Review Corporation 2007-0097 (2008.05.30)

Non-deductible of processing labor costs

It is reasonable to deem the processing labor cost as there is no specific evidence to support the payment of labor cost in relation to the construction work, while submitting a written confirmation and receipt.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

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

On June 11, 2007, the defendant imposed corporate tax of 2003 on the plaintiff 54,657,247, corporate tax of 2004, corporate tax of 41,591,610, corporate tax of 2005, corporate tax of 31,678,930, and notification of change in the amount of bonus disposal by the Park JJ, respectively.

1. Details of the disposition;

The following facts are recognized, either as different between the parties, or as a whole by taking into account the respective descriptions of Gap 1, 2, and 1-1 through 4, and the overall purport of arguments:

A. The Plaintiff is a company established on August 22, 1996 for the purpose of the supply of and demand for civil and construction works, etc.

B. On February 2007, the Director of Busan Regional Tax Office conducted an integrated investigation of corporate tax for the year 2003, 2004, and 2005 with respect to the plaintiff, that the amount of labor expenses, wages, and outsourcing expenses reported by the plaintiff included as deductible expenses for each business year in the above business year, the amount of KRW 303,420,00 in the business year 2003, 108,125,000 in the business year 2004, and the amount of KRW 81,517,272 in the business year 205, and notified the defendant of such excessive appropriation. The detailed details are as follows.

C. Accordingly, the Defendant deemed that the above processing labor cost was excluded from deductible expenses and the above amount was reverted to the Plaintiff’s representative, and disposed of as bonus. On June 11, 2007, the Defendant revised the corporate tax base and tax amount to the Plaintiff on the business year 122,823,110 won in the business year 2003, and imposed corporate tax on the Plaintiff in the business year 41,591,610 won in the business year 2004, and 31,678,930 won in the business year 205, and notified the change in the income amount due to the above disposal.

D. Accordingly, on September 12, 2007, the Plaintiff filed a request for review with the Commissioner of the National Tax Service on September 12, 2007, and the Commissioner of the National Tax Service rendered a review on May 30, 2008 that KRW 179,900,000, out of the labor cost for the business year 2003, the Plaintiff newly built, as a sales agency service fee for the sale of Do EE apartment units, should be included in the expenses, considering that the fact that the Plaintiff actually paid to real estate consulting is recognized, the tax base and tax amount for the business year 2003, and the remainder of the Plaintiff’s request was dismissed.

E. Accordingly, on June 30, 2008, the defendant should additionally include 179,90,000 won as necessary expenses for the business year of 2003, in deductible expenses, as well as 54,657,247 won for corporate tax of 2003 (hereinafter referred to as the "disposition in this case").

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case should be revoked because it is unlawful for the following reasons.

(1) Of the principal labor cost, the amount of KRW 19,690,00 in the business year 2003, KRW 45,155,00 in the business year 2004, KRW 2640,00 in the business year 2005, and KRW 67,485,00 in the business year 2005 (hereinafter referred to as the “instant key amount”) shall be the amount of the pertinent labor cost, when the Plaintiff transfers the amount of labor cost in package to the site warden according to the progress of the construction work, the site director shall pay the amount in cash to the professional engineer and the human resources supplier, the human resources supplier shall pay the amount to the individual worker again in cash. If the Plaintiff transfers the amount of labor cost to the professional engineer or the human resources supplier, the method of paying the amount of labor cost again to the individual worker or the Plaintiff shall not be included in the calculation of losses, and thus, the actual amount of labor cost in the instant case shall not be included in the calculation of the amount of labor cost.

(2) Even if not, money paid by the Plaintiff to a professional engineer is considered as having been paid pursuant to a labor contract, i.e., a method of employing human resources to the present head to the extent delegated by the Plaintiff as a result of the Plaintiff’s entry of the scope of construction and the input of human resources into the professional engineer, and thus, it should be included in deductible expenses as it falls under the pretext of outsourcing expenses

B. Relevant legislation

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

(c) Fact of recognition;

The following facts are recognized without disputes between the parties, or by taking account of the aforementioned evidence and the overall purport of the pleadings.

(1) As a result of comparison and review of the daily labor cost statement, etc. submitted by the Plaintiff on the labor cost reported by the Busan regional tax office in his deductible expenses with the computerized data managed by the National Tax Service via the National Tax Service’s computer network, the total amount of KRW 199,665,000 was investigated as being paid to the overlapping person, another company’s employees, and employees at the time when it is difficult to perform construction work, and the total amount of the processing labor cost was identified as having been included in deductible expenses (the request for review was included in deductible expenses as necessary expenses).

of the Board).

(2) On April 2007, ParkJ around Busan Regional Tax Office prepared and submitted a certificate of confirmation that the representative director used the daily labor cost of 262,350,000 won in the business year 2003, 93,275,000 won in the business year 2004, and 23,940,565,000 won in the account book for the business year 23,940,000 won in the business year 2005, and that the cost of 379,565,000 won in the above processing labor cost of 379,565,00 won in the account book, although there was no fact that the representative director used the daily labor cost of 203,379,565,000 won for personal purposes from January 1, 203 to December 31, 2005.

