2014 depth 337

The mere fact that service charges are separately stated in credit card sales slip sales slip, etc. cannot be viewed as service charges excluded from the assessment basis of value-added tax and individual consumption tax.

The mere fact that service charges are separately stated on credit card sales slip sales slip, etc. cannot be deemed as service charges that are exempt from value-added tax and individual consumption tax base, and that arbitrarily manipulating credit card instruments in a way that the percentage of sales can be uniformly divided into service charges irrespective of customer’s intent constitutes “Fraud or other unlawful act.”

Articles 1, 2, and 3 of the former Special Consumption Tax Act (amended by Act No. 7840 of Dec. 31, 2005)

Article 25 of the Framework Act on National Taxes

2014Guhap1758 Disposition of Disposition of Imposition of Value-Added Tax, etc.

KimA and 8

BB Director of the Tax Office

October 15, 2015

November 12, 2015

1. All of the plaintiffs' claims are dismissed.

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

Cheong-gu Office

The defendant's each disposition listed in the separate disposition No. 1 against the plaintiffs on June 14, 2012 shall be revoked.

1. Details of the disposition;

A. The plaintiffs are joint business operators operating an entertainment drinking house business with the trade name of 00 - 00 - 0000 - 000 - '000 -' from January 2004 to January 2008 (hereinafter "the instant business establishment"), and the period during which the plaintiffs operated the instant business establishment is as follows.

B. From Oct. 3, 2006 to Jan. 1, 2008, the instant place of business had a 00% share of 00% and Plaintiff Kim 00 jointly engaged in the instant business with a 00% share of 00%. From Jan. 1, 2008 to Feb. 7, 2010, Nonparty Park 00% and Nonparty Kim 00 jointly engaged in the instant business with a 30% share of 30% share.

C. The non-party Park 00, the plaintiff Kim 00, and the non-party Kim 00 filed a report on value-added tax and special consumption tax for the business year from around 2006 to 2008 of the instant place of business, while jointly operating the instant place of business, and filed a report on the amount of 000 won paid to the employees of the instant place of business (excluding value-added tax and special consumption tax 1).

D. From January 21, 2010 to February 19, 2010, the Defendant: (a) conducted a personal integration survey on Nonparty 200 and Kim00 (hereinafter “taxide00, etc.”) on the instant workplace for the business year 2006 to 2008; (b) confirmed that Park 000 won from the instant workplace was treated as the service fee of the employees of the instant workplace during the business year from 2006 to 2008; and (c) made a disposition of correcting and notifying Park 00, etc. of value-added tax of KRW 000, individual consumption tax, and earned income tax of KRW 000,000, respectively.

E. From October 17, 201 to November 24, 2011, the Board of Audit and Inspection conducted an audit on the actual status of tax investigation. Since 25% of the sales amount at the instant workplace were uniformly recorded as service charges, and there was omission of value-added tax, etc. by fraud or other unlawful act, such as arbitrarily operating credit card settlement equipment, and preparing a service charge payment ledger after the fact that the exclusion period under Article 26-2 subparagraph 1 of the former Framework Act on National Taxes (amended by Act No. 8139, Dec. 30, 2006; hereinafter the same) constitutes 10 years, the Board of Audit and Inspection demanded 00 regional tax office to additionally collect value-added tax, etc. for the pertinent workplace for the pertinent business year from October 17, 2011 to November 24, 2011, the Director of the Regional Tax Office notified the Defendant of the above request for correction of the income tax by the Board of Audit and Inspection (hereinafter referred to as “the Plaintiffs’ notice of correction”).

G. The Plaintiffs were dissatisfied with each of the dispositions in this case and filed a request for review with the Board of Audit and Inspection on September 7, 2012, but the Board of Audit and Inspection dismissed the request for review on July 24, 2014.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 3, Eul evidence Nos. 1, 2, 6 through 9 (including each number), the purport of the whole pleadings

2. The plaintiffs' assertion or related laws

A. The plaintiffs' assertion

The instant disposition shall be revoked on the grounds that it is unlawful for the following reasons.

