The re-audit decision following the formal objection cannot be deemed to be abuse of tax investigation authority.

It does not constitute a violation of the principle of non-defluence against the follow-up disposition following the re-examination of the objection.

Article 81 (Prohibition of Abuse of Right of Tax Investigation)

2015Guhap21047 Revocation of Disposition of Imposing corporate tax, etc.

(State)AAA

Head of Suwon Tax Office

October 20, 2015

November 24, 2015

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of KRW 00,000,000 for the business year 2008 against the Plaintiff on March 17, 2014 is revoked.

1. Details of the disposition;

A. The plaintiff is a corporation that runs the business of importing and exporting electronic parts, and the second period of 2008.

Although ○○ Co., Ltd. (hereinafter referred to as “○○ Electronic”) issued sales tax invoices of KRW 000,000,000 (the supply value; hereinafter referred to as “the first issue amount”) during the taxable period, it omitted a sales report on the first issue amount at the time of filing a corporate tax base and tax amount for the business year 2008.

B. The first issue of this case at the time of filing a revised return of corporate tax for the business year 2008 on June 27, 2013

Although the amount was treated as an internal reserve in the calculation of earnings and losses, it did not pay corporate tax accordingly.

Accordingly, on July 2, 2013, the Defendant issued a revised and notified the Plaintiff of KRW 000,000,000 as corporate tax on July 2, 2013.

On July 17, 2013, the first issue amount was deemed to have been out of the company, and was disposed of as a bonus to Han, the representative of the Plaintiff, and the notification of the change in the amount of income (hereinafter referred to as “the notification of the change in the amount of income”). As the Plaintiff did not perform its withholding duty following the notification of the change in the amount of income, the Plaintiff imposed and notified the Plaintiff of KRW 00,000,000 as earned income tax on October 8, 2013 (hereinafter referred to as “the imposition of tax on earned income”).

C. On December 30, 2013, the Plaintiff was dissatisfied with the imposition disposition of wage and salary income tax of the instant case and raised an objection against the Defendant.

The defendant filed an application after deliberation by the National Tax Examination Committee, and on January 28, 2014, "the first issue amount in this case"

Although there is no fact that the amount is counted in the account book or included in the gross income, it appears that the considerable amount is deposited in the corporate foreign currency account, and it appears that the corporation paid the credit purchase amount related to the corporation's business with the funds withdrawn from the input amount, it is reasonable to exclude the first issue amount from the bonus disposal subject to the representative bonus because it is not leaked outside the company.

However, in light of the fact that the sales time and the settlement date did not perform normal accounting and did not include the amount at the time of filing a corporate tax return for the business year 2008, even though the first issue was deposited at a certain fixed sales place, the Plaintiff’s balance at the end of the credit account sales term and the balance at the end of the credit sales term at ○○ e-mail did not appear to amount to the first issue amount, and that the Plaintiff’s balance at the end of the credit sales term and the balance at the end of the credit sales term at the customer’s account settlement, and that the balance at the end of the credit sales term at the customer’s account settlement term and at the end of the credit sales term at ○ e-electronic are inconsistent with each other and not proved specifically as to the reasons, it is reasonable to re-examine whether the first issue amount was used as the expenses related to the corporate

D. After re-audit according to the re-audit decision of this case, the Defendant: (a) deemed that the key issue of this case was reserved in the company; and (b) notified the change in the amount of income of this case; and

On March 17, 2014, the re-audit process confirmed the credit account sales amount of KRW 00,000,000 which was omitted in the account book (hereinafter referred to as the "second-party amount of this case") and included it in the gross income, and revised the corporate tax of the business year 2008 to KRW 00,000,000, the Plaintiff corrected the corporate tax of the business year 2008 to correct and notify the remainder of KRW 00,000 except for the already notified amount.

E. The Plaintiff, who is dissatisfied with the instant disposition, filed an objection on June 13, 2014 and filed on October 23, 2014.

Although the Intellectual Property Tribunal filed a petition for an inquiry, the petition was dismissed on February 3, 2015.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, Eul evidence Nos. 1, 2, 3, and 7, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

1) The re-audit decision of this case re-audits as to whether the first issue amount was out of the company or reserved for the company, and as a result, the tax base of the disposition imposing tax on earned income of this case

The defendant is merely the purport of correcting the amount of tax. The defendant is the scope of the re-audit decision of this case.

income tax that is not related to the earned income tax that is subject to an objection shall increase corporate tax for the business year 2008.

As the instant disposition was made, the instant disposition goes against the validity of the ruling stipulated in Article 80 of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014; hereinafter referred to as the “Framework Act on National Taxes”).

