early 201st century 5073 ( November 05, 2012)

The exclusion period from the bonus disposal of income tax due to the embezzlement of corporate funds shall be five years;

Even though there was an intention to evade corporate tax, it is reasonable to view that it is difficult to view that it is difficult to avoid the comprehensive income tax on the bonus to be reverted to them, as it is anticipated that the income disposition by the tax authorities should also be made as a result of subsequent embezzlement or omission of sales on the embezzlement.

2013Guhap3917 Notice of Change in Amount of Income

AAA Industry Corporation

Head of Central Tax Office

April 26, 2013

June 14, 2013

1. On March 29, 2011 and April 8, 2011, the Defendant confirmed that each notice of change in the income amount stated in the separate sheet No. 1, which was issued to the Plaintiff, is all null and void.

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

Main Affairs

The same shall apply to the order.

Preliminary claim: On March 29, 2011 and April 8, 2011, the defendant's notice of change in each income amount is revoked.

1. Details of the disposition;

A. The Plaintiff was established on September 15, 1961, engaged in the manufacture, processing, and sales of synthetic fibres and synthetic fibers, and this BB on the Plaintiff’s corporate register was the Plaintiff’s representative director from February 28, 1997 to February 9, 2012, and this BB’s mother, respectively, was the Plaintiff’s director from October 30, 1993 to March 14, 201.

B. 1) From February 21, 201 to March 31, 2011, the Defendant made a non-data transaction product to an agent without issuing a tax invoice and sold the non-data transaction product to the agent in such a manner that the Plaintiff, in the course of investigating the tax offense against the Plaintiff, did not enter into a tax invoice by purchasing a national housing bond under the name of the Plaintiff, and that the Plaintiff, in the course of 2000 to 2004, produced textile products, such as Switzerland, etc., less than the actual production (referring to the production ratio of the product compared to the raw material inputs, and if reported to the National Tax Service by lowering the production ratio, the remaining production may be sold as non-data if reported to the National Tax Service) or that the sales generated in the production process would be discarded as inferior products. The Defendant confirmed that the Defendant made a non-data transaction product and sold it to the agent without issuing a tax invoice and received the price in cash, omitted sales, and then used it for personal purposes.

2) In addition, the director of the Seoul Regional Tax Office found that the result of the partial investigation of the corporate tax against the plaintiff, the plaintiff included expenses, personnel expenses, confidential expenses, etc. in the processing process, and the actual sales thereof as if it were discarded, and confirmed the fact that thisCC had used it personally, and notified the defendant thereof.

C. 1) Accordingly, the defendant corrected and notified the corporate tax for the business year of 2000 to 2004 with respect to the plaintiff's total income amount omitted in the business year of 2000 to 2004 (hereinafter referred to as "the income amount of this case"), while considering that the income amount of this case was out of the company as stated in the separate sheet No. 1, the person to whom the income amount of this case belongs, and the remaining 000 won (=00 won - 0000 won) were treated as each bonus to thisCC, who is to whom the plaintiff belongs, as stated in the separate sheet No. 1, and notified the changes in the income amount (hereinafter referred to as "each of the changes in the income amount of this case").

2) On May 201, according to the notice of the change in each of the instant income amounts, the Plaintiff fulfilled the obligation to withhold tax on KRW 000 (including resident tax) and global income tax of thisCC (including resident tax).

D. On October 21, 201, the Plaintiff dissatisfied with the notice of change in the amount of income issued to B by the income earner among the notice of change in the amount of income in the instant case, and filed a request for a trial with the Tax Tribunal on October 21, 201, but dismissed on November 5, 2012.

E. On the other hand, this B and thisCC was charged with violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) by Seoul Western District Court 201No755 on January 30, 2011 due to the facts constituting the crime described in the above paragraph (b). On December 20, 2012, the appellate court was found guilty in part of the Seoul High Court 2012No755, and the BB was sentenced to imprisonment of 4 years and 6 years in the previous 200 won, and thisCC was sentenced to imprisonment of 2 years and 000 won (the part of this judgment regarding this BB in the above judgment was currently pending in the final appeal by this Court and the Prosecutor by Supreme Court 2013Do658, and the part of thisCC was determined as it was by the withdrawal of this OO after appeal).

[Ground of recognition] The non-sured facts, Gap evidence 1, 2 (including natural disaster, hereinafter the same shall apply), and Eul evidence 1, 2, and 4, and the purport of the whole pleadings

2. Determination on this safety defense

The defendant, and the plaintiff filed the lawsuit in this case without going through a request for examination or a request for trial under Article 56 (2) of the Framework Act on National Taxes, which is the procedure before and after the income change in each of the instant reports on income amount, the plaintiff asserts that the part concerning the notice of change in income amount that the income earner in the instant lawsuit in this case was unlawful. Since the lawsuit seeking confirmation of nullity of administrative disposition can be filed without the need to go through a prior trial procedure, the part concerning the main claim in the instant lawsuit is legitimate. In addition, as seen below, the part concerning which the income earner in the notice of change in income amount in this case designated as thisCC was made after the lapse of the exclusion period for global income tax of 200 through 204 on the grounds that the part of the notice of change in income amount in this case was made after the lapse of the exclusion period for global income tax of 200 to 204 on thisCC, and that the part concerning the conjunctive claim in this case was unlawful due to the failure to go through the previous trial procedure. Therefore, the defendant'

3. Judgment as to the main claim

A. The plaintiffs' assertion

The plaintiff's obligation to withhold tax according to the notice of change in the income amount of this case is premised on this BB, and thisCC's obligation to pay income tax, and the income tax is extinguished by the Do of the exclusion period of imposition, the plaintiff is not obligated to withhold tax as a matter of course. Therefore, if this case's obligation to pay income tax of this CC has been extinguished by the Do of the exclusion period of imposition, it is null and void if the notification of change in the income amount of this case was made after this case's obligation to pay income tax of this 2,00 through 204 was extinguished by the Do of the exclusion period of imposition, and this case's obligation to pay income tax of this case's tax was reverted to this B, and this case's tax was disposed as bonus to this CC, and accordingly disposed of the tax amount of this case's tax, and the initial date of the exclusion period of imposition of income tax of this case's 2,002, Jun. 1, 2002, and 203

B. Relevant statutes

Attached Table 2 shall be as stated in the relevant statutes.

