agreement received pursuant to the protocol of settlement in accordance with the request for relief from the unfair dismissal shall be equivalent to other income as a honorarium.

The agreement of this case is paid as a case of cooperation for the prompt and smooth settlement of disputes related to the request for unfair dismissal after confirming that the employment relationship has been terminated as the date of dismissal, and it constitutes a honorarium.

Article 21 (Other Incomes)

2018Guhap64086 Revocation of global income tax assessment, etc.

EO

O Head of tax office

September 20, 2018

November 1, 2018

1. Of the instant lawsuit, the part of the Defendant’s motion to revoke the revocation of the disposition rejecting the rectification of global income tax against the Plaintiff on May 17, 2017 is dismissed.

2. The plaintiff's remaining claims are dismissed.

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

Cheong-gu Office

The Defendant’s refusal to rectify global income tax against the Plaintiff on May 17, 2017 and revocation of the global income tax decision against the Plaintiff on October 18, 2017, respectively.

1. Details of the disposition;

A. On March 3, 2001, the Plaintiff became a member of the OOO bank (hereinafter referred to as the “OOO bank”) and was working for promotion to the unit table on December 2, 2007, and was subject to disciplinary action as of October 24, 2014, and filed an application for unfair dismissal with the Seoul Regional Labor Relations Commission on October 31, 2014.

B. In the above unfair dismissal remedy procedure, the Plaintiff and the instant bank reached a settlement on December 24, 2014 with the following content (hereinafter “the settlement in this case”).

C. On December 31, 2014, the instant bank considered the instant agreed amount as other income under Article 21(1) of the Income Tax Act, and paid 218,40,000,000 won (=280,000,000 won - 61,60,000,000 won) calculated the withholding tax (income tax of 56,000,000 and local income tax of 5,60,000) from the instant agreed amount to the Plaintiff.

D. On January 27, 2016, the Plaintiff filed a global income tax return (after the due date) for the global income tax for 2014 by aggregating the instant agreed amount and the earned income for the pertinent year with the Defendant, and additionally paid KRW 52,03,49, global income tax.

E. On March 26, 2017, the Plaintiff rendered a request for correction (hereinafter “instant request for correction”) to refund KRW 108,033,440 of global income tax on the ground that “the agreement amount to the Defendant is a consolation money for mental damage caused by the unfair dismissal of the instant bank, and thus cannot be subject to taxation.” However, on May 17, 2017, the Defendant rejected the Plaintiff’s request for correction (hereinafter “instant refusal disposition”) on the ground that “the agreement amount was paid on May 17, 2017 on the condition that it does not raise any legal objection in the future, and can be deemed as a honorarium for other income under Article 21(1)17 of the Income Tax Act subject to the total global income tax.”

F. On August 16, 2017, the Plaintiff filed an appeal with the Tax Tribunal on the instant rejection disposition, but the Tax Tribunal dismissed the Plaintiff’s appeal on February 20, 2018.

G. On October 18, 2017, the Defendant decided and notified the Plaintiff’s comprehensive income tax in 2014 as follows (hereinafter “instant disposition”).

Facts that there is no dispute with recognition, Gap evidence 1, Eul evidence 1 through 5, and the purport of the whole pleadings.

2. Judgment on the defendant's main defenses against the disposition of refusal of this case

A. Defendant’s defense prior to the merits

Article 45-2(1) of the Framework Act on National Taxes is limited to a person who has filed a tax base return by the statutory due date of return. Since the Plaintiff filed a global income tax base return with the Defendant on January 27, 2016, the statutory due date of return after the statutory due date of return, the instant rejection disposition rejecting the instant request for correction does not constitute a mere civil petition correspondence and a rejection disposition subject to appeal. Thus, the part of the instant lawsuit seeking revocation of the instant rejection disposition is unlawful.

