Cho Jae-2017- Daejeon-0252 (2018.09)

Whether the bonus paid to the employee with respect to the income omitted by the Plaintiff can be deducted as necessary expenses.

If a tax assessment is conducted by the on-site investigation decision on the omitted income amount, the taxpayer should assert and prove the necessary expenses corresponding to the omitted portion.

Article 27 (Calculation of Necessary Expenses of Business Income)

Daejeon District Court-2018-Gu Partnership-103722 ( September 19, 2019)

○ ○

○ Head of tax office

2019.07.18

2019.18

1. The Defendant’s imposition of gift tax amounting to KRW 7,921,50 on November 7, 2017 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

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 global income tax of KRW 16,260,760 for the year 2013 and global income tax of KRW 6,866,360 for the year 2014 against the Plaintiff on September 5, 2016 is revoked.

1. Details of the disposition;

가. 원고는 'ㅇㅇㅇ 이○○사무소'(이하 '이 사건 사무소'라 한다)를 운영하는 ㅇㅇㅇ이다.

B. From June 7, 2016 to July 11, 2016, the head of a tax office conducted a tax investigation with respect to the Plaintiff, and as a result, determined that the Plaintiff omitted income amounting to KRW 96,314,190 and excessive appropriation of KRW 10,352,430 as necessary expenses. Accordingly, on July 25, 2016, the head of a tax office notified the Plaintiff of KRW 16,345,876 of the global income tax for the year 2013, the global income tax for the year 2014, and KRW 23,127,132 from January 2, 2012 to February 2, 2014.

C. On August 2, 2016, the Plaintiff filed a request for pre-assessment review with the head of AA tax office on August 2, 2016, asserting that the amount of KRW 87,400,000 paid as performance-based rates and KRW 9,725,000 paid to the employees of the Plaintiff should be recognized as necessary expenses, among the 4th insurance premium paid to the employees of the Plaintiff. However, on August 2, 2016, the lower court rendered a decision of non-adopted on August 24, 2016. On September 5, 2016, the Defendant notified the head of AA tax office of taxation data to the Plaintiff on imposition of KRW 16,260,760 of global income tax for the year 2013, and KRW 6,866,360 of global income tax for the year 2014 (the amount included

D. On September 28, 2016, the Plaintiff filed an objection against the instant disposition with the director of the regional tax office having jurisdiction over BB on the purport that KRW 61,390,000 paid as the performance-based bonus of the employees among KRW 105,945,610 (based on the cost of supply) and KRW 7,030,850 paid as the performance-based bonus of the employees paid by the Plaintiff and KRW 4-15,271,220 of the employees paid by the Plaintiff should be deducted as necessary expenses. However, on November 10, 2016, the Plaintiff rendered a final decision to dismiss the instant disposition.

E. On December 2, 2016, the Plaintiff asserted that KRW 87,400,000 on the performance-based rates paid to its employees ought to be deducted from the omitted sales amount, and the Plaintiff filed an appeal against the instant disposition with the Tax Tribunal. However, on April 9, 2018, the Plaintiff rendered a final decision to dismiss the instant disposition. [Grounds for recognition] In the absence of dispute, Party A’s statements in subparagraphs 1 through 5, 8, and Nos. 1 and 2, and the purport of the entire pleadings.

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

1) The amount of income omitted by the Plaintiff in relation to the disposition of the instant case includes KRW 87,40,000 paid as piece rates to BB and CCC, an employee of the instant office, and the said amount constitutes necessary expenses and must be deducted from the amount of income.

2) Other arguments relating to cost.

원고는 2012년부터 2014년까지 등기비용(등초본발급비용) 8,475,000원, ㅇㅇㅇ협회비 2,507,105원, 퇴직금 2,600,000원, 설 ・ 추석 거래처 접대비 5,666,500원 합계19,249,105원을 지출하였고, 이는 필요경비에 해당한다. 따라서 위 금액 역시 수입금액에서 공제되어야 한다.

