(영문) 서울행정법원 2019. 10. 15. 선고 2018구합89923 판결

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Title

Conclusion of Pleadings

Imposition of Judgment

Text

Purport of claim and appeal

Reasons

Plaintiff

텍스트 조절

글꼴

크기(pt)

굵기

줄 간격

자간(%)

(영문) 서울행정법원 2019. 10. 15. 선고 2018구합89923 판결

사업소득에 있어서의 사업개시일을 언제로 보아야 하는지 여부[국승]

Title

Whether the starting date of the business on business income shall be deemed to be the time

Summary

The plaintiffs' new construction and sale business of the housing of this case should be deemed to be the time when sale was commenced with approval for use of the housing of this case. The plaintiffs' income amount is not applicable to simple expense rate, and it is reasonable to estimate the income amount by applying standard expense rate.

Related statutes

Article 143 of the Enforcement Decree of Income Tax Act

Cases

2018Guhap8923 global income and revocation of disposition

Plaintiff

The AA et al.

Defendant

○ Head of tax office et al.

Conclusion of Pleadings

on December 24, 2019

Imposition of Judgment

October 15, 2019

Text

1. The plaintiffs' claims against the defendants are all dismissed.

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

Purport of claim and appeal

Defendant ○○○ Tax Office’s revocation of the imposition of global income tax of KRW 000,00,000 (including additional taxes), global income tax of KRW 000,000,000 (including additional taxes) accrued for May 1, 2018 by Defendant ○○ Tax Office against Plaintiff B on May 1, 2018, global income tax of KRW 00,000 (including additional taxes) accrued for the year 2015, global income tax of KRW 00,000 (including additional taxes) accrued for the year 2016, global income tax of KRW 00,000 (including additional taxes), Defendant ○○ Tax Office’s imposition of global income tax of KRW 00,00,000 (including additional taxes) accrued for Plaintiff B on May 1, 2018, and the imposition of global income tax of KRW 000,000 (including additional taxes) accrued for Defendant ○ Tax Office’s imposition of global income tax on May 1, 2018.

Reasons

1. Details of the disposition;

A. From 2014 to 2018, the Plaintiffs are affiliated with the Housing Construction and Sales Business as listed in the following [Attachment 1]:

The housing of this case (hereinafter referred to as the "housing of this case") as described below, after making a business registration:

The new construction was made.

[Attachment 1]

Business Operator

Type of business

Plaintiff

2014

Amount of reported sales by-products;

2015

Type of Report

Revenue amount

Necessary expenses

Amount of income;

242,500

2,213,901,673

1,995,497,910

218,403,763

Simple Expense

[Attachment 2]

(unit: won)

Plaintiff

2015

Sales by-products

Reported income amount

2016

Type of Report

Revenue amount

Necessary expenses

Amount of income;

The AA

75,000

0,000,000,000

5,611,470,152

00,000,000

Simple Expense

74,400

0,000,000,000

4,645,228,595

00,000,000

Simple Expense

5,600

00,000,000

349,906,284

00,000,000

Simple Expense

Dadddi

20,000

00,000,000

258,196,777

00,000,000

Simple Expense

D. After conducting an individual consolidated investigation against the Plaintiffs, the director of the Seoul Regional Tax Office: (a) deemed that the Plaintiffs did not fall under the application of simple expense rate under Article 143(4) of the former Enforcement Decree of the Income Tax Act; (b) notified the Defendants of the estimation

E. Accordingly, the Defendants issued each correction and notice of the comprehensive income tax on the Plaintiffs (hereinafter “each disposition of this case”).

F. The Plaintiffs were dissatisfied with each of the instant dispositions and filed an appeal with the Tax Tribunal, but all of the appeals were dismissed on September 28, 2018.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 5 through 18 (including each number, hereinafter the same shall apply), Eul evidence Nos. 1 and 2, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiffs' assertion

In the case of engaging in construction business like the plaintiffs, if the ground is maintained for new construction of housing or the removal of existing buildings is required, and the economic value of soil and sand and by-products generated therefrom remains to be sold to a third party, this constitutes an income accruing from construction business. In addition, the sale by-products by the plaintiffs constitutes the supply of goods which inevitably arise in relation to the construction business, which is the main business.

Therefore, the Plaintiffs constitute an entity subject to simple expense rate, and thus, each of the instant dispositions is unlawful on different premise.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Under the principle of no taxation without law, a tax law shall be interpreted in accordance with the text of the law, and shall not be extensively interpreted or analogically interpreted without a reasonable reason, barring any special circumstance. However, even according to the language and text of the tax law itself, if its meaning is unclear or if it appears that there is a conflict between the laws and regulations, the court must naturally indicate the true meaning of the language and text at issue through harmonious interpretation between the laws and regulations. In such cases, a judge can make a combined interpretation of the laws and regulations that consider legislative intent and purpose to the extent that it does not undermine legal stability and predictability pursued by the principle of no taxation without law (see, e.g., Supreme Court Decision 2007Du4438, Feb. 15, 2008).

