Seoul Administrative Court 2008Guhap11303 ( October 13, 2009)

National High Court Decision 2007Du2780 ( December 31, 2007)

Procedures of a previous trial on any authorized disposition;

Even if a corporation had gone through the pre-trial procedure on the disposition imposing corporate tax and the disposition imposing corporate tax, it cannot be viewed that it had gone through the pre-trial procedure on the person to whom it belongs, and it does not constitute a case where it is not necessary to go through the pre-trial procedure in duplicate.

The contents of the decision shall be the same as attached.

1. The plaintiffs' appeal is dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

1. On February 22, 2007, Defendant AA head of the tax office revoked the disposition of imposition of KRW 370,652,550 of corporate tax for the year 201, March 10, 2007, on the Plaintiff’s ○○ Housing Co., Ltd. (the bonus disposition of KRW 2.8 billion in relation to the Plaintiff, Han-gu, Seoul Special Metropolitan City, and the bonus disposition of KRW 70,652,550, respectively) and the disposition of imposition of KRW 370,65

2. The notice of payment of KRW 370,652,556 of the corporate tax of KRW 370,652,556 on March 10, 2007, which was issued by the head of the tax office of defendant AA in relation to the Plaintiff-A-A-U-U-U-U-

3. Defendant DD head of Korea filed a disposition imposing global income tax of KRW 1,256,453,120 on April 4, 2007 against the Plaintiff, and KRW 125,645,310 on the part of KRW 100,00,00,000 on the part of KRW 125,645,310 on the part of KRW 100,000,000 on the part of KRW 356,527,920 on May 1, 2007, and imposition imposing global income tax of KRW 35,652,790 on the part of KRW 30,00 on the part of KRW 201 on the part of KRW 35,652,790 on the part of KRW 200.

Purport of appeal

In the judgment of the court of first instance, ① Defendant AA director of the tax office imposed the Plaintiff’s ○○ Housing on February 22, 2007 (the bonus disposition of KRW 2.81,859,484 for the Plaintiff, and the bonus disposition of KRW 370,652,550 for the corporate tax of March 10, 2007; ② Defendant DD director of the tax office imposed the Plaintiff’s global income tax of KRW 1,256,453,120 for the global income tax of KRW 201 for the Plaintiff, and the imposition disposition of KRW 356,527,920 for the global income tax of KRW 201 for the Plaintiff on May 1, 2007 (the bonus disposition of KRW 781,859,484 for the Plaintiff) and the imposition disposition of corporate tax for each of the Defendants’ respective global income tax of KRW 370,652,520 for the Plaintiff and each of the imposition disposition of the Plaintiff.

1. Circumstances of the disposition;

A. While the Plaintiff ○○○ Housing Co., Ltd. (hereinafter “Plaintiff”) was promoting the instant new construction project of Buridong apartment (hereinafter “the instant new construction project”), 25-1 and three parcels of land, Nowon-gu, Seoul Special Metropolitan City, the Plaintiff transferred the instant new construction project to K Construction Co., Ltd. (hereinafter “K Construction”) on May 19, 200, KRW 8.377 billion in transfer proceeds (hereinafter “the instant transfer proceeds”).

B. Defendant AA head of the tax office having jurisdiction over the location of the Plaintiff Company: (a) deemed that it is inappropriate to determine the balance amount corresponding to the instant case’s balance, whose ownership is unclear on February 15, 2007, as the bonus for one of the representative directors, and notify the Plaintiff, and at the same time, notify the head of the DD head of the tax office having jurisdiction over the domicile of the Plaintiff △△△△, of the income amount recognized as the bonus for the Plaintiff △△, and at the same time, notify the Plaintiff of the income amount.

C. On April 4, 2007, on the basis of the above recognized income data on April 4, 2007, Defendant DD head of the tax office imposed global income tax of KRW 1,256,453,120 on the Plaintiff, Han-gu, Seoul Special Metropolitan City based on the above recognized income data.

D. On June 14, 2007, the Plaintiff Han-gu Seoul Special Metropolitan City and the National Tax Tribunal filed an appeal against the disposition of imposition of global income tax. On December 31, 2007, the National Tax Tribunal rendered a decision to dismiss the above appeal.

