Disposal of income at the time of filing a revised return on the omission of corporate tax sales;

Since the revised declaration of this case was filed with the prior knowledge that the correction of the corporation would be made, the representative disposition of the omitted amount of this case is legitimate.

Article 67 of the Corporate Tax Act

Cheongju District Court Decision 2016Guhap10867

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ㅁㅁ세무서장

The second instance decision

National Rotations

o October 20, 2016

1. The plaintiff's claim is dismissed.

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

The notice of change in income amount of KRW 269,480,000, and income amount of KRW 198,040,200, which the former Defendant, committed against the Plaintiff on June 19, 2015 by the former Defendant on June 19, 2015, is revoked.

1. Details of the disposition;

A. The Plaintiff is a company established on August 10, 2006 for the business of unsatisfing, etc., and AA is the representative director of the Plaintiff from the time of its establishment.

B. On October 1, 2014, the director of the Central Regional Tax Office of China requested AA to explain the current status, etc. of the source of the source of the funds when comparing the current status of the operation of the funds and the source of the funds based on computerized data of the National Tax Service on the basis of the National Tax Service, and on October 1, 2014, AA requested the Commissioner of the Central Tax Office of China to explain the current status, etc. of the source of the funds. On October 28, 2014, AA submitted a written explanation of the source of funds that the actual amount of the funds is not insufficient. After reviewing the above written explanation submitted by AAA, the director of the Central Regional Tax Office of China requested AA to submit a revised statement of the source of funds, such as real estate, from 207 to 2010, which had been submitted to the former director of the Local Tax Office of this Regional Tax Office, and the Plaintiff's revised statement of the amount of funds deposited to AAA on November 14, 2014.

D. On November 15, 2014, AA submitted a revised return on the total amount of KRW 409,381,000 and KRW 876,901,020,020 of the Plaintiff’s sales accumulated amount of KRW 467,520 and KRW 467,901,020, to the Director of the Central Tax Office of Medium-Term Regional Tax Office. The Plaintiff was aware of the amount of KRW 467,520,20 for each business year of 2011 and 2012 (hereinafter “the key amount in this case”) as its internal reserve - the amount of income was disposed of as its internal reserve - on November 20, 2014, the revised return on the amount of income accrued to the Defendant for each business year of 2011 and 2012, and on November 25, 2014, the revised return on the amount of income accrued to the Plaintiff 2010.

F. The Plaintiff dissatisfied with the instant disposition and filed an objection against the Defendant on September 11, 2015, but the said application was dismissed on October 8, 2015, and thereafter filed an appeal with the Tax Tribunal on December 14, 2016, but the said application was dismissed on March 31, 2016.

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 through 9 (including paper numbers; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff confirmed that there was an omission of sales by the Plaintiff in the process of requesting the submission of explanatory data by the Central Tax Office against AA, which is a separate taxable object from the Plaintiff, and voluntarily filed a revised corporate tax return with respect to the amount at issue in this case. However, the Defendant rendered the instant disposition by deeming that the Plaintiff’s revised tax return constitutes cases prescribed by each subparagraph of Article 106(4) proviso of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 26981, Feb. 12, 2016; hereinafter “former Enforcement Decree of the Corporate Tax Act”), and the instant disposition was rendered by deeming that the Plaintiff’s revised tax return falls under cases prescribed by each subparagraph of Article 106(4) proviso of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 26981, Feb. 12, 2016; hereinafter the same shall apply) prior to the amendment of the former Enforcement Decree of the Corporate Tax Act (amended by the former Enforcement Decree of the Corporate Tax Act).

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act, upon delegation under Article 67 of the Corporate Tax Act, stipulates that where it is clear that the amount included in gross income under Article 67 of the Corporate Tax Act has been leaked out of the company, it shall be disposed of as dividends, bonuses from the disposal of profits, other income, and other outflow from the company according to the person to whom it reverts, and where it is unclear to whom it reverts, it shall be deemed that it has been reverted to the representative. Paragraph (4) of the same Article provides that "where a domestic corporation collects illegally flow out of the company, such as sales omission and processing expenses, within the period for filing a revised return under Article 45 of the Framework Act on National Taxes, and files a report by including it in gross income as tax adjustment, the disposal of income shall be deemed retained: Provided, That this shall not apply to cases falling under any of the following subparagraphs where it has been notified in advance that it would be corrected (subparagraph 1), "where it becomes known that an tax investigation has been launched (subparagraph 2),", "where tax officials have received notice of outflow from the head of the company" (Article 5).

The above provision is a principle that disposes of income pursuant to Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act with respect to the amount which was originally released from the company and is reverted to the representative, etc. of the relevant corporation. However, the main sentence of Article 106 (4) of the same Act provides that if the relevant corporation collects the amount by voluntary efforts within the prescribed period, it shall not be deemed that the amount was not out of the company, and thus, it shall be deemed that the amount was not out of the company, and thus, it shall not be out of the company. On the other hand, even if the amount

The disposal of income is required to be made.

2) In light of the purport of the above relevant Acts and subordinate statutes, we examine whether the Plaintiff’s revised return of corporate tax and the amount of outflow from the company were made voluntary efforts by the Plaintiff, and the proviso of Article 106(4) of the former Enforcement Decree of the Corporate Tax Act provides that the amount of outflow from the company should be included in the calculation of earnings, and where it is recognized that the Plaintiff would not have been able to make correction in advance without any voluntary efforts by the corporation by prescribing “other cases similar to those provided for in subparagraphs 1 through 5” among those provided for in subparagraphs 1 through 5, the disposition of the Plaintiff’s revised return of income pursuant to Article 106(1)1 of the former Enforcement Decree of the Corporate Tax Act is deemed as similar to those provided for in subparagraphs 1 through 5, and thus, the Plaintiff’s submission of the revised return of income amount to the Director of the Regional Tax Office, which appears to be legitimate after the Plaintiff’s request for correction of income amount, cannot be seen as having been made under the premise that the Plaintiff did not voluntarily submit any other data related to the Plaintiff’s request for correction of income amount.

3. Conclusion

Therefore, the Plaintiff’s claim of this case is dismissed as it is without merit. It is so decided as per Disposition by the assent of all participating Justices October 20, 2016.

presiding judge***