The commencement of business of the Housing Construction and Sales Business is not at the time of by-products sales but at the time of sales;

Since it is reasonable to view that the commencement of business of the Housing Construction and Sales Business is not the time of sale by-products but the time of sale by-products, it is reasonable to estimate the amount of the plaintiffs' income as standard expense because the income of housing business commenced is at least 150 million won

Article 143 (3) of the former Enforcement Decree of the Income Tax Act;

2018Guhap78596 global income and revocation of disposition

○ ○

○ Head of tax office

July 26, 2019

September 6, 2019

1. All of the plaintiff's claims are dismissed.

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

Cheong-gu Office

The imposition of global income tax on the Plaintiff in 201 X. X. 201 X. is revoked by the Defendant’s disposition of imposition of global income tax on the Plaintiff in 201 X, a trade-related class, and a trade-related class

1. Details of the disposition;

A. The Plaintiff completed the business registration (50% of the Plaintiff’s equity ratio) under the Housing Construction and Sales Business Act with △△ and 201X. XX. End. 201X.

B. The Plaintiff and Jeong-si, Y. X. X. 1, 201, obtained a building permit to newly build 12 multi-household units on the 9 XX-X ground of △△dong (hereinafter referred to as “instant housing”) and sold the instant housing after obtaining approval for use from X. Y. 201X.

C. When the Plaintiff filed a comprehensive income tax for the year 201 X, the Plaintiff calculated estimated income by applying the “simplified expense rate” under Article 143(4)2(b) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 25193, Feb. 21, 2014; hereinafter the same) and reported and paid the comprehensive income tax pursuant to Article 7(1) of the former Restriction of Special Taxation Act (amended by Act No. 12853, Dec. 23, 2014; hereinafter the same) by applying special tax reduction and exemption to small and medium enterprises pursuant to Article 7(1) of the former Restriction of Special Taxation Act.

D. The director of the Seoul Regional Tax Office, upon conducting a personal consolidated investigation against the Plaintiff, notified the Defendant of taxation data to the effect that: (i) the Plaintiff is a new business operator who commenced the business in 201 X with the sales revenue of the instant house; (ii) the amount of income exceeds the standard amount under Articles 143(4)1 and 208(5)2 of the former Enforcement Decree of the Income Tax Act; (iii) the amount of income should be estimated by applying the standard expense rate rather than the simple expense rate; and (iv) the Plaintiff did not engage in the construction business; and (iii) the tax data to the effect that it should exclude the special tax reduction and exemption for small

E. Accordingly, the Defendant issued a notice of correction and notification of global income tax 7X, commercialization, and commercialization (including additional tax) for the Plaintiff in 201 X. X. 201 X. (hereinafter “instant disposition”).

F. The Plaintiff, who was dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on X. X. 201 X. 201 X. 201X. However, the Tax Tribunal dismissed this appeal. X. XX. 201X.

[Reasons for Recognition] Unsatisfy, Gap evidence 1 through 5 (including branch numbers, hereinafter the same shall apply), Eul evidence 1 to 5, the purport of the whole pleadings

2. Relevant statutes;

It is as shown in the attached Form.

3. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

1) As to application of standard expense rate

The time of commencement of the business of the Plaintiff is not the time of commencement of sale, but the time of commencement of the business of the Plaintiff as a business operator who newly constructs and sells residential buildings, and the time of commencement of the business is the time of commencement of the construction of new buildings after completing business registration, or the time of occurrence of income by selling by-products

Even if not, since the business income taxation system of the Income Tax Act is considerably similar to the Corporate Tax Act, Article 6(5) of the Corporate Tax Act and Article 3 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 29529, Feb. 12, 2019) shall apply mutatis mutandis, the starting date of the business under the Income Tax Act shall be deemed the business registration date

"Therefore, the Plaintiff, as well as the commencement of the new construction of the instant housing and the commencement of the business in 201 X from selling the by-products generated in the process. However, the Plaintiff’s revenue in 201 X does not exceed KRW 36 million, and the Plaintiff constitutes a person subject to the application of simple expense rate pursuant to Article 143(4)2(b) of the former Enforcement Decree of the Income Tax Act. Ultimately, the instant disposition that applied the standard expense rate to the Plaintiff on a different premise is unlawful, and 2) the special tax reduction and exemption related to small and medium enterprises.

