Supreme Court Decision 2017Du534 ( July 12, 2018)

Exceptional reasons for re-audit

There is room for a case where there is error in connection with the two or more business years, and it should be determined whether there was a specific material to support the exceptional reasons for re-audit, at the time of the commencement of re-audit.

Article 81-4 (Prohibition of Abuse of Right of Tax Investigation)

2018Nu182 Revocation of Disposition of Imposing Corporate Tax, etc.

A. A.

b Head of the Tax Office

Seoul Administrative Court Decision 2012Guhap34594 decided June 28, 2013

December 12, 2018

1. Of the judgment of the court of first instance, the part concerning corporate tax for each business year of 2006 and 2007 shall be modified as follows:

A. Of the imposition disposition of corporate taxx (including additional tax) imposed on the Plaintiff on April 2, 2012 by the Defendant on the Plaintiff on April 2, 2012, the part exceeding thex won shall be revoked.

B. The plaintiff's remaining claims are dismissed.

2. 80% of the total costs of the litigation shall be borne by the plaintiff and the defendant living together.

The judgment of the first instance shall be revoked. The defendant's imposition of corporate tax Xx (including additional taxes) on the plaintiff on March 2, 2012; the imposition of corporate tax of 2006 on March 2, 2012; the imposition of corporate tax of 2007; the imposition of corporate tax of xxx (including additional taxes); the imposition of corporate tax of 2008; and the imposition of xxx (including additional taxes); the imposition of xxx (including additional taxes); the imposition of xxx (including additional taxes) of 209; and the imposition of xxx (including additional taxes) of 2010; and the imposition of xxx (including additional taxes) of 208 for the first half of 2008.

1. Scope of adjudication of this court;

"The first instance court dismissed all of the plaintiff's claim, and the plaintiff appealed. The second instance court's decision was 200. The defendant appealed 10. The second instance court's decision on March 2, 2012, 206 and the second instance court's decision on April 2, 2007 (including additional tax) which included the part on the imposition of corporate taxx 200. The second instance court's decision on April 2, 2012 and the part on the imposition of corporate taxx 207 (including additional tax) which included the part on the imposition of corporate tax for 2006 business year and corporate tax for 207 business year. The second instance court's decision on the revocation of the second instance court's request on the second 20, 2006, 207, referring to the part on the second 20, 2007, referring to the part on the second 20, 2006, and 207, referring to the part on the second 206, respectively.).

2. Details of the disposition;

"This Court's explanation on this part is identical to the statement on the 2nd 1th 1th 1th 2th 1th 1th 1th 3th 9th 9th 9th 1th 2th 3th 3th 9th 9th 9th 9th 1th 200 of the first decision of the court of first instance, and Article 8 (2) of the Administrative Litigation Act, the main sentence of Article 420 of the Civil Procedure Act," and "O 3th 5-6th 5th 5th 5th 6th 20 (hereinafter "the disposition in this case") as follows," and "the first 208 imposition of corporate tax xx (including additional tax) made by the defendant to the plaintiff, and the imposition of corporate tax xxx (including additional tax) in the year 2009 xx 20th 206th 207th 206th 207.

"This Court's explanation concerning this part is as follows, except as follows, from 3th to 24th parallel 11th parallel 11th parallel to 24th parallel 2th parallel 4th parallel 2th parallel 2th parallel 3 of the judgment of the court of first instance. This part is identical to the entry (including attached Form) on the legitimacy of the disposition of this case, and this part is cited as it is in accordance with Article 8 (2) of the Administrative Litigation Act, Article 420 of the Civil Procedure Act, and Article 420 of the Civil Procedure Act.

O 6th table "the plaintiff submitted to this court" is referred to as "the plaintiff submitted to the court of first instance".

O 6 the first instance court below's first instance court is regarded as the court of first instance.

O 12 The first "court of this Court" shall be regarded as the "court of the first instance."

O 13 Parts relating to service costs shall be deleted from the last parallel to 17 pages.

