Cho-2015-China-5748 (2016.02.04)

Legal disposition in accordance with the substance over form principle

When converting from a simplified taxable person to a general taxable person, only the name of business operator has been changed in order to continue to enjoy the benefits of tax reduction and exemption as a simplified taxable person.

Article 14 of the Framework Act on National Taxes

Article 3 of the Value-Added Tax Act

2016Guhap306 Revocation of Disposition of Revocation of Additional Tax

Hasa

○ Head of tax office

2017.03.21

2017.04.18

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 value-added tax for the first term of 2010 against the Plaintiff on September 1, 2015 is revoked in all of KRW 0,00,000, value-added tax for the second term of 2010, value-added tax for the second term of 2010, value-added tax for the first term of 20,000,000, value-added tax for the second term of 2011, for the second term of 2012, for the first term of 20,000,000, for the second term of 20,000,000, for the second term of 203, 2013, and for the second term of 200,000,000 for the second term of 20 years in 2014.

1. Details of the disposition;

A. During the following period, the Plaintiff and the Plaintiff’s HabB registered the business as a representative ofCC (hereinafter referred to as the “instant business place”) located in △-ro 96, △-ro, △-gun, △△-gun, △△-gun.

B. Around May 2015, the Defendant conducted a tax investigation on the instant place of business, and imposed tax on the omitted amount of sales at the instant place of business from October 14, 2008 to March 7, 2013 (hereinafter “instant taxable period”) and deemed the actual business operator as the Plaintiff during the period from March 1, 2013 (hereinafter “instant taxable period”). On September 1, 2015, the Defendant issued a disposition to correct and notify value-added tax as stated in the Plaintiff’s claim (hereinafter “instant disposition”).

C. On November 30, 2015, the Plaintiff filed a petition with the Tax Tribunal for a trial against the instant disposition, but the petition was dismissed on February 4, 2016, and was served with the notice of dismissal on February 15, 2016.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff did not fully participate in the operation of the instant workplace during the taxable period of the instant case, and since HaB actually operated the instant workplace, the instant disposition is unlawful against the substance over form principle.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

1) The following facts are recognized in light of the statements in Eul evidence Nos. 3 through 17, the testimony of witnesses and the purport of the whole pleadings, etc.

A) From December 8, 2006, the Plaintiff, a simplified taxable person from May 1, 2007, when operating the instant place of business, opened the EE resting on May 1, 2007 and registered as a general taxable person. As a result, on July 1, 2007, the Plaintiff was converted to a general taxable person on July 1, 2007.

B) On October 10, 2008, the Plaintiff filed a report on business closure with respect to the instant place of business, and on October 14, 2008, filed an application for business registration again in the name of BB with respect to the instant place of business as the agent of BB.

C) The Plaintiff is the owner of the land and building in the instant place of business, and from December 24, 2009, the Plaintiff’s domicile was indicated as the same address as the domicile of the instant place of business from December 24, 2009 in the column of the registered titleholder’s domicile in each real estate registry. On the other hand, BB did not file a move-in report at a place other than FF or GG Si from October 26, 201 after the birth report was filed on October 27, 1981.

D) Around June 201, the Plaintiff, a manager of the Kabter at the instant place of business, filed a petition for occupational embezzlement of HaH (work from around December 2008 to September 30, 201). At the time of the investigation and trial, the Plaintiff himself asserted that Ha was the actual business operator of the instant place of business, and stated on the grounds that Ha was employed by HabH in the course of the investigation and trial, the relationship between the Plaintiff’s wife and HaH, the developments leading up to the Plaintiff’s awareness of Hah’s embezzlement, the method of managing Hah’s profits through Hah, and the method of preparing books.

E) On July 11, 2012, the Plaintiff filed a lawsuit against HaH, asserting that HaH embezzled embezzled the amount equivalent to KRW 00,000,000, that it would have to pay to the Plaintiff during the work at the instant workplace. In the instant lawsuit, KRW 00,00,000 was recognized as the embezzled amount of HaH’s embezzlement.

F) A tax investigation into the instant workplace was conducted, and the Plaintiff prepared a written confirmation on April 30, 2015, and the content thereof was that the Plaintiff directly operates the instant workplace from December 8, 2006 to December 8, 2006, and HaB did not take part in the operation of the instant workplace (the Plaintiff merely received the said written confirmation as it was accepted by the Plaintiff to believe that DoD, a tax inspector, would not pay taxes to the Plaintiff, but there is no evidence supporting its assertion).

2) If so, on July 1, 2007, the Plaintiff’s business classification for the instant place of business was converted from a simplified taxable person to a general taxable person, and the Plaintiff appears to have changed only the business registration of the instant place of business in the name of BB in order to continue to enjoy a taxable reduction or exemption as a simplified taxable person, and during the instant taxable period, it is deemed that the actual business operator of the instant place of

3) Therefore, the instant disposition is a lawful disposition that conforms to the principle of substantial taxation.

3. Conclusion

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