Plaintiff (Law Firm Sejong, Attorneys Im Jae Jae-hoon et al., Counsel for the plaintiff-appellant)

Daejeon Head of the District Tax Office

June 1, 2017

Daejeon District Court Decision 2015Guhap10536 Decided December 15, 2016

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance is revoked. On November 3, 2014, the defendant's rejection disposition against the plaintiff at KRW 286,767,086 against the plaintiff shall be revoked. The defendant's rejection disposition against the plaintiff at KRW 1,573,862 shall be revoked.

1. Quotation of judgment of the first instance;

The court's reasoning for this case is that the plaintiff's second instance court's 4th instance court's 6th instance court's 6th instance court's 7th instance court's 6th instance court's 7th instance court's 6th instance court's 1th instance court's 6th instance court's 1th instance court's 6th instance court's 1th instance court's 6th instance court's 1th instance court's 6th instance court's 1th instance court's 6th instance court's 1th instance court's 6th instance court's 1th instance court's 6th instance court's 1th instance court's 6th instance court's 6th instance court's 1th instance court's 6th instance court's 1th instance court's 6th instance court's 6th instance court's 100 million won's 6th instance court's 1th instance court's 6th instance court's 1th court's 6th instance'

2. Parts to be dried;

3) In full view of the contents, text, and structure of Article 21(1)17, 19, and 37(2) of the former Income Tax Act (amended by Act No. 11611, Jan. 1, 2013; hereinafter “former Income Tax Act”) and Article 87 subparag. 1(b) of the former Enforcement Decree of Income Tax Act (amended by Presidential Decree No. 24315, Jan. 16, 2013); other income under each item of subparagraph 19 should be classified into “price for provision of personal services” or “price for provision of personal services” (see, e.g., Article 17 subparag. 19 of the former Income Tax Act) and “where income from provision of services exceeds the nature of consideration for provision of services, it is reasonable to view that the amount of consideration for provision of services under subparagraphs 17 and 17 of the former Income Tax Act should be included in “the amount of remuneration for provision of services” under subparagraph 2 of the same Article.

In light of the above legal principles, it is reasonable to view the issue amount in this case as falling under the “compensation” under subparagraph 17 among other income under Article 21(1) of the former Income Tax Act. The reasons are as follows.

A) The instant agreement is not an agreement on the payment of remuneration that the company ordinarily pays to directors in return for the performance of duties while in office, but has the character of an agreement on successful compensation according to the outcome of the instant project.

B) After the appointment of the director of △△△△△△, the Plaintiff seems to have been in charge of the authorization and permission of the instant project. After the approval of the project, the Plaintiff would have made considerable efforts for the success of the instant project by holding office as the head of the golf course construction headquarters and taking charge of overall business affairs. Accordingly, the △△△△△△△ may be deemed to have agreed on the payment of the initial amount

C) The Plaintiff asserts that “The key issue amount is not the wage but the other income, and the key amount is at least the “temporary human service cost” under Article 21(1)19 of the former Income Tax Act, and thus, necessary expenses of 80% should be recognized.”

However, since the original amount of this case is more large than the objective value of the service provided by the plaintiff, it seems that the nature of the honorarium for the plaintiff who made efforts for the success of the business of this case is more strong than the price of the service provided by the plaintiff (as a result of the criminal judgment (No. 9-1 and No. 2) related to the business of this case, the plaintiff was voluntarily committed for the success of the business of this case by some illegal days), and the plaintiff's career, etc. who worked for a long time in the construction of the construction of the company at the location of the place of residence where the plaintiff was involved in the business of this case, rather than because the plaintiff had any professional knowledge or special function related to the promotion of the business of this case, it is difficult to accept the plaintiff's assertion.

D) Meanwhile, even if the Plaintiff won the prior civil suit seeking the payment of the original amount, the appellate court could have sufficiently disputed the existence and scope of the claim between the parties (refer to the evidence Nos. 2 and 3-1 of the evidence Nos. 3). Accordingly, during the conciliation procedure, the Plaintiff and the other parties to the instant agreement participated in the conciliation intervenor and received total of KRW 3 billion from the △△△△△△△△△△, and the above five persons received total of KRW 3 billion from the conciliation intervenor and received it in proportional distribution. Instead, the Plaintiff, Nonparty 1 and Nonparty 2 renounced all other claims, and agreed to cooperate in the smooth resolution of the provisional seizure and the compulsory execution suspension case under mutual agreement. According to this, the issue amount at issue falls under Article 17(1)1 of the Income Tax Act where the Plaintiff received the compensation amount under the conditions that the Plaintiff waives his claim for the remaining part of the civil procedure.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed as it is groundless.

[Attachment Omission]

The judge’s seat (Presiding Judge) Ma-hee Park Jong-hee