Cho Jae-2014-China-2955 (Law No. 18, 2015)

Whether a notice of results of the second tax investigation constitutes double-investigations

The second investigation is difficult to be deemed as a tax investigation because it corrected the error or omission in the details of the Plaintiff’s report, and even if it is a tax investigation, it is reasonable to deem that it does not constitute a tax investigation prohibited from re-investigation. Moreover, it is difficult to readily conclude that there is a serious defect to the extent to revoke the instant disposition solely on the grounds that

Article 81-4 of the Basic Act

Incheon District Court 2015Guhap53798 Revocation of Disposition of Imposing Corporate Tax, etc.

New OOO Limited Partnership

OO Head of the tax office

2017.20

2017.28

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of KRW 1,812,630 for year 209, KRW 1,529,220 for year 2010, KRW 1,022,680 for year 201, and each disposition of imposition of KRW 201,610,660 for year 200, KRW 94,510,261 for year 201, KRW 17,158,236 for year 201 for representative employees, and each disposition of notice of change in income for KRW 201,610 for year 2009 is revoked.

1. Details of the disposition;

A. The Plaintiff is a corporation that is established on October 16, 1973 and is engaged in taxi transport business under the Passenger Transport Service Act. The Defendant, from September 3, 2012 to September 21, 2012, conducted a tax investigation (the period subject to investigation: January 1, 2009 to December 31, 201; the subject tax item subject to investigation: the corporate tax and value-added tax; hereinafter referred to as “first investigation”) with respect to the Plaintiff, and issued a notice of tax investigation to the Plaintiff on August 27, 2012 without undergoing a prior notice of tax investigation pursuant to the proviso to Article 81-7(1) of the former Framework Act on National Taxes (Amended by Act No. 11604, Jan. 1, 2013; hereinafter referred to as “Framework Act”).

B. As a result of the first investigation, the Defendant: (a) when the Plaintiff paid benefits to a general taxi driver under the Passenger Transport Service Act (hereinafter referred to as “cab driver”); (b) based on the determination that the corporate tax base was omitted; (c) based on the determination that: (a) the amount of income actually below the standard amount of income; (b) the amount of income in excess of fuel expenses; and (c) the amount of non-use of fuel expenses (hereinafter referred to as “amount in excess, etc.”) was included in the gross income as if all the prescribed benefits were paid, and (d) the amount of income in excess of the standard amount of income and the amount of non-use of fuel expenses (hereinafter referred to as “amount in excess, etc.”) was included in the deductible expenses on the ground that the Plaintiff accounts as if he paid the amount in the form of piece rate; and (c) the sales amount in the year 2011 was omitted; and (d) based on the determination that the corporate tax base was modified; and (d) notified the Plaintiff as a result of the tax investigation to dispose of the difference between the above representative and the deductible expenses.

C. However, even after the completion of the above investigation period, the Defendant examined the data for taxation, such as the benefit ledger that the Plaintiff submitted in addition to the Plaintiff (hereinafter referred to as “the second investigation”), prepared a report on the completion of the investigation, and issued a revised tax investigation report on December 14, 2012 (the details of the taxes are as stated in attached Table 1(2); hereinafter referred to as “the second notification”).

D. As a result of the Plaintiff’s request for pre-assessment review on the second notification on January 10, 2013, on March 8, 2013, the Plaintiff was determined to deduct KRW 5,360,480 for the year 2009, and KRW 45,717,332 for the year 201 from the notified amount of income change, but received a decision to dismiss the remainder.

E. On April 1, 2013, the Defendant issued a correction notice of KRW 1,812,630 for the Plaintiff, KRW 1,529,220 for the year 209, KRW 1,529,220 for the year 2010, and KRW 1,022,680 for the year 201 for the Plaintiff’s interest management of the representative members (hereinafter “instant disposition”), and the notice of changes in the amount of income for the year 2009, KRW 201,610 for the bonus for the Plaintiff’s interest management of the representative members, KRW 94,510,261 for the year 201, KRW 17,158,236 for the year 201 (hereinafter “the notice of changes in the amount of income of this case”), and each of the instant dispositions referred to as “each of the instant dispositions”).