(i) there is a defect in the procedure of the tax investigation;

The tax investigation based on each of the dispositions of this case was conducted only for Park 00, a representative at the time of the tax investigation without any notification or investigation with respect to the plaintiffs. Although the plaintiffs did not conduct the above Park 00 and joint business, they were not given notification or opportunity to vindicate the above tax investigation. Ultimately, the disposition of this case was unlawful on the ground that the disposition of this case was conducted based on the tax investigation that was not wholly involved by the plaintiffs.

2) Service charges for the instant workplace shall be deemed as service charges excluded from the assessment basis of value-added tax and individual consumption tax.

In the case of service charges for the instant workplace (hereinafter referred to as “service charges”), the Plaintiffs did not enter into an employment contract with employees, and they were free occupation income for their customers, not for employment, and the Plaintiffs withheld the pertinent service charges and kept the service charges ledger signed by the recipient of the pertinent service charges. As such, the Plaintiffs issued the service charges by the method of separately entering the service charges when issuing credit card sales slips as prescribed by “the matters to be observed by the business operators who intend to exclude the service charges (No. 2001-17 of the National Tax Service Notice No. 2001)”, and signed and confirm the fact that the recipient of the service charges directly receives them. The instant service charges should be deemed as the service charges excluded from the tax base of value-added tax and the individual consumption tax.

(iii) a period of exclusion from the imposition of national taxes is not subject to 10 years, because it does not constitute fraud or other unlawful acts.

Even if the service charges in this case constitute the service charges that are excluded from the assessment basis of value-added tax and individual consumption tax, the Plaintiffs do not have any act of arbitrarily manipulating credit card instruments regardless of their will, i.e., fraud or other unlawful acts, and preparing a payment ledger of service charges after the fact. Therefore, the exclusion period for imposing national taxes for 10 years cannot be applied to the Plaintiffs.

(b) Related statutes;

Attached Form 2 shall be as stated in the relevant statutes.

3. Whether the instant disposition is lawful

(a) Whether there is a defect in the procedure of the tax investigation;

First of all, the defendant conducts a tax investigation only on gambling, etc., and received a correction and notification disposition only on gambling, etc., but after receiving a request for correction by the Board of Audit and Inspection, it seems that the disposition of this case was conducted without conducting a tax investigation against the plaintiffs.

However, Article 81-3 (1) of the Framework Act on National Taxes provides that "tax officials shall conduct a tax investigation to the minimum extent necessary for appropriate and fair taxation, and shall not abuse the right of tax investigation for any other purpose, etc." and does not impose any obligation on tax officials to conduct a tax investigation. Thus, the defect in the procedure of the tax investigation cannot be said to exist on the ground that the defendant made the disposition of this case solely based on the result of the tax investigation on gambling, etc.

Therefore, this part of the plaintiffs' assertion is without merit.

B. Whether the service fee of this case should be deemed as the service fee excluded from the tax base of value-added tax and individual consumption tax

1) Article 48(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 19330, Feb. 9, 2006; hereinafter the same) provides that "the tax base under Article 13(1) of the former Enforcement Decree of the Value-Added Tax Act includes all monetary values, regardless of the pretext, such as the prices, charges, fees, and other things received from a transaction partner," and Article 13(9) of the same Act provides that "Where a business operator enters the service charges of an employee (including free-income earners) who receives food and accommodation services or personal services, along with the price, separately from the price, on the tax invoice, receipt, credit card sales slip, etc. under Article 32-2 of the Act, where it is confirmed that the service charges are paid to the relevant employee, the service charges shall not be included in the tax base: Provided, That the same shall not apply where the business operator appropriates

In addition, Article 1 (1) of the former Special Consumption Tax Act (amended by Act No. 7840 of Dec. 31, 2005; hereinafter the same) provides that "the special consumption tax shall be imposed on admission to a specific goods or a specific place and entertainment, eating and drinking at a specific place." Article 2 (1) 11 of the former Enforcement Decree of the Special Consumption Tax Act (amended by Presidential Decree No. 19258 of Dec. 31, 2005; hereinafter the same shall apply) provides that "the special consumption tax shall be imposed on the admission to the specific goods or a specific place and on the eating and drinking at a specific place." Article 2 (1) 11 of the former Enforcement Decree of the Special Consumption Tax Act (amended by Presidential Decree No. 19258 of Dec. 31, 2005; hereinafter the same shall apply) refers to the amount received by the operator of the taxable entertainment place from a person who provides entertainment and eating services regardless of the name of the service charge, if separately stated on the tax invoice, credit card or receipt."

