The non-party company cannot be deemed to have withheld income tax from the plaintiff.

The plaintiff's claim cannot be accepted in that there is no objective evidentiary materials to recognize that the non-party company actually withheld income tax of KRW 60 million from among the 300 million service fees of this case from the plaintiff who is the taxpayer.

Article 145 of the Income Tax Act

2017Guhap2358 Global income and revocation of disposition

Das

F. Head of a tax office

2018.18

2018.05.25

1. The plaintiff's claim is dismissed.

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

The disposition of imposition of global income tax of KRW 89,147,054 imposed on the Plaintiff on September 7, 2016 by the Defendant was revoked.

1. Details of the disposition;

A. Conclusion of a service contract

1) The Gg Co., Ltd. (hereinafter referred to as “gg”) is a company that was ex officio closed on December 31, 2015 while engaging in textile machinery, manufacturing and sales business, etc., and sss are the representative director of Gg.

2) The Plaintiff entered into a service contract with Gg around 2015 with the following content.

In the process of selling a third party owned by the Gg, the plaintiff will be paid KRW 300 million in return for providing services, such as repayment of debt, termination of compulsory auction, termination of seizure, smooth reorganization of factories such as agriculturality, etc., and buyer's physical color for sale and purchase (hereinafter "the service of this case").

B. The Plaintiff’s global income tax return for the year 2015

On May 31, 2016, the Plaintiff reported to the Defendant the refund of KRW 48,119,000 of global income tax for the year 2015, as follows:

1) The total amount of income accrued in 2015 is KRW 320 million, including the instant service fee of KRW 300 million.

2) Of the instant service commission, the Plaintiff calculated the amount of KRW 60 million (=30 million x (100 - 80%) as income amount by deducting the amount equivalent to 80% of the instant service commission from the necessary expenses.

3) In addition, the Plaintiff was aware that Gg withheld income tax of KRW 60 million, among the service fees of this case of KRW 300 million, and deducted KRW 60 million as already paid tax amount.

C. The defendant's first correction notice

On September 7, 2016, the Defendant notified the Plaintiff of the rectification of KRW 109,487,520 of the global income tax for the year 2015 on the following grounds.

1) The instant service commission fee of KRW 300 million is “a brokerage fee for property rights” under Article 21(1)16 of the Income Tax Act. In such cases, 80% of the income is not a necessary expense deduction, but only the expenses, the actual disbursement of which is confirmed, may be recognized as necessary expenses.

Therefore, the plaintiff's income amount should be KRW 320 million of the total income amount reported by the plaintiff.

2) It is not confirmed that Gg, a withholding agent, has withheld income tax of KRW 60 million out of KRW 300 million of the service fee of this case from the Plaintiff.

Therefore, income tax of 60 million won which the plaintiff deducted in advance should not be deducted as already paid tax amount.

(d) Decision of the Tax Tribunal;

1) On February 20, 2017, the Plaintiff dissatisfied with the above disposition and filed a petition for tax trial with the Tax Tribunal on February 20, 2017.

2) On June 22, 2017, the Tax Tribunal rendered a decision to partially accept the Plaintiff’s claim with the following content.

"The imposition of global income tax of KRW 109,487,520 on September 7, 2016, imposed by the Defendant on the Plaintiff on September 7, 2016, includes the brokerage commission paid by the Plaintiff to 109,487,520 for the year 2015 and the amount reported to the tax authority and confirmed by the Plaintiff in necessary expenses, and the tax base and tax amount are corrected and the remaining request for a trial is dismissed."

E. The defendant's second correction notice

On July 25, 2017, the Defendant issued a revised notice of KRW 104,148,124 of the global income tax for the year 2015 by including the amount of tax initially notified to the Plaintiff from the amount of tax initially notified to the Plaintiff in necessary expenses.

