Suwon District Court-2016-Gu Partnership-68244 (Law No. 31, 2017)

Whether it is a false tax invoice without real transactions

The Defendant’s disposition imposing the Defendant on the premise that the instant tax invoice was a processing transaction, which was received without a real transaction, is not sufficient to deem that the instant transaction was a processing transaction, and thus, is unlawful.

Article 67 (Disposal of Income)

2017Nu57204 Revocation of Disposition of Imposing global income tax, etc.

(O)

O Head of tax office

Suwon District Court Decision 2016Guhap68244 Decided May 31, 2017

January 11, 2018

February 8, 2018

1. The defendant's appeal is dismissed.

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

1. Purport of claim

The Defendant’s disposition of imposition of global income tax of KRW 199,986,455, global income tax of KRW 35,997,647, and additional tax for unfaithful payment, and KRW 19,078,708, which reverts to the Plaintiff on June 15, 2015, is revoked.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Quotation of judgment of the first instance;

The reasoning of the judgment of the court of first instance is "no more than 4.20 lines of the decision of the court of first instance". Then, "(the same shall apply to the case in which the defendant's additional submission of evidence Nos. 6 through 11, 13, and 14 was made, the new bank, the Bank of Korea, the National Bank of Korea, the National Bank of Korea, and the KB Bank, but the KB bank, or the KB bank, and each reply to the order to submit financial transaction information to the bank, which was issued by the court of first instance was added in Paragraph 2 below. Thus, this is identical to the reasoning of the judgment of the court of first instance, except for the addition of the judgment as to the plaintiff's assertion

2. Additional determination on the Plaintiff’s assertion

A. The plaintiff's assertion

1) On November 25, 201, 201, OOOO was extinguished as a legal entity pursuant to the Seoul Central District Court Decision 2010Haxz. to discontinue the bankruptcy, and it is impossible under tax law to rectify the corporate tax base for the extinguished OOOOOOO. Since the Defendant served the OOO with a notice or notice on the revision of the corporate tax base, it cannot be deemed that it did not change the corporate tax base for the OOOOOO. The instant disposition was conducted without revising the corporate tax base for the OOOOOO.

2) Even if an increase in corporate tax base against OOO was corrected, the instant disposition of this case is unlawful since service by public notice of change in income amount is inappropriate against the Plaintiff.

B. Determination

1) As to the allegation that the instant disposition was unlawful because it was conducted without revising the corporate tax base for the OOO.

A) A) A decision to discontinue a bankruptcy is to terminate a bankruptcy procedure without achieving the purpose of the bankruptcy after the declaration of bankruptcy. A discontinuation of a bankruptcy is discontinued due to the abolition of consent and lack of expenses (Article 538(1) and Article 545(1) of the Debtor Rehabilitation and Bankruptcy Act). The bankruptcy is terminated without waiting for the decision to discontinue a bankruptcy when the decision to discontinue a bankruptcy becomes final and conclusive, and the effect of the declaration of bankruptcy is terminated in the future. On the other hand, even when a corporation registers the completion of the liquidation, it shall continue until the corporation performs its obligation to pay corporate tax on the income for each business year or liquidation income, and where a corporation registers the completion of the liquidation without full payment of national tax imposed or payable, the registration shall continue until the corporation performs its obligation to pay corporate tax on the income for the liquidation of each business year or liquidation income. Accordingly, the registration shall not be based on a legitimate completion of the liquidation, and thus, the company shall be deemed to continue to exist within the necessary scope, and the obligation to pay national tax imposed

Article 70 of the Corporate Tax Act provides that "where the head of a regional tax office or the head of a regional tax office having jurisdiction over the place of tax payment determines or corrects the tax base and amount of corporate tax on income for each business year of a domestic corporation pursuant to Article 53 or 66, he/she shall notify the relevant domestic corporation thereof, as prescribed by Presidential Decree." The main sentence of Article 109 (1) of the Enforcement Decree of the Corporate Tax Act provides that "where he/she notifies the tax base and amount of tax pursuant to Article 70 of the Act, he/she shall notify the relevant tax base and amount of tax to the head of the competent district tax office having jurisdiction over the place of tax payment, along with the detailed statement of calculation of the tax base and amount of tax, and where there is no or no amount of tax to be paid for each business year, he/she shall notify the determined amount of tax."

