Cho-2018-China-2663 (2018.05)

Judgment on the exclusion period for taxation of earned income tax due to the disposal of corporate tax;

The instant disposition constitutes a subordinate statute with the exclusion period for imposition of ten years, since the exclusion period for imposition has not elapsed at the time of January 1, 2012, which was the effective date pursuant to Article 26-2 of the Framework Act on National Taxes amended by Act No. 11124, Dec. 31, 2011, and thus, it is reasonable to apply the exclusion period for imposition of ten years.

Article 26-2 of the Framework Act on National Taxes (Period for Excluding Assessment of National Taxes)

Article 135 of the Income Tax Act (Special Cases concerning Timing for Withholding Taxes)

2018Guhap2187 Revocation of Disposition Rejecting Correction

AAAA

○ Head of tax office

1, 2019.04

oly 16, 2019

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

On February 12, 2018, the Defendant’s disposition of rejecting a claim for correction seeking refund of KRW 134,155,850 for wage and salary income tax for the year 2007, and wage and salary income tax for the year 2008 shall be revoked.

1. Details of the disposition;

A. The Plaintiff is a company whose business purpose is the export-import business, sales business, etc. of infant goods.

B. On November 2017, the Defendant gave guidance to the Plaintiff on the omission of sales in the business year 2007 and 2008.

C. The Plaintiff omitted KRW 224,275,560 in the sales of the goods in the business year 2007 and recognized the fact that the purchase price of the goods excessively appropriated KRW 200,263,29 in the gross income, thereby including the above KRW 224,275,560 in the gross income and not including the above KRW 200,263,29 in the gross income; and ② by recognizing the fact that the sales of the goods in the business year 2008 was omitted, the Plaintiff included the above KRW 46,294,930 in the gross income.

D. Accordingly, on January 2, 2018, the Plaintiff filed a revised return on corporate tax on ① the amount of income belonging to the Defendant for the business year of 2007, KRW 385,94,417 [The Plaintiff’s total amount of KRW 224,275,560, - KRW 20,388,687, and KRW 200,263,299, KRW 18,205,754) + (the purchase cost of the goods - KRW 224,205,75,754), while filing a revised return on the revised return on the revised tax amount to KRW 20,263,29, KRW 424,538,859, and KRW 208, KRW 426,306, KRW 309, KRW 429639, KRW 46306, KRW 2946, KRW 309, KRW 463964636,29646, etc.

E. Accordingly, on February 12, 2018, the Plaintiff withheld income tax amounting to KRW 464,618,859 (= salary amounting to KRW 40,080,00 + wage amounting to KRW 424,538,859) from KRW 135,384,541 minus the tax credit amounting to KRW 500,00,000 for wage and salary income from KRW 134,884,541 minus the tax credit amounting to KRW 134,85,850 (= KRW 134,884,541 - KRW 728,690) from KRW 1365,661 after deducting the tax credit amounting to KRW 134,84,541 - KRW 728,690 for wage and salary income accrued in 208; ② tax credit amounting to KRW 1601,6365,615,6016,65,6106,65,6060

F. On February 12, 2018, the Plaintiff filed a claim with the Defendant to rectify the amount of KRW 134,155,850, and KRW 7,335,940, and the amount of KRW 134,884,540, and KRW 7,699, respectively, for the reason that the period for exclusion of five years has expired, the Plaintiff filed a claim with the Defendant to rectify the amount of KRW 134,884,540, and KRW 7,690, and KRW 7,651,61, and KRW 315,69, respectively, of the amount of earned income for the year 2008.

G. On March 9, 2018, the Defendant issued a notice to the Plaintiff on the ground that “the omitted sales can be reported as value-added tax or other sales, the deposit was made to the account in the name of the mother, not the representative director, and the precedent regarding the claim for correction was prior to the amendment that “the exclusion period is ten years” was “the disposition in this case.”

[Reasons for Recognition] Facts without dispute, Gap evidence 1, Eul evidence 1-1 and Eul evidence 1-2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

(i) the exclusion period

The omission of sales in 2007 and 2008 by the Plaintiff was not aimed at evading corporate tax, value-added tax, and labor income tax, but it was not necessarily issued by some agencies among the Plaintiff’s business partners due to the Plaintiff’s failure to receive the tax invoice. The omitted sales amount was remitted to the parent account of the representative director of the Plaintiff, and it was not significantly difficult or impossible for the Defendant to detect the omission of sales when the Defendant conducts a tax investigation.

Therefore, since the omission of sale by the plaintiff does not constitute fraud or other improper acts, the exclusion period of imposition of wage and salary income tax for 2007 and 2008 shall be 10 years and 5 years.