In full view of the above provisions, if a business operator enters the service fee of employees separately from the price for the service provided by the business operator, the service fee is not included in the tax base of value-added tax and individual consumption tax, and in this case, the "employee's service fee" means the amount paid by the business operator with the intention to directly belong to the employee who provided the service in question, as the price for intangible service, such as the speech, friendship, consideration, etc. of the employee who provided the service in the service provided by the business operator, separate from the price for the service provided by the business operator. Thus, if the business operator enters the service fee of employees who received the service in addition to the price for the service provided by the business operator, separately from the price for the service provided by the credit card sales slip, etc., if it is confirmed that the service fee was paid to the employee in question, the service fee is not included in the tax base of value-added tax and individual consumption tax, or simply divided into the service fee in the credit card sales slip, etc., the service

(2) In light of these legal principles, we examine whether the service charges in this case constitute "service charges of employees prescribed in Article 48 (9) of the former Enforcement Decree of the Value-Added Tax Act and Article 2 (1) 11 of the former Enforcement Decree of the Special Consumption Tax Act", and as seen earlier, the service charges in this case are separately entered in the credit card sales slip issued at the instant place of business with the prime share, etc. However, the following circumstances, which are acknowledged as being comprehensively taken into account the entire arguments in Article 4, 5, and 6 of the former Enforcement Decree of the Value-Added Tax Act, i.e., there is no objective evidence to recognize that the plaintiffs paid the amount as service charges in this case to employees such as the prime share of the above credit card sales slip 4, 100, 1000, 2000,0000,0000,0000,000,0000 won, 10,000,0000 won.

(c) Ten-year application period of exclusion from the imposition of national taxes because it does not constitute a fraud or other unlawful act;

Other than different areas

The legislative purport of Article 26-2(1) of the former Framework Act on National Taxes is to extend the exclusion period of the national tax imposition right to 10 years, in principle, in cases where there is an unlawful act, such as making it difficult for the tax authority to discover the taxation requirement of the national tax or forging false facts, while the exclusion period of the national tax imposition right is five years in order to promptly determine tax relations, and it is difficult for the tax authority to expect the exercise of the imposition right. Therefore, the "Fraud and other unlawful act" under Article 26-2(1)1 of the same Act refers to a deceptive and other active act, which makes it difficult or considerably difficult to impose and collect the tax impossible or difficult, and it does not constitute mere failure to file a tax return under the tax law or making a false tax return without accompanying any other act, but it can be deemed that it has been made impossible or considerably difficult to impose and collect the tax in cases where there are circumstances, such as failure to file a tax return or underreporting, and intentionally omitting the revenue or sale, etc. in the account book (see, e.g., Supreme Court Decision 2013213Du1361361, Dec.

In full view of the purport of the argument in Eul evidence No. 6, it can be acknowledged that the plaintiffs operated the workplace of this case jointly in 2004 and 005, and operated the credit card device at will to include 25% of the sales in a uniform classification of service charges regardless of customer's intent, and in light of the legal principles as seen earlier, the above acts by the plaintiffs constitute "Fraud or other unlawful acts" as stipulated in Article 26-2 (1) 1 of the former Framework Act on National Taxes, which make it impossible or considerably difficult to impose and collect taxes.

Therefore, this part of the plaintiffs' assertion that differs from this premise is without merit.

4. Conclusion

Therefore, the plaintiffs' claim of this case is dismissed in entirety as it is without merit, and it is so decided as per Disposition.