Cho Jae-2015-west-4589 ( October 20, 2016)

The exclusion Period for 10 years is applicable due to fraud or other unlawful act.

The transfer of money to the Plaintiff’s bank account without reporting to the head of the competent customs office, after an employee entrusted with the deposit received a small amount of cash transaction from his bank account so that it does not notify the Plaintiff of the large amount of cash transaction, constitutes an affirmative concealment conducted to avoid the function of the State to secure the right to taxation.

Article 26-2 of the former Framework Act on National Taxes (Period for Excluding Imposition of National Taxes)

2017Guhap51143 global income and revocation of such disposition

O KimO

○ Head of tax office

July 12, 2017

August 25, 2017

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The imposition of global income tax of KRW 00,000,000 (including additional tax) for the year 2008 against the Plaintiff on June 5, 2015 shall be revoked.

1. Details of the disposition;

A. The Plaintiff, as an expert in maritime engineering, has been operating the said company as the representative director of ABC Systru (hereinafter “ABC”) who mainly engages in the design, manufacture, etc. of maritime and submarine structures from March 4, 2013.

B. The Plaintiff provided relevant advisory services, etc. to a foreign company, such as DEF master lease, which intends to perform submarine pipeline installation works in the Republic of Korea, and received the price for such services from a bank account at issue located in Hong Kong (hereinafter referred to as “the bank account at issue at issue”) in the U.S. or in the U.S., and did not return and pay the comprehensive income tax. The details of the money deposited by the Plaintiff to the bank at issue at issue are as follows.

Reversion Year

Deposit Date

Amount of foreign currency entry

208

July 2, 2008

00,000 US$

July 15, 2008

00,000 US$

October 14, 2008

00,000 US$

209

December 11, 2009

00,000 US$

December 17, 2009

00,000 Oils

2010

December 14, 2010

00,000 US$

2011

October 26, 2011

00,000 US$

2013

September 24, 2013

00,000 US$

C. The Plaintiff withdrawn 00,000 U.S. dollars or U.S. dollars from Hong Kong, etc. to U.S. dollars and U.S. dollars, without filing a report under the Foreign Exchange Transactions Act, carried in the Republic of Korea to the Republic of Korea, and exchanged O, an employee in charge of ABC funds, into the Korean won at the private exchange center, etc. located in Dong-dong, and then transferred OO to the Plaintiff’s domestic bank account.

D. Meanwhile, while the Plaintiff leased one apartment household in SY-gu and paid the lessor KRW 0,000,000 as the lease deposit, it was revealed that the Plaintiff did not return and pay the comprehensive income tax on each of the above incomes related to the above incomes deposited in the HH bank account by the director of the regional tax office in the course of undergoing a tax investigation on the source of the loan.

E. The Defendant determined that the Plaintiff evaded the global income tax on the above income by fraud or other improper means, and applied the ten-year exclusion period as stipulated in Article 26-2(1)1 of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 2010; hereinafter the same). Accordingly, prior to the expiration of the exclusion period, the global income tax on the global income including the deposit amount of July 2, 2008; the deposit amount of 00,000; the deposit amount of 15, July 14, 2008; the sum of 00,000,000 won and the deposit amount of 0,000,000 won and the total of 0,000,000 won and 200,000 won and 200,000 won and 200,000 won and 205, 2005, 2005.

F. On June 5, 2015, the Plaintiff filed an appeal with the Tax Tribunal against the correction and disposition of KRW 000,000,000 of the global income tax for the year 2008, which the Defendant filed with the Plaintiff on June 5, 2015. The Tax Tribunal dismissed the Plaintiff’s appeal on October 20, 2016 (hereinafter “instant disposition”), which was the Plaintiff’s objection to the correction and disposition of the global income tax for the year 2008, which was the Plaintiff’s objection (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1 to 3, 5, 15, Eul evidence 1 to 3 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff received advisory fees, etc. from a bank account in the process of obtaining advisory services, etc. from a foreign company in return for the instant income in return for the provision of advisory services, etc. from a foreign company. Since it was merely bringing in cash to save fees, etc. incurred in transferring the instant income to a domestic bank account and allowing OO to deposit it into the Plaintiff’s bank account, the Plaintiff cannot be deemed to have evaded the comprehensive income tax on the instant income by fraud or other unlawful act, the disposition of this case applying the exclusion period of ten years on a different premise is unlawful.

2) Of the instant income, KRW 00,000, which was deposited on July 2, 2008, and KRW 000,000,000, which was deposited on July 15, 2008, was merely a partial transfer of income prior to the year 2008, which was managed in the United States, and thus, the Plaintiff cannot be deemed to have earned any income in 2008 as to the total amount of the said income. Therefore, the part of the instant disposition, which included the said income in the calculation of the global income tax base in 2008, is unlawful.

B. Relevant statutes

Attached Table 1-Related Acts and subordinate statutes

C. Determination

1) Whether the exclusion period for imposition of ten years applies

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, for the prompt determination of tax law relations, in cases where there is an unlawful act, such as making it difficult for the tax authorities to discover the taxation requirement of the national tax or forging false facts, and it is difficult for them to expect the exercise of the imposition right. Therefore, “Fraud and other unlawful act” under Article 26-2(1)1 of the former Framework Act refers to a deceptive act, etc. which makes it impossible or considerably difficult for them to impose and collect taxes, and it does not constitute mere failure to report under the tax law or making a false declaration without accompanying any other act, but it does not constitute an unlawful act, such as underreporting or underreporting, and also making it difficult for them to impose and collect taxes if there are other circumstances such as intentionally not intentionally entering revenue or sale in the account book (see, e.g., Supreme Court Decision 201Du26159, Dec. 21, 2013).