2) The instant disposition was conducted on July 2, 2013 by re-audit of the same tax item (corporate tax) and the same taxable period (2008 business year) as corporate tax already imposed on the Plaintiff on July 2, 2013, which is in violation of the principle of prohibition of abuse of the right of tax investigation, as it goes against the principle of prohibition of abuse of the right of tax investigation.

3) The instant disposition is simply a balance of the credit account sales term and a statement of customer director on the Plaintiff’s account settlement.

The fact that the balance of the credit account sales and the balance of the credit purchase amount of ○○ Electronic does not coincide;

There is no proof as to when the issue amount of the second issue of this case was omitted by any method, and it is contrary to the principle of taxation based on the evidence, without any proof as to when the issue amount of this case was omitted.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination on the Plaintiff’s first argument

A) Whether the instant disposition goes against the binding force of the re-audit decision

The re-audit decision is a unique type of decision that allows the agency to re-examine specific matters, and most of the decisions are made in the form of "to determine the tax base and tax amount according to the results of re-audit", and most of the criteria or scope for re-audits are presented, and the subsequent dispositions are reserved entirely to the agency. Since the binding force of the review decision affects only the determination on specific reasons such as the order of the judgment and the recognition and judgment of facts constituting the premise, that is, the disposition, etc., in accordance with the criteria for the re-audit decision, the disposition agency merely has the legal obligation to conduct re-audit in accordance with the criteria for the initial disposition or even if the disposition is maintained after re-audit in accordance with the purport of the re-audit decision or based on the new taxation requirements, it does not go against the binding force even if the disposition agency maintains the initial disposition after re-audit decision or re-audit in accordance with the purport of the re-audit decision. However, as seen above, the defendant held that the first issue amount of the re-audit decision was reserved after the re-audit decision against the plaintiff's decision.

B) Whether there was a violation of the principle of prohibition of disadvantageous change

(1) Article 79(1) of the Framework Act on National Taxes provides that “The Council of Tax Judges or the Joint Session of Tax Judges shall not cancel or modify all or part of the disposition other than the disposition for which a request for adjudgment has been made, or make a decision on a new disposition.” In addition, Article 79(2) provides that “The Council of Tax Judges or the Joint Session of Tax Judges shall not make any decision unfavorable to the claimant than the disposition for which a request for adjudgment has been made.” This principle and the principle of prohibition on disadvantageous change apply to the case of an objection without express provision. However, it is generally applied to the case where the main contents of the decision on objection are more unfavorable to the claimant than the taxation subject to the objection, and it is not applicable to the case where the tax authorities correct the tax base or tax amount omitted or erroneous on the basis of the contents of the decision on objection revealed by the grounds for objection (see, e.g., Supreme Court Decision 2005Du106

On the other hand, a re-examination decision which is conducted in practice as a type of the decision on the objection, etc. takes the form of re-auditing the matters pointed out in the relevant decision on all or part of a single taxation unit, and making the disposition following the correction of tax base and tax amount or maintaining the initial disposition according to the result. Accordingly, only after receiving the notification of the subsequent disposition following the re-audit decision, the applicant, etc. who received the notification of the re-audit decision can specify the subject and scope of objection in the next stage of litigation. Considering the form and purport of the re-audit decision, and the characteristics of the tax legal relationship with autonomous administrative control function and complicated and professional and technical nature of the administrative appeals system, the re-audit decision is deemed to be a modified decision in which the agency made the results of re-audit as to the matters pointed out in the relevant decision, and it would be deemed that the content of the subsequent disposition would be part of the decision on the objection. Accordingly, the re-audit decision becomes effective as a decision on the objection.

(See Supreme Court en banc Decision 2007Du12514 Decided June 25, 2010, etc.)

(2) In light of the above legal principles, as seen earlier, the defendant revoked the notification of change in the amount of income of this case and the disposition of imposition of wage and salary income of this case originally rendered to the plaintiff as a result of re-audit of the plaintiff according to the re-audit decision of this case, and such decision constitutes a subsequent disposition of the re-audit decision immediately. Thus, the above revocation of the original disposition is not in violation of the principle of non-defluence in re-audit decision or in violation of the principle

On the other hand, the instant disposition is not a follow-up disposition according to the instant re-audit decision, but a decision to correct the tax base or tax amount which is erroneous based on the details revealed in the reasons for the instant re-audit decision ("the Plaintiff's balance of the credit account sales term, the balance of the credit account sales term of the customer director, and the balance of the credit sales term of ○○○ Electronic on the account settlement of the Plaintiff's account). In addition, the subject of Article 79 (2) of the Framework Act on National Taxes is stipulated as the Council of Tax Judges or the Joint Session of Tax Judges as the subject of the judgment, and considering the special nature of the tax relationship with autonomous administrative control and complicated and technical character of the administrative appeals system, it cannot be deemed that the instant disposition violates the principle of prohibition of disadvantageous alteration.