E. Meanwhile, Defendant AA director of the tax office deemed the instant construction cost as part of the transfer price of the instant new construction business, and included the said construction cost in the Plaintiff Company’s gross income for the business year 2001, on the ground that KA constructor paid the instant construction cost in lieu of the instant transfer price, separately from the instant transfer price (hereinafter “the instant construction cost”). Based on this, on March 10, 2007, he imposed corporate tax 370.652.50 won on the Plaintiff Company for the year 2001, and notified the Plaintiff of the bonus for the instant construction cost, which is the representative director, and at the same time, notified the Plaintiff of the income data by recognizing it to the head of the DD Tax Office having jurisdiction over the domicile of the Plaintiff Hai-si, the representative director, and notified the Plaintiff of the income data.

F. On May 1, 2007, the head of the Defendant DD Tax Office imposed KRW 356,527,920 on the Plaintiff, Seoul Special Metropolitan City Mayor based on the above recognized income data on May 1, 2007.

G. On June 8, 2007, the Plaintiff Company filed an appeal with the Tax Tribunal regarding the disposition of imposition of the above corporate tax and the disposition of the construction cost in this case as bonus to the Plaintiff in Seoul Special Self-Governing Province. On March 20, 2008, the Tax Tribunal dismissed the Plaintiff Company’s appeal.

[Reasons for Recognition] Evidence No. 2-1, Evidence No. 5, Evidence No. 8, Evidence No. 12, Evidence No. 20, Evidence No. 21, and Evidence No. 27

2. Whether the litigation of this case is legal; and

A. Ex officio determination

ex officio, there is no evidence to regard that Defendant AA Tax Office notified the Plaintiff Company of the change in the amount of income stated in the claim on February 22, 2007. Thus, this part of the lawsuit is unlawful as a revocation lawsuit against the non-existent disposition.

B. Determination of Defendant DD Head of the District Tax Office on the defense of the principal safety

In relation to the disposition of imposition of global income tax of 356,527,920 won on May 1, 2007 against the Plaintiff, Seoul Special Self-Governing Province (hereinafter “Seoul Special Self-Governing Province”), the head of the Korea Special Self-Governing Province (hereinafter “Seoul Special Self-Governing Province”) filed the lawsuit in this case without going through an administrative appeal. As such, this part of the lawsuit is alleged to be unlawful, and there is no evidence to acknowledge that the Plaintiff Do governor made a request for examination or a request for trial as stipulated in the Framework Act on National Taxes with respect to the disposition of imposition of global income tax of 1 May 1, 2007. This part of the lawsuit was brought without going through due process. This part of the lawsuit is unlawful under Article 56(2) of the Framework Act on National Taxes [this part], even if the Plaintiff Company had already completed the procedure of imposition of global income tax and notice of changes in the amount of income which is the premise of the above disposition of imposition of global income tax, and thus, it is not necessary to re-examine the above disposition of global income tax and non-taxation.

3. Determination on the merits

A. As to the disposition of global income tax on April 4, 2007 (hereinafter in this paragraph referred to as the “disposition of this case”) against the Plaintiff Han-gu △△△ (hereinafter in this case)

1) Summary of the Plaintiff 1’s assertion

Han-won asserts that the disposition of this case is unlawful on the following grounds.

A) Since the notice of change in the income amount, which is the pre-disposition of the instant case, is not legally served on the Plaintiff Company, it is also illegal to handle the instant case.

B) The instant disposition was premised on the premise that the instant balance was reverted to the Plaintiff-do Seoul Special Metropolitan City, but the instant balance was not actually reverted to the said Plaintiff.

C) Despite the fact that the remainder of this case belonged to the Plaintiff Company in the business year of 2000, not the business year of 2001, the instant disposition was disposed on the premise that the amount equivalent to the remainder of this case was reverted to the Plaintiff Company in 2001.