With respect to this case, if the Plaintiff received a total of 00,000 won from July 2, 2008 to HH bank account, 140,000 on July 15, 2008, and 400,000,000 on October 14, 2008 from the Plaintiff’s bank account, and the Plaintiff did not file a return of the above money in foreign currency, and did not deposit it with the Plaintiff’s bank account at a certain amount of 40,000,000 won or more on the same date. The Plaintiff did not file a return of the money in foreign currency pursuant to the procedures set forth in the Foreign Exchange Transactions Act, and did not deposit it with the Plaintiff’s bank account at a certain amount of 00,000 won or more on the same date as the Plaintiff’s statement in the list of cash receipts received from the Plaintiff, and the Plaintiff did not deposit it with the Plaintiff’s bank account at a certain amount of 50,000 won or more on the same date as the Plaintiff’s account.

However, according to Article 17 of the former Foreign Exchange Transactions Act (amended by Act No. 9351, Jan. 30, 2009; hereinafter the same), Article 31 of the Enforcement Decree of the same Act, and Article 6-2 (2) and (5) of the former Foreign Exchange Transactions Regulations (amended by Presidential Decree No. 2008-6, Jun. 2, 2008); where a person carries and imports payment means exceeding 10,000 U.S. dollars, the head of the competent customs office shall report the fact to the head of the competent customs office; and the head of the competent customs office upon receipt of such report shall notify the Commissioner of the National Tax Intelligence Unit of the details of the report for each specific period of time; Article 6 (1) of the former Act on Reporting and Use of Financial Transaction Information (amended by Act No. 9919, Jan. 1, 201; hereinafter the same shall apply); Article 20 of the Enforcement Decree of the same Act; Article 12 of the same Act shall be notified to the Commissioner of the Korea Financial Intelligence Unit.

As can be seen, the former Foreign Exchange Transactions Act imposes a duty to report on information on imports of a specific foreign exchange and notifies the Commissioner of the National Tax Service through the head of the competent customs office of the details of the report, and the former Financial Information Act requires a financial institution to report on a specific large cash transaction, etc., analyze whether money laundering, including tax evasion, etc. based on the data reported to the Commissioner of the Korea Financial Intelligence Unit, including tax evasion, etc., and, if necessary for investigation to confirm the suspicion of tax evasion, the purpose of the former Foreign Exchange Transactions Act is to ensure that the State is able to ascertain the movement of funds subject to taxation and fairly exercise the right to impose and collect taxes (see, e.g., Articles 1 and 2 subparagraph 4 (c) of the former Financial Information Act).

Therefore, as seen earlier, the Plaintiff brought into high-amount foreign currency currency without performing the procedures for filing a report with the head of the competent customs office. However, it is reasonable to view that the Plaintiff’s transfer of the money to the Plaintiff’s bank account after the Plaintiff’s transfer of the money to the bank account by paying the money in small installments on several days, which is not the owner of the cash, was made. Ultimately, the Plaintiff’s global income tax in 2008 falls under the case where the Plaintiff, a taxpayer, evaded national taxes due to fraud or other unlawful acts, and thus, the ten-year exclusion period is applicable. This part of the Plaintiff’s assertion is without merit (the Plaintiff’s assertion to the effect that the Plaintiff’s act of concealing the money cannot be viewed as the Plaintiff’s act of concealment as the Plaintiff’s act, regardless of whether the Plaintiff’s act of hiding’s agent or agent’s foreign currency without filing a report with the head of competent customs office or not, and thus, the Plaintiff’s act of concealing the money in accordance with the legal principles as the Plaintiff’s agent or agent’s agent’s act of concealment.

2) Whether income on the aggregate of KRW 00,000 paid on July 2, 2008, and KRW 000,000 paid on July 15, 2008 is recognized

Generally, in a lawsuit seeking the revocation of a tax imposition disposition, the burden of proving the fact of taxation requirements is a taxable person. However, in a case where it is proved that the fact of taxation requirements is presumed in light of the empirical rule in the specific litigation process, unless it proves that the taxpayer’s issue is inappropriate to apply the empirical rule, or that there are special circumstances to exclude the application of the empirical rule in a case, it cannot be readily concluded that the taxation disposition is an illegal disposition that fails to meet the taxation requirements (see, e.g., Supreme Court Decision 2015Du60341, Jun. 10,

As to the instant case, the following circumstances can be acknowledged by comprehensively taking account of the purport of the entire arguments, which are: (a) the Plaintiff was engaged in the business of providing services, such as consulting, etc. from around 2007, before the Plaintiff becomes the representative director of ABC; (b) the Plaintiff’s opening of the HS bank account located in Hong Kong for the purpose of giving advisory fees to the Plaintiff; (c) the Plaintiff appears to have been used for keeping and managing the Plaintiff’s business income; (d) the Plaintiff asserted that AA, who was in charge of income in the existing U.S., transferred the said money to the Plaintiff upon the Plaintiff’s instruction, but it is difficult to accept the said money, based on the empirical rule, without submitting any materials to acknowledge it; (e) the said money is presumed to have been paid by the Plaintiff from the other party to the business; (e) on the other hand, the Plaintiff’s opening of the HS bank account in Hong Kong as of February 1, 200, based on the entire arguments written in subparagraphs 6 through 8.

3. Conclusion

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