Suwon District Court 2008Guhap4553 ( November 24, 2009)

Examination Income 2008-0100 (27 August 2008)

Where subscription compensation is deposited and paid to creditors, capital gains tax liability;

Even in cases where the expropriation compensation has been deposited and paid to the creditors, from the standpoint of the plaintiff, the plaintiff would have caused the decrease of liabilities.

1. The plaintiff's appeal is dismissed.

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

1. Purport of claim

The Defendant’s disposition of imposition of KRW 39,784,60 of global income tax for the year 2001 and KRW 3,978,460 of global income tax for the Plaintiff on May 7, 2008 is revoked.

2. Purport of appeal

The part of the judgment of the court of first instance against the plaintiff shall be revoked. The part that the defendant does not exceed 418,195 won among the disposition of imposition of global income tax of 39,784,600 won belonging to the plaintiff on May 7, 2008 shall be revoked.

1. Scope of the judgment of this court;

In the first instance court, the Plaintiff sought revocation of the disposition stated in the purport of the claim against the Defendant, and on November 24, 2009, the first instance court dismissed the part of the lawsuit of this case seeking revocation of the disposition imposing resident tax. On May 7, 2008, the Defendant revoked the part exceeding KRW 418,195 of the disposition imposing global income tax of KRW 39,784,600 pertaining to the Plaintiff for the imposition of global income tax of KRW 39,784,60 pertaining to May 7, 2001. The remainder of the Plaintiff’s claim is dismissed. The Plaintiff’s remaining claim is dismissed. The fact that only the Plaintiff appealed against the part against the Plaintiff regarding the disposition imposing global income tax of KRW 201 and appealed is apparent in the record. Thus, this court should decide only on the legality of the part that was not revoked by the first instance court.

2. Quotation of judgment of the first instance;

This court's "basic facts" and "related Acts and subordinate statutes" among the grounds for the court's explanation of this case are the same as those of Paragraph 1 and Paragraph 3-b, each part of the judgment of the court of first instance, and therefore, they are cited by Paragraph 2 of Article 8 of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

3. Whether the portion not exceeding 418,195 won, among the disposition imposing global income tax, is lawful.

A. The plaintiff's assertion

(1) Since the compensation for the instant land was received by Nonparty A, not by the instant company, but by Nonparty A, etc., the said compensation does not constitute the income of the instant company. Accordingly, the instant disposition that imposed income tax on the Plaintiff on the premise thereof is unlawful.

(2) Even if there was an estimated decision on the income amount in the year 2001 due to the existence of a non-reported income amount in the instant company, it is the subject of the tax imposition resulting therefrom, and it cannot be deemed an individual of the Plaintiff. Therefore, there is no tax claim against the Plaintiff.

(3) Unlike a corporation that is a withholding agent, the Plaintiff, a withholding agent, merely bears the duty to collect and pay the source tax of the withholding agent, and does not bear a direct tax liability. Thus, the imposition of income tax against the Plaintiff is unlawful.

B. Determination

(1) Judgment on the Plaintiff’s first assertion

According to Article 11 subparagraph 6 of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 17457 of Dec. 31, 2001), since the reduced amount of liabilities due to the extinguishment of obligations is included in profits, even if the real estate was seized by the creditors of the owner before the transfer of the real estate and its profits from the transfer of the real estate were paid to the creditors, the owner of the real estate incurs income from the transfer of the real estate due to the decrease of liabilities due to the extinguishment of obligations, and the same applies to expropriation.

According to the purport of Gap evidence Nos. 10 and Eul evidence Nos. 5 and 6 (including each number), and the whole purport of the arguments, 112,726,80 won of the company's compensation for the expropriation of the land of this case was deposited in the Daejeon District Court No. 99 in April 16, 2001 and was requested for payment in the future and four persons, and the above facts are acknowledged as being the creditors of the company of this case. Thus, the company of this case obtained the same amount of money as the above compensation was paid to the creditors of this case and reduced their liabilities.

In this regard, the Plaintiff asserts that the disposition of global income tax imposition was based on the Defendant’s notice of change in the amount of income in KRW 131,958,620 of the income amount accrued in October 5, 2007, and that the notice was made without any taxation data on the corporation subject to taxation, and thus, the disposition of global income tax imposition in this case is unlawful. However, as acknowledged in the previous facts that the above notice of change in the amount of income is included in the income accrued from the above compensation from the corporation’s non-reported income, the disposition of global income tax imposition in this case should be revoked. However, as seen above, as long as the above expropriation compensation amount was paid to the creditors and its liabilities decreased, so long as the company in this case obtains income and thereby obtains income therefrom, the above expropriation compensation amount, as determined in the first instance court, even if the amount of income illegally included in the above notice of change in the amount of income amount includes the amount of income within the scope of income accrued from the above expropriation compensation, the Plaintiff’s above assertion is rejected.

Therefore, the plaintiff's first argument is without merit.

