National High Court Decision 2000Gu2959 ( October 24, 2001)

Global Income

Dismissal

The estimation determination is just because the books and documentary evidence presented are insufficient to calculate the real income amount, and the estimation determination is not subject to the "average income rate for each type of business", and it is based on the "standard income rate".

Article 80 of the Income Tax Act (Determination and Correction)

The request for a trial on global income tax of KRW 60,397,030 shall be dismissed, and the remaining request for a trial shall be dismissed.

1. Facts;

The claimant operated a funeral business with the trade name "○○○○○ History" in Daegu Metropolitan City ○○○-dong, Daegu Metropolitan City. The disposition agency conducted a special investigation from April 24, 200 to May 29, 200 based on the data on self-tax evasion, and decided on May 16, 200 and May 27, 200 by applying the standard income rate to the annual income belonging to each claimant from May 16, 200 and May 27, 200, based on the annual income belonging to each claimant from 1994 to 1998, for the reason that there are no or no books and documentary evidence related to the claimant's business or lack of important parts.

On October 26, 2000, the claimant appealed and filed an appeal for adjudication.

2. Opinions of the claimant and disposition agency;

A. The claimant's assertion

The claimant has failed to record and keep the books and documentary evidence under the Income Tax Act, but the actual income amount can be calculated based on some original records of the business, written confirmation of transaction partners, general management expenses receipt, etc. As so, the tax base shall be calculated based on the real income amount. The standard income rate for funeral business determined by the Commissioner of the National Tax Service is an unreasonable estimation method that the claimant does not properly reflect the business status of the general funeral and other claimant's funeral in the sense that the claimant provides funeral services upon delegation of the funeral events of the upper members of ○○○ Development. Therefore, the estimation shall be made based on the average income rate for each type of business reported by the same captain.

(b) Opinions of disposition agencies;

After analyzing account books, customer confirmations, and receipts of general management expenses presented by the claimant that the real income can be calculated, general management expenses from 1994 to 1998 are limited to 1.36 percent of gross sales, and taxes, public charges, communications expenses, water and mineral heat expenses, insurance premiums, etc. are merely in custody in a general home, and thus, the real income amount cannot be calculated on the basis thereof.

In addition, the method of estimating the income rate by the "average income rate by type of business" claimed by the claimant is that when the standard income rate has not been determined, or when the account books and other documentary evidence are lost due to natural disasters or other force majeure, the account books and other documentary evidence are considered to be the most accurate, the determination or correction of the income amount by taking account of the income amount of the other businessmen

3. Issues and judgments

A. Key issue

(1) Whether the applicant can calculate the amount of actual income based on partial original records, such as miscellaneous records kept by him/her, and

2. If the estimation is based on the estimation, it is possible to determine the amount of income according to the average income ratio by type of business other than the standard income ratio.

(b) Related statutes;

Article 80 (3) of the Income Tax Act at the time when the tax requirements for this case are established shall be based on the books and other documentary evidence in cases where the head of a regional tax office or the head of a regional tax office having jurisdiction over the place of tax payment determines or revises the tax base and amount of tax for the year concerned under paragraphs (1) and (2): Provided, That in cases where the amount of income cannot be calculated by books or other documentary evidence for reasons as prescribed by the Presidential Decree

Article 143(1) of the Enforcement Decree of the same Act provides that “Any reason prescribed by the Presidential Decree” referred to in the proviso of Article 80(3) of the same Act refers to any of the following cases. Article 143(1) of the same Act provides that “Where there is no necessary account books and documentary evidence in calculating the tax base, or where there is no material or material part is incomplete or false, the entry’s contents are obviously false in light of the facility size, number of employees, raw materials, the market price and various charges of goods or products, the entry’s contents are clearly false in light of quantities of raw materials used, electric power used

Paragraph (2) provides that where the tax base is estimated, determined and determined under the proviso of Article 80 (3) of the Act, the amount of income calculated under paragraph (3) shall be calculated by making personal deduction and special deduction under Articles 50 through 52 of the Act from the amount of income calculated under paragraph (3); and

Paragraph (3) of Article 80 (3) of the Act provides that when the amount of income is determined or revised by estimation pursuant to the proviso of Article 80 (3) of the Act, the method of determining or revising the amount of income by multiplying the amount of income by the standard income rate shall be the method of determining or revising the amount of income; subparagraph 1 provides that when the standard income rate has not been determined or the account books and other documentary evidence are lost due to natural disasters or other force majeure, the method of determining or revising the amount of income in consideration of the amount of income of other business operators of the same business type of the same business type in which the entry is deemed most correct: Provided, That where the account books, etc. are lost after the final return of income amount is made without any other business operator of the same business type, the return under Article 70 of the Act and the accompanying documents shall be made and the account books,

