early 201st century 2030 ( December 03, 2012)

Whether the embezzlement part which was found not guilty in the criminal judgment is recognized as deductible expenses under the Corporate Tax Act

The reason for innocence of a criminal case is that it is difficult to recognize the intention of unlawful acquisition, and in this case, it cannot be recognized as losses under the Corporate Tax Act because the plaintiff has the burden of proving the expenses incurred in connection with the business and there is no evidence to prove it.

Article 19 (Scope of Losses)

2013Guhap6411 The revocation of the disposition of revocation of change in income amount

AAA, Inc.

The Director of Gangnam District Office

October 10, 2013

December 12, 2013

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

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1. Details of the disposition;

A. The Seoul District Tax Service investigated the corporate tax of the Plaintiff from August 31, 2010 to February 11, 201, and notified the Defendant that the representative director UOB and KimCC should dispose of the amount appropriated as a bonus from January 1, 200 to December 31, 2009, where there is no evidence related to the business among the equipment from January 1, 2005 to December 31, 2009.

B. On February 11, 1201, the Defendant issued a notice of change in the amount of income (hereinafter in this case’s notice of change in the amount of income) and a disposition of change in corporate tax (hereinafter in this case’s correction disposition) as shown in the attached Table 1 B as shown in the attached Table 1 B, and filed a complaint against the Plaintiff as a violation of the Punishment of Tax Evaders Act, etc. on March 8, 2011, and C. The Plaintiff appealed to the Tax Tribunal on May 6, 2011, but was dismissed on December 3, 2012.

[Ground of recognition] Each entry of Gap evidence Nos. 1, 2, 6, 7 through 12, Eul evidence Nos. 1 (including branch numbers; hereinafter the same shall apply), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The portion of overseas non-equipment

From January 1, 2005 to December 31, 2009, the UB-related overseas exit equipment (hereinafter referred to as the "overseas exit equipment") among the overseas exit equipment shall be recognized as losses because it is not exempt from the obligation to receive the eligibility verification in accordance with the special provision on the receipt of the disbursement document (Article 116 of the Corporate Tax Act, Article 158 of the Enforcement Decree of the same Act, and Article 79 of the Enforcement Rule). Further, in addition, the burden of proof of corporation 4-02 of the common rule of the Corporate Tax Act, and the amount equivalent to the expenses prescribed by the rules of the Plaintiff Company's company's company's company's company's company's company's company's company's company's company's company's company's company's company's

2) Payment Fees Parts

“The Defendant was acquitted of tax evasion on September 12, 2006, on the ground that the OOOOO of the commission fee (hereinafter “the instant commission”) out of the costs of non-deductible expenses was aimed at supporting the Plaintiff’s agency’s business activities in the relevant criminal judgment. Accordingly, this part must be recognized as costs.”

Attached Form. The entry in the relevant statutes is as follows.

C. Determination

1) Part of the overseas exit equipment

A) In the administrative litigation seeking the revocation of a taxation disposition on the grounds of illegality, in principle, the tax authority bears the burden of proof with respect to the legality of the disposition and the existence of the taxation requirements. However, as to the existence of special circumstances in light of the empirical rule, the taxpayer has the burden of proof or proof with respect to the amount of expenses to be included in the deductible expenses, which serve as the basis for determining the income amount of corporate tax, in principle, the tax authority bears the burden of proof with respect to the amount of expenses to be included in the deductible expenses, which are the basis for determining the corporate tax base. However, inasmuch as there is a lack of proof with respect to the specific items of expenses, or there is a case where the taxpayer bears the burden of proof with regard to the taxpayer taking into account the equity of the parties concerned, it is argued that the taxpayer is not a real expense, and that the taxpayer has the burden of proof with regard to the purpose of use of the expenses claimed by the tax authority and the other party to the payment. As long as the taxpayer asserts that there was a fact of other than the same amount as stated in the report, it needs to prove in the taxpayer’s possible presentation of the account and evidence (see, 2006.

B) If Eul evidence Nos. 2 and 3 is added to the purport of the entire pleadings, the defendant considered that the part where the plaintiff's operating place and accommodation days do not coincide with the result of the entry into and departure from Korea (import, entry) and that the part where there is no supporting materials such as credit card receipts and local receipts, etc. paid at the overseas business place is considered to be "processing," and that the details of the overseas departure equipment related to the UB from 2005 to 2009 were excluded from deductible expenses. ② Meanwhile, the UB made a global income tax return for the DD engineering from 2005 to 2009, the UB included 58 OB equipment for the Japanese departure from 2005 to 209 to 2009 to OB equipment for the aggregate of earned income from 2005 to 2009 to OB equipment for the plaintiff's domestic income was counted to OB at the actual expense of the plaintiff.