2) Violation of the principle of retroactive taxation prohibition

Since the application of the new law to the exclusion period for taxation to the plaintiff's simple omission of sales cannot be seen as more public interest than the protection point of trust, it is against the principle of prohibition for retroactive taxation to extend the exclusion period unfairly by applying the revised tax law.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) As to the exclusion period of imposition

A) The main text of Article 26-2(1) of the former Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 2011; hereinafter the same) provides that “national taxes shall not be imposed after the expiration of the following periods,” and Article 26-2(1)1 provides that “if a taxpayer evades a national tax, receives a refund or deduction by fraudulent or other unlawful means, it shall be for ten years from the date on which the national tax may be imposed,” and subparagraph 3 of the same Article provides that “if a taxpayer does not fall under subparagraphs 1, 1-2 and 2, it shall be for five years from the date on which the national tax may be imposed.”

Article 26-2(1)1 of the Framework Act on National Taxes (hereinafter referred to as the "Framework Act on National Taxes") amended by Act No. 111124 on December 31, 201 provides that "if a taxpayer evades a national tax or receives a refund or deduction due to a fraudulent or other unlawful act prescribed by Presidential Decree (hereinafter referred to as "unlawful act"), it shall be for ten years from the date on which the national tax is assessable. In such cases, if a national tax evaded, refunded or deducted by such unlawful act is a corporate tax, it shall be for ten years from the date on which the income or corporate tax can be imposed on the amount disposed of pursuant to Article 67 of the Corporate Tax Act."

B) First, we examine whether the Plaintiff evaded corporate tax on the income for each business year of 2007 and 2008 by fraud or other improper act.

“Fraud or other unlawful act” under Article 26-2(1)1 of the former Framework Act on National Taxes refers to a deceptive scheme or other active act that makes it impossible or considerably difficult to impose and collect taxes, and it does not constitute merely failing to file a tax return or filing a false tax return without accompanying any other act. However, in cases where the circumstances indicate active concealment, such as failure to file a tax return or underreporting, and intentionally failing to enter revenues or sales in the account book, etc., the imposition and collection of taxes may be deemed impossible or considerably difficult (referring to Supreme Court Decision 2014Du2522 Decided September 15, 2015). Whether active concealment of taxes can be objectively revealed should be determined by comprehensively taking into account the following factors: (a) whether the basic account book stating revenues or sales, etc. is falsely prepared; (b) whether the pertinent tax return method is a taxation method; (c) details leading to a failure to file a tax return or a false tax return; and (d) whether the pertinent tax return method or a false tax return constitutes a false tax declaration; and (c) whether the pertinent tax base can be determined differently from the facts.

In full view of the following circumstances, it is reasonable to view that the Plaintiff evaded corporate tax on income for each business year of 2007 and 2008 by fraud or other wrongful act.

(1) The method of determining tax liability is divided into the method of filing a tax return, the method of imposing a tax, and the method of automatically determining the amount of tax. In the case of a tax imposing method, even if a tax return is required to be filed under an individual tax law merely provides data necessary for the determination of the amount of tax, it is difficult to recognize that there is fraud or other unlawful act unless other active act is accompanied by the submission of data. However, in the case of a tax filing method, the tax base and the amount of tax are determined by the tax filing return, and thus, it is more likely to be deemed that the same act of filing

(2) According to the evidence Nos. 2 and 3-1 and 2 of evidence Nos. 2 and 3-2, the Plaintiff received processing tax invoices from KimD, operated by an enterprise called “CC” in the second taxable period of February 2007, and on September 3, 2007, transferred 200,263,200 won from the Plaintiff’s corporate bank account (Account Number ○○○-○○-○-○-○-○○-○) to the bank account in the name of KimD, and then transferred 200,263,200 won from KimD on the same day, the Plaintiff received a return of KRW 20,263,200 from the Plaintiff’s corporate tax to its deductible expenses; and the Plaintiff received a return of KRW 200,263,200 from the Plaintiff’s corporate tax to its deductible expenses; and the Plaintiff received a return of KRW 200,300,297,209 from the 29,27060.

As such, the creation of processing and purchase by receiving processing tax invoices constitutes an active act to evade corporate tax by reducing the amount of income.

(3) According to the evidence Nos. 2 and 3-2 of the evidence Nos. 2 and 3-2, the Plaintiff sold baby carriages to consumers, etc. from January 4, 2007 to December 22, 2008, and deposited KRW 270,570,490 in the amount to be deposited into the CE account, and transferred most of the deposited amount to BB’s account. ② Upon filing a corporate tax return for each business year of 2007 and 2008, the Plaintiff omitted sales from 270,570,490 won (=24,275,560 won in the business year of 207 + 46,294,930 won in the business year of 208). ③ The Plaintiff did not issue a tax invoice while selling it to consumers, etc. as above.

As such, the Plaintiff did not issue a tax invoice to be used as taxation data of corporate tax so that it is difficult for the tax authority to understand the Plaintiff’s income. The Plaintiff received the sales proceeds of the prote account, not the bank account of the Plaintiff or the BaB, but the payment proceeds of the prote account, and seems to be based on the intent to conceal sales.

