Seoul Administrative Court 2012Guhap35368 (2013.08)

It is reasonable to see that the advisory service was performed independently by utilizing professional knowledge continuously and repeatedly, and therefore constitutes business income.

" insofar as advisory services provided by the plaintiff in relation to the management and tax management have the nature of counseling, supervision, guidance fees, and advisory fees, the defendant's disposition of this case which applied the expense rate of personal services corresponding thereto cannot be deemed unlawful" (the contents of the judgment)

2013Nu8242 Global income and revocation of disposition

LAA

Samsung Head of Samsung Tax Office

Seoul Administrative Court Decision 2012Guhap35368 Decided February 8, 2013

December 18, 2013

February 12, 2014

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

1. Purport of claim

The Defendant’s imposition of each of the dispositions on the Plaintiff on February 22, 2012, including ① OOOO(including additional tax), global income tax for the year 2006, OOO(207, global income tax for the year 2008, global income tax for the year 2009, OOO(2009, global income tax for the year 2009, global income tax for the global income tax for the year 2010, ② global income tax for the year 2010, imposed on the Plaintiff on the Plaintiff on January 15, 2013, exceeding OOOO(207, imposition of global income tax for the year 2008, imposition of additional tax for the global income tax for the year 208, imposition of additional tax for the global income tax for the year 209, and imposition of additional tax for the global income tax for the year 2010, respectively, is revoked.

2. Purport of appeal

The part against the plaintiff in the judgment of the first instance shall be revoked, and the claim for the plaintiff corresponding to the revoked part shall be accepted.

1. The part citing the judgment of the court of first instance

The reasoning of the judgment of the court of first instance is as follows, and the judgment on the plaintiff's assertion is added in the next paragraph. Thus, it is identical to the ground of the judgment of the court of first instance. Thus, it is cited in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the

The following is added to 7th day below."However, in light of the following facts: "The defendant's service, which is a subordinate element of the association and organization in the public notice of cost rate, repair and other personal service business" in relation to the calculation of expense rate: advisory, supervisory, guidance, and advisory (940600). However, since the expense rate is applied to calculating necessary expenses to be deducted when calculating and correcting the amount of income of the business income earner, all the types of business classified in the public notice of expense rate are premised on that it falls under the business activities under the Income Tax Act (it is interpreted that it is naturally premised on the revenue obtained through continuous and repetitive business activities), it cannot be viewed that the defendant's additional statement of "in principle, it cannot be viewed that it is against the principle of "the principle of no taxation without the plaintiff's internal document". 6. It cannot be viewed that the plaintiff's internal document of this case is inconsistent with the principle of no taxation without the plaintiff's internal document of this case.

A. As to the relevant assertion, such as the grounds for calculating the amount of duty

1) Plaintiff’s assertion

The first disposition (the part of this tax) is unlawful because the tax notice does not specify the type of expenditure rate, the basis for calculating the amount of tax including the code number, etc.

2) Determination

If the tax items imposed on the total income generated in the year to which the tax was reverted, such as global income tax, are sufficiently notified by specifying the year to which the tax was reverted, the tax base for the year to which the tax was reverted, the basis for calculation of the tax amount, and the basis for calculation of the tax amount. However, according to the evidence No. 1, the Defendant’s imposition and notification by a tax payment notice stating the year to which the tax was reverted, tax base, tax rate, calculated tax amount, the notified tax amount, etc., while making the Plaintiff’s first disposition is recognized. If so, the calculation basis of the tax base or the tax amount pursuant to the relevant statutes is sufficient to the extent stated in the tax payment notice, and it cannot

B. As to the relevant argument, such as the public notice of cost rates

1) Plaintiff’s assertion

A) The public notice of the cost rate is not a de facto business operator by prescribing that Article 143(4) of the Enforcement Decree of the Income Tax Act shall be excluded in the case of personal service business income earners, and that only simple expense rate shall be applied. As such, even if a personal service income earner is a de facto non-business operator, the above public notice that sets the personal service income as business income is invalid beyond the delegation scope of superior laws and regulations. Even if the above public notice of cost rate is applied, the Defendant calculated an excessive amount of tax equivalent to the amount of OO won of the income amount due to error in the application of the expense rate