C. Determination

1) Relevant legal principles

Article 26-2 (1) 1 of the former Framework Act on National Taxes can be interpreted as "Fraud or other unlawful acts under Article 9-2 (1) 2 of the Punishment of Tax Evaders Act". "Fraud or other unlawful acts I" means a deceptive scheme or other active acts that make it impossible or considerably difficult to impose taxes, and the crime of tax evasion is committed by a person liable for tax payment, knowing that his act constitutes fraud or other unlawful acts, and that it would result in tax evasion (see Supreme Court Decision 204Do817, Jun. 29, 2006). In addition, if the person liable for tax payment receives 20 years from the date when he receives the notice of change in the income amount under the provisions of the Corporate Tax Act, it is difficult to view that the person concerned would have received 20 years from the date when he receives the notice of change in the income amount, and that the person concerned would have received 2 years from the date when he receives the notice of change in the income amount under the provisions of the former Framework Act, and that the person concerned would have already become unlawful.

Article 26-2 (1) 1 of the Framework Act on National Taxes provides that "if a taxpayer evades a national tax or obtains a refund or deduction by fraudulent or other unlawful means, it shall be ten years from the date on which the country can impose the national tax." In this case, if the national tax that has been evaded, refunded or deducted by unlawful means is corporate tax, it shall be ten years from the date on which the income tax or corporate tax can be imposed on the amount disposed of under Article 67 of the Corporate Tax Act." This is to improve and supplement some deficiencies in accordance with the existing Framework Act on National Taxes, as in the case of the corporate tax that has been evaded by unlawful means, and as in the case of the income tax that has been disposed of by unlawful means, it seems that the previous legislation has been made because it is generally difficult to recognize the intention of the tax evasion due to unlawful means."

A) In light of the above legal principles and the amendment history of Article 26-2(1)(d) of the Framework Act on National Taxes, and in this case to which the former Framework Act on National Taxes applies, the above provision should be interpreted in accordance with the above legal principles, and in accordance with the above facts, B and CC corporate tax.

Even though there was intention to evade, it is reasonable to view that it is difficult to view that the tax authority's disposition should be made in order to evade the comprehensive income tax on the bonus that it will belong to, as the fact of embezzlement or omission of sales in the future is revealed about their embezzlement, and it is difficult to view that there is a change depending on whether the ownership of the income amount in this case is clear, and whether the BB and thisCC are in the position to exercise overall control over the management of the whole AAA group as an affiliate of the Plaintiff. Accordingly, with respect to the global income tax of this case, the taxpayer under Article 26-2 (1) 1 of the former Framework Act on National Taxes cannot be deemed to fall under the "where the taxpayer evades, evades, and obtains a refund or deduction of national tax by fraud or other unlawful act," and the exclusion period for taxation shall be applied in accordance with Article 26-2 (1) 3 of the former Framework Act on National Taxes (Article 26-2 (2) 2 of the above Act, and there is no dispute as to whether the exclusion period for taxation should be applied).

B) Meanwhile, under Article 26-2(4) of the former Framework Act on National Taxes and Article 12-3(1)1 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 19893, Feb. 28, 2007), in the case of national taxes, such as global income tax, the date following the tax base and tax return deadline of the relevant national tax can be assessed on the date on which the tax base and tax return deadline can be assessed on the relevant national tax, and under Article 70(1) of the former Income Tax Act (amended by Act No. 7837, Dec. 31, 2005), the filing deadline of global income tax was until May 31 of the year following the taxable period, and the five-year exclusion period of imposition for global income tax of 200 through 204 was determined on June 1, 201; June 1, 2002; from June 1, 2003;

4) Judgment on the defendant's assertion

A) Defendant’s assertion

Considering the exclusion period of global income tax on B andCC as five years, compared to the omission of income tax by an individual entrepreneur in a similar situation, it would result in unfair discrimination compared to a juristic person and thus go against the principle of tax equality. In other words, in case where an individual entrepreneur has embezzled funds by omitting sales and appropriating processing expenses by fraudulent or other unlawful means, the exclusion period of imposition for global income tax is applied to the global income tax, while the representative of the juristic person is liable to pay global income tax, while the exclusion period of imposition for global income tax is applied to the representative’s global income tax in case where funds have been embezzled by omitting sales and appropriating processing expenses. Accordingly, the exclusion period of imposition for global income tax on thisCC and the exclusion period of imposition for global income tax should be recognized as ten years.

B)Judgment

The principle of tax equality, while the imposition and collection of taxes must be made fairly and equally in accordance with the taxpayer's ability to pay taxes, and it is not allowed to discriminate against or treat a specific taxpayer unfavorably without any reasonable reason, and the tax treatment different from the tax treatment for an individual entrepreneur, including income tax, and corporate tax, for a legal entity, and for a legal entity, where the representative of the legal entity has omitted the sales of the legal entity and appropriated the processing expenses, it constitutes a case of evading the corporate tax by fraud or other improper means, and thus the period of exclusion for imposition of 10 years is applied to the corporate tax, and this part of the defendant's

4. Conclusion

Then, the plaintiff's primary claim of this case is reasonable, and it is decided as per Disposition by admitting it.