Most of necessary expenses are located in the taxpayer's territory and burden of proof exists for taxpayers.

The burden of proof of necessary expenses claimed by the plaintiff is the taxpayer, but there is a lack of objective data to prove such necessary expenses.

Necessary expenses for business income under Article 27 of the Income Tax Act

Daejeon District Court 2015Guhap10685

OO

O Head of tax office

on December 24, 2015

October 29, 2015

1. Details of the disposition;

A. The Plaintiff is a dentist who opened and is operating a AAD Hospital (hereinafter “instant hospital”) at OO as O.O.O. O. O. O. O. O. OO. O. O. O. O. O. O. O. O.

B. The Daejeon regional tax office conducted an integrated investigation of the Plaintiff from 200O.O. to 200O.O.O.O. by 200O.O.O.O., confirmed the omission of reporting KRW 2008 to 201, and notified the Defendant of the omission of reporting necessary expenses, such as personnel expenses and dental technicians fees. Accordingly, the Defendant issued each global income tax disposition, such as the Plaintiff’s claim onO.O.O. 200. 1) (hereinafter collectively referred to as “instant disposition”).

C. The Plaintiff appealed and filed an appeal with the Tax Tribunal on 200O.O.O., but it was dismissed on O.O.O. on 2014.

Facts without any dispute, Gap's No. 1, 2, Eul's No. 1 (including branch numbers, if any; hereinafter the same shall apply), and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant disposition should be revoked because it is unlawful in the following respect.

1) The instant disposition: (a) and (b) the same personnel expenses as specified in attached Table 1 (hereinafter referred to as “the instant personnel expenses”), but in relation to global income tax for the year 201, the Defendant rendered a decision to correct the instant disposition as OO members by subtracting OO members for the overlapping aggregate of income amounts (O.O.).

Since the portion of the ex-post official fees such as the attached Table 2 (hereinafter referred to as the "ex-post official fees of this case") are omitted from the necessary expenses, it cannot be deemed to be based on the correct tax base, it is illegal.

2) In the case of a dental hospital, the expenses of OO% (Standard rate of a dental hospital in 2012) is generally recognized even after the dental hospital proposes purchase costs, rent, and personnel expenses. Since the expenses recognized by the Defendant and the instant personnel expenses and the instant external parking charges are all combined, O% is recognized, the expenses equivalent to this amount should be recognized in conformity with the empirical rule, but the instant disposition on a different premise is unlawful.

(b) Related statutes;

Attachment 'Related Acts and subordinate statutes' shall be as shown.

C. Determination

1) As to the first argument

A) In a lawsuit seeking revocation of the imposition of income tax, the burden of proof of the tax base, which is the basis of taxation, is the tax authority, and the tax base is deducted from necessary expenses, so the burden of proof of income and necessary expenses is the tax authority. However, in light of the fact-finding that most of the necessary expenses are favorable to the taxpayer and the necessary expenses are within the area under the control of the taxpayer, and the burden of proof is easy to prove, it is reasonable to presume the absence of necessary expenses that the taxpayer does not perform the verification activities, and to recognize the necessity of proof to the taxpayer by allowing such presumption of non-existence is consistent with the concept of fairness (see, e.g., Supreme Court Decision 86Nu121, May 24, 198).

B) Based on the above legal principles, in light of the following circumstances acknowledged by the health team, the facts and evidence as seen earlier, the evidence as well as the evidence Nos. 6, 8 through 12, the evidence No. 2, the witness mostB testimony and the witness mostB testimony, and the whole purport of the pleadings, it is difficult to believe that the records No. 7 and the witness mostB testimony were insufficient to recognize that the Plaintiff actually paid the instant personnel expenses and the external cycle service fee for the instant hospital at the expense of the instant hospital, and there is no other evidence to acknowledge otherwise.

Therefore, the plaintiff's assertion is without merit.

(1) Although the maximumB admitted that it was a witness in this Court and that it was written with Gap evidence Nos. 7 and 8-1 of Gap evidence No. 8, it was not possible to give a clear answer on the grounds that it could have stated the exact amount as above in relation to the monthly salary as stated in the evidence No. 7, and the testimony was made to the effect that it would depend on the memory that it was not just on the accurate understanding of the wage portion for KimCC, but rather on the memory that it would depend on its own.

(2) Of the instant personnel expenses, there is no evidence for the part of the office head of KimD, and there is no objective evidence for dentists to verify this fact other than the evidence verification No. 6.

(3) Of the instant personnel expenses, the part related to KimCC is the representative director of FF Co., Ltd (hereinafter referred to as “FF”) for the purpose of providing medical consultation as the Plaintiff’s mother, and even based on the fact-finding certificate (Evidence A-2-2), KimCC appears to have been reported to the time limit for payment of wages to the time limit for withholding taxes, in light of the following: (a) KimCC’s position as a FF director; and (b) there is no reason for the payment of wages from the FF to the Plaintiff; and (c) there is no objective data to verify that KimCC received regular wages from the Plaintiff in addition to the above fact-finding certificate.

(4) With respect to the instant external parking charges, the Defendant recognized as necessary expenses for 20O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.(II), 20O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.O.(K.)(K.) in relation to the instant external parking charges, there is insufficient objective data to verify such facts of transactions.

2) Concerning the second argument

A) In principle, the tax base and tax amount of global income tax shall be determined by the actual amount revealed by the method of a field investigation, and it shall be exceptionally permitted only when there is no taxpayer’s account book or documentary evidence in order to determine it by the method of a field investigation, or when there is no other way for the tax authorities to disclose the actual amount of income without the credibility of the important portion being recorded therein. Thus, even if the taxpayer did not keep and preserve account books as prescribed by the Income Tax Act, if the tax base can be calculated based on other documentary evidence, such as a contract, if the tax base and tax amount can be determined by the method of a field investigation and the method of a preliminary investigation is not determined by the method of a field investigation, and the taxpayer’s own intention to investigate and determine it by the method of estimation cannot be deemed as satisfying the requirements for a field investigation (see, e.g., Supreme Court Decision 200

B) In light of the above legal principles, according to the health team, the facts acknowledged as above, the evidence, and the purport of the entire pleadings, the defendant determined the income amount, expenses, etc. omitted by the field investigation method and rendered the disposition in this case. In this case, the remaining necessary expenses cannot be determined by the estimation investigation method. Thus, the prior plaintiff's assertion on a different premise is without merit without further review.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.