The scope of small and medium enterprises subject to special tax reduction or exemption, disposal of income, and recognition of extra expenses for the sales business;

If a building is newly constructed and sold under a contract, it is not subject to the special tax reduction or exemption for small and medium enterprises, and it is unclear that the processing costs leaked out of the company and the costs incurred outside the company directly cope with them, so the disposition of income by the tax authorities is legitimate, and the refund of corporate tax on the costs incurred outside the company other than the disposition of disposition is not subject to administrative litigation and the amount of tax

Article 7 of the Restriction of Special Taxation Act: Special Tax Abatement or Exemption for Small or Medium Enterprises

Article 67 of the Corporate Tax Act, Article 14 of the Framework Act on National Taxes

1. All of the plaintiff's claims are dismissed;

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

Defendant ○○ Head of the Tax Office’s disposition of imposing KRW 2,890,385,50 on the Plaintiff on December 1, 2004, exceeding KRW 2,277,10,080 among the disposition of imposing KRW 2,207,10,080 of corporate tax for the business year 2002, and the disposition of notifying the Plaintiff of the change in the amount of income for the business year 2000 through 2003 of the attached Table 3 against the Plaintiff on December 16, 204 is revoked. Defendant ○○○ shall pay to the Plaintiff the amount of KRW 482,398,180 and the amount of KRW 5% per annum from the next day to the day of delivery of the copy of the complaint of this case, and 20% per annum from the next day to the day of full payment.

1. Basic facts

A. On June 11, 1999, the Plaintiff was a corporation established with the business of housing construction project, housing site formation project, housing site formation project, lease, sale and lease of movable property, sale by unit, consignment sale business, soil construction business, etc. between December 1999 and August 2003, and used the construction work of 24th floor above ground and 6th underground floor between December 1999 and August 2003, the Plaintiff calculated the sales of 200 through 2002 in accordance with the work progress rate for the sales of 200 to 200 to 202. The Plaintiff applied the tax reduction and exemption for the construction work of 24th floor above ground and 30 of the former Restriction of Special Taxation Act (amended by Act No. 731, Dec. 31, 2004; 2002, 300 to 200 to 20 to 30 to 270 to 20 to 30 to 27 to 27.

B. The head of ○○○○ Tax Office conducted an investigation on the Plaintiff’s business year 199 through 2003, including corporate tax, etc. on the Plaintiff’s 204; (1) deemed that the Plaintiff calculated the rate of work progress and the amount of revenue based on the purchase of the apartment house for a long time, and re-calculated it as earnings and losses for each business year; (2) deemed that the Plaintiff’s construction of the apartment house in this case constituted a real estate supply business rather than a construction business that can be subject to the application of the special tax reduction or exemption under Article 7(1) of the former Restriction of Special Taxation Act, and denied the reduction or exemption of the special tax for the small and medium enterprise; (3) the sales management expenses and construction expenses for the business year 200 to 203 to 2003, the total amount of KRW 2,003,605,556 was not actually paid, and the Plaintiff calculated the corporate tax on the basis of the corporate tax for the business year 200,500,57,20147.

C. Meanwhile, the head of ○○ Tax Office, on the ground that the total amount of 2,003,605,556 won was out of the company and the title of the processed labor cost of this case was unclear, he received each of the above amounts as the bonus to ○○○, ○○, and ○○○○, a representative director who held office at the time of each taxable period, and notified the Plaintiff of the change in the amount of income on December 16, 2004.

D. Afterwards, Defendant ○○ Head of the National Tax Office’s disposition of imposing corporate tax for the business year of 2000 to 2003 and the notice of the change in the amount of income of this case filed a request for a trial with the National Tax Tribunal on March 10, 2005, but the said request for a trial was dismissed on February 15, 2007.

[Based on Recognition] Unstrifed Facts, Gap evidence 1, Eul evidence 2-1, 2-1, 3-4, Gap evidence 4-1 through 4, Gap evidence 5-1, 2, Gap evidence 12-1 through 4, Gap evidence 13, Eul evidence 13, Eul evidence 4-1, respectively.

