early 2010Ch217 ( October 22, 2011)

The method of taxation by mixing the on-site investigation and the estimated investigation is not allowed.

The method of partial estimation is that a single taxable object is mixed with on-site investigation and the estimation investigation, and it is not permissible to determine the tax base. On the other hand, if there is no books and documentary evidence necessary for the on-site investigation, the disposition calculated by the total income amount of the global income tax taxable period

2011Guhap18755 global income and revocation of disposition

XX

Head of Sungbuk Tax Office

September 9, 2011

October 7, 2011

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposing KRW 399,957,880 on the Plaintiff on April 12, 2010 is revoked.

1. Details of the disposition;

The following facts may be acknowledged in full view of the purport of the entire pleadings, or all of the statements in Gap evidence Nos. 1, 2, and 1 and 2, although there is no dispute between the parties:

A. The Plaintiff is an individual entrepreneur who is engaged in the housing construction and sales business under the mutual name of Pyeongtaek 000 from Pyeongtaek 00.

B. The Plaintiff, during the tax period of global income tax in 2008, sold to 3,852,410,850 won each of the multi-family houses listed in the separate sheet Nos. 1 through 8 of the multi-family houses in the separate sheet Nos. 1 through 8 of the multi-family houses (hereinafter referred to as “the multi-family houses in this case”) during the tax period of global income tax, the Plaintiff calculated only the total sales amount of the multi-family houses listed in subparagraphs 1 through 5 of this case as the revenue amount and reported and paid the comprehensive income tax in 2008.

C. As a result of the tax investigation by the head of Pyeongtaek-si Tax Office on the Plaintiff, it was confirmed that the total sales amount of the apartment houses and multi-family houses of this case (3,852,410,850 won - 1,948,320,810 won) was omitted at the time of filing and paying the above global income tax return.

D. Accordingly, on April 12, 2010, the Defendant estimated 876,825,966 won, which is the amount calculated by multiplying the amount of income calculated under the simple expense rate as indicated below by 2.6, which is the multiple factor stipulated by the Commissioner of the National Tax Service, as the amount of income of the Plaintiff’s total income in the global income tax taxable period in 2008 (hereinafter “instant disposition”), and notified the Plaintiff of 39,957,880 won of global income tax for the year 2008 (hereinafter “instant disposition”).

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) An illegal disposition that violates the principle of partial estimation.

According to the principle of basis taxation prescribed in Article 16 of the Framework Act on National Taxes, in cases where any omission or error exists in the return of income tax or any omission or omission in the entry, the amount of income related to the first or fifth multi-family houses of this case which is normally reported by the uniform account book in calculating the amount of income in the taxable period of global income tax in 2008, shall be calculated by the method of a field investigation, and the amount of income related to the six or eight multi-family houses of this case in which the report is omitted by the method of a field investigation, shall be calculated by the method of a estimate investigation. Accordingly, the Defendant’s disposition of this case, calculated by

(2) Illegal disposition that applies simple expense rate

Simple expense rate can only be applied to business operators whose revenue amount in the pertinent taxable period is less than a certain amount, and even if the revenue amount in the global income tax taxable period in 2008 is not a simple expense rate of 3.8 billion won, the defendant calculated the plaintiff's estimated income amount by applying simple expense rate. Accordingly, the disposition of this case must be revoked.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

(1) Judgment on the Plaintiff’s first argument

Since determining the tax base by mixing a single tax object with on-site investigation and a separate investigation by estimation cannot be deemed as a taxation method recognized by relevant Acts and subordinate statutes, such as the Income Tax Act and the Value-Added Tax Act, it cannot be deemed as a means of estimation for revenue partially omitted, and it is not permissible to calculate and add the tax base by the method of on-site investigation with respect to revenue reported (see Supreme Court Decision 2005Du14561, Jul. 26, 2007). The method of partial estimation of the Plaintiff’s assertion is not permissible as it determines the tax base by mixing a single tax object with on-site investigation and a separate investigation by estimation, and it cannot be deemed that there is no books and documentary evidence necessary for the on-site investigation, and there is no illegality in the disposition of this case by the Defendant calculated by the method of estimation with respect to the entire

(2) Judgment on the second argument by the Plaintiff

The Enforcement Decree of the Income Tax Act amended by Presidential Decree No. 17032, Dec. 29, 2000 has abolished the standard income rate system, which is the method of surveying the previous income amount, introduced the standard expense rate system and the simple expense rate system. In order to implement the standard expense rate system, in order to ease the business operator's income burden significantly increased over a short period compared to the previous standard income rate system, and to ensure that the standard expense system is smoothly settled, the standard expense system established the sunset provision that makes it possible to determine the amount calculated by multiplying the income amount calculated by the standard expense rate [income amount - (income amount ? simple expense rate] by the rate determined by the Commissioner of the National Tax Service, by the rate determined by the Commissioner of the National Tax Service, if the income amount calculated by the standard expense rate is above the amount calculated by multiplying by the rate determined by the Commissioner of the National Tax Service. However, Article 143 (3) 1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 21301, Feb. 4, 2009).

If the statement in the evidence No. 2 and the statement in the statement in the evidence No. 2, the plaintiff who applied the standard expense rate was 1,781,885,364 in the taxable period of global income tax in 2008, while the amount calculated by multiplying the income amount calculated under the simple expense rate by 2.6, which is the rate determined by the Commissioner of the National Tax Service, is 876,825,966, and in this case, where the amount calculated by the standard expense rate exceeds the amount calculated by multiplying the income amount calculated by the standard expense rate by the rate determined by the Commissioner of the National Tax Service under the simple expense rate rate, the disposition of this case by the defendant who estimated the amount of income for the taxable period of global income tax in 2008 according to the method prescribed by the proviso of Article 143(3)1 of the former Enforcement Decree of the Income Tax Act is legitimate. Accordingly,

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.