In regard to the plaintiff's assertion that overseas departure equipment related to the UB, which the plaintiff calculated, is related to the plaintiff's business, it is not sufficient to recognize only the entry of Gap evidence No. 3 related to immigration, and there is no other evidence to acknowledge it.

C) Article 116(1) of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter the same shall apply) provides that a corporation shall prepare or receive documentary evidence for all business-related transactions in each business year and keep them for five years from the expiration of the time limit for report under Article 60. The main sentence of Article 116(2) of the former Corporate Tax Act provides that where a corporation receives goods or services from a business operator prescribed by the Presidential Decree in cases of paragraph (1) and receives the price for such goods or services, it shall not be deemed that a credit card sales slip under the Specialized Credit Financial Business Act (including documentary evidence where such goods or services are traded using those similar to credit cards as prescribed by the Presidential Decree) and Article 121 of the Value-Added Tax Act and Article 163 of the Income Tax Act are not provided with documentary evidence for the use of goods or services as deductible expenses. However, even if it is difficult for the Plaintiff to receive documentary evidence from farmers or fishermen, it shall not be provided with such documentary evidence.

In relation to the burden of proof of a corporation, common rules 4-02 of the Corporate Tax Act provides that a corporation liable to pay corporate tax shall prove that it is legitimate to vest in all transactions in the corporation based on transaction evidence, payment rules, objective data such as the company's bylaws, etc. Provided, That this shall not apply to expenses within the scope deemed inevitable in view of social common sense and expenditures within the scope recognized in view of internal control functions of the corporation concerned. In relation to the "standard for inclusion of overseas travel expenses in deductible expenses", common rules 19-1922 of the Corporate Tax Act provides that travel expenses paid to officers or employees in connection with overseas travel of the corporation shall be paid to the officers or employees of the corporation in principle in excess of the amount deemed necessary for the performance of functions of the corporation's business and travel expenses paid to them in connection with overseas travel expenses that are not recognized as necessary for the performance of functions of the corporation. However, where such overseas travel is deemed clearly necessary for the corporation's business through a little period of time, the total amount of expenses paid for such overseas travel shall be deemed as deductible expenses of the corporation.

However, the Plaintiff may not be deemed to have appropriated the equipment reasonably through appropriate internal procedures, by appropriating the equipment for withdrawal in relation to the UB, the representative director, and including the portion not for actual business trip, and even if the destination or the purpose of business trip is unclear, the Plaintiff cannot be deemed to have appropriated the equipment reasonably through appropriate internal procedures. The provisions of each of the above general provisions are intended to relieve the burden of proof if a corporation appropriates the equipment for the purpose of business in accordance with the internal provisions related to the purpose of business, and it is not intended to recognize it as losses even if it is not verified whether it is related to the purpose of business, such as the Plaintiff. The Plaintiff’s assertion

2) Payment Fees Parts

A) Facts of recognition

"1) The plaintiff's representative director and the plaintiff's 20G 207 KG 207 KG 2007 KG 2007 KG 2007 KG 2007 KG 2007 KG 2007 KG 2007 KG 2007 KG 2007 KG 2007 KG 2007 KG 2007 KG 2007 KG 2007 KG 206 KG 2007 KG 2007 KG 2007 KG 2007 KG 207 KG 2007 KG 207 KG 2007 KG 207 KG 2007 KG 207 KG 2007 KG 208 KG 2007 KG 208 KG 2005.

[Grounds for recognition] Class A 5 and the purport of the whole argument

B)Judgment

The relevant criminal judgment was rendered not guilty on the grounds that it is difficult to recognize that the portion of the payment fee of this case among the embezzlement crime by the UB is illegal acquisition intention of the UB. In other words, the aforementioned judgment did not actively recognize the payment fee of this case as the cost, but on the degree of proof for conviction in the criminal judgment, the UB could have used the said money for the company, and it is difficult to view that the UB had proven the intention of illegal acquisition to the extent of excluding reasonable doubt.

However, in regard to the instant case, the instant payment fee cannot be recognized as lawful loss because the Plaintiff forged a foreign exchange account statement, etc., and caused loss. Accordingly, the burden of proving that the instant payment fee is included in the scope of deductible expenses lies in the Plaintiff. However, there is no evidence to prove that this case’s payment fee was paid under any pretext by this FF or UGG, and there is no evidence to prove that the Plaintiff actually paid the instant payment fee in relation to its business, such as whether there is a reason for the Plaintiff to pay the commission to the agent, etc., the said criminal judgment alone that there was no intention of illegal acquisition of BB alone is insufficient to recognize the instant payment fee as a brokerage fee for the agent owner, and there is no evidence to prove otherwise.

3. Conclusion

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