Whether the amount of free meals provided to employees of subcontractor enterprises constitutes entertainment expenses

The amount of free and salt provided at a cafeteria for employees of a subcontractor and the amount of voluntary waiver of claims due to the default of customers constitutes entertainment expenses, and the amount of wages reported to be paid to those who worked for government offices, etc. among daily workers falls under the processing labor expenses.

Non-Inclusion of entertainment expenses in Article 18-2 of the former Corporate Tax Act

Article 41 (Use of Credit Cards, etc. other than Entertainment Expenses)

1. The plaintiff's appeal is dismissed.

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

1. Purport of claim

The Defendant’s disposition of imposition of corporate tax for the business year 1997 against the Plaintiff was revoked as KRW 713,794,750, corporate tax for the business year 1997, corporate tax for the business year 376,227,231, corporate tax for the business year 1998, corporate tax for the business year 132,59,765 (the first 140,025,500 won was the first 140,025,000 won, but the Defendant corrected the reduction of the amount of KRW 132,59,765, as a result of the first 12 September 12, 2005, the purport of the Plaintiff’s claim was reduced at the first 132,59,765, corporate tax for the business year 200, corporate tax for the business year 54,632,69, and value-added tax for each year 198.

2. Purport of appeal

The part of the judgment of the court of first instance against the plaintiff shall be revoked. The defendant revoked the disposition of imposition of KRW 698,153,380 of corporate tax for the business year 197, KRW 366,171,78 of corporate tax for the business year 1998, KRW 132,59,765 of corporate tax for the business year 1999, KRW 81,307,61 of corporate tax for the business year 200, KRW 23.95,922 of corporate tax for the business year 200, and KRW 17,424,680 of corporate tax for the first year for the business year 198, respectively.

1. Details of the disposition;

A. On September 2, 2002, the Defendant imposed corporate tax of 713,794,750 for the business year of 1997, corporate tax of 195,364,230 for the business year of 1998, corporate tax of 140,025,50 for the business year of 1999, corporate tax of 200, corporate tax of 94,448,060 for the business year of 200, corporate tax of 200, corporate tax of 56,079,70 for the business year of 201, and corporate tax of 17,424,680 for the first year of 198.

(1) The excess of the entertainment expenses of the reconstruction association as non-deductible expenses

In implementing a housing redevelopment project, the Plaintiff considered the aggregate of 150 million won of the operating expenses of the association paid to each of the above associations (hereinafter referred to as "the operating expenses of the association of this case") as entertainment expenses while performing the reconstruction project by ○○○ apartment reconstruction housing association, ○○○ and ○○ reconstruction housing association, or ○○○ reconstruction housing association after being awarded a contract for the reconstruction project and performing the reconstruction project, and excluded the excess amount from the deductible expenses.

(2) Non-Inclusion of excess amount of entertainment expenses for internal restaurant salt and free food store

The Plaintiff considered the total amount of KRW 323,960,341 as entertainment expenses, and included the excess amount of KRW 210,726,829 as entertainment expenses, and excluded the excess amount of KRW 210,726,829 as entertainment expenses.

(3) Non-Inclusion of excess amount in excess of the entertainment expense for the claim for voluntary waiver of the ○○ Tourist Hotel

On January 27, 1997, the Plaintiff renounced KRW 606,908,119 of the remainder interest excluding KRW 25,571,707 of the principal and interest among the principal and interest (principal KRW 793,452,954 and interest KRW 632,479,826) for the principal and interest of the ○○○ Tourist Hotel Co., Ltd. (hereinafter referred to as “○○○○ Hotel Hotel”) as entertainment expenses, the amount of KRW 606,908,119 of the waiver of the claim was deemed as entertainment expenses, and the excess amount exceeded KRW 596,817,511 was excluded from the deductible expenses.

(4) Non-Inclusion of fees for equipment such as ○○ Construction in deductible expenses

The Plaintiff deemed KRW 121,100,000 as a processing purchase that the Plaintiff leased ○○ Building and ○○○○○○, and paid dump truck as its usage fee, and deemed the corporate tax reverted to the business year of 198 as deductible expenses in calculating the corporate tax belonging to the business year of 198, and disposed of the input tax deduction of KRW 12,110,000 in calculating the value-added tax for the first period of 198

(5) Non-deductible expenses of construction-day workers

In each business year from 197 to 2001, the Plaintiff deemed the total labor cost of KRW 1,821,046,200 as the processing labor cost and excluded the Plaintiff from the deductible expenses.

(6) Loss of credit card use ratio due to the disposal of entertainment expenses in deductible expenses

Of the amount included in deductible expenses by the Plaintiff, 127,038,017 won was included in deductible expenses, considering the shortage of the credit card use ratio as entertainment expenses.

B. Accordingly, on October 11, 2002, the Plaintiff filed an appeal with the National Tax Tribunal on the imposition of the above corporate tax and value-added tax, and on April 9, 2003, the National Tax Tribunal decided on September 16, 2002 that the Defendant’s imposition of the above corporate tax and value-added tax against the Plaintiff on September 16, 2002 (referred to as “the error in the entry of September 2, 2002”) should be deducted from the total amount of gross income of KRW 505,70,000 for corporate tax for the business year 1998. The imposition of KRW 56,079,770 for the business year 201 should be corrected by deducting the tax base and amount of tax from the total amount of gross income of KRW 4,050 for each tax base and amount of tax.

C. After that, according to the above decision of the court below, the defendant decided to reduce the plaintiff to 595,364,230 won of corporate tax for the business year 1998 to 376,227,231 won, and 56,079,770 won of corporate tax for the business year 2001 to 54,632,696 won, respectively, and the court of first instance decided to reduce to 140,025,50 won of corporate tax for the business year 1999 to 132,59,765 won of corporate tax for the business year 1999 (hereinafter referred to as "each disposition of this case").

[Reasons for Recognition] Facts without dispute, Gap evidence 1 to 6, Gap evidence 2, 3, Eul evidence 1 to 7, Eul evidence 8, and the purport of the whole pleadings

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

A. As to the non-deductible of the excessive amount of the entertainment expense of the reconstruction association

(1) The parties' assertion

(A) At the time of concluding a contract with a reconstruction association, the Plaintiff already states that expenses for the operation of the association shall be included in the law of the contract amount, and the expenses for the operation of the association shall be in nature equivalent to the cost of the construction corresponding to the contract amount which is profit-making, and the reconstruction association shall also claim that the expenses for the operation of the association shall not be included in the entertainment expenses, because it is paid by the Plaintiff from the construction business company for the same amount as the cost of the construction, in order to resolve the diversity arising from the direct payment of the

(B) In regard to this, the Defendant asserts that the expenses to be borne by the members of the reconstruction association, or the intent of the Plaintiff to order construction from the reconstruction association and maintain the smooth progress of construction, namely, payment of money equivalent to the operating expenses of the association in order to facilitate transactional relations, which is classified into the sales promotion cost account or the amount to be appropriated as the sales promotion cost account, but is in substance constituted entertainment expenses.