(ii) the facts of recognition

A) On May 26, 200, the Plaintiff Company transferred the remainder of the claim in this case with respect to KK Construction, and on May 26, 200, the KRW 1 billion to △△△△△△△△△, and on June 2 of the same year, written the assignment of claim (No. 17-2 and 4) to the effect that the part of KRW 800 million is transferred to △△△△△△△, and the one billion won part is transferred to △△△△△△△

나) KK건설은 그 후 권◇◇에게 양도된 이 사건 잔금채권(합계 18억 원) 중 11억 7,600만 원 부분에 대한 대물변제조로 권◇◇에게 아파트 7세대를 양도한 것으로 처리하는 등, 2000. 6. 21.부터 2001. 5. 11.까지 사이에 이 사건 잔금채무를 권◇◇ 및 김◎◎(또는 그들로부터 다시 이 사건 잔금채권을 양도받은 조□□, 이■■ 등 제3자) 에게 모두 변제한 것으로 처리하였고 한편 그 무렵 위 아파트 7세대 중 6세대는 김복 남에게, 나머지 1세대는 이△△에게 각 양도된 것으로 처리되었다.

C) The Plaintiff Company, with respect to the repayment of the remainder of the instant claim or the payment in substitutes, failed to keep the accounts, or accounted as a half of the cash payment after cash payment without any particular ground (the Plaintiff, Han-gu, Seoul Special Metropolitan City, was justified in the above accounts, but at all, failed to submit evidentiary materials to support the legitimacy of the above accounts).

라) 한편, 원고 한☆☆은 2000년경까지 김▲▲으로부터는 총 9억 8,000만 원을 차용하였고, 이△△으로부터는 2억 원을 차용하였다.

E) In the tax investigation conducted by the National Tax Service that was an opportunity to dispose of the instant case, △△△△ and △△△△△ stated to the effect that he received the remainder of the instant claim, transferred it to a third party, received repayment or payment in kind, or transferred an apartment acquired by payment in kind to a third party in lieu of the remainder of the instant claim, the Plaintiff △△△△△△ and △△△△△△ stated to the effect that he, without permission, made the appearance

바) 김▲▲ 또한 위 세무조사에서 자신이 원고 한☆☆로부터 변제받을 채권에 대한 대물변제로서 위와 같이 아파트 6세대를 양도받았다는 취지로 진술하였다.

[Ground of recognition] Evidence Nos. 8, Eul evidence Nos. 9, Eul evidence Nos. 17-2 through 4, Eul evidence Nos. 18, Eul evidence Nos. 19, Eul evidence Nos. 23-4, 5, 7 through 9, 11 through 13, Eul evidence Nos. 24 through 26, and the purport of the whole pleadings

3) Determination

A) In the case where the tax authority disposes of income, as the payer of the income amount, the corporation that is the withholding agent, is liable to withhold the income tax on the date on which the notice on the change of income amount was served on the corporation, unlike the fact that the withholding agent is established, if the income is disposed of regardless of whether the notice on the change of income amount was served on the corporation, it constitutes "the amount disposed of as bonus pursuant to the Corporate Tax Act" under Article 20 (1) 1 (c) of the Income Tax Act and is subject to taxation of the income tax (see Supreme Court Decision 2004Du9944, Jul. 27, 2006). The fact that the notice on the change of income amount was not given to the Plaintiff Company, and thus, the tax assessment of the global income tax on the △△△△△, a person who is the Plaintiff’s owner of the income