F. The defendant's third correction notice

1) On September 2017, the Plaintiff again requested the Defendant to exclude KRW 20 million, out of the total amount of global income tax initially reported to the Defendant, from the amount of income, and filed a claim for rectification.

2) The Defendant, upon receiving a request for correction, excluded the above KRW 20 million from the amount of income, and included the amount verified as having been actually paid by the Plaintiff in necessary expenses. On September 28, 2017, the Defendant notified the Plaintiff of the rectification of KRW 89,147,054, global income tax for the year 2015 (hereinafter the Defendant’s imposition of KRW 109,487,520, which remains after the reduction of September 28, 2017, “the instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, Eul evidence Nos. 1 to 8, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The tax amount withheld by a withholding agent, even if the withholding agent did not pay it at the competent tax office, shall be exempted within the scope of such withheld tax amount.

However, G clearly withheld income tax of KRW 60 million from the Plaintiff’s service fee of this case of KRW 300 million.

Therefore, even if g, a withholding agent, did not pay the above KRW 60 million to the Defendant, the Plaintiff, a taxpayer, is exempted from liability within the scope of the above withheld tax amount, and thus, the instant disposition is unlawful.

B. Relevant statutes

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

(c) Fact of recognition;

According to each of the above evidence, Gap evidence Nos. 2 through 14 (including each number, hereinafter the same shall apply), Eul evidence Nos. 9, 10, and 11, the following facts are recognized:

1) The Gg did not submit a statement of payment or a report of performance of withholding tax with respect to the payment of the instant service fee to the head of the competent Ri office.

2) The Gg reported the tax amount to be withheld at zero (0) won in the corporate tax base and tax return (proof No. 9) for the business year 2015 as follows:

3) As to the instant case, the Plaintiff submitted two different withholding receipts to the Defendant as follows.

(A) On June 2016, the Plaintiff submitted a withholding tax receipt (No. 10-2) to the Defendant on the ground that Gg was withheld income tax amounting to KRW 60 million. The withholding tax receipt was submitted by the Plaintiff on the ground that ① there was omission of the seal of gg or the signature seal of the representative director, etc. in the “person obligated to report” column, ② ‘necessary expenses' is public column, ③ no local income tax is indicated, ③ the Plaintiff’s withholding tax receipt (No. 10-2) at the time when Gg was raised to the Defendant on the ground that the Plaintiff withheld income tax amounting to KRW 60 million. The withholding tax receipt was submitted to the Defendant on the ground that ① the seal of ggg, the representative director in the “person obligated to collect (report)” column, ② the seal of the representative director in the “person obligated to report” column, ② the signature and seal of 200g gg and 40g g g g g g g g g g g g g g g g g g g g g g g s, and the Plaintiff.

A) The aforementioned confirmation document contains the following: ① the date of preparation is August 15, 2016; ② Es’ self-written signatures and seals are affixed to the corporation; ③ the service cost is a total of KRW 300 million and the service cost is to be paid only when all the above matters are resolved in the registration document (Provided, That income tax shall be withheld at KRW 60 million).

B) The receipt and confirmation document are ① The date of preparation is “1 November 30, 2015.” ② The written signature of Es and seal of Es are affixed to the corporate seal. ③ The Plaintiff was paid KRW 100 million on February 6, 2015, KRW 140 million on April 23, 2015 (* KRW 300 million on the service contract KRW g, withheld income tax from g and paid KRW 00 million).

C) In addition, the Plaintiff submitted to the Defendant a copy of the details of deposit account transactions and cashier’s checks (No. 11). The details of the said deposit account transactions are stated as KRW 100 million on February 10, 2015, KRW 100 million on April 23, 2015, and KRW 30 million on April 27, 2015. Moreover, the cashier’s checks that the Plaintiff received on February 10, 2015 are issued on February 9, 2015 and face value KRW 100 million on face value.