(2) Relevant statutes

○ former Corporate Tax Act (amended by Act No. 5418 of Dec. 13, 1997)

Article 18-2 (Non-Inclusion of Entertainment Expenses in Calculation of Losses)

(1) Entertainment expenses disbursed by a domestic corporation for each business year in excess of the sum of the following amounts shall not be included in deductible expenses in the calculation of the income amount for the relevant business year:

1. The amount calculated by multiplying twenty-four million won by the monthly lawsuit in the current business year, and by the division by 12; and

2. The amount obtained by multiplying the equity capital (limited to five billion won) as of the end of the concerned business year by 1/100 (2/100 in the case of the small and medium enterprise as prescribed by the Presidential Decree).

3. The amount obtained by multiplying the revenue amount for the concerned business year (excluding the revenue amount as prescribed by the Presidential Decree) by the rates under the following table: Provided, That with respect to the revenue amount falling under one of the following items, it shall be the amount obtained by multiplying the revenue amount by 5/10,000 (1/1,000 in case where there exists the revenue amount falling under the provisions of item (c

(a) Revenue amount generated from the real estate business as prescribed by the Presidential Decree;

(b) Revenue amount accruing from the consumptive service business prescribed by the Presidential Decree (hereinafter referred to as the “ consumptive service business”); and

(c) Revenue amount generated from transactions with related parties as prescribed by the Presidential Decree;

(3) The term "entertainment expenses" in paragraphs (1) and (2) means entertainment expenses, social expenses, secret expenses, recompense, and other expenses of a similar nature regardless of the pretext thereof, which are disbursed by a corporation in connection with its business: Provided, That an amount within the scope prescribed by Presidential Decree, of confidential expenses disbursed under the conditions as prescribed by Presidential Decree, shall be deemed entertainment

○ former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998)

Article 18-2 (Non-Inclusion of Entertainment Expenses in Calculation of Losses)

(1) The entertainment expenses paid by a domestic corporation for each business year in excess of the sum of the following amounts (the amount equivalent to 70 percent of the aggregate in cases of a corporation subject to Article 61 (4) of the Regulation of Tax Reduction and Exemption Act and corporations other than corporations under subparagraph 2 of the attached Table 2 of the same Act from among public corporations under Article 59 (1) of the same Act) shall not be included in deductible expenses in the calculation of

1. The amount calculated by multiplying 12 million won (18 million won in the case of a small or medium enterprise prescribed by the Presidential Decree) by the number of months in the concerned business year, and dividing it by 12;

3. The amount obtained by multiplying the revenue amount for the concerned business year (limited to the revenue amount prescribed by the Presidential Decree) by the rates under the following table: Provided, That for revenue amounts falling under any one of the following items, the appropriate amount shall be 20 percent of the amount obtained by multiplying the revenue amount by the rates provided for in the following table:

(a) Revenue amount generated from the real estate business as prescribed by the Presidential Decree;

(b) Revenue amount accruing from the consumptive service business prescribed by the Presidential Decree (hereinafter referred to as the “ consumptive service business”); and

(c) Revenue amount generated from transactions with related parties as prescribed by the Presidential Decree;

(3) The term "entertainment expenses" in paragraphs (1) and (2) means entertainment expenses, social expenses, secret expenses, recompense, and other expenses of a similar nature regardless of the pretext thereof, which are disbursed by a corporation in connection with its business: Provided, That an amount within the scope prescribed by Presidential Decree, of confidential expenses disbursed under the conditions as prescribed by Presidential Decree, shall be deemed entertainment

○ former Corporate Tax Act (amended by Act No. 6293 of Dec. 29, 2000)

Article 25 (Non-Inclusion of Entertainment Expenses in Deductible Expenses)

(1) Entertainment expenses (not including the amount falling under paragraph (2) paid by a domestic corporation in each business year in excess of the sum of the following subparagraphs shall not be included in deductible expenses in the calculation of the income amount for the concerned business year:

1. The amount calculated by multiplying 12 million won (18 million won in the case of a small or medium enterprise prescribed by the Presidential Decree) by the number of months in the concerned business year, and dividing it by 12;

2. The amount obtained by multiplying the revenue amount for the concerned fiscal year (limited to revenue amounts as determined by the Presidential Decree) by the rates under the following table: Provided, That for revenue amounts generated by transactions with a person with a special relationship under the provisions of Article 52 (1), the appropriate amount shall be 20% of the amount obtained by multiplying the revenue amount by the rates provided in the following table:

(4) The term "entertainment expenses" used in paragraphs (1) through (3) means entertainment expenses, social expenses, recompense, and other expenses of a similar nature which are disbursed by a corporation in connection with its business.

○ former Corporate Tax Act (amended by Act No. 6558 of Dec. 31, 2001)

Article 25 (Non-Inclusion of Entertainment Expenses in Deductible Expenses)

(1) Entertainment expenses (not including the amount falling under paragraph (2) paid by a domestic corporation in each business year in excess of the sum of the following subparagraphs shall not be included in deductible expenses in the calculation of the income amount for the concerned business year:

1. The amount calculated by multiplying 12 million won (18 million won in the case of a small or medium enterprise prescribed by the Presidential Decree) by the number of months in the concerned business year, and dividing it by 12;

2. The amount obtained by multiplying the revenue amount for the concerned fiscal year (limited to revenue amounts as determined by the Presidential Decree) by the rates under the following table: Provided, That for revenue amounts generated by transactions with a person with a special relationship under the provisions of Article 52 (1), the appropriate amount shall be 20% of the amount obtained by multiplying the revenue amount by the rates provided in the following table:

(4) The term "entertainment expenses" in paragraphs (1) through (4) means entertainment expenses, social expenses, recompense, and other expenses of a similar nature which are disbursed by a corporation in connection with its business, regardless of the pretext thereof.

(3) Facts of recognition

(A) On July 8, 1997, the Plaintiff entered into a contract with the ○○ apartment reconstruction housing association (hereinafter referred to as the “○○ apartment reconstruction association”) for construction work with the Plaintiff as the contractor for the total amount of 18,000 won for the construction work on the land outside ○○○○○○○○○○○, ○○○○○○, and 2 lots on the ground, and the construction work on one apartment building and one commercial building. The Plaintiff entered into an agreement with the ○○○ Housing Association to pay the total construction contract amount to be paid to the members of the ○○○ Housing Association for the construction work, including the apartment, commercial, and other appurtenant facilities, the remainder of the apartment, commercial, and other appurtenant facilities, other appurtenant facilities, other than the relevant land, which are to be sold to a third party (general purchaser), including the total amount of revenue from the construction contract amount to be paid to the ○○ Housing Association from the date of conclusion of the construction contract to the date of new construction of the above apartment, but see Article 2 of the above agreement (1).