(3) The Defendant’s total product cost of KRW 199,665,00 (i.e., KRW 379,565,00 in the initial processing labor cost of KRW 179,565,00 in the initial processing labor cost of KRW 179,9,900 in the business year of 2003, KRW 45,15,000 in the business year of 2004, and KRW 67,485,00 in the business year of 2,640 in the total amount of KRW 2,640 in the business year of 205 is as shown in the attached Table.

D. Determination

(1) The part concerning the claim in paragraph (1) above

(A) Where the tax authority finds that part of the labor cost reported by the taxpayer as deductible expenses is a processing labor cost, the burden of proving that the above labor cost was actually paid as actual wage is attributable to the taxpayer who is easy to submit all the data, such as the book-keeping of the specific cost expenditure and the evidence, considering the equity of the parties (see, e.g., Supreme Court Decisions 96Nu1627, Apr. 26, 1996; 96Nu8192, Sept. 26, 1997). Furthermore, if the tax authority received a confirmation from the taxpayer that a certain portion of the labor cost was a processing labor cost in the course of a tax investigation, the value of the evidence of the confirmation cannot be readily denied unless there are special circumstances, such as the taxpayer’s forced preparation against the will of the author, or it is difficult to consider it as supporting material for the specific fact due to lack of the content (see, e.g., Supreme Court Decision 201Da2560, Dec. 6, 2002).

(B) From the above point of view, in light of the facts of recognition of Paragraph (c) above, and the circumstances of Paragraph (1) through (9) above, if the plaintiff paid directly the price of the dispute in this case, it is difficult to believe that each of the statements of No. 4-1 to 10, 10, 10-1, 13-1, 12-1, 14, 16-1, 2, 17, 19-1 through 4, 21-1 through 5, 10, 10-1 to 10, 10, 21-1, 10, 10-1, 2, 13-1, 2, 12-15, 212-2, 3-1, 2, 3-2, 15-2, 2, and 21-2, 3-1, 3-2, and 3-15 of the plaintiff evidence.

1) As to the new construction of the Jinju City Branch of the KK Federation:

A) Although the Plaintiff submitted a written confirmation (Evidence No. 5-1) to the effect that, if he/she pays the labor cost to an individual worker as a lump sum contract owner, he/she would have paid the labor cost to him/her as a lump sum, during the construction work, but there is no contract to support him/her.

B) According to the statement in Category A6, the fact that the money was remitted to the MM bank account in the Plaintiff’s name on November 21, 2003 can only be acknowledged, and there is no financial data to recognize that the said money was actually paid as labor costs to the pP, Kim NN, GaO, etc. as alleged by the Plaintiff, and the amount is inconsistent with KRW 11,390,000, the Plaintiff asserted that the amount was actually paid.

C) According to Gap evidence Nos. 4-1 through 10, from the above MM bank account under the plaintiff's name, the fact that the above MM bank account was remitted to the K account under the plaintiff's name on April 10, 2003, with the 33,312,710 won on June 10, 2003, with the 33,312,710 won on July 10, 2003, 19,36,444 won on July 19, 2003, 9,927,320 won on August 11, 2003, and 13,450,440 won on November 13, 2003, and 14,51,518,780 won on November 14, 2003, and there is no objective evidence to know that the above remittance was made to the relevant worker.

2) With respect to DES new EE projects, etc.

가) 원고는 '권QQ가 워 공사현장의 현장소장오로 재직하면서 원고 본사로부터 원고 현장 사용통장으로 노무비를 송금받아 개별 노무자들에게 노무비를 지급하였다'는 취지의 권QQ 작성의 확인서(갑11호증의 1)률 제출하고 있으나, 위 확언서 외에는 원고 주장과 같이 권QQ가 위 공사 현장의 현장소장으로 재직하였다거나 원고로부터 자금을 송금 받아 실제로 유연분, 김윤숙, 정경희, 이금수 등에게 노무비를 지급하였을을 인정할 만한 객관적인 증거자료가 없다.

B) According to the statements in Gap's evidence Nos. 8 and 9, it can be acknowledged that on June 26, 2003, the plaintiff deposited 570,000 won with the post office account in the name of ParkF by using his credit card, and on July 10, 2003, with the cash card in his own name, deposited 90,000 web with the KK Federation account in the name of NowonG. However, there is no evidence to verify the relation between the above deposited amount and the above construction, and there is no difference between the above amount and the plaintiff's assertion that the above amount was paid to Nowon and ParkF as the direct labor cost.

C) According to each of the statements in Gap evidence 10 and 13-1 and 2, from the above MF bank account under the plaintiff's name, the K account under the plaintiff's name was transferred to 3,510,300 won on December 10, 2003, and the above MF bank account was also transferred to 8,159,300 won on December 10, 2003, and 910,300 won on March 10, 2004, and 11,810,300 won on March 10, 2004, and 2,660,300 won on April 12, 2004, and 27,335,300 won on April 12, 2003, and there is no evidence suggesting that the above remittance was made to the pertinent person of labor.