According to Article 7(1) of the former Restriction of Special Taxation Act, a small and medium enterprise special tax amount shall be reduced on income accrued from a place of business that runs a construction business. However, although the constructor of the instant housing is not the Plaintiff but another construction business entity, it is merely merely borrowed the Plaintiff’s name of a construction business entity under the name of the construction business, and in fact, the Plaintiff should be deemed to run the construction business. Accordingly, the instant disposition that excluded the above reduction or exemption provision is unlawful.

B. Determination

1) Determination as to whether standard expense rate is applied

A) According to the proviso of Article 80(3) of the former Income Tax Act (amended by Act No. 15225, Dec. 19, 2017; hereinafter the same) and Article 143(3) of the former Enforcement Decree of the Income Tax Act, when the amount of income is estimated, the amount of income shall be determined or corrected by deducting the amount calculated by multiplying the purchase cost, rent, labor cost, and income amount from the amount of income by standard expense rate. However, for a person subject to simple expense rate, the amount of income shall be determined or corrected by deducting the amount of income from the amount of income by simple expense rate. "person subject to simple expense rate" of the above provision means a new business operator who has commenced a business in the pertinent taxable period, and the constructor (including a residential development and supply business in the immediately preceding taxable period) whose amount of income is less than 150 million won, or a constructor (including a new business operator under Article 143(4)1 and 208(5)2(b) of the former Enforcement Decree of the Income Tax Act) or a new business operator under Article 14(13) of the former Value-Added Tax Act.

Meanwhile, under the principle of no taxation without representation, tax laws shall be interpreted as the text of the law, and shall not be extensively interpreted or analogically interpreted without reasonable grounds, barring any special circumstances. However, even according to the language and text of the tax laws itself, if their meaning is unclear or if it appears that there is a conflict between the laws and regulations, the court must naturally indicate the true meaning of the language and text at issue through harmonious interpretation between the laws and regulations. In such cases, a judge can make a combined interpretation of the laws and regulations that consider legislative intent and purpose to the extent that it does not undermine legal stability and predictability pursued the principle of no taxation without representation (see, e.g., Supreme Court en banc Decision 2011Du551, Apr. 16, 2015).

B) In full view of the contents of the relevant statutes and the evidence and the purport of the entire pleadings, it is reasonable to view the Plaintiff’s business commencement date as 2013, which is the starting point of the sale of the instant housing, as the starting point of the sale of the instant housing, rather than the starting point of the Plaintiff’s business registration or the starting point of the purchase of the by-products from the time of the Plaintiff’s business registration.

(1) Article 143(4)1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010) stipulates that Article 143(4)1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010) stipulates that Article 143(2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580) applies simple expense expense to a business operator who newly starts a business in the pertinent taxable period. Article 143(4)2 of the former Enforcement Decree of the Income Tax Act provides that the former Enforcement Decree of the Income Tax Act (including the amount of revenue increased by decision or revision) shall apply to a business operator whose total amount of revenue during the immediately preceding taxable period (including the amount of revenue increased by decision or revision) is short of the standard amount of income. Article 143(4)1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 2130, Feb. 1, 20101, 20101).

In addition, Article 143 (4) of the Enforcement Decree of the Income Tax Act, which applies to the portion of income for the taxable period that begins after January 1, 2019, which was amended by Presidential Decree No. 28637, Feb. 13, 2018, provides for the application of standard expense rate by excluding the application of simple expense rate in cases where the amount of income for the taxable period concerned falls short of the standard amount of the total amount of income for the immediately preceding taxable period, as well as the business operator (title 1) who starts a new business in the taxable period concerned,

In light of the amendment history of Article 143 (4) of the Enforcement Decree of the Income Tax Act, the simple expense rate system is a system that intends to minimize the tax payment costs of small small-scale business operators who lack the capacity to keep records of the principal expenses required by the standard expense rate system, and the legislators seem to have gradually reduced the scope of business operators subject to the simple expense rate application. Furthermore, according to the text of the supplementary provision, legislators seem to understand the "construction commencement", "construction business, construction business, and commencement of real estate development and supply business" as a separate concept.

Therefore, considering these legislative intent, in the case of housing construction and sales business that operates a business for a long period exceeding a certain scale due to its characteristics, it is necessary to grasp the commencement date of the business as objective and practical time for the supply of housing subject to sale rather than the commencement date that can be determined according to the intention of the

(2) The commencement date of a business of the Housing Construction and Sales Business shall not be formally determined on the basis of the date of business registration, etc., but shall be substantially determined on the basis of the time when the preparation for the business was completed and when the business was in a state where the business was performed or is able to perform its original business (see Supreme Court Decision 94Nu15905, Dec. 8, 1995). The initial housing construction and sales business is included in real estate sales business due to its nature (see Supreme Court Decision 2008Du21768, Jul. 22, 2010). The purpose is to sell housing ultimately.