B. Determination

1) Article 45-2(1) of the Framework Act on National Taxes recognizes the right to file a claim for determination or correction of the tax base and amount of national tax only to “person who has filed a tax base return by the statutory deadline for filing a tax return.” This is only intended to reduce disadvantages such as non-return additional tax and non-payment penalty by prescribing special cases concerning the submission of a tax base return with respect to “a person who has failed to file a tax base return by the statutory deadline for filing a tax return. Even if a taxpayer filed a tax return after the statutory deadline for filing a tax return, he/she still does not have the right to claim for correction under the above provision. As such, a taxpayer cannot have the right to claim for correction under the above provision because he/she is not a person who has filed a tax base return by the statutory deadline for filing a tax return, and even if the tax authority received a request for correction for filing a tax return after the statutory deadline for filing

2) As to the instant case, the fact that the Plaintiff filed a subsequent return on January 27, 2016, which was after May 31, 2015, based on the final tax base return of global income tax base for the agreement amount for the year 2014, with respect to the agreement amount. As seen earlier, the refusal of the instant refusal disposition, which was a request for correction of the return after the said deadline, cannot be deemed a disposition subject to appeal. Therefore, the part of the instant refusal disposition seeking revocation of the instant refusal disposition among the instant lawsuit is unlawful, and the Defendant’s objection prior to the merits pointing this out is with merit.

3. Determination on the legitimacy of the instant disposition

The Defendant asserts that the instant disposition is lawful on the grounds of the grounds of the disposition and the provisions of relevant Acts and subordinate statutes. The Plaintiff asserted that the said disposition was unlawful on the grounds as follows. The Plaintiff’s act of causing the settlement with the bank of this case among the procedures for remedying unfair dismissal by Seoul Regional Labor Relations Commission cannot be deemed as an act of dealing with business or providing services for the bank of this case. Thus, the instant agreement cannot be deemed as a honorarium under Article 21(1)17 of the Income Tax Act in light of the grounds and procedures for disciplinary dismissal against the Plaintiff, and the developments leading up to the payment of the instant agreement, etc., the instant agreement amount has the character of consolation money for emotional distress and defamation suffered by the Plaintiff due to the unfair dismissal by the bank of this case

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 21(1)17 of the Income Tax Act provides as one of the other income, “compensation” refers to money and valuables provided as a means of a case in connection with administrative affairs or provision of services, etc., and whether it constitutes such money and valuables ought to be determined by comprehensively considering the motive and purpose of receiving the relevant money and valuables, relationship with the other party, amount, etc. (see, e.g., Supreme Court Decision 2016Da17729, Jul. 20, 2018).

2) In light of the above legal principles, in full view of the following circumstances acknowledged as the health team and the above facts, the agreement in this case shall be deemed to have been paid as the case of cooperation for the prompt and smooth settlement of disputes related to the application for unfair dismissal as of October 24, 2014, which is the date of dismissal of the plaintiff, after confirming that the employment relationship had been terminated as of October 24, 2014. Thus, it shall be deemed that Article 21 (1) 17 of the Income Tax Act constitutes "a honorarium as defined by other income."

① At the time of the instant reconciliation, the instant bank’s dismissal from office on October 24, 2014 after the revocation of the disciplinary dismissal dismissal on the same day, and the instant settlement terms, Paragraph 3(a) proviso of Paragraph 3(a) of the Settlement Terms and Conditions, clearly stated that the instant bank did not recognize the Plaintiff’s assertion in the instant case for remedy for unfair dismissal filed by the Plaintiff. As such, the instant bank cannot be deemed to have paid the instant settlement amount under the pretext of consolation money for emotional distress or defamation of the Plaintiff.

② With respect to the termination of labor relations with the instant bank at the time of the instant reconciliation, the Plaintiff agreed to waive and exempt the former and incumbent officers and employees of the instant bank, the head office, other branches, affiliate companies, and other interested parties, etc. of the instant bank from any claims arising from the termination of their work and duties with the instant bank, and not make any administrative or judicial claims and any other form of objection (Article 2.b. (5) of the instant settlement terms), not to make any defamation against the instant bank, etc. (Article 2.2.b. of the instant settlement terms), and not to raise any objection by any means of public, criminal or administrative or other means (Article 5 of the instant settlement terms), and to settle disputes with the Plaintiff and the instant bank related to dismissal (Article 7).

4. Conclusion

Thus, the plaintiff's claim seeking revocation on the ground that the disposition of this case is illegal is dismissed as it is without merit.