Seoul Administrative Court-2015-Gu Partnership-82686 ( December 09, 2016)

Whether monthly travel expenses constitute non-taxable earned income in the nature of compensation for actual expenses

(The same as the judgment of the first instance court) The criteria for paying monthly travel expenses are not deemed to have been calculated based on the required expenses in the course of regular business trips, and therefore, the nature of reimbursement for actual expenses is not sufficient.

Article 20 of the Income Tax Act

2016Nu82852 Revocation of revocation of the disposition to collect earned income tax.

Aa and 105

00. Head of tax office and 33

Seoul Administrative Court 2015Guhap82686 ( December 09, 2016)

June 13, 2017

July 11, 2017

1. All appeals filed by the plaintiffs are dismissed. 2. The costs of appeal are assessed against the plaintiffs.

The judgment of the first instance court is revoked. Attached Form No. 1 written by the Defendants against the Plaintiffs is written.

The imposition of the aggregate income tax shall be revoked.

1. Quotation of judgment of the first instance;

The court's explanation on this case is identical to the reasoning of the judgment of the court of first instance except for dismissal or addition as follows. Thus, it shall refer to the reasoning of the judgment of the court of first instance pursuant to Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

2. Parts to be removed or added;

The following is added to the fourth 10th 10th 10th 1th 4th 1st 1st 1st 1st 1st 2th 1st 1st 1st 1st 1st 1st 1st 1st 1st 1st 1st 1st 1st 1st 1st 202

○ On the 7th judgment of the first instance court, the following 4 and 5 conduct:

D) As above, monthly travel expenses of this case are regularly paid to employees performing specific duties regardless of whether they actually traveled, etc., and working conditions were closely related to their unique characteristics, which led to the formation of the contents of the working conditions. Therefore, rather than as wages of a nature for compensating actual expenses, such monthly travel expenses constitute "monthly salary paid in the name of travel expenses" under Article 38 (1) 10 of the Income Tax Act, rather than as wages of a nature for compensating actual expenses

E) The Plaintiffs asserts to the effect that the monthly travel expenses of this case should be recognized as benefits of the nature of reimbursement of actual expenses, in light of the fact that the travel expenses required for the business trip of the 'regular travel official' under the Public Officials Travel Expenses Regulations are recognized as reimbursement of actual expenses.

Article 29 (2) of the Regulations on Travel Expenses of Public Officials provides travel expenses to public officials in need of regular business trips (Evidence A5). The above regular business trip public officials are public officials belonging to the Ministry of Oceans and Fisheries who are directly engaged in fishing village guidance duties, public officials belonging to the Ministry of Land, Infrastructure and Transport, public officials who are directly engaged in railroad security duties after boarding a train, public officials belonging to the Statistics Korea who are directly engaged in statistical surveys or statistical guidance duties, and public officials who are in need of regular business trip duties other than the original business place, and they are paid travel expenses to compensate for them because they are not provided with means of transportation, lodging place, meal, etc. in the business place. On the contrary, the plaintiffs are not allowed to provide travel expenses to public officials in the workplace assigned to the above regular business trip, maintenance and repair personnel, and dispatched employees who are assigned to the above office, and they cannot be considered to have paid travel expenses to public officials who are similar to the above regular business trip expenses.

F) Therefore, the Plaintiffs’ assertion that monthly travel expenses of this case constitute non-taxable income as remuneration in the nature of reimbursement for actual expenses is without merit.

According to the 8th judgment of the first instance court, the following contents are added to the Plaintiffs’ assertion of non-taxation practice, while the Plaintiffs’ assertion of non-taxation practice under Article 18(3) of the Framework Act on National Taxes is accepted as justifiable by a general taxpayer who is not a specific taxpayer even if erroneous interpretation or practice is not reasonable, and it is not unreasonable for taxpayers to trust such interpretation or practice. In tax law relations, the establishment of non-taxation practice with respect to the acts of the tax authorities is not only an objective fact that the tax authorities did not impose taxes on certain matters for a long time, but also requires the tax authorities to externally or implicitly express or impliedly indicate the intent that the tax authorities would not impose taxes on the said matters. Such public opinion is deemed to have been established on the premise that travel expenses are not exempt from taxation on the said matters, and it is difficult to view the Plaintiffs’ assertion that the aforementioned public opinion will not be subject to taxation on the said matters as the grounds that it is necessary to establish travel expenses on the basis that the non-taxation or non-taxation practice would not be subject to taxation on the said matters. It is also difficult to deem that the Plaintiffs’ monthly and non-taxation practice on travel expenses.

○ The following shall be added to the second sentence of the first instance judgment No. 40:

▣ 국세기본법 제18조(세법 해석의 기준 및 소급과세의 금지)

(3) Once any construction of the tax-related Act or practices in tax administration has been generally accepted by the taxpayers, any act or computation according to such a construction or practice shall be considered to be correct, and no tax shall be retroactively imposed by a new construction or practice.

3. Conclusion

If so, the judgment of the first instance court is justifiable, and the plaintiffs' appeal is dismissed.