[1] Where a tax invoice on a part of the expenses reported by a taxpayer is false, the person who bears the burden of proving that the expenses were actually paid (=person liable for tax payment)

[2] In a case where a corrective disposition to increase or decrease the amount of initial taxation is taken after the enforcement of Article 22-2 of the Framework Act on National Taxes, the subject of adjudication in an appeal litigation (i.e., a corrective disposition to increase the amount of tax), and whether the grounds for illegality regarding the initial report

[1] Article 16 of the Framework Act on National Taxes and Article 27 of the Income Tax Act / [2] Article 22-2 of the Framework Act on National Taxes, Article 19 of the

[1] Supreme Court Decision 96Nu8192 delivered on September 26, 1997 (197Ha, 3327) / [2] Supreme Court Decision 91Nu6108 delivered on February 25, 1992 (Gong1992, 1196) Supreme Court Decision 91Nu9596 delivered on May 26, 1992 (Gong1992, 2051), Supreme Court Decision 96Nu8796 delivered on May 16, 1997 (Gong197Sang, 1787), Supreme Court Decision 2002Du9261 delivered on August 16, 2004 (Gong204Ha, 150) 209Du130989 delivered on May 14, 2009

Plaintiff, Ltd.

Head of Geumcheon Tax Office

Seoul High Court Decision 2007Nu31746 decided September 4, 2008

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

1. As to the revocation of the disposition imposing corporate tax for the business year 2002

Inasmuch as the tax authority bears the burden of proving the legality of the taxation disposition and the existence of the taxation requirement fact in the administrative litigation seeking revocation on the grounds of illegality of taxation disposition, the tax authority should bear the burden of proving necessary expenses, which are the basis of the determination of taxable income, as well as the burden of proving necessary expenses. However, insofar as a tax invoice on some of the expenses reported by a taxpayer has been falsely prepared without real transaction, it is proved to a considerable extent by the tax authority as to whether it is real expenses, and there are special circumstances, such as the use of expenses claimed by the taxpayer and the case where it is proved to the extent that the other party to the payment is false, it is difficult for the taxpayer to present data, such as books and evidence, regarding that such expenses have been actually paid (see Supreme Court Decisions 96Nu8192, Sept. 26, 1997; 2005Du16406, Apr. 14, 2006, etc.).

According to the reasoning of the judgment below, as a whole, the court below found that the plaintiff's three copies of the tax invoice issued by the non-party 1 corporation (hereinafter "the tax invoice of this case") on the amount equivalent to 300,178,000 won of the purchase cost of the materials among the expenses included in the deductible expenses for the business year 2002 were falsely prepared, and the tax authority requested the explanation on the actual payment of the expenses as to the inclusion of the purchase cost of the materials in the deductible expenses under the tax invoice of this case. The plaintiff first presented to the non-party 1 corporation the explanation that the representative of the non-party 1 corporation did not make a transaction with the plaintiff, and submitted it to the tax authority for the explanation that the plaintiff did not purchase the materials from the non-party 2 corporation and paid them as a bill, but it was proved that the bill was also a financing bill. After that, in light of the legal principles as to the purchase price of the materials in this case and the records, it is difficult to find that the plaintiff's non-party 2 corporation did not purchase the above amount in the tax invoice of this case.

2. As to the revocation of the disposition imposing corporate tax for the business year 2003

Article 22-2 of the Framework Act on National Taxes (amended by Act No. 6782, Dec. 18, 2002) provides that "an increase of the amount of tax initially determined under the provisions of tax-related Acts shall not affect the rights and obligations under this Act or tax-related Acts with respect to the amount of tax originally determined," under the title of "an increase of the amount of tax initially determined under the provisions of tax-related Acts". The revised disposition does not add only the amount of tax initially determined but also includes the increased portion of tax, and determines a single tax amount again as a whole (see Supreme Court Decisions 91Nu9596, May 26, 1992; 2003Du12721, Jun. 10, 2005; 2003Du12721, etc.). The purport of the revised disposition of Article 22-2 of the Framework Act on National Taxes (see, e.g., Supreme Court Decision 2009Du29686, Jun. 16, 2019).

In the same purport, the court below acknowledged the facts as stated in its holding, and held that the part of the plaintiff's lawsuit of this case seeking revocation of the disposition imposing corporate tax for the business year 2003 on August 1, 2005 among the plaintiff's lawsuit of this case is unlawful as it is the object of the lawsuit's disposition which loses its independent value by absorbing the disposition of increased tax amount as of February 1, 2007. There is no error in the misapprehension of legal principles as to the validity of correction, etc. under Article 22-2

3. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Young-chul (Presiding Justice)