2. Determination on Defendant 1’s claim against the head of ○○ Tax Office

A. The plaintiff's assertion

(1) The allegation that the disposition of imposing corporate tax for the business year 2002 is unlawful

The plaintiff is in charge of construction directly and indirectly, and related labor costs and benefits was also paid to the ○○○ Company, which is entrusted with part of the construction of the apartment in this case. Thus, the plaintiff's above-mentioned type of business is "industrial activities performing construction activities taking general responsibility for new construction, extension, reconstruction and remodeling of various buildings", which are "industrial activities performing construction activities" under Article 17 of the Statistics Act, which is applied mutatis mutandis pursuant to Article 2 (3) of the Restriction of Special Taxation Act.

Nevertheless, Defendant 1. The head of ○○ Tax Office: (a) deemed that the Plaintiff’s business carried on constituted a real estate supply business, not a construction business subject to special tax reduction under Article 7(1) of the former Restriction of Special Taxation Act; and (b) imposed corporate tax amounting to KRW 2,890,385,50 for the business year 202; and (c) thus, the portion exceeding KRW 2,277,110,080

(2) The allegation that the instant disposition of notifying the change in income amount is unlawful

On June 17, 2003, the Plaintiff paid 1 billion won to ○○○ Co., Ltd. for the purpose of acquiring ○○○○○○, a fee of which was actually paid as brokerage commission or underwriting commission. Since it was actually paid from 2000 to 2003 as the processed labor cost, etc. of this case, it is deemed that the head of ○○○ Tax Office would not have reverted to 2,003,605,556 won, such as the processed labor cost of this case, etc., as the bonus for the representative director, the Plaintiff’s disposal of the income as a bonus for the representative director, and accordingly, the disposition of this case’s notice of change in the amount of income was unlawful.

B. Relevant statutes

Attached Form 3 is as shown in the "relevant Acts and subordinate statutes".

C. Determination on the legality of the disposition imposing corporate tax for the business year 2002

(1) Relevant provisions and interpretation of the scope of special tax reduction for small and medium enterprises

Article 7 (1) of the former Restriction of Special Taxation Act (amended by Act No. 7012, Act No. 45212) excludes "industrial activities that build residential apartments" as one of "housing Construction Business (45)" among "Housing Construction Business (45)" and "Construction Business (4521) directly sell real estate after being entrusted to another construction business (7012, real estate supply business)". "Real estate business (70)" should be separated from "Real estate business (70)", "Real estate business (70)" and "real estate business (70)" should be classified as "real estate business (70)" and "real estate business (70)" should be defined as "construction business, apartment housing construction business (45212)" and "construction business" should be defined as "construction business, apartment housing supply business (70)" and "construction business" should be defined as "construction business" or "sale of real estate to another person (70).

On the other hand, the interpretation of tax laws and regulations shall be interpreted in accordance with the provisions of the law, barring special circumstances, and shall not be extensively interpreted or analogically interpreted without reasonable grounds, and in particular, it accords with the principle of equity in taxation to strictly interpret the provisions that can be seen as clearly preferential provisions on the grounds that the provisions of reduction and exemption are established (see, e.g., Supreme Court Decision 2002Du9537, Jan. 24, 2003).

In light of the above relevant provisions and the legal principles, small and medium enterprises running apartment construction business (45212), who are engaged in the business of building residential apartment units, shall be engaged in the business of building apartment units to be subject to corporate tax reduction and exemption. In the case where apartment units are built or sold after being entrusted or subcontracted to another construction business, the real estate supply business, which is not the apartment construction business, is not the apartment construction business in the case where apartment units are built and sold after being sold after being constructed by being entrusted or subcontracted to another construction business. In the case where the buyers of apartment units directly constructed and supplied apartment units, the degree of their direct construction is limited to the degree that the buyers participated in the entire construction work, the degree of the buyer's participation in the whole construction work, the circumstance of the sale of the apartment units, the parties' intention, etc., and it shall be deemed that the apartment construction business is

(2) As to whether the business run by the Plaintiff is subject to the reduction of special tax amount

