Seoul Administrative Court 201Guhap1105 ( December 07, 2012)

It is reasonable to deem that the exclusion period for imposition of global income tax due to the disposal of the credit income tax is five years.

Where the exclusion period of imposition of corporate tax for the business year 2003 is deemed five years, the imposition of corporate tax for the business year 2003 shall be invalidated after the lapse of five years from April 1, 2004, which is the day (the day following the reporting period) on which

Article 26-2 of the National Tax Basic Act

2013Nu1548 Revocation of Disposition of Imposing Corporate Tax, etc.

AA police officer, Inc.

Head of Seodaemun Tax Office

Seoul Administrative Court Decision 2011Guhap1105 decided December 7, 2012

July 3, 2013

July 31, 2013

1. The corporate tax for the business year of 2003 and the additional tax for the business year of 2004 to 2007, including the plaintiff's claim expanded at the trial of the trial, shall be modified as follows:

A. The Defendant imposed corporate tax on the Plaintiff on September 1, 2009, imposed corporate tax on the Plaintiff for the business year 2003, and imposed additional tax on the Plaintiff for the business year 2004, OOOOwon for the business year 2005, OOOOwon for the business year 2006, OOOOwon for the business year 2006, and OOOwon for the business year 2007, respectively.

B. The plaintiff's remaining claims are dismissed.

2. 30% of the total costs of litigation shall be borne by the Plaintiff, and 70% by the Defendant, respectively.

1. Purport of claim

On September 1, 2009, the Defendant revoked the imposition of corporate tax for the business year of 2003, the imposition of corporate tax for the business year of 2004, the imposition of corporate tax for each business year of 2005 through 2007, each of the imposition of corporate tax for each business year of 2005 through 207, and the imposition of additional tax for each business year of 2003 through 207 (the Plaintiff sought revocation of all of the imposition of additional tax for the business year of 2004 to 2007).

2. Purport of appeal

The part against the plaintiff in the judgment of the court of first instance shall be revoked. The defendant shall revoke the disposition imposing corporate tax on the plaintiff on September 1, 2009 and each business year of 2004.

1. Scope of adjudication of this court;

In the first instance court, the Plaintiff filed a claim for partial revocation of the imposition of corporate tax for the business year of 2003, ② revocation of the imposition of corporate tax for the business year of 2004, ③ partial revocation of the imposition of corporate tax for each business year of 2005 to 2007, ④ revocation of the imposition of penalty tax for the business year of 2003, ⑤ revocation of the imposition of penalty tax for each business year of 2004 to 2007, and ⑤ the imposition of penalty tax for each business year of 2004 to 207. The court of first instance accepted the part of the claim for partial revocation of the imposition of penalty tax for each business year of 2005 to 207, ② the claim for revocation of the imposition of penalty tax for the

In response to this, the plaintiff only filed an appeal against the losing part and sought the revocation of all the imposition of additional tax for the business year from 2004 to 2007, which sought the revocation of the original part of the claim. As such, the object of this court is limited to ① the revocation of the imposition of corporate tax for the business year from 2003, ② the revocation of the imposition of corporate tax for the business year from 2004, ③ the revocation of the imposition of corporate tax for the business year from 2004

2. Details of the disposition;

The court's reasoning for this part is the same as the corresponding part of the judgment of the court of first instance. Thus, this part of the judgment is accepted in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

3. Whether the disposition is lawful;

A. The part on the revocation of the disposition imposing corporate tax for the business year 2003

(1) The plaintiff's assertion

Although the processing labor cost was included in the deductible expenses at the time of reporting the corporate tax for the business year 2003, this is merely a simple false declaration, and it does not constitute fraud or other unlawful acts, the imposition of corporate tax for the business year 2003 is null and void after the lapse of five years.

(2) Determination

(A) According to Article 26-2(1) of the Framework Act on National Taxes, national taxes can not be imposed after the lapse of five years from the date on which they can be imposed (No. 3). However, if a taxpayer evades a refund or deduction of national taxes by fraud or other unlawful acts, it cannot be imposed after the lapse of ten years (No. 1). Such dispositions made after the lapse of 7 years (No. 208Du109522, Dec. 23, 2010) are null and void (see, e.g., Supreme Court Decision 200Du1060, Dec. 20, 200). It is difficult to view that the Plaintiff’s act was carried out on the above 20th anniversary of the filing date of the tax return by means of fraud or other unlawful acts under Article 9-2(1)1, and thus, it is difficult to view that the Plaintiff’s act was carried on with the requirement of exclusion or omission of corporate tax by means of fraud or other unlawful acts.

B. The part of the claim for revocation of imposition of corporate tax for the business year 2004

(1) The plaintiff's assertion

(A) The Plaintiff was awarded a subcontract for landscaping works as indicated in the subcontract construction content table from a large constructor and directly performing planting works, etc., and jointly performed the facilities construction works, etc. among them.