F. On March 27, 2014, the Plaintiff filed a petition for adjudication with the Tax Tribunal (hereinafter “Tax Tribunal”) on March 27, 2014, and the Plaintiff once accounts for the total expected transport income as revenue, and accounts for the amount below the amount in the instant case as provisional payment after paying the benefits. As a result, there is no difference between the actual transport income and the actual payment after paying the benefits, and the net asset value. Therefore, the Defendant asserted that the amount below the amount in the instant case was inappropriate to include the amount in the calculation of miscellaneous income and the bonus disposal as the representative’s profit. The Tax Tribunal investigated whether the amount below the amount in the instant case, which was deducted by the Plaintiff at the time of paying the transport employee’s wages, included in the reported amount in each business year, and dismissed the tax base and tax amount as a result, and dismissed the remaining claims.

G. The Defendant conducted a reinvestigation from June 22, 2015 to July 11, 2015, and sent a notice of tax investigation results to the Plaintiff on September 2, 2015 that the initial disposition is justifiable, and the Plaintiff received the said notice on September 8, 2015.

[Reasons for Recognition] Facts without dispute, Gap 1-7 (including branch numbers if there are serial numbers; hereinafter the same shall apply), Eul 2 and 11, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. Summary of the Plaintiff’s assertion

(1) procedural illegality such as double tax investigations

㈎ 금지되는 중복세무조사에 해당

Notification of the result of the investigation by the defendant is an administrative disposition subject to appeal litigation, and the defendant's primary section

The second investigation of the same tax item and the same period based on the taxation data already acquired and prepared at the time of the death constitutes the conduct of a duplicate tax investigation prohibited by Article 81-4(2) of the Framework Act on National Taxes. Therefore, each of the instant dispositions is illegal disposition due to abuse of the right to tax investigation.

㈏ 세무조사결과통지 수정 불가

The defendant concluded the first investigation and issued the second notification beyond the supplement of the first notification based on the already acquired data even after the notice of the results of the tax investigation was completed. In light of the fact that the Framework Act on National Taxes does not provide for the procedures to revise the notice of the results of the tax investigation, the second investigation and the second notification unfairly increased the tax amount in a voluntary manner without following the procedures prescribed by the Framework Act on National Taxes.

㈐ 세무조사 기간 연장사유 및 승인, 통지의 부존재

If the second investigation is not a duplicate tax investigation, it is at least an extension of the first investigation.

However, the defendant did not have grounds for the extension of the tax investigation period stipulated in Article 81-8 (1) of the Framework Act on National Taxes, and did not obtain approval from the head of the tax office pursuant to Article 81-8 (3) of the same Act, and did not notify the document under Article 81-8 (6) of the same Act. Thus,

(2) The substantive violation of the disposition of the corporate tax of this case

The Plaintiff, in the course of accounting, handled the total amount, including the amount below the instant amount, as transportation income, and handled the amount below the instant amount as a provisional payment, etc., and disposed of only the amount actually deposited as transportation income as alleged by the Defendant, the Plaintiff did not omit the instant insufficient amount, etc. from gross income by treating it as a transport income even though it

(3) The substantive illegality of the notice of change in the income amount of this case

㈎ 2009년, 2010년 급여대장은 피고의 주장에 의하더라도 1차 조사 당시 이미 확보된 자료였던 점, 원고의 매출누락분은 1차 통지 당시에 '기타'였다가 2차 통지 당시 '대표자 상여'로 변경되었으나 2차 조사와는 아무런 연관관계가 없는 점 등의 사정에 비추어 보면, 2차 조사 당시 추가로 제출된 자료{인천광역시장 해석사례, 노사합의서, 2011년 급여대장}와 이 사건 소득변동통지처분 사이에는 인과관계가 없다. 즉, 피고는 1차 조사에서 이미 취득한 자료만을 근거로 하여 다시 위법한 2차 조사(재조사)를 거쳐 위 처분을 하였는바, 이는 앞서 본 바와 같이 중복세무조사금지 규정에 위반한 것 일 뿐 아니라 근거과세원칙에 반하여 위법하다.

