Since the place where alcoholic beverages are sold with dancing stage, it constitutes a taxable entertainment place, and the employee's embezzlement income is included in the tax base.

Since customers have a stage for dancing and sell alcoholic beverages, they are deemed taxable entertainment places subject to the imposition of individual consumption tax by deeming them as taxable entertainment places, and even if they were unaware of the embezzlement of employees, the amount of embezzlement shall be included in the income amount to be reported.

Articles 1 and 7 of the Value-Added Tax Act (Supply of Services)

Article 1 of the Individual Consumption Tax Act (Taxable Object and Tax Rate)

2015Guhap68208 Disposition of Disposition of Imposition of Value-Added Tax, etc.

○○ Kim et al.

Mapo Tax Office et al.

March 18, 2016

April 08, 2016

1. The Defendants’ payment of the value-added tax and global income tax as stated in the separate sheet to the Plaintiffs

The portion exceeding the stated amount of "political tax" shall be revoked.

2. The plaintiffs' remaining claims are dismissed.

3. Of the costs of lawsuit, 4/5 are assessed against the Plaintiffs, and the remainder is assessed against the Defendants.

Cheong-gu Office

All of the measures taken by the Defendants against the Plaintiffs shall be revoked.

1. Details of the disposition;

The Plaintiffs reported to a general restaurant and operated each workplace, but the employees embezzled the price by selling forged admission tickets.

The Defendants impose value-added tax and global income tax (including additional tax) on the Plaintiffs on the grounds that the proceeds embezzled by the employees of the Plaintiffs were omitted from the sales amount, as shown in the attached Form, and each of the Plaintiffs’ respective companies.

The head of the business considered the taxable pleasure place as stipulated in the Individual Consumption Tax Act and imposed the individual consumption tax (including the additional tax) (hereinafter referred to as "each disposition of this case") as shown in the attached Form.

[Ground for Recognition] Unsatisfy, Gap evidence 1 to 9 (including a tentative number; hereinafter the same shall apply),

The purport of all pleadings

2. Whether each of the dispositions of this case is legitimate

A. Disposition of imposition of value-added tax and global income tax in this case

1) The plaintiffs' assertion

The amount that employees received in return for a forged admission ticket is not attributed to the plaintiffs.

The Plaintiffs are victims of embezzlement and embezzlement of employees, and are provided for in the Value-Added Tax Act.

There is no supply of services. The plaintiffs file a complaint against the employees for embezzlement, and apply for a payment order.

The plaintiffs are not legal experts.

The Plaintiffs are deemed to have justifiable grounds for failure to perform tax liability, inasmuch as the employees could not know the sales price of forged admission tickets received.

(ii) the facts of recognition

The employees of the Plaintiffs sold admission tickets to those who want to enter the instant workplace, and engaged in the business of collecting, keeping, and depositing sales proceeds. From January 10, 201 to January 14, 201, they embezzled sales proceeds after forging admission tickets.

In January 2013, the Seoul Regional Tax Office confirmed that one mother among the plaintiffs' employees purchased high-priced houses, and the employee's embezzlement was conducted. In the process, the employee's embezzlement was revealed.

On February 6, 2013, the Plaintiffs accused the employees of the Plaintiffs against embezzlement, and the employees of the Plaintiffs convicted on March 6, 2014.

Upon receipt of the judgment (Seoul Western District Court 2013Gohap417). Employees agreed to repay most of the profits acquired by committing a crime in the course of criminal investigation against embezzlement to the Plaintiffs who are victims. Plaintiffs Kim○, Seo-○, and Kim○○ applied for a payment order against the employees for the return of each embezzlement. On April 8, 2014, the payment order ordering the payment of the amount equivalent to embezzlement was finalized (Seoul Western District Court 2014 tea628).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 8 through 12, 19, Eul evidence No. 9, the purport of the whole pleadings

2) Determination

A) Imposition of value-added tax and global income tax

According to the above facts of recognition, the Plaintiffs filed a complaint against the employees in the crime of embezzlement, received most of the damages from embezzlement from the employees, and received a payment order claiming the return of embezzlement money against the employees. In light of these circumstances, the sales price of forged admission tickets may be deemed to have been reverted to the Plaintiffs. Furthermore, the Plaintiffs may be deemed to have entrusted the employees with the authority to admit visitors during business hours and collect the admission fee. In addition, the Plaintiffs cannot be deemed to have paid admission fees to such employees and to have used the place of business without permission.

(1) The Plaintiff asserts that, as in the instant case, the Plaintiff could not enter the place of business with a forged admission ticket, and that such position is an unauthorized position. However, as seen earlier, customers entered the place of business after paying admission fees to employees delegated by the Plaintiffs with the authority to collect admission fees, and since the sales proceeds accrue to the Plaintiffs, customers may be deemed to have paid the service fees and received the service from the Plaintiffs.

Therefore, the disposition imposing the value-added tax and the global income tax on the premise that the sales price received from the customers who purchased the forged admission ticket belongs to the plaintiffs is legitimate.

B) Additional tax

In addition to the purport of the entire pleadings in each statement of evidence Nos. 8 through 10, the plaintiffs listen to the opinion that there are many cases of embezzlement of part of the price of admission tickets sold in cash by employees, and the fact that the employees worked in circularly to monitor each other when they move every day. Meanwhile, the employees’ embezzlement was revealed in the course of a tax investigation against the plaintiffs on or around January 2013, and the plaintiffs filed a complaint against the employees for embezzlement on or around February 6, 2013.