From the 19th parallel to the 5th parallel below on the same side shall be as follows:

2) Whether the case constitutes exceptional grounds for permission

(A) Article 81-4(1) of the former Framework Act on National Taxes (amended by Act No. 11604, Jan. 1, 2013; hereinafter the same) provides that a tax official shall conduct a tax investigation to the minimum extent necessary to realize appropriate and fair taxation, and shall not abuse his/her right to conduct a tax investigation for any other purpose. Paragraph (2) provides that "no tax official shall conduct a reinvestigation for the same item and the same taxable period unless it falls under any of the following subparagraphs, unless it is exceptionally permitted," and Paragraph 3 of Article 81-4(1) of the former Framework Act provides that a tax investigation should be conducted within the minimum scope necessary for appropriate and fair taxation. Since Article 81-2 of the former Framework Act on National Taxes (amended by Act No. 11604, Jan. 1, 2013; hereinafter the same shall apply) provides that an act of tax investigation conducted on the same item and taxable period constitutes an exceptional one of the two or more different reasons for the commencement of reinvestigations in light of the purpose and the two or more different reasons.

B) The following facts can be acknowledged in full view of the purport of the entire arguments as seen earlier.

① Although most of the Plaintiff’s shares issued as a corporation engaging in real estate rental business, the Plaintiff was initially held by CCC. However, due to the aggravation of the Plaintiff’s financial standing, four corporations, such as D, e,ff, and g, which were related organizations related toj from around 2006 to around 2010, were x% of the Plaintiff’s shares issued and x% of the Plaintiff’s shares were x%.

② The net profit of the business year 2005 increased rapidly as the business normalization, such as attracting hh and ii, etc. as lessee, has occurred until the business year 2003.

③ On November 8, 2005, the board of directors held on November 8, 2005, "CC as a start-up owner, did not sell a building in lots, maintained it as a leased facility, and contributed significantly to the improvement of profit-making structure, such as the attraction of large-scale lessees, the rate increase, and so on. The chairperson of the board of directors, as the chairperson of the board of directors, made a resolution of the board of directors stating that the performance bonus shall be paid within the range of x% of the rental income every year only when net income occurs after the end, taking into account the significant operational achievements, such as raising the interest rate and the rate increase. The time and amount of payment, etc. are determined by the board

④ As the net income of the Plaintiff for each business year from 2006 to 2010, each of thex numbers,xx number,xx number,xx number, andx number as the net income of the Plaintiff, the Plaintiff paid the CCC a performance bonus of this case from each of thex members,x number,xx number,xx number,xx number, andxx number within the scope of thex percent of the rental income of the department stores and the hotel, while the organization related to other major shareholders'j has paid the xx number,xx number,xx number,xx number, andxx number to the relevant organization for each business year.

⑤ These performance bonuses, donations, etc. have been allocated according to the Plaintiff’s share ratio at the time. The Plaintiff did not have any provision on the criteria for payment of performance bonuses and the basis for calculation, so the representative director set bonuses at his own discretion, and CCC paid performance bonuses to other executives, and there was no change in the CCC’s share ratio.

C) Examining these facts in light of the legal principles as seen earlier, the Plaintiff’s payment of performance bonus in each business year from 2006 to 2010 is based on the resolution of November 8, 2005, which decided to pay bonus to CCC within the x% of rental income each year to the Plaintiff’s start-up owner and the chairman of the board of directors. In light of its contents and the progress before and after the resolution, it can be deemed that the resolution of the board of directors, without any particular payment criteria, paid dividends for disposal of surplus funds to CCC each year, but it would be deemed that it would be in the form of bonus subject to inclusion in deductible expenses only on the pretext, and even if the specific performance bonus amount to be paid to CCC was determined at the general meeting of stockholders and the board of directors, etc. held for each business year, it is reasonable to deem that the CCC andj-related organizations were to pay the performance bonus in accordance with the plan to pay the performance bonus at the time of the resolution of the board of directors on November 8, 2005.

Therefore, the re-audit based on the above circumstances is likely to fall under the case where there is error in relation to the two or more business years prescribed as one of the cases where the re-audit is exceptionally permitted under Article 81-4 (2) 3 of the former Framework Act on National Taxes, and it is problematic whether specific data to support the exceptional reasons for re-audit have been prepared at the time of commencement of re-audit, and in the case of the business year 2006.

