) As of January 10, 201, there is no dispute between the parties that the Plaintiff transferred the processed sales claims of this case to AAB, according to the statement of evidence Nos. 15, 25, 29, and 30 as to whether the Plaintiff bears the obligation to purchase credit of the processed sales claims of this case to AAB as of January 10, 201, it is difficult for the Plaintiff to use the above processed sales claims of 00 won from 00 bank accounts to 000, the Plaintiff’s account No. 1300, 2000, 200, 300, 200, 300, 200, 300, 00, 000, 20, 00, 00, 00, 00, 00, 20, 300, 00, 20, 00, 20, 3,000, 3,00.

Therefore, the defendant's disposition of this case, which included the above 00 won in the calculation of earnings, is unlawful, and the plaintiff's assertion pointing this out is with merit.

D. Sub-committee

If the Plaintiff excludes 000 won of the processed sales price of this case and 000 won of the processed sales price of this case from the calculation of earnings for each business year, with respect to the reasonable corporate tax to be paid for each business year of 2008 to 2011, the reasonable tax amount for each business year. Thus, the part of the disposition of this case which exceeds 00 won of the disposition of this case for the business year of 2008, the disposition of imposing corporate tax of 00 won of the business year of 2009, the disposition of imposing corporate tax of 00 won of the business year of 2009, and the disposition of imposing corporate tax of 00 won of the business year of 2011, which exceeds

3. Conclusion

Therefore, the plaintiff's claim of this case is justified within the scope of the above recognition, and the remaining claims are dismissed as it is without merit. It is so decided as per Disposition.