D. Determination

1) Generally, in a lawsuit seeking the revocation of a tax imposition disposition, the burden of proof as to the facts requiring taxation exists, but if it is revealed that the facts alleged in light of the empirical rule in the course of a specific lawsuit are presumed, it cannot be readily concluded that the pertinent tax disposition was an unlawful disposition that failed to meet the taxation requirements, unless the other party proves that the facts in question were not eligible for the application of the empirical rule (see, e.g., Supreme Court Decision 2009Du6568, Sept. 24, 2009).

2) In full view of the following circumstances revealed in the instant argument, it is difficult to recognize that Gg withheld income tax of KRW 60 million from the Plaintiff.

Therefore, the plaintiff's above assertion is without merit.

A) According to Articles 145(2) and 164(1)6 of the Income Tax Act (Amended by Act No. 14386, Dec. 20, 2016); and Article 185(1) of the Enforcement Decree thereof (Amended by Presidential Decree No. 26922, Jan. 22, 2016); ① When paying other income, a withholding agent who pays other income shall issue a withholding tax receipt prescribed by Ordinance of the Ministry of Strategy and Finance, stating the amount of such other income and other necessary matters, to the person who receives the income; ② A person who pays other income in Korea to an individual liable to pay income tax at home shall submit a payment record to the head of the competent district tax office, the head of the regional tax office, or the head of the competent tax office by the end of February of the year following the taxable period to which the date of payment belongs; ③ A withholding agent shall pay the withheld income tax along with a payment statement under the National Tax Collection Act, and submit a withholding status report to the head of the competent tax office (including submission through national tax information network).

However, the Gg, a withholding agent, did not pay the withholding tax in relation to the service fee of this case to the head of the competent tax office, nor did it submit a statement of payment or a report of performance of withholding tax.

B) In addition, the Plaintiff submitted two withholding receipts to the Defendant, and each of the above withholding receipts differs from necessary expenses included in one other or the seal of the withholding agent.

In addition, even if each withholding receipt is specifically examined, the withholding receipt (No. 10 No. 10) submitted by the plaintiff to the defendant around June 2016 is ① omitted in the column of "person liable to report" the seal or the representative director's signature and seal, ② the "necessary expenses" is blank, and ③ the "local income tax" is not indicated.

In addition, the withholding receipt (No. 10-2) submitted by the plaintiff to the defendant around October 2016, which was submitted by the plaintiff to the defendant (No. 10-2) is ① is affixed with the signature of Esss, the representative director of Es, and the seal of the corporation of Es, the gg, ② is written with the 240,000,000, and ③ is not written with the local income tax.

As such, it is difficult to view the two withholding receipts submitted by the Plaintiff as the normally issued evidentiary materials.

C) The Plaintiff submitted the receipt and confirmation, fact confirmation, and bank account transaction details, etc. with the evidentiary materials for the fact of withholding.

However, the receipt and confirmation document (A evidence No. 7) indicate that ① the date of payment of the service fee of this case was written on November 30, 2015, even though it was around April 2015, and ② the seal of the corporation of 2, not the g, a withholding agent, has affixed a seal to the seal of the corporation. Thus, it is quite exceptional to deem that the receipt of a large amount of KRW 300 million has been received.

In addition, the receipt and confirmation letter stated that the Plaintiff received KRW 100 million from gg on February 6, 2015, but the cashier's checks of KRW 100 million at par value submitted by the Plaintiff are not consistent with each other because the date of issuance was February 9, 2015.

In addition, a factual confirmation (Evidence A 6) is a document prepared after the instant disposition was issued by the Defendant on September 7, 2016, and can be prepared at will after the latter. Therefore, it is difficult to believe that it has been made.

D) As such, there is no objective evidentiary materials to recognize that Gg actually withheld income tax of KRW 60 million from among KRW 300 million in the receipt of the instant service from the Plaintiff who is liable for tax payment (tax withholding receipt, payment record, and tax withholding performance report).

In addition, the statements or records submitted by the Plaintiff or related persons cannot be trusted as they are.

3. Conclusion

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