Meanwhile, Article 11(1) of the Framework Act on National Taxes provides that "any case prescribed by Presidential Decree, such as where a person under Article 10(4) fails to serve a document at a place where the document is to be served by registered mail as one of the reasons for service by public notice, and where the document may be served by public notice due to the absence of the recipient," and Article 7-2 of the Enforcement Decree of the Framework Act on National Taxes provides that "where it is deemed difficult to serve a document by public notice because the document is served by registered mail but the recipient is returned because it is confirmed that there is absence of the recipient," under Article 11(1)2 provides that "the document shall be served by public notice where it is difficult to serve within the payment period due to the absence of the recipient's visit and deliver the document at least two times, but it is difficult to serve a document by public notice within the payment period due to the absence of the recipient." Considering the purport of the service by public notice system under Article 11 of the Framework Act on National Taxes and the fact that the document may be served by public notice is excessively likely to violate the right to be served by public notice.

B) In full view of the purport of the arguments in Gap evidence 2-1, Gap evidence 2-1, Eul evidence 3, 17, 18, Eul evidence 5, Eul evidence 12-1 and Eul evidence 2-OO was declared bankrupt on August 20, 2010, the Seoul Central District Court 201 closed its business on April 30, 201, and the decision to discontinue the business due to shortage of expenses under the Seoul Central District Court 2010Haxity, 201.3O's tax base was confirmed on April 12, 2012, the defendant was not 20O's tax base for the remaining 20OO's corporate tax for the reason that the tax base of the 20OOOO's corporate tax was revised on April 12, 2012, and the defendant was still 20O's tax base for the remaining 20OO's corporate tax for the remaining amount included in the 202OO's tax base.

However, in light of the legal principles as seen earlier, in light of the above, the Plaintiff’s written evidence No. 20 was residing in the above address from October 29, 2010 to the time of service by public notice, but the registered mail sent on the day to the workplace was only returned to the Plaintiff’s address, and it was insufficient to recognize that the Defendant’s public official’s notification of the result of tax investigation was returned to the Plaintiff’s address, or that it was not possible to deliver it to the Plaintiff’s absence of the addressee. Rather, in full view of the overall purport of pleadings, the Plaintiff could not receive evidence to acknowledge that the registered mail sent on the day to the above address from October 29, 2010 to the time of service by public notice, but the registered mail sent on the day to the workplace did not have to be returned to the addressee’s absence. Thus, if the Defendant attempted to deliver the above information at night due to the absence of the addressee’s phone number and e-mail, it can be acknowledged that the Plaintiff could have confirmed that the above notice was not satisfied at the time of service by public notice.

C) Examining the foregoing facts in light of the legal principles related to the increase in corporate tax base as seen earlier and the provisions of the relevant statutes, the instant disposition of taxation is unlawful solely on the ground that the Defendant, on April 12, 2012, disposed of the instant transaction amount included in the calculation of earnings as bonus to the Plaintiff, who was the representative of the OOOO, at the time of revising the corporate tax base of the OOOOO, as long as the Defendant’s correction of corporate tax base for the increase in corporate tax base was made after the Defendant’s correction of corporate tax base for OOO became final and conclusive.

However, since there was no corporate tax to be additionally notified despite the revision of the corporate tax base for the defendant's OOOOO, the defendant shall notify the determination to the OOOO pursuant to the main sentence of Article 109 (1) of the Enforcement Decree of the Corporate Tax Act. Thus, unless the defendant cannot be deemed to have given such notification to the OOOO, it cannot be deemed that the defendant's correction of the corporate tax base for the OOOOO becomes effective. Considering that the corporate tax base for the OOOO is the prior decision for the disposition of the plaintiff's income, the disposition of this case is unlawful based on the disposition of the plaintiff's income without revising the corporate tax base for the OOOOOO.

2) As to the allegation that the instant disposition of taxation was unlawful, even if the corporate tax base increase by the OOO was corrected, since the notice of change in income amount was inappropriate by public notice against the Plaintiff.

