[Request Number] Trial 2017J 1504 ( June 13, 2017)
[Items] Global Income [Types of Determination]
[Determination] The key service provided by the claimant appears to fall under the business income due to the claimant’s inherent business activities and considerable relations with his/her original business activities. From January 1, 2013 to December 31, 2013, the content of the contract is presumed to have been provided with investment, fund management, and business services, and thus, continuous and repeated services were provided due to the nature of the key service. Considering the fact that the amount received as the price for the key service is higher than the annual salary of the claimant at the time of the claimant and the claimant has reported as the initial business income, there was no error of refusing a request for correction by the claimant to refund the income tax already paid by deeming the key service as other income.
[Related Acts and subordinate statutes] Article 19 of the Income Tax Act / Article 21 of the Income Tax Act
The appeal is dismissed.
1. Summary of disposition;
A. The claimant entered into a contract on the provision of investment, fund management, and business services (hereinafter referred to as “market investment advisory contract”) with an OO (hereinafter referred to as “OO”) located in the OO (hereinafter referred to as “OO”) from March 201 to March 201, and entered into a contract on the provision of investment, fund management, and business services (hereinafter referred to as “market investment advisory contract”) in 2013, and accordingly, received OO from OO on January 6, 2014 in return for providing registration consulting services and preparation of a report (hereinafter referred to as “market services”) conducted using e-mail and documents. On May 27, 2015, the claimant reported and paid the global income tax amount attributed to the global income tax for the year 2014 in addition to the wage and salary income.
B. On November 15, 2016, the claimant filed a request for correction to the effect that the amount of issue falls under other income, and thus, the claimant corrected it and changed the excess amount of global income tax OOO won to refund it. However, on December 28, 2016, the disposition agency rejected it. The claimant filed a request for adjudication on March 24, 2017.
2. Opinions of the claimant and disposition agency;
A. The claimant's assertion
(1) From March 2011 to December 2017, the claimant entered into a key investment advisory contract with OO as an employee working for OO in the Investment Advisory Service chain as an individual qualification in 2013, and carried out temporary registration consulting and preparation of a report using e-mail and documents once from November 2013, and in return, received the key amount on January 6, 201 as a result.
(2) Since the contract period under the contract is one year, the disposition agency continuously and repeatedly provided the key service from January 1, 2013 to December 31, 2013. However, the claimant continued to work in the OO and entered into a contract with the OO during the period of leave before and after childbirth (from November 11, 2013 to February 8, 2014) and did not deliver the OO's employment. Thus, the key amount is the income from the temporary provision of service without an employment relationship and thus constitutes other income.
(3) The receipt date of personal service business income is the earlier of the date when the service is paid or the service is completed, and the receipt date of other incomes is the receipt date of the service. If the claimant receives the total amount of the issues from the applicant’s OO account on January 6, 2014, and the disposition agency recognizes the income attributed to year 2014, it shall be deemed that the other income is not the business income.
(4) According to the substance over form principle, the provisions on the calculation of tax base should be applied to the substance of income, profit, property, act, or transaction, notwithstanding the specification or form of such transaction. Although a claimant falsely reported other income as business income due to an error in the classification of income, the key amount is the price for temporary service, but the key amount is the price for temporary service, as it is confirmed by mail, business files, vacation period, passbook, etc. that the deposit was made once, and thus, the claimant’s comprehensive income tax should
(b) Opinions of disposition agencies;
(1) The claimant's assertion that he temporarily provided the key service from November to December 2013 using the leave period before and after childbirth or insufficient evidence is presented, and in light of the contents of the contract under the major investment advisory contract, the claimant stated that he received OO in return for the service provided from January 1, 2013 to December 31, 2013. Thus, even if the price was received in lump sum, it is reasonable to view that the period for providing the key service is one year.
(2) In addition, considering the fact that the claimant continuously engaged in investment advisory business at the time of the provision of key services, the claimant's assertion that the key service is related to his/her original work activity and considerable relations with his/her original work activity, investment, fund management, and business consulting service continuously and repeatedly for a certain period (one year) in the terms of the contract, and the key amount received in return is about OO more than the annual salary of the claimant at the time of the provision of the key service, the claimant's assertion that the claimant's claim that the service constitutes other income is not reliable because it conducts temporary registration consulting service and receives the key amount.
3. Hearing and determination
A. Key issue
Whether it constitutes other income of the key service provided by the claimant
B. Relevant statutes
(1) Income Tax Act;
Article 19 (Business Income) (1) Business income shall be the following income generated in the relevant taxable period:
13. Income generated from specialized, scientific and technological service business (excluding research and development business prescribed by Presidential Decree; hereinafter the same shall apply);
14. Income generated from business facility management business and business support service business;
20. Income obtained from activities continuously and repeatedly conducted under a person's own calculation and responsibility for profit-making purposes, as income similar to income under subparagraphs 1 through 19.
