Re-investigations based on specific and reliable reports on tax evasion are not illegal duplicate investigations.

Re-audit by a specific report on tax evasion supported objectivity and rationality is not an illegal duplicate investigation, and if the tax authority sufficiently verifies that the re-audit is a processed transaction through the financial flow, the current status of the business operator, a confirmation document, etc., the relevant construction cost is not an object of loss.

Article 81-4 (Prohibition of Abuse of Right of Tax Investigation)

2015Guhap71402 Revocation of Disposition of Corporate Tax Imposition

AAAA Corporation

Head of Guro Tax Office

March 31, 2016

April 14, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of corporate tax on December 1, 2014 on the Plaintiff; imposition of corporate tax on 2008; imposition of corporate tax on ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ in the imposition of corporate tax on 2010; imposition of value-added tax on 2008; imposition of value-added tax on 209, exceeding ○○○○○○○○○○○○○○○○○○○○○○○○○ on the second half-year basis; imposition of value-added tax on 209, exceeding the value-added tax on 209, exceeding the value-added tax on 2010.

1. Details of the disposition;

A. As a result of the consolidated investigation of corporate tax from May 14, 2014 to August 20, 2014 with respect to the Plaintiff (hereinafter “instant tax investigation”), the Director of the Regional Tax Office of ○○○ (hereinafter “the Director of the Regional Tax Office”) confirmed the existence of under-reported income amount of ○○○○○○○○ won, and notified the Defendant thereof.

B. Of the under-reported income amount, the amount indicated as the “processing Purchase” is five business partners’ ○○○○○○.

C. On December 1, 2014, the Defendant issued a correction and notification of corporate tax and value-added tax ○○○○○○ (hereinafter “instant disposition”).

D. On February 26, 2015, the Plaintiff dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on February 26, 2015, but was dismissed on May 29, 2015.

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

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

First, even before the tax investigation of this case, the Defendant conducted a corporate tax investigation of the Plaintiff for the business year 2005-2008 from December 13, 2010 to January 8, 201. Thus, the instant tax investigation constitutes a reinvestigation prohibited under Article 81-4(2) of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014; hereinafter “former Framework Act on National Taxes”).

Second, since there was a real transaction between the Plaintiff, CCC, and DD, the part on the premise of processing and purchase from the above two of the instant dispositions is illegal.

B. Relevant statutes

The entries in the attached Table-related statutes shall be as follows.

(c) fact finding;

1) The instant tax investigation commenced from July 13, 2005 to August 22, 2013, when the processing or purchase of the Plaintiff Company was at issue, as the report on Nonparty EE’s tax evasion (hereinafter “the report on instant tax evasion”).

2) The instant report on tax evasion included the following: (a) Nonparty FF, the representative director of the Plaintiff Company, was registered as the trade name of GG, HH and III (hereinafter collectively referred to as “CCC, etc.”) by lending the name of GG, HH and III (hereinafter referred to as “CCC, etc.”) including CCC, DDD, and completed the business registration under the name of the said company; and (b) drafted a false purchase tax invoice ( equipment fee, etc.) in the name of the said company; (c) opened and kept a passbook in the name of the said company; and (d) withdrawn the amount specified in the tax invoice after remitting the amount to the said account; and (e) withdrawn it individually

3) EE specified the business registration number, account number, etc. of CCC, etc. at the time of the instant tax evasion report, and submitted both the certified transcript of corporate register and the principal transaction passbook of the Plaintiff Company.

4) As a result of investigating the financial transaction details, etc. of the Plaintiff Company in the investigating agency, if the payment is made from the Plaintiff Company’s account to the account in the name of CCC, etc., the cash was deposited from the account in the name of CCC, etc. and immediately deposited into the FF account. In particular, it was revealed that all of the subsequent financial transactions was made at the same bank branch (○○○ branch of ○○ Bank is located near the location of the Plaintiff Company’s principal office, and the FF was completed the move-in report on June 14, 2012).

5) On August 19, 2014, FF prepared and submitted to the Investigation Agency a written confirmation confirming that the processing purchase data from CCC, etc. was sought, such as the instant report on tax evasion.

6) On August 31, 2010, BB, operated by DD, was reported on the closure of business on August 31, 2010, and BB, operated by CCC, the details of sales report in 201 were transferred. The two persons continued to work at the construction site belonging to the Plaintiff Company in 2011.

[Ground of recognition] Facts without dispute, Gap evidence 1, 5, 7, 8, Gap evidence 9-1 through 9, Gap evidence 10, Eul evidence 7, 10, 13, and 14, and the purport of the whole pleadings

D. Determination

However, according to the above facts, EE was in a position to know well the details of the Plaintiff’s tax evasion report and attached documents, and consistent with the facts confirmed by the Investigation Agency. CCC and DD appear to be an independent business operator, not an independent business operator, but an employee belonging to the Plaintiff company. In fact, FF appears to have deposited and withdrawn the payment in the name of the Plaintiff company’s representative director in managing the passbook in the name of CCC, etc., and FF also decided the above processing purchase. In full view of these circumstances, the instant tax investigation was based on specific tax evasion reports and data supporting objectivity and rationality, and constitutes an exceptional review permitted under Article 81-4(2) of the former Framework Act on National Taxes (see Supreme Court Decision 2008Du10461, Dec. 23, 2010), and further, the Defendant’s processing and purchase of the Plaintiff company is sufficient, and thus, the Plaintiff’s disposition of this case is legitimate and reasonable.

3. Conclusion

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