(B) In addition, on April 28, 200, the Plaintiff entered into a construction contract for the new apartment construction project with the contractor as to the Plaintiff’s ○○○○ Housing Association (hereinafter referred to as “○○ Housing Association”) and with the 8 to 15th above the ground level on the lots other than ○○○○○○○○○○○○○○○○○○, and the 3rd apartment construction project for the 1st underground floor, while the Plaintiff entered into a contract for the construction project for the 8 to 15th level above the apartment on the surface, the total construction amount to be paid by the Plaintiff shall be the sum of the proceeds from the sale of the general apartment and commercial building except the apartment that is supplied to the members of the ○○ Housing Association to the members of the association, and the Plaintiff shall be paid KRW 300,000 per month from the conclusion of the construction contract for the said construction project, and the said association operation expenses shall be included in the total construction amount [see Articles 4 and 5 of the conditions of a joint project contract (A evidence 4-

(C) In addition, on January 19, 2001, the Plaintiff entered into a contract for construction work with the Plaintiff as the contractor for the ○○○○-dong ○○○-○, 3rd above ground, 10-15th above ground, and 10-15th below ground, and 40,000 won for each household of the above members, on the aggregate of the proceeds from the sale in lots and the charges that the Plaintiff gains from the third party except for the apartment supplied to the members of the ○○ Reconstruction Association for the total construction amount to be paid by the Plaintiff. The Plaintiff agreed to include the above association operation expenses in the total construction amount [refer to Article 4-2, Article 4, and Article 5].

(D) Under each of the above agreements between 197 and 2001, the Plaintiff paid KRW 39,000,000 in total to ○○ Reconstruction Association (25 months) and KRW 63,000 in total (21 months in total) and KRW 48,000 in total to ○○ Reconstruction Association (12 months in total) and KRW 150,000 in total (9,000 in 197 for each period, KRW 18,000 in 198, KRW 18,000 in 1998, KRW 12,000,000 in 199, KRW 27,000 in 200, KRW 000 in total, KRW 84,000 in 201,00 in total).

[Reasons for Recognition] Facts without dispute, Gap evidence 4-1, 2, 3, and Gap evidence 5, the purport of the whole pleadings

(4) Determination

The entertainment expenses under the Corporate Tax Act refer to entertainment expenses, social expenses, secret expenses, recompense, and other expenses of a similar nature regardless of the pretext thereof, which are disbursed by a corporation in connection with its business. It refers to the expenses paid without compensation to the Plaintiff in order to promote the smooth progress of transactional relations by promoting friendship among the persons related to the business. As seen earlier, the Plaintiff entered into a prior agreement with each of the above reconstruction associations as to the amount and method of payment of the operating expenses of the association, and paid the operating expenses of the association in accordance with such agreement. Further, each of the above reconstruction associations entered into the construction contract with each of the above reconstruction associations to include the operating expenses of the association in the amount of the above construction contract. Each of the above reconstruction associations has the intention to adjust the apartment price in consideration of the cost of the association operation and to receive compensation from the above construction contract amount. Since it is difficult for them to collect from many members of the association, it is difficult to collect the operating expenses of the association from them, and then it is included in the amount of the compensation for the construction expenses paid by each of the above construction associations without compensation.

Therefore, the plaintiff's above assertion is justified.

B. As to the non-deductible of the excessive amount of entertainment expenses for a cafeteria and a free food room

(i)The plaintiff's assertion

(A) In the case of steel structure production and installation works that the Plaintiff received from the ordering office, the contract is concluded after calculating the contract amount including all expenses (including lodging) incurred by the supervisor (including resident expenses) stationed in the factory for the estimated special conditions at the time of concluding the contract for construction works. As such, the food expenses for the supervisor, etc. provided by the Plaintiff shall be actually borne by the relevant ordering office, and the food expenses paid to the supervisor (supervisor) who resides in the factory by providing free meals at the premises in accordance with the contract terms and conditions of the contract for construction works are all expenses for the Plaintiff to perform his/her duties, and thus,

(B) In addition, the Plaintiff’s provision of meals to the subcontractor’s employees, workers dispatched from each subcontractor’s employees, equipment lessors, etc., for cleaning and expenses, is in place within the ○○○○ Industrial Complex. However, it is unlawful to regard the Plaintiff’s provision of meals as entertainment expenses by understanding the salt price and free food for at least two hours as required if the subcontractor’s employees use an external restaurant due to the lack of a general public-use restaurant. In addition, the subcontractor’s employees, etc. use the outer restaurant, the number of hours required to increase business efficiency, and the number of free food offered to them separately and separately by calculating the salt price or free food for each of the relevant enterprises, and by reflecting it in the contract amount, and thereby, reflecting it in advance the provision of meals to the subcontractor’s employees, which actually received the payment of the meal in fact, as the provision of meals was performed according to the contractual terms.

(C) The Defendant calculated the excessive number of 471 customers on July 199, and calculated the excessive number of 430 customers on February 2001 by understanding 60 customers and 273 persons. The customer who provided free meals to the Plaintiff is a business travel employee of the head office and an employee of the related transaction office who provided free meals to the head office. Thus, the provision of free food services to the business travel employee of the head office is deemed to be included in the travel equipment that the Plaintiff Company pays to the business travel employee, and thus, it cannot be deemed to be entertainment expenses.

(2) Relevant statutes

See paragraph 2-A. (2)

(3) Facts of recognition

(A) In ○○ Industrial Complex where the Plaintiff Company moved in, the general public could use a restaurant operated by its headquarters within the ○○ Industrial Complex. However, from 1997 to 2001, the Plaintiff provided food free of charge to the employees, security guards, and cleaning employees of the subcontractor working at the ○○ Factory within the ○○ Factory from the business year of 1997 to the business year of 2001, the Plaintiff was dispatched from the subcontractor’s employees, security guards, and cleaning employees in charge of the expenses and cleaning, and customers visiting the ○ Factory (the main agent’s business travel employees and related transaction employees, etc.) visiting the ○○ Factory.

(B) Meanwhile, the Defendant calculated an excessive amount of KRW 1,119,720 (=430 X2,604) by identifying the number of customers in July 199 as 41 in the case of 199, while 471, the number of customers was 430. ② In February 2001, the number of customers was 60 but 213 as the number of customers was 273. However, the Defendant calculated the excessive amount of 27 persons based on the calculation of under 240 persons by understanding the number of 40 persons, while the free meals provided to the employees of the dispatch and cleaning companies were 280 persons, and as a result, the number of customers was 27 persons (=240-213).

On the other hand, according to the travel expenses regulations of the plaintiff company, in the case of domestic business trips, transportation expenses, daily allowances, and accommodation expenses according to the standards for the payment of domestic business travel equipment are stipulated.

