The plaintiff and her husband cannot be deemed to have conducted a joint business, and the imposition of unfair under-reported additional tax is legitimate.

The plaintiff and her husband cannot be deemed to have conducted a joint business, and the imposition of unfair under-reported additional tax is legitimate.

Seoul Administrative Court-2014-Gu Partnership-72385

HongA

Head of Mapo Tax Office et al.

Mapo Tax Office’s global income tax imposed on the Plaintiff on January 2, 2014, and KRW 7,727,893 (additional tax) in 2008

including, but not limited to, each global income tax and value added tax stated in the purport of the claim, 209

228,00,743 won, 267,754,732 won, 2011 480,272,838 won, 66,134,094 won, 2012

Value-added tax imposed on the Plaintiff on January 2, 2014, and No. 2, 2008, by the head of each imposition disposition and the head of each Defendant Medium and Small Tax Department.

68,627,71 won, 123,08,038 won, 209 209 133,139,606 won, 2010

1st class 164,42,543 won, second class 67,24,634 won, first class 98,021,478 won, second class 2010, 2011

Division 209,079,325 won, 56,85,188 won, and 6,859,652 won, respectively, in 2012

Each disposition shall be revoked in full.

April 26, 2016

June 03, 2016

1. The part of the disposition imposing global income tax for the year 201 imposed on the Plaintiff on January 2, 2014, which exceeds KRW 353,324,58, among the disposition imposing global income tax for the year 201, shall be revoked.

2. The plaintiff's remaining claims against the defendant Mapo Tax Office and the claims against the defendant Jung Jung Tax Office are all dismissed.

- Of the costs of lawsuit 2-3. 1/10 of the portion arising between the Plaintiff and the Head of Mapo Tax Office shall be borne by the Head of Mapo Tax Office, the remainder by the Plaintiff respectively, and the portion arising between the Plaintiff and the Head of Mapo Tax Office shall be borne by the Plaintiff.

Cheong-gu Office

1. Details of the disposition;

가. 원고는 2008. 8. 12.부터 서울 00에 위치한 ## 빌딩에서 'HH'라는 상호로 여성의류 판매업을 영위하였다. 나. 피고 마포세무서장은 2008년부터 2012년까지 원고 명의의 계좌에 입금된 총 금액 11,294,000,000원에서 원고가 신고한 수입금액을 뺀 나머지 금액을 매출누락금액으로 보고, 2008년 귀속 종합소득세는 단순경비율에 의한 추계경정을, 2009년 내지 2012 - 3 -년 귀속 종합소득세는 신고한 수입금액에 대하여 의류도매업 기준경비율을, 신고누락한 수입금액에 대하여 의류소매업 기준경비율을 각 적용하여 추계경정하였고, 그에 따라 피고들은 2014. 1. 2. 원고에게 부당과소신고가산세를 더하여 아래 표 중 '당초처분'란 기재와 같이 각 종합소득세 및 부가가치세를 결정 고지하였다.다. 그 후 피고 마포세무서장은 조세심판원의 결정에 따라 2009. 1. 1.부터 2011. 2. 10.까지의 수입금액에 대하여는 의류도매업의 기준경비율을, 2011. 2. 11. 이후의 수입금액에 대하여는 의류소매업의 기준경비율을 각 적용하여 '경정처분'란 기재와 같이 종"합소득세를 경정 고지하였다(이하 감액경정된 당초처분을이 사건 처분'이라 한다)",[인정근거] 다툼 없는 사실, 갑 제1 내지 4호증(가지번호 있는 것은 가지번호를 포함한다, 이하 같다), 을 제1 내지 6호증의 각 기재, 변론 전체의 취지

2. Related statutes;

It is as shown in the attached Table related statutes.

- 4- Whether the instant disposition was legitimate on March 2003, 2004, 14,57220,57220,699 23,8328,034 30,033,030 35,120,369, 369 31, 73720, 20833, 2006, 2008

(a) Facts of recognition;

1) The Plaintiff received approximately KRW 1.5 million or KRW 2.5 million per month from 2000 to 2006 from the East capital, and obtained an average of KRW 2.5 million or KRW 3 million per month while operating the clothing store from 2006 to 2008. From August 12, 2008, the Plaintiff made a business registration with the trade name “HH” in the APM building where the clothing wholesale store is located, and operated the said business (hereinafter “H”).