(b) Relevant legal principles;

In the event that a tax assessment is conducted on the omitted income amount by the on-site investigation decision, the taxpayer should assert and prove the necessary expenses corresponding to the omitted income amount (see, e.g., Supreme Court Decisions 96Nu14418, Nov. 28, 1997; 2001Du4399, Mar. 11, 2003).

C. Determination

1) Determination on the assertion regarding performance rates

In light of the above legal principles, it is reasonable to view that the Plaintiff’s 87,400,000 won (hereinafter “the instant money”) claiming that the Plaintiff paid performance rates to BB and CCC constitutes necessary expenses corresponding to the omission of the Plaintiff’s revenue amount revealed as a result of the tax investigation, and that the Plaintiff should assert and prove it. However, in light of the following circumstances, it is difficult to believe that the Plaintiff’s 7 evidence as shown in the Plaintiff’s assertion is insufficient to recognize that the Plaintiff’s 87,40,000 won was paid as performance rates only with the remaining evidence submitted by the Plaintiff. Accordingly, the Plaintiff’s above assertion is rejected.

A) The instant monetary amount does not coincide with the payment date even between BB and CCC, and it was paid two to three times on the same day in the case of BB, which is considerably different from the ordinary performance-based payment method. The Plaintiff asserts that the performance-based bonus is paid according to work performance, and that the payment period is in its original non-permanent rules. However, the performance-based bonus is generally paid at the time of setting the performance of the specific period, such as a quarter, regardless of the fact that it can differ from the amount paid according to work performance.

B) In addition, the Plaintiff paid KRW 30,000 on a case-by-case basis in relation to the performance-based payment criteria. However, the Plaintiff asserted that the transaction amount is KRW 50 million or more, and KRW 40,000 or more, KRW 100 million or KRW 50,000,000, respectively. While the instant lawsuit was brought, the Plaintiff did not submit specific data that form the basis for the calculation of the instant amount, and the BB and CCC’s confirmation document (Evidence A7) submitted by the Plaintiff is also written in the BB and CCC’s confirmation document (Evidence A7) that is inconsistent with the Plaintiff’s above assertion.

C) Furthermore, the Plaintiff’s account in which the instant money was paid is managed by BB and CCC as a deposit account in which fees and public charges are deposited from the Plaintiff’s clients. It is difficult to readily accept that employees have brought the instant money as performance-based bonuses from the said account under their management, and there is no evidence to deem that the said money was paid as performance-based bonuses by the Plaintiff during the process of paying the said money, or that the said employee was reported by BB and CCC.

D) A certificate of BB preparation submitted by the Plaintiff at the time of pre-assessment review (Evidence B No. 3) is written as if the amount entered as “acquisition tax, acquisition tax and registration tax refund” was paid as performance-based rates (Article 100,000 won on October 2, 2013, KRW 200,000 won on August 24, 2013, KRW 150,000,000 won on February 11, 2014, KRW 100,000 won on February 11, 2014, and KRW 100,000,000 won on February 6, 2014), and the written confirmation submitted by the Plaintiff as evidence No. 6 in the instant lawsuit is changed to “BB”. Meanwhile, considering the content of a newly written confirmation (Evidence B No. 7) newly prepared by BB as above, it is inconsistent with the above written confirmation document No. 3 (Evidence).

2) 기타 비용 관련 주장에 대한 판단살피건대, 원고가 제출한 증거들만으로는 원고가 주장하는 등기비용(등초본발급비용) 8,475,000원, ㅇㅇㅇ 협회비 2,507,105원, 퇴직금 2,600,000원, 설 ・ 추석 거래처 접대비 5,666,500원 합계 19,249,105원이 이 사건 처분시 필요경비로 수입금액에서 공제되지 않았다는 점을 인정하기에 부족하고, 달리 이를 인정할 증거가 없다(오히려, 을제1, 2호증의 각 기재에 변론 전체의 취지를 종합하면, 피고는 AA세무서장의 세무조사 결과에 따라 위 각 금액을 필요경비로 인정하고, 이를 수입금액에서 공제하여 이사건 처분의 부과금액을 정한 것으로 보인다). 따라서 원고의 이 부분 주장도 받아들이지 아니한다.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.