(C) In the event that a construction contractor enters into a subcontract for construction works with the content of receiving sewage during the pertinent business year, the Plaintiff agreed to the terms and conditions of the contract that the subcontractor’s expenses for supervision of subcontracted construction works and all expenses incurred by the subcontractor’s dispatched employees or supervisors (including lodging) for their stay. In fact, according to the said agreement, the Plaintiff provided free of charge meals to the supervisor (supervisor) dispatched by the subcontractor at the premises restaurant.

(D) The Defendant: (a) during the period of each business year, identified that the Plaintiff’s food and customer who provided salt to the partner companies, such as subcontractors, etc., (b) the subcontractor, (c) the supervisor of the subcontractor, (d) the lessor of heavy equipment, (d) the guard service company, and (c) the employees of the cleaning service company, provided free of charge at the above cafeterias as follows; and (b) denied the Plaintiff’s deductible expenses for KRW 210,726,829 exceeding the entertainment expense limit.

The details of the food for the internal restaurant salt or free of charge (unit: Won)

Provision of Salt Prices

Free provision

guidance.

Customer;

Supervision

Lease of Used Equipment

Expenses, Cleaning

Sub-committees

97

34,563,745

0

24,708,834

0

11,871,892

36,580,726

71,144,471

98 years

3,544,631

755,230

11,006,814

4,987,855

10,146,750

26,896,648

60,441,279

99

40,633,740

1,853,387

6,704,913

5,382,105

9,447,123

23,387,529

64,021,269

00 years

39,405,873

1,092,342

7,519,329

6,118,126

9,072,791

23,802,588

63,208,461

01 years;

38,421,182

2,277,438

9,058,918

6,483,601

8,903,722

26,723,679

65,144,861

guidance.

186,569,171

5,978,398

58,998,808

2,971,686

49,442,278

137,391,170

323,960,341

[Ground of recognition] The facts without dispute, Gap evidence 7-1, 2, 3, Gap evidence 181, Gap 184, 186-1, 2, Gap 187, 188-1 through 6, Gap 189, Eul 49, 50, and 54-1, and the purport of the whole pleadings

【Evidence Evidence】 175 Evidence 1, 2

(iv)judgments

(A) First, as seen above, since the Plaintiff offered meals to the supervising entity free of charge to the supervising entity constitutes entertainment expenses, the Plaintiff offered meals to the supervising entity for free pursuant to the prior agreement with the contracting entity. Thus, the free food for free granted by the Plaintiff to the supervising entity is not an entertainment expense paid without compensation in order to promote the smooth progress of transaction relations by promoting friendship between the supervising entity and the supervising entity.

(B) Second, in light of the following circumstances, the Plaintiff’s provision of meals free of charge or at salt to the subcontractor’s employees, expenses, dispatched employees of service companies, and the lessor of heavy equipment, etc., and the following circumstances revealed by the above recognition: (a) unlike the Plaintiff’s assertion, the Plaintiff provided meals to the employees, dispatched employees, etc. of each of the above cooperation companies, who did not have an employment relationship, free of charge or at salt; (b) whether the Plaintiff provided meals to them free of charge or free of charge; and (c) whether the Plaintiff provided meals to a certain extent if the Plaintiff provided salt, free of charge, or free of charge. In light of the fact that there was no prior agreement, the reason why the Plaintiff provided meals to them free of charge or free of charge is deemed to be for more smooth work relations in accordance with the contents of the subcontract, etc. by boosting their morale and having the Plaintiff’s employees have a sense together with the Plaintiff’s employees. Therefore, it constitutes salt or entertainment expenses provided to them free of charge.

On the contrary, the plaintiff's evidence Nos. 12 and 176, 177, and 178, each evidence Nos. 8 and 12 of the plaintiff's assertion that the plaintiff provided meals to its employees for salting or free pursuant to the prior agreement with each of the above cooperation companies, are merely a mere ex post facto confirmation of the cooperation company and the dispatched company, and there is no written contract. The content of the contract is abstract, so it is difficult to know how the number of food, period, unit price, etc. was determined in the actual contract and reflected in the construction cost. The evidence Nos. 179 and 180 is merely a contract concluded with the other cooperation company for expenses, cleaning service company, and the evidence No. 201-1 and No. 10, No. 202, and Nos. 1 through 5 of the evidence No. 203-1 and No. 6 of the contract price of each of the above cases.

(C) Third, we examine whether the meals offered free to customers by the Plaintiff constitutes entertainment expenses.

1) 1,119,720 won (=430 X 2,604) corresponding to the portion of 430 won was calculated by grasping 471 customers in the case of July of 1999. However, according to the overall purport of the statements and arguments in evidence Nos. 52,53, the defendant exceeded the entertainment expense limit in the fiscal year of 1999, and included the total amount of KRW 11,229,036, which was excluded from deductible expenses, in the calculation of deductible expenses after the first instance court sentenced the amount of 1,119,720 in the calculation of entertainment expenses, and there is no amount of tax to be reduced as a result, even if the above amount is deducted from entertainment expenses, there is no amount of tax to be reduced as a result, even if the amount of 1,119,720 won was deducted from entertainment expenses. Furthermore, considering the fiscal year of 201, even 2700 customers in the case of February of 2, 2013 employees who were under 204.

2) On the other hand, as to whether the provision of free meals to employees of the headquarters who have been traveling to the Plaintiff Company ○○ Factory is included in the exit equipment, and does not constitute entertainment expenses, according to the travel expense regulations of the Plaintiff Company, it is reasonable to view that the food expenses are included in the exit equipment when considering that the Plaintiff Company’s employees anticipated the case of going to go to a business trip to a place unrelated to the Plaintiff Company, which is not the same as the Plaintiff Company ○○ Factory, and that the provision of meals to employees who have been traveling to the Plaintiff Company ○○ Factory constitutes entertainment expenses when free of charge is provided to employees who have been traveling to the Plaintiff Company Posing to the Plaintiff Company.

(D) Therefore, since the Plaintiff’s assertion on the food substitute portion that the Plaintiff provided free of charge to the contracting company’s supervisor (supervisor) among the instant cafeteria cafeteria and free food stand, the Defendant’s respective dispositions of this case that deemed the food cost as entertainment expenses are unlawful, but the Defendant’s respective dispositions of this case against the remaining food stand lawful in conclusion. Thus, the Plaintiff’s assertion on this part is without merit.

C. As to the non-deductible of the excessive amount of the entertainment expense for the claim for voluntary renunciation of the ○○ hotel

(1) The plaintiff's assertion

Pursuant to Article 21 subparag. 3 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15192 of Dec. 31, 1996) and Article 9(2) subparag. 12 of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Prime Minister No. 622 of Mar. 29, 1997), the Plaintiff already met the requirements for bad debt in the business year 1996. However, the Plaintiff did not dispose of bad debt and did only handle bad debt only for part of the claim after collecting it with ○○○ hotel in 1997 without bad debt and agreed with ○○ hotel in 197, and therefore, it must be recognized as bad debt as part.