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

2) Judgment on the second argument by the Plaintiff

However, according to Article 81-4 (2) 4 of the Framework Act on National Taxes, when a tax official conducts an investigation according to the "decision on necessary disposition regarding an objection", a tax official may conduct a reinvestigation on the same item of tax and the same taxable period. As seen earlier, since the re-audit conducted against the plaintiff by the defendant's tax official pursuant to the decision on re-audit of this case against the plaintiff's objection, even if the re-audit was conducted for the same item of tax and the same taxable period as the corporate tax imposed on the plaintiff in the previous taxable year, it cannot be deemed as an abuse of the authority to conduct a tax investigation as it violates the principle of prohibition of double investigation as stipulated in Article 81-4 (2)

3) Judgment on the third assertion by the Plaintiff

In full view of the following circumstances, the Defendant’s determination of the instant No. 2 as the account receivables omitted by the Plaintiff, on the following grounds: (a) the facts as seen earlier; (b) each of the evidence mentioned earlier; and (c) the evidence indicated in the evidence Nos. 4, 5, and 6, and the purport of the entire pleadings is justifiable; and (c) the Plaintiff’s assertion on this part

A) The Plaintiff’s settlement of accounts in the business year 2008 includes a balance of KRW 00,000,000 for the credit account receivables with ○○ Electronic. However, the Customer’s president stated the balance of KRW 00,000 for the credit account receivables with ○ Electronic. As such, the Defendant voluntarily adjusted the difference by the Plaintiff.

B) The Plaintiff’s principal director of the business year 2008 records the credit account balance of the Plaintiff’s ○ Electronic as KRW 000,000,000 (hereinafter the same shall apply), but according to the principal director of the business year 2007 business year, the balance of the credit account sales term for the Plaintiff’s ○ Electronic was stated as KRW 00,000,000,000,000,0000,0000,000,0000,000,000,000,000,000, and the first issue amount of the instant case where the initial sales were omitted, considering the Plaintiff’s accurate balance of the credit account sales at the end of the business year 2008 business year as listed below, the Defendant determined that the credit sales balance of the Plaintiff’s ○ Electronic Products’s 200,000,000,000,000 won, in light of the following facts.

C) During the re-audit process, the Plaintiff asserted that the balance of the credit account sales amount for the Plaintiff’s ○○ Electronic in the business year 2008 was KRW 0 billion, and that the balance of the credit account sales amount for the Plaintiff as stated in the above amount and the Customer Director of the ○○ Electronic is inconsistent with the difference at the time of offset, including the difference at the time of offset, the inclusion of the expected amount of the credit purchase amount for the ○○ Electronic in the amount of credit settlement, and the difference at the time of the settlement of the bill, but

D) On December 31, 2008, the Plaintiff’s opening of the subdivision submitted on December 31, 2008, included sales management expenses (a park) that have not been actually paid as indicated in the following table in the account of reducing credit sales, and accounts for the reduction of credit sales, even though the collection of the actual credit sales is unclear, as if the account was recovered in cash. Thus, at the time of re-audit, the Plaintiff failed to disclose the true account items regarding the account items.

E) The burden of proving the taxation requirement in a lawsuit seeking revocation of a tax disposition is against the tax authority, but if it is revealed that the tax requirement is presumed in light of the empirical rule in the course of a specific lawsuit, it cannot be readily concluded that the pertinent tax disposition is an unlawful disposition that failed to meet the taxation requirement unless the other party proves that the fact is not eligible for the application of the empirical rule (see, e.g., Supreme Court Decision 2002Du6392, Nov. 13, 2002). As seen earlier, the Plaintiff and ○ Electronic business customer president of the business year 2008 does not coincide with the amount of credit sales and the

It can be inferred that the credit account sales corresponding to the amount of the second issue of this case were omitted.

Although it was revealed, the plaintiff was recorded in each book of the plaintiff and ○ Electronic from the time of reinvestigation to the present day.

The credit sales balance shall not be provided with an explanation to be received for the reasons why the balance of the credit sales does not coincide.

In fact, despite the difference in the amount recorded in the books, the second key issue amount in this case is actual.

shipment of any material to the effect that there is no omission of credit account equivalent to the amount of

There is no room for it.

F) On December 31, 2008, the Plaintiff submitted in the course of re-audit, stated the details of "retailing KRW 0 billion in substitution for the sales cost (goods) at the branch of subdivision on December 31, 2008, which the Plaintiff submitted in the course of re-audit, and the Defendant did not present the receipt and payment of goods, etc. in relation thereto, asserting that it should be included in deductible expenses. The Defendant did not prove that the counter account is the actual credit purchase amount, and that the product cost was paid to any transaction partner at any time.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so ordered as per Disposition.

shall be ruled.