Article 1-2 (1) 5 of the former Income Tax Act (amended by Act No. 15225, Dec. 19, 2017; hereinafter the same) provides for the definition of "business entity" and Article 19 (1) of the former Income Tax Act

income arising from any category of business shall be determined as business income; and

Article 8 (3) of the Value-Added Tax Act provides that Article 8 of the Value-Added Tax Act shall apply mutatis mutandis to a business operator who makes a business registration under the Income Tax Act, and Article 6 of the Enforcement Decree of the Value-Added Tax Act shall apply mutatis mutandis to the starting date of the business income.

Inasmuch as there is no provision that explicitly establishes the commencement of business or that such provision shall apply mutatis mutandis, the Gu through a joint interpretation of the laws and regulations that take into account the legislative purport, purpose, etc. of the Income Tax Act to the extent that such a provision does not undermine legal stability and predictability.

It is necessary to look at when the starting of the business in the business income under the Income Tax Act should be seen.

Therefore, in full view of the language, structure, and purport of the relevant laws such as the former Income Tax Act and the Value-Added Tax Act, the starting date of the business of the business of the business income under the former Income Tax Act shall be also based on the time stipulated in each subparagraph of Article 6 of the Enforcement Decree of the Value-Added Tax Act, which provides for the starting date of the business under Article 5(2)

① Considering that Article 19(1) of the former Income Tax Act defines “income generated from various types of business, such as agriculture, forestry, fishery, mining, manufacturing, construction, etc.,” as business income, it is reasonable to view that a business is based on the premise that a real income is generated under the former Income Tax Act, considering that Article 1-2(1)5 of the same Act defines a resident as a “resident with such business income”. Therefore, it is reasonable to view that a business is based on the premise that a real income is generated. Therefore, it is difficult to simply move forward to the time the preparation for the business, which is the time of providing goods or services

② As a result, it is difficult to objectively specify the starting point of preparation activities, inasmuch as a preparatory act is considerably irregular and broad, as well as the scope thereof is set by a business operator’s subjective intent or necessity, it is difficult to objectively specify the starting point of preparation activities. If a preparatory act is earlier than the starting point of business of a new construction and sale business at the time of acquisition of land or the starting point of construction or completion of a building, the revenue amount of the immediately preceding taxable period, which is a premise for the application of the simple expense rate under Article 143(4)2 of the former Enforcement Decree of the Income Tax Act, depending on the time of preparation activities, may vary depending on the time of the preparation activities. As such, a business operator may interfere with the national legitimate exercise of the right to tax

③ Under Articles 1-2(1)5 and 19 of the former Income Tax Act, a resident with income arising from his/her own calculation and responsibility (in independence) and continuous and repeated activities for profit-making purposes becomes an entrepreneur; under Article 2(3) of the Value-Added Tax Act, a person who supplies goods or services independently for business purposes is an entrepreneur and becomes a person liable to pay value-added tax; and under this context, a person who supplies goods or services independently for business purposes is a person who supplies goods or services independently for profit-making purposes and has the type of business to an extent that a value-added tax can be created (see Supreme Court Decision 98Du16705 delivered on September 17, 199) and who supplies goods or services with continuous and repetitive intent to create a value-added tax (see Supreme Court Decision 98Du16705 delivered on September 17, 199), and there is a need to interpret business income related to one business under the former Income Tax Act uniformly from the date of commencing business under the former Value-Added Tax Act.

(4) From this point of view, the former Income Tax Act imposes an obligation on the head of the competent tax office under Article 168 (1) to make a business registration under the former Income Tax Act while imposing an obligation on the business operator who has made a business registration under Article 168 (2) of the same Act shall be deemed to have made a business registration under the former Income Tax Act, and may be deemed to impose an obligation on the person who has received the supply of goods or services by preparing an invoice or receipt as prescribed by Presidential Decree where the business operator has made a business registration under Article 163 (1) of the former Income Tax Act provides for the obligation to issue a tax invoice to the person who has received the supply of goods or services.