In addition, the plaintiff filed a lawsuit against the ○○○ hotel who did not pay a claim for the construction cost, and proceeded with the compulsory execution procedure by attaching the judgment after winning the lawsuit, and filed a complaint against the representative director of the ○○○ hotel due to the crime of evading compulsory execution, etc., while making every possible effort to recover the claim as a creditor, the plaintiff inevitably renounced part of the claim for the construction cost, and there is a justifiable reason therefor. However, it is unreasonable to view the amount of the abandoned claim as entertainment expense by the plaintiff.

(2) Relevant statutes

○ former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998)

Article 9 (Income for Each Business Year)

(3) The term "deductible expenses" in paragraph (1) means the amount of losses incurred by transactions which reduce the net assets of a corporation, except as otherwise provided for in this Act, such as refund of capital or shares, appropriation of surplus funds, and transactions

○ former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998)

Article 12 (Definition of Profits and Losses)

(2) "Loss expenses" in Article 9 (3) of the Act means the expenses prescribed in the following subparagraphs, except those prescribed by the Act and this Decree:

8. Bad debts (including outstanding amounts of value-added sales tax which cannot be recovered and which have not received a bad debts tax deduction under Article 17-2 of the Value-Added Tax Act);

Article 21 (Scope of Bad Debts) The bad debts under Article 12 (2) 8 shall be those falling under one of the following subparagraphs:

1. Debentures which cannot be recovered due to the bankruptcy, compulsory execution, execution of punishment or discontinuation of the business of the debtor;

2. A claim which cannot be recovered due to the death, disappearance, or missing of the debtor.

3. Other bonds which are deemed irrecoverable by the Ordinance of the Prime Minister.

○ Enforcement Rule of the former Corporate Tax Act (amended by Ordinance of the Ministry of Government Administration and Home Affairs No. 41 of August 22, 1998; hereinafter the same shall apply)

Article 9 (Calculation of Bad Debt Allowance and Bad Debt)

(2) Claims deemed irrecoverable under the conditions as prescribed by Ordinance of the Prime Minister under subparagraph 3 of Article 21 of the Decree shall be as listed in the following subparagraphs:

12. Seized claims for which an auction on the debtor's property is revoked under Article 616 of the Civil Procedure Act.

○ former Civil Procedure Act (amended by Act No. 6626, Jan. 26, 2002; hereinafter the same applies)

Article 616 (Revocation of Auction When Surplus is Not Expected)

(1) When a court deems that there exists no surplus if all of the immovables preceding the claims of execution creditors and the costs of procedures are reimbursed at the minimum auction price, it shall notify the execution creditor thereof.

(2) If an execution creditor fails, within seven days from the date of receipt of the notification under paragraph (1), to reimburse the bearing and expenses under paragraph (1), and to determine the price of surplus, and there is no offer of purchase commensurate with such price, he/she shall request the purchase at such price, and revoke the auction procedure.

(3) Facts of recognition

(A) Around April 13, 1991, the Plaintiff filed a lawsuit against ○○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○○ branch of ○ branch of ○○ branch of ○○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of ○ branch of 200.

(B) In addition, on March 29, 1994, the Plaintiff filed a complaint against the representative director of ○○ hotel with a crime of evading compulsory execution, and received a notice of non-prosecution disposition from the ○○ District Public Prosecutor’s Office around March 29, 1995, and filed a complaint and reappeal in sequence to the ○○ High Public Prosecutor’s Office and the Supreme Public Prosecutor’s Office, but received a notice of rejection of complaint and reappeal.

(C) On September 18, 1995, the Plaintiff tried to find out and additionally seize corporeal movables owned by ○○ hotel and not seized by other creditors among corporeal movables owned by ○○ hotel, but failed to attach them.

(D) On January 8, 1996, the Plaintiff filed an application for compulsory auction of real estate with the ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○, issued a decision to commence compulsory auction of real estate on a hotel building owned by the ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ in the name of debt, but on March 25 of the same year, the said decision

(E) Thereafter, around October 1996, the Plaintiff offered a proposal that the Plaintiff would pay only pure construction cost, excluding damages for delay, among the above construction cost claims, which became final and conclusive on January 27, 1997. Around that time, the Plaintiff agreed to give up the pure construction cost of KRW 793,452,954 among the above construction cost claims for which the judgment became final and conclusive with ○○○○ hotel and the delay damages thereon, and the remainder of KRW 606,908,119 among the above construction cost claims for which the judgment became final and conclusive, and the Plaintiff received KRW 793,452,954 from ○○○○ hotel until May 30 of the same year and paid the remainder of KRW 25,571,707.

(F) However, ○○ Hotel continued to engage in business activities at the time of and after the payment of the construction cost and delay damages agreed upon to the Plaintiff as above, and continued to pay the Plaintiff revenues of KRW 100 million a year with the exception of 2003. The details of reporting corporate tax for each business year from 1995 to 2004 are as follows.

○○ hotel’s report of corporate tax

(unit: million won)

Business year

Total revenue amount

Amount of income;

Total tax amount

Jinay

195

3,711

376

0

Losses carried forward deduction

196

3,692

754

0

Losses carried forward deduction

1997

3,686

56

0

Losses carried forward deduction

1998

3,403

812

0

Losses carried forward deduction

199

3,423

366

12

200

3,371

339

83

201

3,109

80

234

202

380

90

2003

△△126

0

204

390

93

(G) Meanwhile, as of July 1, 200, as of July 1, 200, the cumulative loss carried forward by ○○ hotel was 2,453,092,812 won and the debt ratio was 5,503,58% higher, but the cumulative loss was 2,456,42,953 won and the cumulative loss carried forward was 2,456,42,953 won.

[Ground of recognition] A without dispute, Gap 13 through 17 evidence, Gap 190, 191 evidence, Gap 192-1, 2, Gap 207 evidence, Eul 9, 10, 11 evidence, Eul 13 and 46 evidence, testimony of ○○○○○ of a party witness, and the purport of the whole pleadings

(4) Determination

(A) The form of bad debt can be divided into cases where the corresponding claim is legally extinguished (reported matters) and cases where it is based on accounting awareness that it is impossible to recover from the debtor’s asset in light of the debtor’s asset status, payment ability, etc. In the former case, it is naturally impossible to collect the claim despite the corporation’s accounting, and in the latter case, it is also included in deductible expenses for the business year in which the corporation’s claim is extinguished. Thus, it can be included in deductible expenses only when the corporation disposes of bad debt as deductible expenses in accordance with the corporate tax law if it is clearly impossible to collect and dispose of it (see, e.g., Supreme Court Decisions 2002Du727, Dec. 11, 2003; 201Du489, Sept. 24, 2002).