C. Facts and determination

청구인은 1977. 10. 5부터 대구광역시 ○구 ○○X동 XXX-XX에서 ○○장의사(사업자등록번호 XXX-XX-XXXXX)라는 상호로 장의업을 영위하여 왔으며, 1990년부터는 (주)○○○○개발 상조회원들의 장례행사를 위임받아 장의용역을 제공하는 업체로서 처분청은 자체탈세정보자료에 의하여 2000. 4. 24부터 2000. 5. 29까지 소득세 특별조사를 실시하여 수입금액누락분 1994년도 귀속분 327,630,000원, 1995년도 귀속분 426,510,000원, 1996년도 귀속분 520,550,000원, 1997년도 귀속분 629,260,000원, 1998년도 귀속분 264,750,000원의 합계 2,168,700,000을 적출하고, 이에 표준소득률을 적용하여 2000. 5. 16 1994년도 귀속분 종합소득세 58,697,230원을 경정고지하고, 2000. 5. 27 1994년도 귀속분 종합소득세 1,699,800원을 재경정고지하였으며, 2000. 8. 14 1995년도 귀속분 종합소득세 81,334,190원, 1996년도 귀속분 종합소득세 113,909,710원, 1997년도 귀속분 종합소득세 121,624,200원, 1998년도 귀속분 종합소득세 141,526,510원을 청구인에게 경정고지하였으며, 청구인은 적출한 수입금액누락분 2,168,700,000원에 대하여는 이를 인정하여 다툼이 없다. .

With respect to global income tax of 58,697,230 won and global income tax of 1,699,800 won for the tax year 1994, which was revised and notified as of May 16, 200, and notified as of May 27, 2000, which was the date of the request for a trial, as of October 26, 2000, the date of the request for a trial, which is the date of the request for a trial, should be dismissed before the review of the merits.

(1) We examine issues ①.

The claimant failed to record and keep books and documentary evidence under the Income Tax Act, but it is argued that the actual income can be calculated based on some original records of the business, written confirmation of transaction partners and general management expenses receipts, so it is necessary to calculate the tax base according to the relevant real income.

In light of the account books, written confirmations of transaction partners, and receipts of general management expenses, which the claimant presented that the real income can be calculated, the general management expenses from 1994 to 1998 shall be 39,070,670 won to gross sales (2,856,590,000 won). 19,14,670 won among them shall be 1.36% to gross sales (2,856,59,000 won). The 19,14,670 won cannot be calculated on the basis of this, because it is merely a tax, public charges, telecommunications, water and mineral heat, insurance premium, newspaper expenses, etc., so it is difficult to calculate the real income amount, and evidence documents concerning the purchase of funeral goods, which are the most important part in funeral business, can only be calculated on the basis of the confirmation of some transaction parties, and it is impossible to calculate the real income amount by the account books, evidential documents, and verification documents presented by the claimant.

(2) As to the issue ②

The claimant argues that the standard income rate for the business of the funeral set by the Commissioner of the National Tax Service is an unreasonable estimation method that does not properly reflect the actual conditions of the business of the general funeral and the other claimant's business, and therefore, the claimant should make the estimation based on the average income rate for the type of business reported by the same account holder.

The claimant asserts that he shall make a decision by the method of subparagraph 2 of Article 143 (3) of the Enforcement Decree of the Income Tax Act among the method of determination of estimation under each subparagraph of paragraph (3) of the same Article, but if the standard income rate has not been determined or the account books and other documentary evidence have been destroyed due to a natural disaster or other force majeure, it shall be determined or corrected by taking account of the income amount of other businessmen of the same business type of which the account books and other documentary evidence are deemed the most correct, or if the account books and other documentary evidence have not been destroyed due to

In full view of the above facts and relevant laws, it is difficult to calculate the real income amount due to lack of the books and documentary evidence presented by the claimant that the real income amount can be calculated, and the estimation based on the average income rate by type of business claimed by the claimant is a method of determining the case where the standard income rate has not been determined or the account books and other documentary evidence have been destroyed due to natural disasters and so, it is deemed that there is no error in the determination of the tax base and tax amount by the standard income rate under Article 80

D. Conclusion

This case's petition for adjudication is without merit, so it is decided as ordered by the provisions of Articles 81 and 65(1)1 and 65(1)2 of the Framework Act on National Taxes.