(5) Article 8 (1) of the Value-Added Tax Act, which provides that Article 168 (3) of the former Income Tax Act shall apply mutatis mutandis to business registration, uses the term "the starting date of business" in relation to business registration, and Article 5 (2) of the Value-Added Tax Act uses the term "the starting date of business" in relation to the first taxable period for a new business operator, and Article 6 of the Enforcement Decree of the Value-Added Tax Act sets the starting date of business under Article 5 (2) of the Value-Added Tax Act as "the starting date of

2) According to the following circumstances revealed by comprehensively taking account of the contents of the relevant statutes and the evidence and the purport of the entire pleadings, the commencement of business in the case of the Housing Construction and Sales Business Act that the Plaintiffs engaged in the instant housing shall be deemed the commencement time of the sale of the instant housing by starting the supply of goods as stipulated in Article 6 subparag. 3 of the Enforcement Decree of the

① Article 143(4)1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010) stipulates that Article 143(4)1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010) stipulates that Article 143(4)2 of the former Enforcement Decree of the Income Tax Act applies simple expense to all business operators who start a new business in the pertinent taxable period, in addition to those who start a new business in the pertinent taxable period.

Article 143 (4) 1 of the former Enforcement Decree of the Income Tax Act amended by Presidential Decree No. 22580

Even if a business operator starts a new business during a period, the principal competition in the case of a business operator exceeding a certain scale;

Income through the application of simple expense rate, taking into account that there is sufficient evidence keeping and keeping of records;

In order to prevent the reduction of tax amount, if the revenue amount of a new business operator falls under the standard of double-entry bookkeeping, the application of simple expense rate shall be excluded from the application of simple expense rate, but Article 12 of the Addenda (Presidential Decree No. 22580, Dec. 30, 2010) of the Enforcement Decree of the Income Tax Act (Presidential Decree No. 22580, Dec. 31, 2010) stipulates a transitional provision for a business operator who starts new construction, real estate development, and supply business after January 1, 201 to apply simple expense rate (hereinafter referred to as "simplified provision") in accordance with the previous provision in order to prevent the reduction of tax amount. In addition, Article 143(4) of the Enforcement Decree of the Income Tax Act, which applies to the income amount of a new business operator that starts in the taxable period after January 1, 2019, provides for the exclusion of the relevant business operator from the application of simple expense rate in the immediately preceding taxable period.

In light of the legislative history of Article 143(4) of the Enforcement Decree of the Income Tax Act, the simple expense system is a system to minimize the tax payment costs of small small-scale business operators who lack the capacity to keep records of the principal expenses required by the standard expense rate system, and the legislators seem to have gradually reduced the scope of business operators subject to the simple expense rate application. Furthermore, according to the language and text of the supplementary provision, legislators seem to understand the "construction commencement", "construction business," and "Commencement of real estate development and supply business" as separate concepts. Therefore, considering these legislative intent, in the case of housing construction and sales business that operates a business for a long period exceeding a certain scale due to the nature of the business, it is necessary to grasp the commencement of the business of the housing subject to sale rather than the commencement date that can determine the time according to the intention of the business operator.

② The commencement of a business of the Housing Construction and Sales Business shall be substantially determined at the time when the preparation for a business is completed and the preparation for the original business is conducted or is able to be conducted (see, e.g., Supreme Court Decision 94Nu15905, Dec. 8, 1995). The initial housing construction and sales business is included in real estate sales business given its nature (see, e.g., Supreme Court Decision 2008Du21768, Jul. 22, 2010). The purpose of the business is to sell a house, and it is difficult to view that the fact that a house has been completed

③ Whether a business income constitutes business income under the Income Tax Act ought to be determined according to social norms, taking into account whether business activities are continuously and repeatedly conducted in light of the business profit purpose, the scale, frequency, and mode of business (see, e.g., Supreme Court Decision 91Nu6559, Nov. 26, 1991). However, there is no evidence to deem that the Plaintiffs had objectively expressed their intent to engage in the housing construction and sales business for profit prior to commencing the sale of the instant housing, and the fact that the Plaintiffs purchased the instant housing site, or sold by-products, such as commencement of construction of the instant housing, for profit-making purposes solely on the basis that the Plaintiffs purchased the instant housing site or sold by-products, such as the instant housing construction

It is difficult to see that activities conducted repeatedly have objective substance as a new house construction and seller.

3) Therefore, the Plaintiffs’ business of newly constructing and selling the instant housing ought to be deemed to be the time of commencing sales after obtaining approval for the use of the instant housing. Accordingly, even if the Plaintiffs sold by-products such as scrap iron, it is difficult to deem that they commenced a new housing sales business by itself. Therefore, since the Plaintiffs’ revenue in 2015 and 2016 exceeds the standard amount under Article 143(4) of the former Enforcement Decree of the Income Tax Act, the Plaintiffs are not applicable to simple expense providers, and the amount of income should be estimated by applying the “standard expense rate” under Article 143(3) of the former Enforcement Decree of the Income Tax Act. Ultimately, the

3. Conclusion

Therefore, the plaintiffs' claims against the defendants are dismissed since all of them are without merit.

It is so decided as per Disposition.

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