A) Whether service by public notice of change in the amount of income on the Plaintiff is unlawful

(1) In full view of the purport of the entire arguments in the statement No. 12-1 and No. 12-2 of the evidence No. 12, a public official belonging to the defendant: The plaintiff, trade name (the name of a corporation): OOOO, initial and re-verification address: Seoul OOO-Gu 15-3706, the location of the facilities: three floors of OOO-dong 61 OO-dong 61, Seoul: The notice of change in the amount of income, April 12, 2012 (delivery), the notice of change in the amount of income, and the reasons for non-delivery: although the above documents were intended to be delivered after visiting the registration service and the domicile, the representative did not reside at the present address and the whereabouts could not be known, and thus, the defendant prepared a report of non-delivery to serve by public notice under Article 11 of the Framework Act on National Taxes; the defendant's notification of the change in the income amount under Article 12-12 (1) of the Enforcement Decree of the Income Tax Act can be confirmed.

However, the above report on the failure of service by the public official belonging to the defendant alone was insufficient to recognize that the public official's notice of the result of the tax investigation was sent to the plaintiff's above address but returned to the plaintiff's absence, or that the defendant could not be delivered to the plaintiff's absence, although he visited the above address, it was not sufficient to prove that there was no other evidence to prove otherwise. Rather, in full view of the whole purport of the argument in Gap evidence No. 20, the plaintiff was living in the above address from October 29, 2010 to the above service by public notice, but the registered mail sent on the day to the above address was returned to the worker's absence, but the registered mail sent on the day from October 29, 2010 to the above service by public notice was resided at night, so if the defendant attempted to deliver it at night, it was possible to receive the notice of change in the amount of income. Since the defendant could verify the plaintiff's telephone number and e-mail in relation to the above phone number

Examining the foregoing factual basis in light of the provisions of the Act and the relevant legal principles as seen earlier, it is difficult to deem that the Plaintiff left the place of residence for a long time and there was an obstacle to the exercise of the right to impose taxes. As such, the Defendant’s service by publication of a notice of change in income amount for notification to the Plaintiff, who is the income earner, pursuant to the proviso to Article 192(1) of the former Enforcement Decree of the Income Tax Act on May 3, 2015, constitutes an unlawful service without satisfying

B) Whether the instant disposition is unlawful

(1) In cases where the tax authority deemed that the amount of gross income distributed out of the company belongs to an officer or employee and disposed of it as a bonus, regardless of whether a notice on change in the amount of income was served on the corporation, the person to whom the income accrued was disposed of shall be subject to taxation of the amount of earned income tax because it falls under the amount disposed of as a bonus pursuant to the Corporate Tax Act under Article 20 (1) 3 of the Income Tax Act. The amount of income is the receipt date of the labor provided during the pertinent business year, which is subject to taxation. Thus, the liability to pay global income tax (tax) on the person to whom the income accrued shall be established when the taxable period to which the income accrued expires ends (see, e.g., Supreme Court Decision 2004Du9944, Jul. 27, 2006).

Meanwhile, Article 192 (1) (main sentence) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 24356, Feb. 15, 2013; hereinafter the same) provides that, in determining or correcting corporate income, dividends, leisure and other income disposed of shall be notified to the head of a tax office or the director of a regional tax office within 15 days from the date of determination or correction by the head of a tax office or the director of a regional tax office of the regional tax office. However, the proviso provides that, where the location of the corporation is unclear or it is impossible to deliver the notice, or where the corporation falls under the provisions of subparagraphs 1, 2 and 4 of Article 86 (1) of the former Enforcement Decree of the Income Tax Act, the relevant stockholder and the resident who received the disposition of the relevant bonus or other income shall be notified of the scope of income to whom the tax base is returned by the resident under the proviso of Article 134 (1) of the former Enforcement Decree of the Income Tax Act.

(2) In light of the aforementioned legal principles and related provisions, if the Defendant disposed of the instant transaction amount included in gross income as bonus against the Plaintiff who was the representative of OOOO when revising the tax base of corporate tax of OOOOO, the Plaintiff’s liability to pay global income tax ( earned income tax) is established at the end of the taxable period reverted to the pertinent income regardless of whether a notice on change of income amount was served on OOOOOO, and thus, the Plaintiff cannot contest the principal tax of the instant disposition. However, the Plaintiff’s claim that the notice on change of income amount notified to the Plaintiff under the proviso of Article 192(1) of the former Enforcement Decree of the Income Tax Act was not lawfully served can be asserted.

3. Conclusion

Therefore, the plaintiff's claim of this case is accepted on the ground of its reasons (which does not separately determine the remainder of the plaintiff's claim such as the exclusion period of imposition) and the judgment of the court of first instance is just in conclusion, and the defendant's appeal is dismissed as it is without merit.