In full view of the purport of the arguments in Gap evidence 2-2, Eul evidence 2-2, Eul evidence 3-2, and Eul evidence 3-2 and 3-3, the plaintiff entered into a contract with ○○○○ on May 22, 200 for the construction of the apartment of this case with 33,070,000 won, and with 35 months from the commencement date of construction, to the new construction of the apartment of this case. ② The total construction cost of the apartment of this case was KRW 46,653,75,827, and the construction cost of ○○○○○ was 33,445,00 won for the construction of the apartment of this case, and the construction cost of the apartment of this case was 50,00 won for the construction of the apartment of this case was 33,04,000 won for the construction of the apartment of this case to 30,000 won for the construction of the apartment of this case to 36,3134,274,20.

Therefore, it is reasonable to view that the part of construction work directly executed by the Plaintiff, as alleged by the Plaintiff, is not an apartment construction business, but an "real estate supply business" that is not the main type of apartment construction business operated by the Plaintiff. Therefore, it is not subject to the application of special corporate tax reduction for small and medium enterprise in the business year 2002, and the first Plaintiff's above assertion on different premise is without merit.

D. Determination as to the legitimacy of the notice of change in the income amount of this case

(1) Facts of recognition

(A) Details of the Plaintiff’s management of the instant processing labor cost and relevant account transactions

① The Plaintiff managed the instant processing labor expenses, etc. as non-funds, and paid some of them as entertainment expenses, etc. to business partners or government offices at the same time, and some of the remainder has been deposited into the Plaintiff’s accounting division from May 31, 2002 to August 25, 2003, two of the Plaintiff’s accounting division in ○○○○○○ and the Plaintiff’s representative director’s ○○○○ account with the Plaintiff’s corporate director.

② The bank account of ○○○ was opened on May 10, 2002 and deposited several times with KRW 521,929,000,000. On September 13, 2002, the bank account was terminated after the deposit of KRW 521,929,000. The bank account was set up on September 13, 2002 and the deposit of KRW 934-985-297,000,00,000,000,000 won was over several times after the deposit of the balance (However, the amount of ○○○○’s account opened on March 26, 2003 and deposited several times (the amount of 0 million won and the amount of 0 million deposited in the said account is inconsistent with the daily account).

③ On the other hand, on June 17, 2003, 1 billion won was deposited by cashier’s checks from the Plaintiff’s account in the Plaintiff’s name of ○○○○○○○○ account, and the next day was deposited in two copies of 500 million won checks at face value. The Plaintiff’s account books contain no record of accounting of 1 billion won.

④ On June 18, 2003, KRW 338,762,773, and KRW 935,000,000 on the same day was deposited from ○○○○○○○○○○○○○○ Account, which held as the representative director of the Plaintiff, and KRW 935,00,000 on the same day was deposited by ○○○○○○○○○ Account. Meanwhile, on the other hand, KRW 935,00,000 on June 18, 203, deposited KRW 65,000 on a cashier’s check, and KRW 65,000 on a cash account.

(B) The Plaintiff’s attempt to acquire ○○○○ and the process of childbirth

① On March 24, 2000, the ○○○○○ constituted a consortium with ○○○ Investment, and was selected as a subject of preferential negotiations on the acquisition of ○○○○○. As ○○○, the representative director of the ○○○○○○○, was detained in another criminal case, and it is difficult to promote ○○○○○○’s acquisition, the Plaintiff was proposed to transfer the status of a member of the consortium to the Plaintiff.

② The Plaintiff attempted to participate in the acquisition of ○○○ pursuant to the above proposal, but due to the opposition of ○○ trade union, the Plaintiff attempted to take over the ○○○ consortium by terminating the memorandum of understanding on the subject of preferential bargaining with ○○○ and the subject of preferential bargaining on September 9, 2003.

③ Meanwhile, around December 2003, on the ground that ○○○ has a debt of KRW 1 billion against the Plaintiff, the Plaintiff transferred the damage claim and tin arising from the termination of the memorandum of Understanding to the Plaintiff, and the Plaintiff filed a lawsuit claiming damages of KRW 1 billion against the Seoul Eastern District Court on February 2004.