(3) Except as otherwise expressly provided for in this Act, the scope of businesses under each subparagraph of paragraph (1), shall be governed by the Korean Standard Industrial Classification publicly announced by the Commissioner of the Statistics Korea pursuant to Article 22 of the Statistics Act, and other necessary matters concerning the scope
Article 21 (Other income) ① Other income shall be income other than interest income, dividend income, business income, labor income, pension income, retirement income, and capital gains as prescribed in the following subparagraphs:
19. The price received for temporarily furnishing personal services (excluding services governed by subparagraphs 15 through 17) falling under any of the following items:
(a) Demotion services rendered to many persons without an employment relationship and receiving remuneration, such as lecture fuels;
(b) Services, such as commentation, enlightenment, or screening of performances, etc. on the radio, television broadcasting, etc. for remuneration or other rewards of a similar nature;
(c) Services rendered by a lawyer, certified public accountant, tax accountant, architect, surveyor, patent attorney, or a person with professional knowledge or special expertise using his/her knowledge or expertise for remuneration or consideration;
(d) Other services rendered outside of an employment relationship for allowances or the price in the nature similar thereto;
(2) Enforcement Decree of the Income Tax Act
Article 48 (Receipt Date of Business Income) The receipt date of business income shall be as follows:
8. Provision of personal services: The earlier day between the day scheduled to receive the price for services or the day completing the provision of services.
Article 50 (Receipt Date of Other Incomes) ① The Receiving Date of Other Incomes shall be as follows:
4. Other incomes: The date on which the payment was received.
C. Facts and determination
(1) According to the review materials submitted by the agency, the following facts are revealed.
(A) The OO Co., Ltd., for which the claimant serves, is a corporation established on March 2, 201 and whose main business is investment advisory services.
(B) The claimant is confirmed to have given birth on December 18, 2013.
(C) The applicant’s total amount of benefits appears to have received OO in the OO corporation.
(D) On February 22, 2016, the notice of the result of the request for correction issued by the disposition office rendered on February 22, 2016, stating that “the claimant provided services to the OO from January 1, 2013 to December 31, 2013, and received OO won in return. The above services were continuously and repeatedly provided, and only the price was received at a time, so the income classification initially reported by the claimant as business income is justifiable.”
(2) Documents presented by the claimant are as follows.
(a)On the register of commuting to and from work of an OOO corporation, the claimant is under the control of the support team and appears to have used maternity leave and childcare leave for a period of November 11, 2013 through June 30, 2014.
(B) Examining the key investment advisory terms, the contract term is from January 1, 2013 to December 31, 2013. During the contract term, the claimant provides OO with operation and management services, such as investment, fund management, and business consulting services, and OO transfers OO to the bank account designated by the claimant, and the contract date is not confirmed.
(C) The claimant submitted a few e-mail sent to the OO in the course of providing the key service, and the content appears to be a consultation on corporate registration and reporting.
(D) Examining the career report submitted by the claimant, the claimant is a director belonging to the management support office of the OOO corporation. It appears that the principal branch mainly performed the work of communication among the main branch, meeting, meeting, book keeping, marketing, investment, and fund management, support, reporting, etc.
(3) We examine the above facts and relevant laws and regulations comprehensively.
Article 19(1) of the Income Tax Act provides that "business income shall be the following income generated in the pertinent taxable period," subparagraph 13 of Article 19 of the Income Tax Act provides that "income generated from a specialized, scientific, and technological service business," subparagraph 14 of the same Article, "income generated from a business facility management and a business support service business," and subparagraph 20 of the same Article provides that "income generated from a continuous and repeated activity under his/her own calculation and responsibility for profit-making purposes, as income similar to income under subparagraphs 1 through 19, and Article 19(3) of the same Act provides that "the scope of business shall be governed by the Korean Standard Industrial Classification except as otherwise provided for in this Act." Meanwhile, Article 21(1) of the Income Tax Act provides that "other income shall be income, other than interest income, dividend income, business income, labor income, pension income, retirement income
In light of the structure and contents of the relevant regulations on business income and other income as above, in determining which income is business income, and whether it is other income, it should first be determined whether it is included in the scope of business income under each subparagraph of Article 19 (1) of the Income Tax Act based on the Korean Standard Industrial Classification, and if it is determined that it does not fall under other income under Article 21 (1) of the same Act, it should be determined
In this case, investment, fund management, and business consulting services that are to be provided by a claimant under the key investment advisory contract are as follows: M. 710. 710. 710. 7120 Accounting and Tax-Related Services, or management consulting services on 7153. 71. Specialized Services (professional Services such as legal advice and proxy, accounting records and audit, advertisement agency, market research and management consulting, etc.) as a whole; since the registration consulting and preparation services that the claimant claimed to have offered are in the nature of the N. 7591. 75. 75. The key issue is that the applicant is the applicant's business income under Article 19 (1) 13 or 14 of the Income Tax Act at the time of filing a request for correction; considering that such services are continuously engaged in investment advisory business and are related to the applicant's service, it is assumed that there is no different amount of money from the original contents of the contract to be paid for the investment and management of the fund from 31. 21. 31. 31.
This case shall be decided as ordered in accordance with Articles 81 and 65 (1) 2 of the Framework Act on National Taxes because the petition for adjudication has no merit as a result of the review.