㈏ 원고가 기준수입금액 미달액을 운수종사자에 대한 급여에서 차감한 것은 사내유보 처리되어야 하고, 범칙금은 실제 범칙금으로 납부된 금액이므로 그 귀속자가 대표자도 아니고 귀속이 불분명한 경우에도 해당하지 않으므로 대표자에게 상여처분할 수 없다.

㈐ 원고는 이 사건 초과액 등을 운수종사자에게 성과급으로 지급하였는바, 그 이익이 운수종사자에 귀속된 것이므로 대표자에 대한 다른 상여처분액에서 공제하여야 한다.

B. Relevant statutes

Attached Form 2 shall be as shown in attached Table 2.

C. Determination

(1) Whether procedural violation such as double tax investigations is committed

㈎ 관련 법리

A tax investigation is a kind of administrative investigation for the realization of the State's right to impose taxes, and refers to any act of making inquiries to determine or correct the tax base and amount of national tax and inspecting or investigating books, documents and other articles, or ordering the submission thereof. In the case of a tax investigation for which the tax authority's right to ask questions to a taxpayer or a person who is deemed to have a transaction with the taxpayer (hereinafter referred to as "taxpayer, etc.") bears the legal obligation to allow the taxpayer to answer questions and undergo an inspection for the collection of the taxation data by the tax official. Meanwhile, a repeated tax investigation for the same tax item and taxable period may seriously infringe not only the taxpayer's freedom of business or legal stability, but also lead to the abuse of the authority to conduct a tax investigation. Thus, it is necessary to be prohibited except in exceptional

In light of the nature and effect of such tax investigation, the purport of prohibiting duplicate tax investigations, etc., where a tax official’s investigation practically affects taxpayers’ freedom of business by having taxpayers answer questions and undergo an inspection, etc., it shall be deemed a “tax investigation prohibited from re-audit” even if the instructions by the National Tax Service are excluded from the type of tax investigation. However, where it is deemed that all investigation conducted by the tax authority for the collection of taxation data or for the verification of accuracy of the details of the report constitutes a tax investigation prohibited from re-audit, the tax authority should always initiate a regular tax investigation in sufficient cases only on the sole basis of the confirmation of facts, and must respond to an indefinite tax investigation by taxpayers, etc., so it does not constitute a “tax investigation prohibited from re-audit” even if the taxpayer, etc. has no duty to answer or accept, and the taxpayer, etc. does not constitute a “tax investigation prohibited from re-audit”.

In addition, whether an investigation conducted by a tax official constitutes a "tax investigation prohibited by re-audit" shall be determined individually in specific cases by comprehensively taking into account the purpose and details of the investigation, the object and method of the investigation, the data obtained through the investigation, the scale and period of the investigation, etc. In addition, it is difficult to regard it as a "tax investigation prohibited by re-audit" in principle where it is anticipated that a taxpayer can easily respond to the investigation or there is no significant impact on the taxpayer's freedom of business operation, etc., but it is difficult to regard it as a "tax investigation prohibited by re-audit" in cases where the investigation conducted by a tax official directly contact the taxpayer, etc. in the office, workplace, factory, or residence of the taxpayer, etc. for a considerable period of time and ask questions, or inspect and investigate books, documents, articles, etc. for a certain period of time, barring special circumstances (see Supreme Court Decision 2016Du3684, Mar. 28, 2017).