On the other hand, the case was examined in this case. The plaintiff was released from the auction court in the year 1996 that the auction had been ordered to forced commencement of real estate auction on the building owned by ○○○ hotel in the year 196, because it was not likely to have any surplus possibility, but did not account the above construction price claim as bad debt pursuant to Article 21 subparagraph 3 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998) and Article 9 (2) 12 of the former Enforcement Rule of the Corporate Tax Act. The issue of whether the above construction price claim for ○○ hotel in the business year 1997 can be determined as bad debt as stated in the plaintiff's claim for bad debt within the scope of 97 years as of December 31, 1998, since the claim for bad debt should be treated equally as the case where the bad debt debt was revoked without any time of inclusion in deductible expenses, and it can be determined that it falls within the scope of 97 years 197 years old business year.

Therefore, since the requirements for bad debt have already been met in the business year 1996, the plaintiff's above assertion that it is justifiable to waive part of the claim for construction debt to ○○ hotel in the year 1997 and include it as bad debt.

(B) Furthermore, as seen earlier, we examine whether the Plaintiff’s waiver of a part of the above construction cost claim was objectively confirmed in the business year 1997, and proceed with civil procedure and compulsory execution against ○○○ hotel over several years before the Plaintiff collected the above construction cost claim. The Plaintiff filed a criminal complaint with the representative director of ○○○ hotel and made a provisional attachment against property owned by an individual but failed to achieve the purpose, and agreed to pay the principal of the above construction cost claim from ○○ hotel during the period when the Plaintiff failed to achieve the above purpose, it is deemed that the Plaintiff renounced part of the above construction cost claim and collected all the remainder of the above claim. However, even in the business year 197, ○○ hotel continued to increase profits by the business year 204 while operating the above part of the claim (excluding 203 years). Since the Plaintiff did not waive part of the above claim within the short period and collected all the remainder of the claim, the Plaintiff’s assertion that the above disposition of the Plaintiff’s bad debt claim was not objectively justified in the Plaintiff’s calculation of the above bad debt claim.

D. As to the exclusion of fees for equipment such as ○○ Construction from deductible expenses

(1) The plaintiff's assertion

원고는 실제로 ○○건기 및 ○○○○중기와 사이에 덤프트럭 3대 분량을 임대료로 하여 장비 임대차계약ㅇㄹ 체결하고 덤프트럭을 임차하여 사용한 다음 ○○건기 등에 그 사용료로 8장의 약속어음(이하 '이 사건 어음'이라 한다)을 발행해 주었으나, ○○건기와 ○○종합중기의 어음할인 요청으로 현장소장인 ○○○은 장인 ○○○으로부터 현금을 빌려 ○○건기에게 어음 7장을 할인해 주고 이를 다른 직원들 명의로 입금하였다가 나중에 장인에게 빌린 돈을 변제하였고, 원고 직원인 ○○○는 ○○○○중기에게 어음1장을 할인해 주었을 뿐임에도, 피고는, 원고가 실제 거래 없이 허위로 관련 서류를 작성하고 장비 사용료의 지급조로 발행된 이 사건 어음을 직원들 명의의 계좌를 통하여 자금세탁을 하였다는 이유로 위 장비 사용료를 가공매입으로 보아 원고의 1998년 사업연도 귀속 법인세를 계산함에 있어 121,100,000원을 손금불산입하고, 1998년 제1기분 부가가치세 12,110,000원을 매입세액불공제한 위법을 저질렀다.

(2) Relevant statutes

○ former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998)

Article 9 (Income for Each Business Year)

(3) The term "deductible expenses" in paragraph (1) means the amount of losses incurred by transactions which reduce the net assets of a corporation, except as otherwise provided for in this Act, such as refund of capital or shares, appropriation of surplus funds, and transactions

○ former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970, Dec. 31, 1998)

Article 12 (Definition of Profits and Losses)

(2) "Loss expenses" in Article 9 (3) of the Act means the expenses prescribed in the following subparagraphs, except those prescribed by the Act and this Decree:

6. Property rental expenses;

○ Value-Added Tax Act

Article 17 (Payable Tax Amount)

(1) The amount of value-added taxes payable by an entrepreneur (hereinafter referred to as "paid tax amount") shall be the amount computed by deducting the tax amount under the following subparagraphs (hereinafter referred to as "purchase tax amount") from the tax amount on the goods and services supplied by him/her (hereinafter referred to as "sales tax amount"): Provided, That where an input tax amount exceeds the output tax amount, it shall be a refundable tax amount (hereinafter referred to

1. The tax amount on the supply of property or services used or to be used for his own business;

(3) Facts of recognition

(A) In order to transport bad soil in around 1998, the Plaintiff: (a) leased 121,10,100,100, and value-added tax for equipment rent amounting to KRW 133,210,000, and filed a return of the Plaintiff’s corporate tax base for corporate tax belonging to the business year of 1998, the Plaintiff deducted KRW 121,110,000 as input tax when filing a return of the tax base for value-added tax belonging to the business year of 1998; (b) however, in calculating the value-added tax, the Defendant deducted KRW 12,110,00 as input tax in calculating the value-added tax by deeming the above rent as the processing purchase; and (c) in calculating the value-added tax amount, the Defendant paid KRW 121,10,100,000 as input tax amount.

However, the number of leased equipment is stipulated as one in the lease contract concluded between the ○○ Building and the ○○○○ Building, as it does not indicate the number of leased equipment under the lease contract between the ○○○○ Building and the ○○○○ Building.

(B) On June 30, 1998, the date of issuance, and November 13, 1998, the date of payment, and KRW 17,550,00 (cost of equipment rent of KRW 15,500,000 + value-added tax of KRW 1,550,00), each of the promissory notes was issued with the addressee 7 and the addressee ○○○○, ○○, the date of issuance, and the date of payment, respectively, and one promissory note with the face value of KRW 13,860,00 (cost of equipment rent of KRW 12.6 million + value-added tax of KRW 12.60,00).

(C) On July 7, 1998, Park○, an employee of the Plaintiff, opened an account at the ○○○ Branch of ○○ Bank and ○○○○ Branch of ○○ Bank under the name of ○○○ and ○○○○○○ Branch of ○○ Bank (the account between ○○ and ○○○○○ was opened on behalf of ○○○○○○○) and affixed a seal impression on each column of the Plaintiff’s seal imprint.

(D) On November 12, 1998, the bill of this case, which was endorsed by ○○○○○○, and Kang○○○, deposited into each of the above accounts and existing accounts opened by ○○○○, etc. on or after the 14th of the same month, and around the 16th of the same month, the bill of this case was deposited in the accounts of ○○○○○○○○, which was settled by ○○, a managing director Kim○, and KRW 118,350,000 among them, deposited into the accounts of ○○○○○○○, which was in the name of ○○○, the ○○○, the ○○○○○, the head of which was the on-site director, around December 14, 1998.