B) The scope of personal service under the Value-Added Tax Act and personal service under the Income Tax Act is identical, and since the consulting service provided by the Plaintiff does not fall under any of the personal service listed in the subparagraphs of Article 35 of the Enforcement Decree of the Value-Added Tax Act, the disposition of this case is unlawful. Meanwhile, the defendant asserts that the income of this case is derived from the "business service" and "professional service business" under Article 19 (1) 11 of the Income Tax Act and Article 19 (1) 13 of the amended Income Tax Act prior to the amendment, and in calculating the cost rate, the disposition of this case is unlawful since the "human service corresponding to the "individual service" under Article 19 (1) 15 of the Income Tax Act prior to the amendment, and Article 19 (1) 18 of the amended Income Tax Act are applied to advisory, supervisory, guidance, advisory (940600)", and the disposition of this case is unlawful.

A) First of all, it is deemed that the public notice on the expense rate for personal service business income earners is invalid. According to the public notice on the expense rate for the year 2010 (the National Tax Service Notice No. 2011-7, the evidence No. 17) of the income amount for personal service business income, the expense rate higher than the simple expense rate shall apply to the excess portion of the income amount for personal service business income. However, the above public notice should be interpreted in accordance with Article 143(4) of the Enforcement Decree of the Income Tax Act, which provides for persons subject to the simple expense rate. The expense rate notice is interpreted to apply only to persons subject to the simple expense rate under Article 143(4)1 of the Enforcement Decree of the Income Tax Act (i.e., those whose income amount among the personal service business income newly commenced in the pertinent taxable period is less than KRW 75 million, and Article 208(5)2(c) of the Enforcement Decree of the Income Tax Act, the public notice on the expense rate cannot be deemed to violate the Enforcement Decree of the Income Tax Act, which is superior.

B) Next, it is deemed that the Plaintiff constitutes a personal service business income earner under the Value-Added Tax Act. Personal service exempt from value-added tax under the Value-Added Tax Act and personal service subject to business income under the Income Tax Act differs from its purport and scope of application. Since the Public Notice of Security Rate includes activities that obtain income, such as advice, supervision, guidance fees, and advisory fees, which are not expressly provided in each subparagraph of Article 35 of the Enforcement Decree of the Value-Added Tax Act, it cannot be deemed that the scope of personal service in the Public Notice of Security Rate corresponds to the scope

In addition, in principle, the notice of security rate is flexibly given the code numbers of detailed items, if necessary to ensure that it can be applied in accordance with the Korean Standard Industrial Classification system, and the 8 Korean Standard Industrial Classification (Enforcement of March 1, 2000), the association and organization, repair and other private service business classified as S. association and organization, repair and other private service business under the 9 Korean Standard Industrial Classification (Enforcement of February 1, 2008), and the 9 Korean Standard Industrial Classification ("Personal Service" means only laundry, this cosmetic, beauty and funeral service, and other private service business. However, in light of the fact that the association and organization, repair and other private service business have a specific category of service business which are difficult to classify as an individual service business under the Korean Standard Industrial Classification as a whole, it cannot be seen that the detailed classification of the expense rate under the 3th Korean Standard Industrial Classification or the category of service business under the Income Tax Act is accurately consistent with the classification of the items of the plaintiff's service business or the service business type. Therefore, the plaintiff's assertion that the plaintiff's provision of advisory service cannot be accepted.

The Plaintiff asserts that the defect in the Disposition No. 3 (2007 to 2010) was not cured and thus illegal. However, as seen earlier, in the case of penalty tax from 2007 to 2010, the Plaintiff’s claim on January 15, 2013, within the exclusion period for imposition of penalty tax, clearly stated the type of penalty tax, the basis for calculation, and the amount of tax (Evidence No. 8 and 9) and this part of the Plaintiff’s claim cannot be accepted.

3. Conclusion

The judgment of the first instance is justifiable. The plaintiff's appeal is dismissed.