Seoul Administrative Court-2016-Gu Partnership-58000 ( December 08, 2016)

If the disposition of imposition of corporate tax causes for exception to the pre-assessment review, the notice of change in the relevant income amount shall not be subject to the pre-assessment review.

If the disposition of imposition of corporate tax causes for exception to the pre-assessment review, the notice of change in the relevant income amount shall not be subject to the pre-assessment review.

Article 192 of the Enforcement Decree of Income Tax Act

2017Nu3154 Revocation of Disposition of Imposing corporate tax, etc.

Plaintiff and Appellant

○○ Incorporated Company

Defendant, Appellant

○○ Head of Tax Office and one other

Seoul Administrative Court Decision 2016Guhap58000 decided December 8, 2016

May 30, 2017

June 20, 2017

1. The plaintiff's appeal is dismissed.

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

Article 12 (Cancellation of Judgment of the First Instance)

1. Quotation of judgment of the first instance;

The reasoning for the judgment of the court in this case is as stated in the reasoning for the judgment of the court of first instance except for the dismissal or addition under Paragraph (2) below. Thus, this is cited in accordance with Article 8(2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

2. Parts to be corrected;

○ The director of the regional tax office of ○○○ Regional Tax Office(the director of the regional tax office of ○○ Regional Tax Office) is respectively called ○○○ Director(the director of the regional tax office of ○○ Regional Tax Office).

○ The judgment of the first instance court is divided into the 3rd, 7th, 14, 16 and 9th, 11th, and 11th, 'Defendant' into the ○○○ director of the tax office.

○ The judgment of the first instance court is 4 1 'the 4th one,' and 'the ○○ Director of the Regional Tax Office added 'the 'the ○○'.

○ The following shall be added at least 5 pages 13 of the judgment of the first instance court:

3) In the process of calculating the expenses corresponding to the omitted sales of the Plaintiff at the time of the tax investigation, the director of the regional tax office of ○○○○○ was arbitrarily determined by applying the cost discount rate of 78% to the omitted sales amount, and even though the omitted sales amount found in the BB program was all the transaction of non-data and the amount of non-value added tax is included, 10% of the total stock purchase amount subject to value-added tax was deemed as the advance payment of value-added tax

4) Each of the instant dispositions is procedural defects as follows.

(1) The notice of change in each income amount in this case was notified before the deadline for requesting pre-assessment review expires, and there is any error in the entry of a tax notice on earned income tax (e.g., omission of tax rates and clerical error

② Since the notice of the payment of corporate tax against the Plaintiff is examined and decided by the director of the regional tax office of ○○○○○○, it is defective that the director of the regional tax office having jurisdiction over the place of tax payment has made an investigation and decision in accordance with Article 109(1) of the Enforcement Decree of the Corporate Tax Act. (Article 109(1) of the Enforcement Decree of the Corporate Tax Act applies only to the determination or correction of corporate tax, and thus, it is argued that the defect

③ Defendant ○○ Director of the Regional Tax Office conducted a tax investigation for the business year 2007, 2008 without undergoing due process of extension notice of the period of tax investigation during the tax investigation for the business year 2009 or 2013. Therefore, the disposition imposing corporate tax for the business year 2007, 2008, and the disposition imposing value-added tax for the business year 2007, 2007, and 2008 is unlawful as it was based on the investigation conducted without notice of commencement of tax

○ The following shall be added at the 11th day below the judgment of the first instance court:

3) Whether an error exists in the tax calculation process

According to the purport of the evidence No. 9 and the whole pleadings, Defendant 00 director of the regional tax office may recognize the fact of calculating the omission amount based on the data on the shipment status recorded in the BB program, and there is no evidence to deem that the omission amount was calculated by applying the cost discount rate as alleged by the Plaintiff

Meanwhile, in cases where it is unclear whether the amount received by an entrepreneur for the supply of goods or services includes value-added tax, an amount calculated by multiplying the amount received for the supply by 100/110 shall be deemed the value of supply (Article 29(7) of the Value-Added Tax Act). Therefore, even if a transaction is a non-data transaction that does not receive a tax invoice, the value-added tax is included

Therefore, it is reasonable that Defendant ○○○ Director's method of calculating omitted purchase amount and 10% of the total purchase amount of stock subject to value-added tax should be deemed as advance payment of value-added tax and excluded the Plaintiff from deductible expenses.