[Ground of recognition] A without dispute, Gap evidence 2-2, Gap evidence 7 through 10, Gap evidence 11-1 through 3, Gap evidence 12-1 through 4, Gap evidence 13, 14, Eul evidence 4-1 through 3, Eul evidence 5 and 6, Eul's partial testimony, fact-finding with respect to citizen bank of this court, the result of fact-finding with respect to citizen bank of this court, the whole purport of pleadings

(2) Determination

Where a corporation fails to record its sales in the account book despite the fact of sales or appropriates the cost of processing in the account book, barring any special circumstance, the profit of the corporation which caused the omission of sales or the cost of processing shall be deemed to have been leaked out of the company, and in such case, the special circumstance that the total amount omitted sales, etc. is not leaked out of the company shall be proved by the corporation asserting it.

According to the facts acknowledged as above, even if part of the processing labor expenses, etc. of this case was deposited into the account of ○○○ and ○○○○○○○, the Plaintiff’s representative director, the above account is nothing more than the personal account, and as long as the amount deposited with the processing labor expenses, etc. of this case and the money deposited in the above account are not in accord with one day and amount, and as long as the deposited money was withdrawn from time to time without keeping it in the above account, it shall be deemed that the above money was already leaked out and its reversion is unclear.

However, in light of the account of ○○○○ and the details of the entrance and exit of ○○○○○○, even if the Plaintiff paid the said money to the ○○○○○○○, the Plaintiff cannot be deemed to have paid KRW 1 billion to the ○○○○○ with the funds created by the instant processing labor cost, etc.

The plaintiff's revenue equivalent to the processing labor cost of this case, etc. of this case, shall be deemed to have been leaked to others. The plaintiff's assertion that the disposition of notice of change in the income amount of this case against the 2000 to 2003 business year is unlawful on the premise that the processing labor cost of this case, etc. of this case was paid with an amount of KRW 1 billion, such as brokerage commission, etc. to be treated as losses from the non-funds created in 2000 to 2003, is without merit.

3. Determination on the claim against Defendant 2. The claim against ○○○

A. The plaintiff's assertion

Defendant 1. In investigating corporate tax for the business year 2003, the head of ○○○○○○○○○○○○, the Plaintiff’s business was not a construction business that becomes subject to the special tax reduction as prescribed in Article 7(1) of the Act, but a 354,30,000 won for processing labor expenses and gold 7,946,00 won was deemed to have been included in the amount of processed purchase, thereby notifying the Plaintiff to rectify corporate tax for the business year 2003 to KRW 1,391,75,598 by adding the above amount to deductible expenses and adding the amount to gross income. However, the Plaintiff’s business was subject to the reduction of and exemption from the special tax amount for the small and medium enterprise, and ② the total amount of processed labor expenses and processed purchase fees paid by the Plaintiff to ○○○○○ to include the amount of KRW 432,246,000 in deductible expenses. Accordingly, the corporate tax amount for the business year 2003 is legitimate amount of gold 9,377,418 won.

Nevertheless, Defendant 2. Defendant 2. ○○○ has the obligation to additionally refund the remainder amount of KRW 482,398,180 and damages for delay thereof to the Plaintiff, among KRW 1,694,19,114, which was reported as corporate tax for the business year 2003.

B. Determination

In a case where there is no taxation or a deferred invalidity, the amount paid or collected by a taxpayer under this taxation constitutes unjust enrichment acquired by the State without any legal ground. In this case, the taxpayer shall not file an administrative lawsuit against the rejection of refund with the national tax authority, but shall immediately file a claim for refund with a civil lawsuit seeking the return of unjust enrichment (see Supreme Court Decision 91Da13342 delivered on July 9, 191). As seen earlier, the reasons alleged by the Plaintiff cannot be deemed to be the absence of a notice of correction of corporate tax for 2003 business year by the head of ○○○○ Tax Office, nor to be the rightful invalidity. Thus, the Plaintiff’s above assertion is without merit, without merit, to further examine the remainder before it.

3. Conclusion

Thus, the plaintiff's claim against the defendants is without merit, and all of them are dismissed.