나) 위 인정사실에 의하면 이 사건 잔금은 사실상 원고 회사의 대표이사인 원고 한☆☆에 의하여 김▲▲, 이△△에 대한 차용금채무 변제 등의 용도로 사용된 것으로 보이므로, 이 사건 잔금은 모두 사외에 유출되어 원고 한☆☆에게 귀속되었다고 할 것 이고, 설령 이와 달리 보더라도, 위 인정사실에 의하면 이 사건 잔금은 모두 사외에 유출되었고 적어도 그 귀속이 불분명한 경우에는 해당하여, 과세관청은 결국 법인세법 시행령 제106조 제1항 제1호 단서에 따라 이를 대표자인 원고 한☆☆에 대한 상여로 소득처분하여야 할 것이므로, 원고 한☆☆의 이 부분 주장은 어느 모로 보나 이유 없다{이에 대하여 원고 한☆☆은 법인세법 시행령 제106조 제1항 제1호 단서가 상위법령인 법인세법 제67조의 위임범위를 초과한 것으로서 무효라고 주장하나, 법인세법 제67조에서의 소득처분은 법인세의 과세표준을 신고하거나 결정 또는 경정함에 있어서 익금에 산입한 금액이 법인의 내부에 유보된 것인지 또는 사외로 유출된 것인지를 확정 하고, 만일 당해 금액이 사외로 유출된 것이라면 누구에게 어떤 소득의 형태로 귀속된 것인지를 특정하여 그 귀속자와 소득의 종류를 확정하는 세법상의 절차로서, 이미 특정과세연도에 귀속된 소득을 사후적으로 확인하는 절차인바 익금에 산입한 금액이 사외로 유출된 것이 분명한 경우에는 반드시 누군가에게 귀속되었을 것이나, 과세자료 등을 통하여 그 귀속자를 객관적으로 확정할 수 없는 '귀속불분명'의 경우를 충분히 예상할 수 있으므로, 위 법 제67조가 ... 익금에 산입한 금액은 그 귀속자에 따라ㆍ처분한다 고 규정하여 '그 귀속자에 따라'라는 문언을 사용하였다고 하더라도, 위 법조가 대통령령에 위임하고 있는 소득처분의 종류와 내용에는 사외유출된 익금산입액이 누군가에게 귀속되었을 것임은 분명하나 그 구체적 귀속자를 밝힐 수 없는 경우를 포함하고 있다고 봄이 상당하므로 법인세법 시행령 제106조 제1항 제1호 단서는 모법인 위 법 제67조의 위임 범위를 벗어난 무효의 규정이라고 할 수 없다(대법원 2008. 9. 18. 선고 2006다49789 전원합의체 판결 등 참조)}.

C) As seen earlier, in view of the fact that the liquidation of the instant remainder obligation was completed in the last 2001 business year, and the Plaintiff Company reported corporate tax for the year 2001, the Plaintiff Company included the transfer proceeds of this case including the instant remainder in its gross income for the business year 2001, it is determined that the instant remainder was reverted to, or the ownership of, the Plaintiff in the business year 2001 was unclear. The instant remainder was insufficient to reverse the determination on the following grounds: (a) there was a lack of circumstance that KK has paid part of the construction payment of this case in the business year 2000; and (b) there was no ground for the Plaintiff’s assertion on this part of the

4) Sub-committee

Therefore, the argument of the plaintiff △△ in relation to the illegality of the disposition in this case is without merit, and there are no other circumstances to deem the disposition in this case to be unlawful.

B. In view of the disposition imposing corporate tax on the Plaintiff Company on March 10, 2007 (hereinafter referred to as “instant disposition”)

1) The principal of the Plaintiff Company

The plaintiff company is deemed to be illegal for the following reasons.

A) In light of the circumstances, etc. that the part concerning the transfer price after the transfer of the instant new construction project was not modified, the instant construction cost ought to be deemed to be included in the instant transfer price.

B) Since all of the transfer proceeds of this case were paid in the business year 2000, the payment related to the transfer of the new construction project of this case shall be included in the Plaintiff Company’s gross income for the business year 2000, and even if not, KK has paid KRW 700,107,484 out of the construction proceeds of this case from May 23, 2000 to July 20, 200, and it has paid KRW 81,752,000 as of January 20, 2001, the remainder of the construction proceeds of this case shall not be included in the Plaintiff Company’s gross income for the business year 2001.

C) If the instant construction cost is deemed as the Plaintiff Company’s gross income, the amount equivalent to the same amount should be included in deductible expenses. As a result, it should be deemed that there is no change in the corporate tax base

2) Determination

A) In light of the following circumstances, it cannot be deemed that the instant construction price was actually included in the instant transfer price in light of the evidence Nos. 12 through 14, Eul’s statement Nos. 15-1 through 4, and the purport of the entire pleadings:

① On May 19, 200, the Plaintiff Company indicated the total transfer price in the contract (Evidence B No. 12) as KRW 8.37 billion, which is the transfer price (Article 2(1)), in the transfer of the instant new construction project to KK on May 19, 200 (Article 2(1) and agreed to settle the accounts after the actual inspection for KRW 2.87 billion, which is the transfer price for the subcontractor (Article 5).