The Plaintiffs recognized that employees may embezzled part of the sales price of admission tickets, and provided their employees to prevent such embezzlement. Nevertheless, in the course of the tax investigation in January 2013, the Plaintiffs were in office.

As the principal’s account was disclosed, the employee’s embezzlement was revealed. Before February 6, 2013, when the Plaintiffs filed a complaint, it is difficult to view that the Plaintiffs could have known of the embezzlement of the proceeds of sale, the Plaintiffs could have justifiable grounds to refuse to report the sales of forged admission tickets as sales, and thereafter, it cannot be deemed that there was justifiable grounds to deem that the Plaintiffs could have reported the sales and related tax amount (the Defendant is the result of neglecting the management and supervision of the employees within the scope of the Plaintiffs’ control, and thus, it cannot be deemed that there was a justifiable reason to exempt additional tax. However, as seen above, the Plaintiffs could not easily find the facts of embezzlement in light of the fact that the employees’ embezzlement constituted a work system to prevent the embezzlement, and the employees’ embezzlement was committed for a long time).

Therefore, on or before February 6, 2013, additional tax on the instant value-added tax and global income tax.

This part can be recognized as a "justifiable cause" for failure to meet the tax liability.

The disposition of imposition is illegal (the legitimate tax amount under this shall be as shown in the attached Form.).

B. Whether the imposition of the individual consumption tax of this case is lawful

1) The plaintiffs' assertion

Each place of business of this case is a sound cultural space and a tourist destination, average per person of visitors.

The amount of consumption is only 30,000 won and is irrelevant to the suppression of the act of privacy under the Individual Consumption Tax Act. In addition, it does not constitute "business of cooking and selling food while selling alcoholic beverages to the taxable pleasure place, which is the requirement of the taxable pleasure place, because no kitchen is installed in each business place in this case

(ii) the facts of recognition

Each of the instant places of business shall have stage equipment, sound and reflective facilities, special lighting facilities, etc., and customers may drink alcohol or dance in their business hours.

On December 9, 2009, Plaintiff ○○○ and Do○○ were subjected to a business political disposition by the head of Mapo-gu Seoul Metropolitan Government Office on the ground that the instant business establishment violated the Food Sanitation Act by installing a dance hall (a dance hall in which the fingers can dance) under the Enforcement Decree of the Food Sanitation Act. The said Plaintiffs dissatisfied with such a disposition and sought revocation of the disposition of business suspension, but were dismissed on May 13, 2010, and became final and conclusive around that time (Seoul Administrative Court Decision 2009Guhap54901).

From December 6, 2011 to July 21, 2012, Plaintiff ○○○ operated an entertainment drinking house business without obtaining a license for an entertainment drinking house business, and installing lighting facilities, sound facilities, etc. at a place of business, and providing drinking to unspecified customers who have found their place of business, and having them dance in music (Seoul Western District Court Decision 2012Da1394). As such, Plaintiff ○○ was punished as a violation of the Food Sanitation Act.

[Ground of recognition] Facts without dispute, Gap evidence 8 through 10, Eul evidence 13 through 15, each of the images of Eul evidence 16 to 18, and the purport of whole pleadings

3) Determination

According to Article 1(4) and (11) of the Individual Consumption Tax Act and Article 2(3) of the Enforcement Decree of the same Act, individual consumption tax shall be imposed on entertainment and eating in places of business (including cases where permission is not obtained in accordance with the relevant Acts and subordinate statutes) which are practically similar to entertainment and eating in accordance with the Enforcement Decree of the Food Sanitation Act. Article 21(8)(d) of the Enforcement Decree of the Food Sanitation Act provides that "business of cooking and selling alcoholic beverages is a business of cooking and selling alcoholic beverages, employing entertainment workers or installing entertainment facilities, and customers are allowed to singing or dance."

According to the above facts, the workplace of this case provides stage equipment, sound and reflective facilities, special lighting facilities, etc. so that customers can enjoy dancing while drinking alcoholic beverages, and the plaintiffs were subject to a disposition of business suspension or fine due to the violation of the Food Sanitation Act. In light of these circumstances, business activities conducted at each workplace of this case constitute entertainment and drinking subject to individual consumption tax (the Plaintiff asserted at the Tax Tribunal that the Plaintiff reported it as a general restaurant under the Food Sanitation Act to sell beverages and alcoholic beverages because it is impossible to operate the performance and viewing profit in the workplace of this case). In light of this, the Plaintiff asserted that each workplace of this case does not constitute entertainment business due to the lack of cooking in each workplace of this case, but the business of cooking and selling alcoholic beverages can be included not only in the case of cooking and selling alcoholic beverages but also in the case of selling alcoholic beverages, which does not constitute entertainment and eating business subject to individual consumption tax, and thus, it does not change the amount of entertainment and drinking tax per person, which is subject to individual consumption tax.

Therefore, the imposition of the individual consumption tax of this case is lawful.

3. Conclusion

Therefore, the part of the plaintiffs' additional tax amount among the plaintiffs' claims of this case is justified and accepted within the scope, and the remainder is dismissed as it is without merit.