Details of subcontracted Works

Classification

Name of the construction site

Order Points

Construction Period

Subcontract amount (won)

Total (won)

(1)

DDD Dohas

K Construction

From March 4, 2004 to May 30, 2004

OOO

OOO

EE apartment site 2 site

EE Construction

From March 3, 2004 to September 30, 2004

OOO

EE apartment site

EE Construction

From February 13, 2004 to June 30, 2004

OOO

EE apartment

EE Construction

From March 3, 2004 to June 30, 2004

OOO

F The F Home Town;

FFConstruction

From April 27, 2004 to August 31, 2004

OOO

GG

LLLLHC

From July 1, 2004 to October 31, 2004

OOO

HH apartment

MM General Construction

From August 26, 2004 to August 31, 2004

OOO

(2)

Ftel

FFConstruction

From September 1, 2004 to February 28, 2005

OOO

OOO

III Switzerland

GG

From July 24, 2004 to April 30, 2005

OOO

(3)

JJ University

FFConstruction

From June 15, 2004 to December 30, 2006

OOO

OOO

(B) "Classification of the above Subcontract Details Schedule" means ① the amount to be paid to BB in connection with the construction work completed in the business year 2004 as described above is included in the loss for the business year 2004 because only the OOO or the OOOO of the construction work paid after receipt of the tax invoice from BB BB, and the difference between the OOO (=OOO-OO) in the business year 2004 should be additionally included in the loss. ②; ② The above sub-division of the subcontract work schedule is included in the calculation of the earnings for the relevant business year based on the rate of the work progress. ③ The construction work price to be paid to BB shall be included in the expense for the relevant business year according to the actual payment period. ② The division of the construction work price for the corresponding business year shall be included in the calculation of the cost according to the rate of the work progress, ② the OOOO, ③ the OOOO in the division shall be included in the loss.

(A) Relevant provisions

The business year of accrual of losses of a domestic corporation for each business year shall be the business year which includes the date on which the relevant losses are determined (Article 40 (1) of the Corporate Tax Act); and the business year of accrual of losses for construction shall be the business year which includes the date on which the construction is completed, but in cases of construction for which the contract period (referring to the period from the commencement date to the date of the completion of construction; hereinafter the same shall apply) is not less than one year, the expenses calculated based on the rate of work progress shall be included in the deductible expenses for each business year; and in cases of construction for which the contract period is less than one year, the expenses shall be included in the deductible expenses for the relevant business year if the expenses are appropriated based on the rate of work progress. Furthermore, where the total construction cost accumulated cannot be verified because there is no book kept and recorded by the corporation or the contents of the book kept and recorded are insufficient, it shall be included in the deductible expenses for the business year which includes the date of completion of construction [Article 69 (1) 30 of the former Enforcement Decree of the Corporate Tax Act before its amendment]

(B) In light of the above relevant provisions, the following are examined.

In light of the purport of the whole pleadings as to whether the Plaintiff’s obligation for construction cost exists as alleged in BB in relation to each of the above construction works, the Plaintiff is unable to recognize the completion of each of the above construction works by December 31, 2004 as having been awarded a contract for each of the above construction works and having completed each of the above construction works by giving a subcontract to BB. However, it is difficult to recognize that the Plaintiff had no specific standard for calculating the construction cost as well as the amount of each of the above subcontracted construction works at the time of the above subcontract, and that there is no additional provision for the construction cost as stated in BB, and that there is no additional provision for each of the above construction work cost as stated in B, the Plaintiff’s assertion that there was no additional provision for the construction cost as stated in B, and that there is no additional provision for each of the above construction work cost as stated in B, i.e., the Plaintiff’s assertion that there was no additional provision for each of the above construction work cost as stated in B, and that there is no additional provision for each of the above construction work cost.

C. The part of the claim for revocation of the imposition of additional tax in the business year 2004 to 2007

(1) The plaintiff's assertion

Since the Defendant imposed each additional tax for the business year from 2004 to 2007 without expressly stating the type of and the basis for calculation of the additional tax, the imposition of each additional tax is unlawful.

(2) Determination

(A) When a single tax payment notice imposes both the principal tax and the additional tax, the individual tax amount and the basis for calculation thereof should be stated in the tax payment notice separately. In addition, where multiple types of additional tax are imposed, it is natural for a taxpayer to per se by classifying the amount and the basis for calculation of each tax disposition, etc., even if the additional tax are different from each other, so that the taxpayer can be aware of the details of each tax disposition by itself. As such, the imposition of additional tax cannot be avoided if a taxpayer merely states the total amount of additional tax without disclosing the type and the basis for calculation of the amount thereof (see, e.g., Supreme Court en banc Decision 2010Du12347, Oct. 18, 2012). Meanwhile, even if there is any defect in which matters required by relevant Acts and subordinate statutes are omitted, if it is evident that a taxpayer already stated in the tax payment notice prior to the taxation disposition, etc., and thus, the defect of the tax payment notice can be supplemented or recovered (see, e.g., Supreme Court Decision 2009Du3979, Mar.

(B) In light of these legal principles, comprehensively taking account of each of the statements No. 1, No. 1, No. 2, and No. 1-1 of the evidence No. 1, the Defendant’s notice of tax payment imposing additional tax on the Plaintiff, the Defendant did not distinguish each of the additional taxes as stated in the table No. 1 from the principal tax amount, and the total amount was merely stated separately from the principal tax amount, and it can be acknowledged that the basis for calculation of each additional tax is not specified

E.: Type of Additional Tax

Business year

Type of Additional Tax

204

Additional tax on underreporting, additional tax on non-payment, additional tax on non-payment of account statement, additional tax on non-payment of legal evidential documents;

205

206

2007

D. Sub-determination

As seen earlier, the imposition disposition of corporate tax for the business year 2003 was conducted after the exclusion period has expired, and thus becomes null and void. The imposition disposition of corporate tax for the business year 2004 through 2007 is all illegal, while the imposition disposition of corporate tax for the business year 2004 is lawful.

3. Conclusion

Therefore, the plaintiff's claim against the defendant is justified within the scope of the above recognition and the remaining claim is dismissed as it is without merit. Since the part against the plaintiff in the judgment of the court of first instance is unfair with a different conclusion, it is so decided as per Disposition by admitting part of the plaintiff's appeal and the plaintiff's extended claim in the trial of the court of first instance