(2) Judgment on the second assertion by the Plaintiff

According to the above facts, the director of the tax office in Seodaemun-gu estimated the amount calculated by multiplying the amount of the revenue reported to the company in this case by the standard income rate of the company in 201, and ② limit it to the bonus for the representative director who held office in 2001 on the ground that it is unclear that the amount of income is attributed to the company in this case, ③ disposes of the amount corresponding to the representative director in the office of the plaintiff as the bonus of the plaintiff, and notify the plaintiff of the change in the amount of income. ④ Since the plaintiff did not make a return and payment of the comprehensive income tax in accordance with the notice of change in the amount

If the tax authority finds a non-reported amount of income to a juristic person separate from the imposition of corporate tax by including it in the calculation of gross income where it is not reserved to the juristic person and it is unclear to vest it in excess of the company, it shall be deemed that the amount leaked pursuant to Article 67 of the Corporate Tax Act and Article 106 (1) 1 of the Enforcement Decree of the same Act belongs to the representative and can be disposed of as a bonus to the representative. As such, the above amount of income paid as a bonus to the representative is added to the individual's income and is liable to pay it. Therefore, the above amount of income paid as a bonus to the representative director, who is the representative director at the time when it is unclear that it belongs to the representative director at the time of the above reported amount of income, is deemed to have been paid as a bonus. Thus, the company's liability to pay corporate tax of this case, separate from the corporate tax of this case, the plaintiff is liable to pay income tax on the above amount of bonus that the representative

(3) Judgment on the third assertion by the Plaintiff

If there is no withholding tax on income to be withheld from the disposition of income, if the income is to be added to the global income tax base of the person to whom the income is to be withheld, the taxation authority may impose it as global income tax on the person to whom the income is to be withheld (Supreme Court Decision 79Nu347 delivered on September 22, 1981, etc.

According to Articles 4(1)1 and 20(1)1(c) of the Income Tax Act (amended by Act No. 7006 of Dec. 30, 2003), bonus constitutes Class A earned income and it is added to global income. Thus, 131,958,620 won that was disposed of as bonus to the Plaintiff in this case is added to the Plaintiff’s global income tax base, and the Defendant, who is the person to whom it belongs, may be subject to the Plaintiff’s comprehensive income tax.

In addition, the judgment of the Seoul Administrative Court 2008Gu22839 brought by the plaintiff on the ground that in principle, the source taxpayer for withholding is only liable to collect, collect, and pay the source tax of the withholding agent, and does not bear a direct tax liability. However, in the case of withholding tax, the above judgment merely explained that the withholding agent is not liable to pay the withholding tax, and it does not mean that the withholding agent is not liable to pay the withholding tax directly, and it does not mean that the tax authority does not hold that the withholding agent is not liable to pay the Class A earned income tax or global income tax on the income subject to withholding (the above judgment is held that such income tax is established), and it does not interfere with the above recognition.

Therefore, the third argument of the plaintiff is without merit.

(4)Calculation of income tax;

On the other hand, the amount of the income tax for the plaintiff is calculated on the ground that the amount of the compensation for expropriation of this case was reverted to the plaintiff according to the method of disposition of the defendant's income by including it as the amount of the income of the company in 2001.

① The amount of income in 2001 of the instant company

For the foregoing reasons, the amount of income in 2001 of the instant company is KRW 112,726,80,00 paid to the instant company due to the expropriation of the instant land. The fact that the account books and other documentary evidence related to the income amount of the instant company have been destroyed is no dispute between the parties. As such, if the amount of income is estimated by applying Article 66(3) of the Corporate Tax Act and Article 104(2) of the Enforcement Decree of the same Act, the amount of income in 2001 of the instant company is calculated by applying Article 66(2) of the Corporate Tax Act and Article 104(2) of the Enforcement Decree of the same Act, the amount of income in 200 shall be KRW 21,530,818 [==12,726,800,19.1% of the amount of income in 201] according to the standard income rate of 2001

② The Plaintiff’s income amount in 201

According to the purport of the entire argument in this case, it is recognized that the above income amount of the company in this case constitutes a case where the attribution of the income amount in 2001 is unclear. Thus, under Article 67 of the Corporate Tax Act and Article 106 (1) 1 of the Enforcement Decree of the same Act, the above income amount is deemed as bonus to the plaintiff who was the representative director of the company in this case. If it is reverted to the plaintiff in proportion to the period of office of the representative director ( February 27, 2001 - December 31, 2001 - December 31, 2001), the plaintiff's income amount in 201 is 18,168,471 won ( = 21,530,818 won).

③ The Plaintiff’s global income tax amount in 2001

The Plaintiff’s global income tax amount in 2001 is 418,195 won if the income amount in 201 is calculated as shown in the attached Form of the Income Tax Act.

(5) Sub-committee

Therefore, the detailed and disposition of the Defendant’s global income against the Plaintiff is lawful to the extent that it does not exceed KRW 418,195 among them.

4. Conclusion

Therefore, the claim for revocation of the disposition of global income tax of this case shall be dismissed as it does not exceed 418,195 won among them, and the judgment of the court of first instance shall be justified in conclusion, and the plaintiff's appeal shall be dismissed as it is without merit. It is so decided as per Disposition.