(E) On April 30, 1998, the Plaintiff paid 15 tons of dump truck with 15 tons of 15 tons of 5.4 million won each, on May 31, 1998, 4.7 million won each, for ○○ Construction, and ○○ Construction, 15 tons of 15 tons of dump truck, respectively.

(F) In addition, the Plaintiff’s “work site” is kept at the work site, and the Plaintiff’s signature to confirm articles that operate equipment, such as equipment company, business registration number, representative, equipment name, equipment number, equipment number, work hours, and the details of work, and signed by the field manager (see evidence 17-1, 2, and 3). However, it is not indicated that the Plaintiff’s work site includes the Plaintiff’s work site that the ○○ and the ○○ integrated work site were carried out due soil and sand removal around May 1998.

(G) On the other hand, Park○-○ confirmed that ○○○○○ Building, which was brought up by Kim○, a dump truck truck business operator, voluntarily prepared the Plaintiff’s employee’s tax invoice, and that the bill deposited in each account opened in the Plaintiff’s employee’s name is irrelevant to the bill discount (see the evidence No. 18-1, No. 2).

[Reasons for Recognition] Gap evidence 2, Gap evidence 18-1 through 7, Eul evidence 19, Eul evidence 14, 15, 16-1, 2, Eul evidence 17-1, 2, 3, Eul evidence 18, 19-1, 2, and 20-1 through 20-1 of evidence 20, and the purport of the whole pleadings

(4) Determination

As seen earlier, 12,60,00 won and 15,500 won are 12,60,000 equipment usage fees for the Plaintiff’s ○○○○ Construction and ○○○○○○○○ Construction and 200,000 won and 15,00 won paid to other equipment companies during the same period, and the number of equipment usage fees for the Plaintiff’s ○○○○○ Construction and 20,000 won are excessively high without reasonable grounds. In this case, the Plaintiff’s assertion that ○○○○○ Construction and 20,000 won and 15,000 won are indicated in the agreement with other equipment companies, and the number of equipment used for the ○○○○ Construction and 20,000 won and the Plaintiff’s 20,000 won and 3,000 won are not indicated in the name of the Plaintiff’s ○○ Construction and 2,000 won and the Plaintiff’s 3,000 won.

E. As to the non-inclusion of the personnel expenses of construction day workers

(1) The parties' assertion

(A) In light of Article 16(2) and (3) of the Framework Act on National Taxes and Article 81-5 of the former Framework Act on National Taxes (amended by Act No. 6782 of Dec. 18, 2002), the plaintiff's report submitted by the taxpayer is presumed to be true. The defendant denied the plaintiff's labor cost on the ground that 505 persons, including public officials, etc., worked for 7 years at other businesses and 3 years or more, and 4.28 persons who worked for 3 million won or more per year, are different from the facts in light of the empirical rule, but if the head of the working group takes charge of a certain portion of the work, it is impossible for the plaintiff to find that the work was executed by the "in the form of a so-called" method where the work was conducted by the contractor and received the price from the contractor, and that it is not possible for the plaintiff to prove that the labor cost was actually paid to the worker for the purpose of the work in the calculation of deductible expenses.

(B) In regard to this, the Defendant asserts that the Plaintiff should present specific counter-proofs that the Plaintiff caused the problem of the Plaintiff, as it illegally abused personal data and paid labor costs, and that the investigating public officials made false entries of the relevant account books as if they were to have paid labor costs, and that the investigating public officials made it clear that the facts alleged in light of

(2) Relevant statutes

○ former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998)

Article 9 (Income for Each Business Year)

(3) The term "deductible expenses" in paragraph (1) means the amount of losses incurred by transactions which reduce the net assets of a corporation, except as otherwise provided for in this Act, such as refund of capital or shares, appropriation of surplus funds, and transactions

○ Corporate Tax Act

Article 19 (Scope of Deductible Expenses)

(1) Deductible expenses shall be the amount of losses incurred by transactions which reduce the net assets of a corporation, excluding return of capital or financing, disposition of surplus funds, and what is provided for in this Act.

(2) The losses under the provisions of paragraph (1) shall be losses or expenses generated or spent in connection with the business of a corporation which are generally accepted as normal or directly related to profit, except as otherwise prescribed by this Act and other Acts and subordinate statutes.

(3) Matters necessary for the scope and types of losses under the provisions of paragraphs (1) and (2) shall be prescribed by Presidential Decree.

○ former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998)

Article 12 (Definition of Profits and Losses)

(2) "Loss expenses" in Article 9 (3) of the Act means the expenses prescribed in the following subparagraphs, except those prescribed by the Act and this Decree:

3. Personnel expenses;

Enforcement Decree of Corporate Tax

Except as otherwise provided for in the Act and this Decree, the losses under the provisions of Article 19 (1) of the Act shall be those as provided for in the following subparagraphs:

3. Personnel expenses;

○ Framework Act on National Taxes

Article 16 (Ground of Taxation)

(1) If any person liable for tax payment keeps and enters a book under tax-related Acts, the investigation and determination of the tax base of the national tax concerned shall be based on the book kept and entered and related documentary evidence.

(2) In examining and determining national taxes under paragraph (1), if the contents of the entry are different from facts or are omitted from the entry, only such part may be determined in accordance with the facts examined by the Government.

(3) When the Government examines and determines any fact different from the contents of entry or omission in the entry under paragraph (2), the fact examined and ground for determination by the Government shall be stated additionally in the determination note.

○ former Framework Act on National Taxes (amended by Act No. 6782 of Dec. 18, 2002)

Article 81-5 (Assumption, etc. of Taxpayer's Sincerity)

(1) A tax official shall presume that a taxpayer is sincere and the return, etc. submitted by him is true, except in cases prescribed by Presidential Decree, such as where a taxpayer fails to fulfill his obligation to cooperate with tax payment, such as return, etc. as prescribed by tax-related Acts, or he is given detailed information on

○ former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 17830, Dec. 30, 2002)

Article 63-4 (Cause for Excluding Assumption of Duty Payer's Sincerity, etc.)

(1) "Cases prescribed by Presidential Decree" in Article 81-5 (1) of the Act means cases falling under any of the following subparagraphs:

3. Where a duty return contains evident data corroborating a suspicion of omissions or errors;

(3) Facts of recognition

(A) In calculating the corporate tax base for each corporate tax from the year 1997 to the business year 2001, the Plaintiff included 11,627 labor expenses paid to construction-day workers in the construction cost as construction cost during the above period. However, the Defendant included 505 labor expenses for each of the above 11,627 workers who work in another place of business (hereinafter “the two workers of this case”) in deductible expenses.