2) 한편, 원고의 남편인 CC는 2002년경부터 2010. 11. 7.경 퇴직시까지 농림축산검역본부에서 근무하였는데, 위 기간 동안 CC의 소득신고 내역은 아래 표 기재와 같다. CC는 퇴직 이후 2010. 11.부터 2012. 5.까지 HH가 입점해 있던 ## 상가의 상가운영위원직을 수행하였고, 2012. 6. 1. 자신이 2010년 내지 2012년에 매수한 부동산으로 부동산임대업 사업자등록(상호: 'LL빌딩', 공동사업자: 원고)을 마쳤다.

(unit: Won, but less than 000 won)

3) On January 7, 2014, the head of Samsung District Tax Office notified the Plaintiff of KRW 119,901,00,000, which was part of the real estate acquisition fund for the said real estate leasing business, on October 27, 2011, and notified the Plaintiff of KRW 247,608,270, which was donated gift tax (including additional tax) on June 1, 2012. On June 1, 2012,CC filed a lawsuit seeking revocation of each disposition imposing gift tax. On December 11, 2015, the court dismissed the claim on the grounds thatCC cannot be deemed to have jointly operated the Plaintiff and HH on December 11, 2015 (this court’s judgment -5-Gu 2015Gu13213, evidence - evidence - evidence - evidence - evidence - evidence - evidence - evidence 1, 2019, and evidence - evidence 1, - 3, evidence - each of the entire evidence -

B. In light of the following facts and circumstances, it is reasonable to view that the Plaintiff, as a joint proprietor, operated the HH business with the Plaintiff, instead of jointly operating the HH business, in light of the following facts and circumstances, which can be seen by adding the facts and evidence as seen earlier, as well as the evidence and evidence, and the overall purport of the pleading.

① On August 12, 2008, after two or more years of the commencement date of HH from August 12, 2008,CC worked at the Agricultural and Forestry Livestock Quarantine Service located in the Incheon Public Port from November 7, 2010. On a daily basis, it worked at the 8th day during each week (at least average of 15 days, at least 50 hours per month), and worked at the end of each week. In light of the working details during the above period, it is difficult to deem that it actually was in charge of H’s sales and management, and overseas expansion-related business. “C” Since the title “LL” was actually performed by the title “H-related business operator”, “L building business operator who is irrelevant to the clothing business” and “L building”, it is difficult to conclude that the above title was directly related to H, based solely on the circumstances that the above title was directly related to H, it is difficult to conclude that it was in charge of the above business under a joint business or agreement with H.

2) The operating fund or operating fund after HH opening operations.

- Not only did it have been submitted to 6- physical investment, but also it is difficult to view that the above income was not consumed by family living expenses, etc. and invested by H’s opening business funds, etc., even in light of the amount of wage and salary income at the time when the public official was employed. On the other hand, as seen earlier, it is natural to deem that the Plaintiff invested in H because, even before the opening of HH, the clothes company similar thereto worked as a designer or directly operated the clothing company, and thus, it was naturally reasonable to deem that the income was invested in H.

④ There is no ground to deem that H’s income was distributed toCC.CC was subject to gift tax on the Plaintiff’s acquisition of real estate with the Plaintiff’s funds on the ground that it received a donation equivalent to the funds, and filed a lawsuit seeking revocation of gift tax imposition to the effect that the said funds were distributed as joint business operators. However, the first instance court rendered a judgment against the Plaintiff.

⑤CC did not have paid global income tax or value-added tax with respect to H’s business income, and the Plaintiff did not assert that it was engaged in joint business withCC up to the tax investigation related to the instant disposition, the legality prior to taxation, and the process of appeal. In addition, as to whether the standard expense rate for clothing and retail business can be applied or not.

1) Article 21(2) proviso of the former Value-Added Tax Act (Amended by Act No. 11873, Jun. 7, 2013); Article 69(1) of the former Enforcement Decree of the Value-Added Tax Act (Amended by Presidential Decree No. 24638, Jun. 28, 2013); Article 80(3) proviso of the Income Tax Act; Article 144(1), etc. -7 of the Enforcement Decree of the Income Tax Act

The estimation of revenue amount under each provision is not sufficient to be deemed legitimate. The content and method of estimation must be reasonable and reasonable to reflect the actual amount of revenue amount close to the truth in a specific case. In the event of controversy over the legitimacy of estimation method, the burden of proving rationality and validity lies on the tax authorities (see Supreme Court Decision 2008Du7687, Oct. 14, 2010). 2) Wholesale business is an industrial activity that resells the purchased goods or used goods to the general public without changing the goods for consumption. The retail business is an industrial activity that resells the goods for consumption to the general public without changing the goods for consumption. The retail business and retail business are divided depending on whom the other party to the sale is a person. It is reasonable to deem that the Plaintiff, based on the aforementioned evidence and evidence, Gap 5 through 7, evidence No. 11, and evidence No. 14, and evidence No. 2 of the total return of revenue amount after adding it to the above 10 items of revenue and retail business.