(3) Whether the Plaintiff constitutes business income under the Income Tax Act ought to take into account whether business activities are continuously and repeatedly conducted in light of the business profit purpose, the scale, frequency, and mode of business (see, e.g., Supreme Court Decision 91Nu6559, Nov. 26, 1991). However, there is no evidence suggesting that the Plaintiff had objectively expressed his intent to operate a housing construction and sales business for profit prior to commencement of the sale of the instant housing. The fact that the Plaintiff commenced or completed the instant housing for profit-making purposes is difficult to deem that the Plaintiff continuously and repeatedly conducted activities for profit-making purposes, solely on the ground that the Plaintiff sold the by-products generated from the removal of the existing building, it is difficult to deem that the Plaintiff continuously and repeatedly conducted activities for profit-making purposes and became an objective entity of the Plaintiff as a new housing construction and sales business entity. Furthermore, in light of the scale of business, etc., it is doubtful whether the revenue stamps that the Plaintiff claimed in the immediately preceding year have been acquired by removing the previous building.

C) Furthermore, according to the purport of the evidence No. 4 and the entire pleadings, it is evident that the Plaintiff’s report on the revenue amount of the instant housing related to the instant housing was recognized to have been the cause of 1, commercialization, commercialization, and commercialization. According to this, it is evident that the Plaintiff, who started a new business in 201 X, which was the starting point of the sale of the instant housing, did not amount to KRW 15,000,000 in the relevant taxable period. Accordingly, the Plaintiff does not fall under the simplified expense rate under Article 14

D) Therefore, the Plaintiff’s assertion on this part is without merit.

2) Determination on whether to grant special tax reduction or exemption

A) Articles 2(3), 7(1)1(g) and 7(1)2 of the former Restriction of Special Taxation Act concerning the income accrued at the relevant place of business for a company that runs a construction business among small and medium enterprises

The amount of tax calculated by multiplying the income tax by 20/100 shall be reduced or exempted, but the classification of the type of business used in this Act shall be in accordance with the Korean Standard Industrial Classification publicly announced by the Commissioner of the Statistics Korea in accordance with Article 22

However, according to the former Korean Standard Industrial Classification (amended by the Statistics Korea Notice No. 2015-311, Sept. 24, 2015; hereinafter the same), “Housing Construction Business (Classification Code 4111)”, which applies in the instant disposition-related global income tax taxable period, refers to industrial activities that build residential buildings, such as exclusive and multi-households, apartment houses, etc., solely or multi-households. Meanwhile, the industrial activities that build residential buildings by entering into a contract without directly performing construction activities, and sell and sell real estate, are classified as “real estate business and rental business” (Assignment Code 68121).

나) 위와 같은 규정 내용에다가 갑 제6, 7호증, 을 제2, 6 내지 9호증의 각 기재와 변론 전체의 취지를 종합하여 인정되는 다음과 같은 사정 즉, ① 이 사건 주택의 건축물대장에는 시공자가 '최XX XXXX 주식회사'로 기재된 점, ② 원고는 건설업 면허를 소지하고 있지 않고, 이 사건 주택 건설공사를 총괄적인 책임 하에 건설할 인적, 물적시설이나 능력을 갖추었다고 볼 만한 별다른 자료도 제출하지 못하고 있는 점, ③ 원고가 제출한 원천징수이행상황신고서, 일용근로자소득지급 명세서 등(갑 제6, 7호증)에 의하면, 원고가 일용근로자에 대한 노무비 등으로 일부 비용을 지출한 사정은 인정되나, 그 액수가 이 사건 주택의 분양수입금액에 크게 미치지 못하는 액수인 점 등을 고려하면, 원고가 이 사건 주택의 신축ㆍ판매와 관련하여 영위한 사업은 구 한국표준산업분류상 '부동산업 및 임대업'의 세세분류항목에 해당하는 '주거용 건물 개발 및 공급업'에 해당하고, 구 조세특례제한법상 중소기업 특별세액감면 대상이 되는 '건설업'에 해당한다고 보기 어렵다.

C) Therefore, the Plaintiff’s assertion on this part is without merit.

3) Sub-decisions

The instant disposition, which took place by deeming the Plaintiff as a new business operator who started a business in 2013 and calculated the amount of income in 2013 by means of estimation based on standard expense rate, and excludes special tax reduction and exemption for small and medium enterprises, is eventually lawful.

4. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.