3) As to new construction works for the South Changwon Kitk branch

(i) The Plaintiff submitted the AA’s confirmation document to the effect that he/she paid 15,00,000 won to individual workers by giving them a lump sum contract for labor related to the said project, and the N.N. (1, 2) document to the effect that he/she paid 15,00,000 won to each worker by giving them a lump sum contract for the said project, but there is no contract to support it, and the said confirmation document and N.N. document do not contain any specific amount of money, the timing of payment, etc.

B) According to the results of the fact-finding on the point of South ChangwonK in the court of this case as described in the evidence Nos. 15-1 and 2, the fact-finding on the above MM bank account under the Plaintiff’s name that KRW 19,760,00 was remitted from the above MM bank account under the Plaintiff’s name to the K K account under the Plaintiff’s name, and that the Plaintiff issued 13 copies of the above KK’s cashier’s checks on November 10, 2004 on the basis of the above KK account and then issued 10,000 won on November 10, 2004, it can be known that regular A exchanged this in cash, or ER, ES, ES, right T, KimU, KimU, and JeonV deposited this in the passbook, and there is no evidence to verify the relevance between the above deposited amount and the above construction, and there is no amount claimed by the Plaintiff that the above amount was paid to the actual largest W

In contrast to KRW 1,280,000, there is no objective financial data that can be acknowledged that the said funds were actually paid to the largestW, as alleged by the Plaintiff.

4) With respect to the Warsaw Construction Works by Jinju Students Heung N. N.S.

The Plaintiff submitted a certificate of remittance (No. 18) by asserting that he actually paid 880,000 won for the labor cost of October 2004 to the head XX in relation to the Dwork project. However, according to the evidence No. 18, the Plaintiff can only be aware of the fact that the Plaintiff remitted Y’s above MM bank account under his name to the KKK account in this Y’s name from the above MM bank account in this Y’s name to the above Y KK account in December 8, 2004, and there is no evidence submitted as to the relationship between the Dwork and Y and the above Y’s amount of remittance.

5) With respect to restoration work of a damaged area between 2004 and scarke section of 2004

However, according to the fact-finding on the first construction of limited partnership companies in this court, it is confirmed that the first construction of the limited partnership company has not been paid to the insideCC from the funds received from the Plaintiff as labor cost, as the Plaintiff was awarded a subcontract for the first construction of the limited partnership company, and actually paid labor cost of 3,90,000 won.

6) With respect to the project for the improvement and repair of the inland inland water commercial site:

The plaintiff asserts that "if the labor cost is paid in lump sum to the Z as a whole by giving labor related to the construction work to the Z, the Z has been paid to the individual workers." However, there is no evidence to acknowledge that the plaintiff has paid labor cost to the Z as well as the contract to support this.

7) relating to 05-4-1 Facility Construction Works

The plaintiff asserted that since 1,560,000 won and 1,080,000 won were directly paid to HaB as the labor cost in October 2005 related to the above project, it should be included in deductible expenses. However, according to the evidence No. 23-1 and No. 2, the plaintiff's assertion that it should be included in deductible expenses. However, according to the statement No. 1 and No. 2 of the evidence No. 23, the plaintiff's above M&B's account to KK account in the name of HaB as the unit KK account in the name of HaB, 1,671,940 won, and HaH's account in November 15, 2005, it can be recognized that each remitted amount was transferred to HaB as the unit KK account in the name of HaH, and it has been recognized that the amount was larger than the amount already recognized as the above remittance was treated as the industrial expenses.

8) Even based on the results of the fact-finding on the Jinju-si Branch, KK branch, Changwon Branch, etc. of this Court, it is not confirmed that the funds or cashier’s checks released from the above MM bank’s book and the KK account under the Plaintiff’s name were paid to the laborers indicated in the annexed list claiming that the Plaintiff paid the actual labor cost.

9) On the other hand, there is no evidence to deem that the certificate under paragraph (2) (2) above (2) was drafted by force against the will of the originator, and there is no special circumstance, such as that it is difficult to consider it as evidence materials for specific facts due to lack of content, etc., and thus, it cannot be readily denied the value of evidence of the above certificate.

(C) Therefore, we cannot accept this part of the Plaintiff’s assertion on the premise that the issue amount in this case is the actual labor cost that should be included separately in deductible expenses.

(2) The part concerning the claim of the above A. (2)

(A) As seen in the above Paragraph (1), there is no objective evidence to acknowledge that the Plaintiff had ordered the Plaintiff to sell part of the construction work in cash as alleged in the Plaintiff’s assertion, and the mere fact that the Plaintiff exchanged the Plaintiff’s check in cash is insufficient to recognize the Plaintiff’s assertion.

(B) Therefore, we cannot accept the Plaintiff’s assertion on this part.

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.