Details of personnel expenses not added to deductible expenses (unit: Won)

Classification

1997

1998

199

200

201

Total

Labor Expenses

749,661,300

618,552,00

249,950,700

165,809,200

37,073,000

1,821,046,200

(B) As a result of comparison and examination of a statement of payment of daily labor cost in the document prepared and kept by the Plaintiff’s employee who provided work in the construction site, the Defendant was identified as 1,400 workers employed in other workplace than the Plaintiff’s workplace among the said 11,627 workers in comparison with the personal labor cost data managed by the National Tax Service’s computer network.

(C) If the Defendant’s total amount of wage and salary income is added to seven-seven workers of state public officials, local public officials, public institution workers, and the amount of non-taxable wage and the amount of wage and salary income which are deemed to have been continuously employed for a considerable period in light of the empirical rule, the Defendant selected 505 persons, including 428 persons, who would have been employed for three or more years in other places of business (the annual wage and salary income tax base after various deductions exceeds three million won) as those who would have been expected to have been employed for a considerable period of time in light of the empirical rule, and excluded them from the deductible expenses.

(D) The plaintiff's appeal against each of the dispositions of this case was filed by the National Tax Tribunal. Among the double workers' expenses of this case, the National Tax Tribunal decided ① 1,450,000 won in which the plaintiff had been employed as a cover of 5,50,000 won in the construction site of Han River Park construction site of Han River-gu, but the defendant paid 5,50,000 won in error, and thus, 4,050,000 won in deductible expenses was excessively paid by the defendant. (See the statement of payment of daily labor expenses of the plaintiff, the statement of payment of the plaintiff was stated as the "Maximum ○○," and ② 5,70,000 won in deductible expenses paid by the defendant to Han River-gu, which was actually paid by the defendant to Han River-gu, the Tribunal decided that the above excessive amount of deductible expenses should be reduced to 4,050,000 won in deductible expenses and corporate tax paid to 5,700,000 won in deductible expenses for each business year as seen 90.

[Reasons for Recognition] Facts without dispute, Gap evidence 2, Eul evidence 1 through 11, Eul evidence 21-1 to 5, Eul evidence 22-1 to 8, the purport of the whole pleadings and arguments

(4) Determination

In general, in a lawsuit seeking the cancellation of a tax imposition disposition, the burden of proving the facts of taxation requirements shall be borne by the person liable for taxation. However, if the facts alleged in the facts of taxation requirements in light of the empirical rule in the course of a specific lawsuit are revealed, it cannot be readily concluded that the other party is an unlawful disposition that fails to meet the taxation requirements, unless the other party proves that the facts at issue are not eligible for application of the empirical rule (see Supreme Court Decision 97Nu13894, Jul. 10, 1998). In a case where the tax authority proves that the purpose of any expenses reported by the person liable for tax payment and the other party to the payment of the expenses are false or unreasonable, the burden of proving the specific items of the amount of losses to be deducted in calculating the amount of income for each business year of the corporation shall be returned to the person liable for tax payment in consideration of the party’s equity (see Supreme Court Decision 97Nu15463, Jan. 15, 199)

In light of the empirical rule, those who worked in a public institution, such as a health team or public official, or those who worked in another place of business for more than three years, and whose annual wage and salary income amount exceeds three million won, appear to be difficult to work twice at the Plaintiff’s workplace. Therefore, unless there is no evidence to reverse this, it is difficult to recognize that the Plaintiff actually paid labor expenses to dual workers of this case, such as the Plaintiff’s statement of payment of daily wage costs, as stated in the

(2) According to the evidence evidence No. 1 to No. 47-2 of the Plaintiff’s evidence No. 5 of the instant case, the Plaintiff’s testimony No. 1 to No. 1 to No. 47-2 of the instant evidence No. 5 of the instant case constitutes “A” and the Plaintiff’s testimony No. 2 of the instant evidence No. 1 to No. 5 of the instant evidence No. 1 to No. 45 of the instant evidence No. 7 of the Plaintiff’s assertion that the Plaintiff’s testimony No. 5 of the instant evidence No. 1 to No. 3 of the instant evidence No. 4 was false, and the Plaintiff’s testimony No. 6 of the instant evidence No. 1 to No. 5 of the instant evidence No. 1 to No. 3 of the instant evidence No. 7 of the evidence No. 1 to No. 6 of the instant evidence No. 7 of the evidence No. 1 to the effect that the Plaintiff’s testimony No. 1 to No. 97 of the instant evidence No. 2 of the evidence No.

F. As to the non-deductible of the shortage of credit card use ratio following the disposal of entertainment expenses

(1) The plaintiff's assertion

The disposition of entertainment expenses of the reconstruction association operating expenses, disposal of entertainment expenses such as free food, disposal of abandoned entertainment expenses for ○○ hotel, etc. inevitably affect the amount below the credit card use ratio according to the disposal of entertainment expenses, and accordingly, it should be reflected in the corporate tax base.

(2) Relevant statutes

○ former Corporate Tax Act (amended by Act No. 5374 of Aug. 28, 1997)

Article 18-2 (Non-Inclusion of Entertainment Expenses in Calculation of Losses)

(2) In the application of the provisions of paragraph (1), where the ratio of the total sum of entertainment expenses paid by a domestic corporation under the Credit Card Business Act (including those similar to credit cards as prescribed by the Presidential Decree) and the tax invoice under subparagraph 16 (1) of the Value-Added Tax Act to the amount received by using the tax invoice under subparagraph 16 of the same Article falls short of the ratio as prescribed by the Presidential Decree, the amount calculated under the conditions as prescribed by the Presidential Decree shall not be included in the calculation of

○ former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15564 of Dec. 31, 1997)

Article 43 (Standard for Calculation of Revenue Amount of Entertainment Expenses, etc.)

(6) "Rate prescribed by Presidential Decree" in Article 18-2 (2) of the Act means the choice of a corporation from among the rates in the following subparagraphs:

1. Where the tax base is applied to the ratio of the amount disbursed using credit cards or tax invoices to the amount included in the calculation of losses under Article 18-2 (1) of the Act (hereafter in this Article, referred to as the "amount of entertainment expenses") as entertainment expenses disbursed in the concerned business year, which is the ratio under the provisions of the following items:

(a) For a corporation whose place of tax payment is in Seoul Special Metropolitan City, 75%;

2. Where the ratio of the amount (hereafter referred to as "amount of entertainment expenses spent by each region" in this Article) calculated by the following formula to the amount (hereafter referred to as "amount of entertainment expenses spent by each region" in this Article) calculated by using credit cards or tax invoices in the relevant area is applied to the entertainment expenses for each region in which the entertainment expenses are held (limited to the areas other than the areas referred to in items (a) through (d) in the Special Metropolitan City