C) The fact that a corporation received a false tax invoice and appropriated an excessive purchase amount on the account book can be deemed as an act to evade corporate tax by concealing corporate income, and it is difficult to view that the representative of the corporation was made in order to evade income tax to be imposed because he/she was not aware of the existence of the concealed corporate income from the company as above. Thus, it is difficult to view that he/she was made in order to evade income tax to be imposed because he/she was found to have been the representative of the corporation as a member of the corporation. Thus, it cannot be deemed that the case where the taxpayer evaded national tax by fraudulent or other unlawful means under Article 26-2 (1) 1 of the former Framework Act on National Taxes, which is related to income tax due to such recognition and disposition, constitutes "the case where the taxpayer evades national tax by fraudulent or other unlawful means", and the exclusion period of imposition of income tax of the representative shall be returned to the principle of the exclusion period of imposition of income tax pursuant to Article 26-2 (1) 3 of the former Framework Act on National Taxes

The plaintiff has evaded corporate tax on income for each business year of 2007 and 2008 by fraud or other improper act. ① Under Article 26-2 (1) 1 of the former Framework Act on National Taxes, the exclusion period of corporate tax shall be ten years, and the exclusion period of imposition of income tax on the representative of the corporation resulting from the concealment of income shall be five years under Article 26-2 (1) 3 of the same Act. ② Under Article 26-2 (1) 1 of the revised Framework Act on National Taxes, the exclusion period of imposition of corporate tax and the exclusion period of imposition of income tax on the above earned income shall be ten years.

Therefore, this article examines the application of Article 26-2(1)1 of the former Framework Act on National Taxes and Article 26-2(1)1 of the amended Framework Act on National Taxes.

D) Article 2(1) of the Addenda to the Framework Act on National Taxes provides that “The amended provisions of the latter part of Article 26-2(1)1 of the Framework Act on National Taxes shall apply from the amount disposed of under Article 67 of the Corporate Tax Act for the first time after January 1, 2012.”

According to the above provision, if the disposition of income is taken after January 1, 2012, it seems that Article 26-2 (1) 1 of the revised Framework Act on National Taxes applies. However, if the exclusion period has already expired at the time of the revision of the Framework Act on National Taxes, it is not constitutionally permitted because it constitutes a so-called "defensive legislation". Thus, it is reasonable to interpret the above supplementary provision as constitutional only where the exclusion period has not yet expired at the time of the amendment of the Framework Act on National Taxes (unf

The deadline for filing wage and salary income tax for the year 2007 by the grandchildrenB was on May 31, 2008, and the exclusion period was from June 1, 2008, and the deadline for filing wage and salary income tax for the year 2008 was on May 31, 2009, and the exclusion period for filing the tax on wage and salary income tax for the year 2008 was on June 1, 2009. Thus, on January 1, 2012, five years have not yet elapsed since the enforcement date of the amended Framework Act on National Taxes.

Therefore, Article 26-2 (1) 1 of the revised Framework Act on National Taxes applies to the exclusion period of imposition of each of the above earned income tax, and ten years have passed since the revised provision of Article 26-2 (1) 1 of the revised Framework Act on National Taxes, and on January 2, 2018 (the date of filing a revised return of the Plaintiff’s corporate tax) was withheld from the Plaintiff’s wage and salary income tax due to the Plaintiff’s recognized contribution.

E) Therefore, this part of the Plaintiff’s assertion is without merit.

2) As to the assertion of violation of the principle of retroactive taxation prohibition

Article 18(2) of the former Framework Act on National Taxes provides that "The principle of prohibition of retroactive taxation shall not be imposed retroactively according to new tax laws after the establishment of income, profits, property, act or transaction in which an obligation to pay national taxes (in cases of national taxes separately provided for by tax-related Acts, an obligation to collect and pay them; hereinafter the same shall apply) is established."

According to Article 21 (2) 1 of the former Framework Act on National Taxes, an obligation to pay income tax and corporate tax withheld shall be established when income or income is paid.

According to Articles 135(4) and 131(2)2 of the Income Tax Act, where the corporate tax base is reported on a bonus disposed of pursuant to Article 67 of the Corporate Tax Act, the income tax shall be withheld at source by deeming that the earned income was paid on the date of report or revised report.

Therefore, the obligation to pay withholding income tax on wage and salary income tax from the disposal of credit for the lossB is established on January 2, 2018, which is the date when the plaintiff filed a revised return of corporate tax. Therefore, applying Article 26-2 (1) 1 of the revised Framework Act on National Taxes to the exclusion period of imposition of wage and salary income tax cannot be deemed to violate the principle of prohibition of retroactive taxation.

Therefore, the plaintiff's assertion on this part is without merit.

3. Conclusion

Thus, the disposition of this case is legitimate, and the plaintiff's claim is dismissed as it is without merit.