In light of the following circumstances that can be seen by comprehensively taking into account the purport of the entire arguments, it is reasonable to deem that the Seoul Regional Tax Office has already secured specific materials to support exceptional reasons for permission at the time of commencement of a double tax investigation for the business year 2006 ( February 14, 2012) as the defendant or the Seoul Regional Tax Office has already secured specific materials to support that the error or omission in the calculation of the tax base and the amount of tax occurred over two or more business years. Accordingly, in the case of the business year 2006, a reinvestigation may be deemed to constitute an exception permitted under Article 81-4 (2) 3 of the former Framework Act on National Taxes, since it can be deemed that it constitutes a reinvestigation that exceptionally permitted under Article 81-4 (2) 3 of the former Framework Act on National Taxes for the business year 2006.

① At the time of the first investigation, the director of the Seoul Regional Tax Office submitted the Plaintiff’s executive remuneration, retirement allowance, bonus payment regulations, minutes of the board of directors from 2005 to 2008, and additionally made the second investigation, the Seoul Regional Tax Office examined setting limits on contribution rates, and secured the details of donation advertising and publicity expenses, performance rate details, etc.

② At the time of the commencement of the second investigation, the taxable period subject to investigation was from 2007 to 2010, and the taxable period subject to investigation was extended on February 14, 2012.

(3) On December 6, 201, 201, at the time of the second investigation, KK, a manager of the management support headquarters of the Plaintiff Company, stated on December 6, 201 at the time of the second investigation that it was not a standard to measure the degree of effort of each executive officer, payment of piece rates according to the contribution, andCC made payment of piece rates differently from other executive officers, and in accordance with the shareholders' share ratio in each year, "the number of large shareholders and performance contribution allocation rate", CCC paid bonus, and j-related organizations treated bonus as donations or advertising expenses as desired by the other party, and the CCC's bonus orj-related organization's contribution and advertising expenses were distributed in substitution according to its share ratio, and only at the time of securing the statement of KK, it seems that the Seoul Director of the Seoul Regional Tax Office grasped the fact that the performance bonus payment to the CCC, which serves as the basis of the disposition of this case, is a non-deductible expense in accordance with the Corporate Tax Act."

The Seoul Director of the Seoul Regional Tax Office, at the time of the second investigation ( November 8, 201), seems to have already submitted the meeting minutes of the board of directors on November 8, 2005, to have been holding the meeting minutes of the board of directors on the first investigation, payment of retirement allowances, bonuses, and the meeting minutes of the board of directors in 2005 2008. However, it is difficult to view that the defendant or the Seoul Regional Tax Office has secured specific evidentiary materials for re-audit. The following circumstances revealed by considering the entire purpose of the arguments, i.e., the performance bonus at the time of the first investigation, and the Seoul Regional Tax Office's statement at the time of the second investigation are not at least 200 if it appears that it is difficult to consider the following circumstances, including the statement of KK at the time of the second investigation, and that the amount of performance bonus at the time of the second investigation at the time of the second investigation at the time of the second investigation at the time of the second investigation at the time of the second investigation at the time of the acquisition of corporate tax for the year.

22 On the right side of the 9-way side, "206 business year" shall be added.

O 22. The following shall be added between the 11st page of the same 10 parallels:

(3) Sub-decisions

Therefore, among the dispositions in this case, the corporate tax for the business year of 2006 cannot be deemed to have the above laws as alleged by the plaintiff, but the corporate tax for the business year of 2007 among the dispositions in this case should be revoked because it violates the prohibition principle of double tax investigation.

22.With respect to service charges, the phrase “(3)” shall be deleted from 11. to 24.4 pages.

4. Conclusion

Therefore, the part of corporate tax for the business year 2007 among the parts belonging to the scope of the judgment of this court should be revoked illegally. Thus, the plaintiff's claim for this part should be accepted and dismissed for the reason of the reason. Since the judgment of the court of first instance is improper in some conclusion, it is unfair, and the part concerning corporate tax for each business year in the judgment of the court of first instance concerning 2006 and 2007 should be revised to the above contents.