On the other hand, in light of the above legal principles and the relevant laws, it is necessary to examine the nature of the act of tax investigation in determining whether it is a "tax investigation prohibited by re-audit" under Article 81-4 of the Framework Act on National Taxes, and whether the notice of the result of tax investigation is an administrative disposition subject to appeal litigation is not directly related to it.

㈏ 검토

1) Examining the following circumstances that can be acknowledged by comprehensively taking account of the overall purport of the statements and arguments made by the Plaintiff 3-10 and the evidence as seen earlier, it is reasonable to deem that the second investigation is a tax investigation as a correction of errors or omissions in the Plaintiff’s reported content, and it does not constitute a “tax investigation prohibited by re-investigation.” Furthermore, in the instant case where there are no circumstances such as the Defendant’s abuse of investigation authority, it is difficult to conclude that there exists a serious defect to the extent to revoke each disposition of the instant case solely on the grounds that the Defendant was difficult to evaluate that the period of tax investigation was extended or omitted in the prior notice procedure.

(1) Purpose and details of the preliminary investigation and the obtained data.

The Defendant demanded the submission of the benefit ledger for the period subject to investigation during the first investigation to verify the suspicion of corporate tax evasion. However, the Plaintiff related to the year 2009 and 2010

The accurate data was submitted, and the 2011 Benefit Ledger was not submitted. On the basis of the above data, the defendant calculated the plaintiff's tax amount for the year 2009 and the year 2010, the corporate tax for the business year 2011 and the income tax for the year 2009, and did not state the income tax for the year 2010 and the year 2011 (On the other hand, there were circumstances in which the plaintiff requested the defendant at the time of the first investigation to defer the decision of the relevant imposition on the grounds that the plaintiff submitted the benefit ledger for the year 201 and the additional supporting documents, etc.).

(2) Data acquired through a secondary survey and the details of the acquisition thereof.

On December 7, 2012, the Plaintiff seems to have finally submitted the benefit ledger [the newly submitted (in 2009 and 2010 division into regular and daily employment) and the benefit ledger for 2011: the first submission of the first submission]; from 2009 to 2011.

In light of the contents of the primary investigation result, the Plaintiff asserted that the Defendant had already received the aforementioned final text during the first investigation period from 2009 to 2011. However, it is difficult to accept the Plaintiff’s assertion in light of the following: (a) the Plaintiff’s vice president’s submission of the benefit ledger from 209 to 2011 to 201 to the Defendant on December 7, 2012, 201, which is, the Plaintiff’s vice president’s submission of the benefit ledger from 2009 to 2011, that there was no other benefit ledger (in addition, 12 copies of each benefit ledger for the pertinent period were attached to the attached data). In light of the fact that each of the instant dispositions appears to have been corrected immediately after the submission of the said verification procedure based on the final text of the benefit ledger corresponding to the taxable period of the instant case.

(3) Objects and methods of the secondary investigation, results of investigation, etc.

As seen earlier, the Defendant seems to have suspended judgment on income tax (representative bonus) for the year 2010 and the year 2011 on the wind for which the Plaintiff submitted taxation data credibility, and seems to have corrected the amount of bonus disposition, etc. for the representative director through the analysis (re-examination) of the evidence submitted by the Plaintiff at the time of the second investigation.

In light of these circumstances, after receiving the above wage ledger submitted by the plaintiff after the first investigation, the labor-management agreement and the reply of the Mayor of Incheon Metropolitan City, the defendant does not contact the plaintiff's counterpart and conduct further on-site investigations or inquiries, or conduct books, documents, goods, etc., and does not inspect the appropriateness of the reported matters through a short-term analysis of the data submitted at the time of the first investigation and the data newly submitted for the second investigation, and later, it seems that the errors or omissions in the first investigation were re- corrected about the income tax, etc. for which the plaintiff did not properly analyze the reported matters due to the reasons of the plaintiff (in light of the background of the investigation, method of investigation, and investigation, etc. on the omitted portion of the sales revenue from the operation of a rolling stock, this part

(4) Evaluation of the secondary investigation.

