Where the tax authority's disposition of income and the notice of change in the amount of income is given, whether the tax authority can contest the liability for income tax, not the inherent defect in the collection disposition in an appeal litigation on the subsequent disposition of collection.

In a case where a tax office’s disposition of income and a notice of change in the amount of income is given, the tax office’s disposition of income and a notice of change in the amount of income are deemed to have paid the relevant amount to the person to whom the income recorded in the notice was given on the date of receipt of the notice of change in the amount of income, and at the same time the tax liability for withholding is established, and thus, the notice of change in the amount of income is subject to appeal litigation as an act of the tax office directly affecting the tax liability of the corporation that is the withholding agent. In addition, the tax office’s notice of change in the amount of income constitutes a disposition of tax collection ordering the payment of the determined amount of income, which is a prior disposition, even if there is a defect in the notice of change in the amount of income that is a prior disposition, it shall not be succeeded as it is, unless there is a ground for invalidation. Accordingly, if the tax office’s disposition and the notice of change in the amount of income are given, the tax office’

Articles 21(2) and 22(2) of the former Framework Act on National Taxes (Amended by Act No. 911, Jan. 1, 2010); Articles 66(2)1 and 67 of the former Corporate Tax Act (Amended by Act No. 7005, Dec. 30, 2003); Article 106(1)1 Item (b) of the former Enforcement Decree of the Corporate Tax Act (Amended by Presidential Decree No. 18174, Dec. 30, 2003); Article 127(1)4 of the former Income Tax Act (Amended by Act No. 6958, Jul. 30, 2003); Article 2 of the Administrative Litigation Act

Supreme Court Decision 74Da1254 Decided October 8, 1974 (Gong1974, 8073), Supreme Court Decision 85Meu1548 Decided November 8, 198 (Gong1988, 1519), Supreme Court Decision 98Du16682 Decided March 28, 200 (Gong2000Sang, 102Du9254 Decided March 28, 2000), Supreme Court en banc Decision 2002Du1878 Decided April 20, 206 (Gong2006Sang, 940), Supreme Court Decision 205Du14394 Decided September 8, 2006, Supreme Court Decision 2005Du14394 Decided 2085 Decided 208205Du16885 Decided 2065205).

doping Co., Ltd. (Law Firm Seoil, Attorneys Ahn Byung-hee et al., Counsel for the defendant-appellant)

Samsung Head of Samsung Tax Office

Seoul High Court Decision 2008Nu29504 decided July 16, 2009

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

Where the tax authorities’ disposition of income and the notice of change in the amount of income thereby are given, the corporation, the withholding agent, is deemed to have paid the relevant amount to the person to whom the income recorded in the notice was given on the date of receipt of the notice of change in the amount of income and becomes final and conclusive at the same time, so the notice of change in the amount of income is subject to appeal as an act of the tax authorities directly affecting the corporate tax liability (Supreme Court en banc Decision 2002Du1878 Decided April 20, 206), which is the withholding agent, as the act of the tax authorities that directly affects the corporate tax liability (Supreme Court Decision 2002Du1878 Decided April 20, 206). Furthermore, the tax office’s notice of change in the amount of income constitutes a disposition ordering the payment of the finalized amount of tax, and even if there is a defect in the notice of change in the amount of income, it shall not be succeeded as it is as it is the subsequent disposition, unless the defect does not constitute a ground for invalidation.

According to the reasoning of the judgment below, on June 1, 2003, the defendant deemed three copies of purchase tax invoices received from Gold Korea as false tax invoices without real transactions, and deemed the supply price of 118,322,760 won as non-deductible expenses, and disposed of 130,15,036 won including the purchase tax amount as bonus to the representative, and issued a notice of change in the income amount (hereinafter "the notice of change in the income amount") to the plaintiff on August 1, 2006. Since the plaintiff did not pay the withholding tax pursuant to the notice of change in the income amount, the defendant notified the plaintiff on March 1, 2007 that he would pay the total of 35,68,290 won including the tax withholding tax for the year 203 as earned income (hereinafter "the collection disposition of this case"), and determined that the plaintiff did not dispute the change in the amount of income of this case and did not dispute the change in the collection of the income amount of this case as unlawful.

In light of the above legal principles and records, the judgment of the court below is just and there is no error in the misapprehension of legal principles as to the grounds for appeal against the collection disposition.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Min Il-young (Presiding Justice)