① The APM building occupied by H is a building in which clothing and retail stores have been located. The prime customers are clothing and retail stores. APM building is distinguishable from that of clothing and retail stores located in the vicinity of the building, using similar trade names, and is distinguishable from that of clothing and retail stores.

② H mainly from 21:00 to 05:00 the following day, it is difficult for ordinary consumers to visit, and does not have sufficient space, etc. where ordinary consumers can enjoy clothes in the place of business; H does not have any clothes retailers around the store.

- 8- The so-called ‘the so-called ‘satis' is stored with a pumsatum. Even if the clothes sold to ordinary consumers in the store are harsh in light of these business methods, the proportion seems to be insignificant.

③ The Plaintiff added a category retail business to the category of business on February 11, 2011, but there is no evidence to deem that any change has occurred in the existing business method, starting its business.

④ Even after February 11, 2011, the fact that “H category wholesale business” still remains a category of business category of H, deeming that the total amount of revenue omitted is all the revenue earned from the operation of the clothing retail business. In the course of the tax investigation, it is natural to see that the omission of cash sales on behalf of the Plaintiff is a revenue earned from the operation of the clothing retail business. However, in the course of the tax investigation, it is true thatCC prepared a written confirmation (Evidence No. 14) that the omission of cash sales on behalf of the Plaintiff is a retail revenue sold in cash to Chinese tourists and domestic consumers, but it is not a content that confirms the omission

⑤ The Plaintiff did not report value-added tax, etc. on the revenue omitted, and did not disclose the other party to the transaction. However, as long as the Plaintiff was the revenue amount omitted from the income return received in cash (if the Plaintiff reported value-added tax by clearly stating the transaction partner, there is no reason to make the correction of the estimated value-added tax) solely on the above facts alone, the total amount

3) Therefore, the part of the disposition imposing global income tax for the imposition of global income tax for the year 201, which exceeds KRW 353,314,519, calculated by applying the standard expense rate for the clothing wholesale business, is unlawful.

D. As to whether an additional tax for underreporting can be imposed on an illegal underreporting

- 9-

1) In a case where the return of a tax base by unlawful means, which is the requirement for an illegal underreporting additional tax as provided by Article 47-3(2)1 of the former Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 2011), is underreporting the tax base by an active act such as making it difficult to detect the taxation requirements on the national tax or forging false facts, it means the return attributable to the purpose of evading the tax, such as the avoidance of the progressive tax rate and the application of the provisions on loss brought forward (see Supreme Court Decision 2013Du12362, Nov. 28, 2013). In light of the following facts and circumstances, it is reasonable to view that the Plaintiff underreporting the tax base of each global income tax and value-added tax on the disposition of this case by unlawful or unjust means.

(1) As a result of the tax investigation, the Plaintiff has continuously omitted the report on the amount of income, such as cash sales, from the commencement of H.

② The Plaintiff sought for the correction of the estimation based on the premise that the content of the account book prepared by himself is different from the fact even in the case of legality prior to taxation.

③ In the course of the tax investigation, the Plaintiff did not submit a daily table, sales ledger, etc. to the effect that there was no existed. In light of H’s sales size, etc., it is difficult to readily understand that the Plaintiff did not entirely prepare such data.

④ In April 2009, the Defendant secured the account books on which the Plaintiff entered in the account book to receive revenue in April 2009. The sales amount exceeds KRW 400 million. Of them, the account amount is merely 15%. The Defendant failed to secure the above account books for other periods, and eventually, imposed tax by estimating only the amount corresponding to the amount of the Plaintiff’s account entry in the Plaintiff’s name.

- 10 -

4. Conclusion

The plaintiff's claim against the defendantMapo Tax Office is accepted within the scope of the above recognition, and the remainder of the claim and the plaintiff's claim against the defendant Jungpo Tax Office are dismissed for all reasons.