② After that, K Construction paid all the proceeds of the instant transfer to the Plaintiff Company, separately paid the amount equivalent to the instant construction cost to the subcontractors of the instant new construction project as accounts payable for construction-related projects. Among them, the value of which the Plaintiff Company received tax invoices from the subcontractors is KRW 566,389,100, and the value of which K Construction directly received tax invoices from the subcontractors is KRW 215,470,384.

③ From June 2001 to October 20 of the same year, K Construction requested the Plaintiff Company to issue a purchase tax invoice on the construction price of the instant construction project, and accordingly, the Plaintiff Company issued a purchase tax invoice on the part of the construction price of the instant construction project to K Construction.

④ Defendant AA director of the tax office requested the Plaintiff Company to vindicate whether the instant construction price was included in the instant transfer price, prior to the instant disposition, but the Plaintiff Company did not provide any explanation therefor at the time.

⑤ The Plaintiff did not raise any objection as to the payment of the amount corresponding to the instant construction cost to the subcontractor by the administrative appeal application and the complaint of the first instance court, and instead, asserted the illegality of the decision on the expiration of the exclusion period for imposition of the instant disposition and on the premise of the payment period and amount of the amount equivalent to the said construction cost to the subcontractor claimed by K Construction.

④ Although the Plaintiff Company asserts that the instant construction price was offset against the outstanding amount of the instant transfer price, there is no evidence to acknowledge it.

B) From the business year of 2000 to the business year of 2001, K Construction paid the instant construction cost during the business year of 2001; the liquidation of the balance of the instant transfer price was finally completed during the business year of 2001; and the Plaintiff Company reported corporate tax for the year of 2001, the instant transfer price included the instant transfer price in the gross income for the business year of 2001 cannot be deemed to have any error in the taxation authority’s inclusion of the instant construction price in the total amount in the business year of 2001, which is the time when the Plaintiff Company accounted for the accounts

C) In cases where the tax authority finds the amount of income omitted from the initial return of the pertinent corporation, it shall be deemed that the corresponding deductible expenses were included in the total deductible expenses corresponding to the total amount of income, unless there exist special circumstances, such as where the account book or other documentary evidence revealed that the corresponding deductible expenses were separately disbursed. In such cases, if the tax authority failed to report the expenses corresponding to the omitted income and wants to obtain the deduction, it shall be asserted and proved by the taxpayer who seeks to include the relevant expenses in the deductible expenses (see, e.g., Supreme Court Decision 2002Du2673, Nov. 27, 200

However, comprehensively taking account of the overall purport of the arguments in the statement No. 15-1 to No. 4 of this case, the plaintiff company can recognize the fact that it received tax invoices, etc. from the subcontractor with respect to the construction price of this case paid on behalf of KK Construction. Thus, barring any special circumstance, the plaintiff company did not make any assertion or evidence as to the omission of the plaintiff company's report on some of the expenses corresponding to the construction price of this case in deductible expenses at the time of filing corporate tax return for the corresponding year, and otherwise, the plaintiff company did not submit any assertion or evidence as to the omission.

3) Sub-decisions

Therefore, the plaintiff company's arguments related to the illegality of the disposition of this case are without merit, and no other circumstance exists to deem that there is any illegality in the disposition of this case.

4. Conclusion

Therefore, on February 22, 2007, the director of the tax office of defendant AA had issued a notice of change in the amount of income on the plaintiff's ○○ Housing Co., Ltd. [the bonus disposition of KRW 2.8 billion against the plaintiff Han-gu Seoul Special Self-Governing Province and bonus disposition of KRW 781.859.484) and the director of the tax office of defendant DD has dismissed the plaintiff's claim for cancellation of the disposition of imposition of global income tax of KRW 356,527,920 for the plaintiff Han-gu Seoul Special Self-Governing Province for May 1, 2007. The plaintiff's claim for cancellation of the disposition of imposition of global income tax on April 4, 2007 and the claim for cancellation of the disposition of imposition of corporate tax against the defendant AA by the director of the tax office of Korea Special Self-Governing Province for the plaintiff's Do, and the judgment of the first instance is just, and all of the appeals of the plaintiffs are dismissed as per Disposition.