4) Whether there are procedural defects in each of the dispositions of this case

A) As to the defect in the notice of change in each of the instant income amount

Unless there exist special circumstances, such as that the Framework Act on National Taxes and the Enforcement Decree of the Framework Act on National Taxes can immediately impose a tax without undergoing a pre-assessment review or that even before a decision on the pre-assessment review is made, the imposition of a tax before a request for pre-assessment review or a decision thereon is made, which infringes on taxpayers’ procedural rights and thus is null and void due to a significant and apparent procedural defect (see Supreme Court Decision 2016Du49228, Dec. 27, 2016). Meanwhile, Article 81-15(1)1 of the Framework Act on National Taxes provides that a person who has received a written notice on the result of a tax investigation may file a request for pre-assessment review within 30 days from the date of receipt of the notice, but Article 81-15(2)2 provides that the case of filing a complaint or a decision on the violation of the Punishment of Tax Evaders Act

Comprehensively taking account of the overall purport of arguments in Gap evidence Nos. 1 through 4, 10, and Eul evidence Nos. 7 (including branch numbers, if any), Defendant 00 director of the regional tax office, on April 7, 2015, notified the plaintiff of the results of a tax investigation, which contains taxation data of each of the dispositions of the instant case, and notified the change of each of the instant income amount on April 10, 2015, for which 30 days have not passed thereafter; Defendant 00 director of the regional tax office, on May 7, 2015, filed a complaint with the plaintiff on the suspicion of evading value-added tax belonging to 2010 through 2013 and 2010 through 2013; Defendant 00 director of the regional tax office, who prepared double-sale books from 207 to 209 in the course of a tax trial, constitutes fraud under Article 6(1)4 of the Punishment of Tax Evaders Act and other unlawful acts under Article 6(3)3).

In light of the above, it is not necessary to separately remove the notice of change in income amount on the ground of tax evasion, even though the disposition of corporate tax in question falls under the exception of the pre-assessment review, and it is not necessary to recognize the necessity of remedy through the pre-assessment review if there is a suspicion of crime. ② Disposition of income is a procedure to determine the person to whom the corporate tax is to be imposed and the type of income if the income is discharged from the company, and the notification of change in income amount is a procedure to inform the withholding agent who is the taxpayer. Thus, if a complaint is filed for the reason of tax evasion, the income was judged to have become out of the company. ③ It is not necessary to recognize the pre-assessment review separately from the notice of change in income amount on the ground of tax evasion, ③ it is reasonable to consider the fact that the director of the regional tax office of 007 through 209 and the value-added tax for the business year of 207 through 209 as well as the fact that the above notice of change in corporate tax or the above-mentioned change in income amount of income amount of 15 days.

Meanwhile, the Plaintiff’s non-entry in the tax payment notice of earned income tax on the Plaintiff and the misunderstanding of the tax year are merely disputing the defect in the latter disposition, and thus does not constitute an unlawful ground for the notice of change in each of the instant income amount. The Plaintiff’s assertion

B) As to the assertion of violation of Article 109(1) proviso of the Enforcement Decree of the Corporate Tax Act

Article 103 (1) of the Enforcement Decree of the Corporate Tax Act provides that "the determination or correction of tax base and amount of tax under Article 66 of the Corporate Tax Act shall be made by the head of the district tax office having jurisdiction over the place of tax payment: Provided, That with respect to those deemed particularly important, the Commissioner of the district tax office having jurisdiction over the place of tax payment may make such determination or correction," and Article 109 (1) provides that "in case where the head of the district tax office having jurisdiction over the place of tax payment notifies the tax base and amount of tax pursuant to Article 70 of the Act, the notice shall be accompanied by the detailed statement of calculation of the tax base and amount of tax, and in case where there is no amount or no amount of tax payable,

In full view of the evidence No. 2 and evidence No. 2 (including each number), it is recognized that Defendant ○○○ Head of the tax office corrected and notified the corporate tax base of the Plaintiff. As such, the proviso of Article 109(1) of the Corporate Tax Act, which applies to the case where the Commissioner of the competent Regional Tax Office having jurisdiction over the place of tax payment determines the tax base of the Plaintiff, does not apply to the disposition imposing corporate tax on the Plaintiff.

C) As to the defective argument in the notice of commencement of tax investigation and the notice of investigation findings

According to the purport of evidence No. 12-1, 2, and 3, Defendant 00 director of the regional tax office of November 27, 2014, on the ground of "the conversion of a tax offense and the extension of the scope through an integrated investigation into a corporation in 2009", the type of the tax investigation against the Plaintiff was a criminal investigation from a general integration investigation to a criminal investigation; from January 1, 2010 to December 31, 2013 to "from January 1, 2007 to December 31, 2013, the Plaintiff did not have any error in the law regarding the change of the tax period from 0.1 to 31, 2014 to the Plaintiff on the ground that it was not subject to investigation from 0.1 to 31, 2014 to 10.21, 201 to 20.21, 201 to 31,201.

3. Conclusion

Therefore, the judgment of the first instance court is justifiable, and the plaintiff's appeal is dismissed as it is without merit.