In light of the details and methods of the second investigation as seen earlier, there is room to view that the second investigation was conducted to provide the Plaintiff with an opportunity to voluntarily correct himself due to the circumstances on the part of the Plaintiff (the Plaintiff was partially reduced upon the Plaintiff’s vindication). In fact, the Defendant did not have any fact that the Defendant provided several obligations to the Plaintiff by visiting the Plaintiff’s workplace and investigating account books, documents, articles, etc. by visiting the Plaintiff’s workplace. The Defendant appears to have conducted the second investigation in order to discover and correct errors in the existing reported portion through the factual verification or analysis of the taxation data, explanatory materials, etc. submitted after the Plaintiff’s situation. In this process, it does not seem that the Plaintiff did not seem to have caused a significant obstacle to the Plaintiff’s business (the purport of the Plaintiff’s assertion that there was no demand for new data other than the data submitted by the Plaintiff at the time of the second

In this context, when there is any error or omission in the details of corporate tax returns filed by a corporate taxpayer, the tax authority may rectify the increase (see Article 66 (2) 1 and 66 (4) of the Corporate Tax Act). Ultimately, the second investigation of this case is difficult to evaluate at least the "tax investigation prohibited from duplicate investigation."

(2) Whether the imposition of the corporate tax of this case is unlawful

㈎ 관련 법리

In a lawsuit seeking revocation of corporate tax disposition, the tax authority bears the burden of proving the legality of taxation disposition and the existence of the facts requiring taxation, and thus, the tax authority is in principle responsible for the burden of proving the gross income and deductible expenses for each business year, which serves as the basis of the tax base. However, in cases where it is proved by the tax authority that the other party to the payment of deductible expenses or the amount reported as deductible expenses was false or failed to meet the requirements for deductible expenses, the burden of proving that such expenses were actually paid or deductible expenses were met due to other circumstances are returned to the taxpayer (see, e.g., Supreme Court Decision 2012Du23341, Aug. 20, 2014).

㈏ 쟁점

The Plaintiff’s payment of benefits to transport employees shall be deducted if the amount in this case is short of the amount, and the amount in this case is additionally paid as piece rates, and the Plaintiff, however, in the accounting of the benefits to transport employees, treated only the amount in this case and the standard benefit without reflecting the excess amount, etc. (hereinafter “standard benefit”) as the payment of the amount in this case, and then included the standard benefit in deductible expenses can be acknowledged by the evidence that there is no dispute between the parties concerned or by means of the above evidence.

The Plaintiff’s assertion related to this is that the transport income shall include all of the amount below the amount of this case in the settlement of accounts, and the amount below the amount of this case, etc. shall be treated as the provisional payment, and it shall be treated as having received payment after the payment of the base payment, and thus, the Plaintiff’s assertion that the Plaintiff did not have any deductible expenses. The Defendant’s assertion purport that even though the Plaintiff’s actual income did not include the amount below the amount of this case in the settlement of accounts was included in the calculation of losses, the amount below

Therefore, the issue of this part is whether the plaintiff included the amount below the amount of transportation revenue in the settlement of accounts and appropriated it.

㈐ 검토

In light of the relevant legal principles, the following circumstances, which can be acknowledged based on the overall purport of statements and the entire pleadings as seen earlier, appears to have been proven to a considerable extent that the Plaintiff did not include the amount below the amount of transportation revenue in the account settlement. The sole evidence submitted by the Plaintiff alone lacks to reverse it, and there is no other obvious evidence to acknowledge it otherwise.

① The Plaintiff appears to have calculated the amount of transport income daily on the basis of cash deposited by transport employees. The Plaintiff voluntarily submitted data related to the amount of transport income during the investigation process following the review decision by the Tax Tribunal, and explained that the transport employee reported the amount of transport income as the amount of transport income at the corporate tax declaration. Therefore, the Plaintiff’s amount of transport income is deemed to have been the actual amount of transport income not included in the amount of short of the amount of the instant case.

