Case Number of the previous trial
Cho Jae-2015-China-2387 ( December 10, 2015)
Title
Where it is deemed that the tax burden of a corporation has been unjustly reduced due to transactions with a person with a special relationship, it shall be subject to rejection of wrongful calculation.
Summary
Where it is deemed that the tax burden of a corporation has been unjustly reduced due to transactions with a person with a special relationship, it shall be subject to rejection of wrongful calculation.
Related statutes
Article 52 of the Corporate Tax Act: Denial of Wrongful Calculation
Cases
2016Guhap514 Global Income and Revocation of Disposition
Plaintiff
AA
Defendant
Head of △ District Office
Conclusion of Pleadings
November 25, 2016
Imposition of Judgment
December 23, 2016
Text
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The Defendant’s disposition of imposition of KRW 00,000,000 on January 2, 2014 against the Plaintiff was revoked.
Reasons
1. Details of the disposition;
A. From July 22, 2010 to September 17, 2010, the Director of the △△ Regional Tax Office conducted a corporate integration investigation with respect to AAAAAA (hereinafter “instant corporation”) andCC (hereinafter “CCA”) and confirmed that the instant corporation and the non-party corporation have appropriated loans to the Plaintiff as listed in the following table on their books, and then appropriated the amount of interest recognized in the business year from 2006 to 2009 as non-business income, and then included it as non-business income in the calculation of the income amount as a bonus to the Plaintiff, and notified the changes in the income amount to each of the above corporations.
[Voting] (Units:cheon Won)
Classification
Business year
206
2007
208
209
Total
The Corporation of this case
Loan Balance
0,000,000
00,000
0,000,000
0,000,000
Recognition Interest
00,000
00,000
00,000
00,000
00,000
Non-Party Corporation
Loan Balance
0,000,000
0,000,000
0,000,000
0,000,000
Recognition Interest
00,000
00,000
00,000
00,000
0,000,000
B. On May 201, the head of the SS Tax Office: (a) after the on-site verification of the non-party corporation on the account book, deemed that the actual owner of KRW 0,00,000,000, which was appropriated as a loan to the plaintiff on the account book by the non-party corporation, was considered as a bonus for DD; (b) accordingly, the head of the S Tax Office revoked the notification of the change in the income amount in the business year from 2006 to 2008
C. On January 6, 2014, the Defendant notified the Plaintiff of the change in the amount of income in the business year of 2009 (the instant corporation’s KRW 000,000,000,000, and the non-party corporation’s KRW 000,000), which was first notified by the commissioner of the regional tax office of △△ (the Defendant issued the notice of the change in the amount of income in the business year of 2009.
D. On December 10, 2015, the Tax Tribunal rejected the Plaintiff’s appeal. On December 10, 2015, the tax Tribunal reduced the comprehensive income tax for 2009 (the disposition of this case, where the remaining reduction was made) by subtracting the notification amount of change in the income amount of the non-party corporation from the Plaintiff’s income by recognizing the actual reversion of the amount leased by the non-party corporation as the Plaintiff.
[Ground of recognition] Facts without dispute, Gap's statements in Gap's 3, 4, 5, and 6 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings
2. Whether the instant disposition is lawful
A. The plaintiff's assertion
Under Article 52 of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter the same) in order to include the interest rate recognized as the loan in the calculation of the income amount of each business year of the corporation and dispose of it as the income of the person to whom it reverts, the corporation and the other party to the act must be the specially related person provided for in Article 87 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 23589, Feb. 2, 2012; hereinafter the same shall apply). However, the Plaintiff merely repaid the loan to D, which is the corporation of this case or the person to whom it actually operated, and did not constitute a specially related person
B. Relevant statutes
The entries in the attached Table-related statutes are as follows.
C. Determination
1) Where it is deemed that an act or calculation of the income amount of a domestic corporation has unjustly reduced the tax burden on the corporation’s income through transactions with a specially related person, the head of the competent district tax office, etc. may calculate the income amount for each business year of the corporation, regardless of the act or calculation of the income amount of the corporation (Article 52 of the former Corporate Tax Act). In revising the corporate tax base, the amount included in the calculation of the income amount may be disposed of as bonus, etc. (Article 67 of the former Corporate Tax Act). A person with a special relationship is deemed to exercise de facto influence on the corporation’s management, such as exercising the right to appoint and dismiss officers or determining the business policy, a person who instructs the director to conduct the business by using his own influence on the company, a person who is not a director, a person who directly performs the business in the name of a director, and a relative thereof (Article 87(1)1 of the former Enforcement Decree of the Corporate Tax Act
2) In light of the following circumstances, it is reasonable to deem that the Plaintiff is a person who actually runs the instant company with DD and is a specially related person, and thus, it is reasonable to deem that the Defendant disposed of the amount of the loan recognized and equivalent as a bonus to the Plaintiff as a bonus to the Plaintiff.
① The Plaintiff seems to have operated a real estate development project by operating AAA, BB2, KK, KK2, and KK3 as well as DD before the establishment of the instant legal entity.
② The Plaintiff, along with DD, LL, and U.U., established the instant legal entity that operates a real estate development project with the acquisition of YY Co., Ltd., and served as the owner or president of the instant legal entity.
[Plaintiffs sent the certificate of content to DD, LL, U.U. on December 10, 2008, and acknowledged that the actual chairperson is the owner of a business start-up business (Evidence 6)].
③ The Plaintiff was registered as the representative director of the instant corporation from March 24, 2005 to April 14, 2005. Around that time, the Plaintiff acquired and transferred 10,000 shares of the said corporation. Even after the resignation of the representative director, the Plaintiff prepared and received in advance the minutes of a temporary general meeting of shareholders concerning the change of the officer from the LL registered as the representative director for the purpose of continuously exercising the right of management.
④ 이 사건 법인이 원고의 대여금으로 계상한 돈은 그 무렵 원고 명의의 △△은행 계좌로 이체되었고, 이후 원고가 소지하던 ○○은행, ◊◊ 계좌로 재이체되어 원고의 소득세, 운전기사 월급, 전화요금 등 개인적인 용도로 사용되었다. 또한 원고는 이 사건 법인의 자금으로 자녀 등의 결혼비용, 유학비용, 미국 내 주택구입비용을 충당하였다.
⑤ The Plaintiff used the position of the Chairperson, had an office located in the place of business of the instant legal entity, worked 1 to 2 times a week, and used the corporate vehicle operated by the engineer at the time of his attendance.
(6) The Plaintiff asserted that the Plaintiff received a certain amount of monthly return from the instant corporation because it was unable to settle the profits accrued from real estate development projects through DD, but there is no objective data to recognize the Plaintiff’s assertion (it cannot be deemed as a loan to the instant corporation even if the Plaintiff’s assertion is acknowledged).
3. Conclusion
Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.