(2) The standard amount of income, standard amount of fuel cost, penalty, etc. may be reached or exceeded according to the current status of transport employees’ operation, and it is difficult in light of the empirical rule to view that the occurrence or absence of fixed standard amount of income, the amount exceeding fuel cost, penalty, etc. is treated as transport income and provisional payment in the form of transport income or provisional payment.

③ The Plaintiff failed to submit objective materials, such as records of transport employees’ operation and daily funds, related to the instant insufficient amount, etc., and did not submit any specific evidence that the instant insufficient amount, etc. was accounted for as transport income or provisional payment.

(3) Whether the disposition of notifying the change of income in this case is unlawful

㈎ 관련 법리

Where a corporation fails to record its sales in the account book despite the fact of sales or appropriates the cost of processing in the account book, barring any special circumstance, the profit of the corporation equivalent to the omitted sales or the cost of processing shall be deemed to have been leaked out of the account book, and in this case, special circumstances to deem that the total amount omitted sales, etc. was not leaked out of the account book need to be proved by the taxpayer, including the corporation asserting it (see, e.g., Supreme Court Decision 2003Du11797, Jan. 12, 2006). Furthermore, as long as the revenue of the corporation that was released from the account book is not clearly known, the tax authority has no choice but to dispose of the revenue of the corporation as a bonus to the representative under Article 67 of the Corporate Tax Act and Article 106(1)1 (proviso) of the Enforcement Decree of the Corporate Tax Act, and in this case, the burden of proving that the ownership is clear shall be proved (see, e.g., Supreme Court Decision 2010Du20805, Mar.

㈏ 검토

① Although the Plaintiff paid the instant insufficient amount, etc. by deducting the wages from the transport employees actually, the fact that all of them were paid as wages and included in the calculation of losses is as seen earlier. Therefore, barring any special circumstance, barring any special circumstance, the amount below the instant insufficient amount is deemed as having been actually leaked to a transport employee, and the evidence presented by the Plaintiff alone is insufficient to readily conclude that it belongs to the transport employee, etc. as alleged by the Plaintiff, etc., and there is no other obvious evidence to acknowledge it as a bonus for the representative. Therefore, the disposal of the amount below

② The Plaintiff asserts that the instant excess amount should be deducted from the bonus disposal amount for the representative. However, in full view of the purport of the entire pleadings, the Plaintiff appears to have reported the amount prior to excess use deduction and the amount prior to the payment of performance-based bonus as salary, while the Plaintiff, by setting the daily average fuel standard usage amount by type of vehicle and deducting the excess use amount from the amount of wages, was actually paid as performance-based bonuses. In cases where the deduction amount after deducting the deduction amount and the payment amount are higher, the Defendant is deemed to have included the excess income in the calculation of earnings and where the amount of performance-based bonus payment is higher, the amount of the excess amount should be included in the calculation of earnings, and

③ Since the first investigation, the Plaintiff submitted the final benefit ledger, explanatory materials, etc. from 2009 to 2011, and conducted each of the dispositions of this case through verification and analysis procedures based on them as seen earlier, it is difficult to accept the Plaintiff’s assertion on the different premise. On the other hand, it is difficult to accept the Plaintiff’s assertion on this part of this case’s assertion on the other premise [it seems that the Defendant did not take the relevant materials submitted additionally at the time of the second investigation [it appears that the case of Incheon Metropolitan City’s interpretation and the labor-management agreement (see, e.g., Incheon Metropolitan City’s Chapter, the labor-management agreement (see, e., e., B), 2011’s wage ledger as it appears that the Plaintiff’s submission of additional explanatory materials, etc. was corrected through analysis, and thus, it cannot be deemed that it violated the principle

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.