The sales promotion fee paid to the sales employees should be deducted as necessary expenses in calculating the amount of profit margin on land.

The sales promotion fee paid by the plaintiff to the sales staff is the introduction fee directly paid by the plaintiff for the purpose of transferring land, and it should be deducted as necessary expenses in calculating the amount of profit margin on land.

Article 163 of the Enforcement Decree of the Income Tax Act

2015Guhap517 Global Income and Revocation of Disposition

○ ○

○ Head of tax office

April 8, 2016

May 13, 2016

1. The Defendant’s disposition of imposing global income tax on the Plaintiff on February 1, 2014 is revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff is a person who engages in real estate sales business with the trade name, Y development, with ○○, ○-2, the business place of Gyeonggi-gun ○○○-gun, and ○-2.

B. The Plaintiff sold real estate located in Gyeonggi ○-gun and ○ City as shown in [Attachment 1] as set out below in the business year of 2012.

[Attachment 1]

C. The Plaintiff reported the amount of KRW 2,988,300,00 for the business year to which 2012 reverts, as necessary expenses, KRW 2,882,502,283 (including sales promotion expenses of KRW 1,650,419,28).

D. The Defendant, on the ground that the sales promotion expenses paid by the Plaintiff to the sales employees pursuant to the service consignment agreement cannot be deemed necessary expenses for the real estate sales promotion profits, did not deduct the sales promotion expenses from the necessary expenses when calculating the profit margin, such as housing, and did not correct and notify the comprehensive income tax by re-calculated the tax base and calculated tax amount as shown below (hereinafter “instant disposition”).

[Attachment 2]

E. The Plaintiff appealed and filed an appeal, but the Tax Tribunal dismissed the appeal on December 30, 2014.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 3, 6, 7, 8 (including branch numbers, hereinafter the same) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

According to Article 97 (1) 3 of the Income Tax Act and Article 163 (5) 1 (c) of the Enforcement Decree of the same Act, the amount of notarized expenses, stamp fees, and brokerage expenses directly paid for the transfer of real estate, etc. constitutes necessary expenses deducted from the transfer value when calculating gains on transfer. The Plaintiff’s sales promotion expenses paid to the sales employees while conducting real estate sales business also constitutes brokerage expenses disbursed to attract many and unspecified persons and transfer real estate, but the Defendant’s disposition of this case, which calculated capital gains without deduction, is unlawful.

B. Relevant statutes

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

C. Determination

1) Whether a sales promotion fee constitutes necessary expenses as a sales promotion fee

Article 64 of the former Income Tax Act (amended by Act No. 12852, Dec. 23, 2014; hereinafter the same) and Article 122(2) of the Enforcement Decree of the Income Tax Act provide that real estate sales profits of a real estate sales businessman shall be the value obtained by subtracting necessary expenses of transferred assets and basic deduction of capital gains from the sales price of the relevant land, calculated pursuant to Article 163(1) through (5) of the Enforcement Decree of the Income Tax Act. Article 163(5)1 of the Enforcement Decree of the Income Tax Act provides that securities transaction tax paid directly for the transfer of assets under the Securities Transaction Tax Act, expenses for filing a return of tax base of capital gains tax and contract, notarial expenses, stamp

Since Article 163 (5) 1 (c) of the Enforcement Decree of the Income Tax Act uses the term "in lieu of "retailment fee", expenses other than money paid to a licensed real estate agent may be deducted as an introduction fee. In the case of a real estate broker, sales promotion activities may be necessary for a large number of transfer transactions, and sales employees may explain the location and conditions of the land and induce the purchase, so this can be considered as expenses actually paid for the transfer of real estate. As such, the portion of sales promotion expenses spent as above can be deemed as global income tax, although the amount equivalent to the transfer income tax amount cannot be deemed as income of a real estate broker, and it cannot be deemed as income, and thus, it is unfair that sales promotion expenses are not deducted as necessary expenses. In light of the fact that sales agents, after concluding an entrustment contract, are independent business operators independent of the real estate broker, since the real estate broker explain the location and conditions of the land subject to sale and development possibility, conditions of purchase, etc. to attract sales to an unspecified number of persons, and then, the basic amount paid for real estate sales business is 214 (a.

2) In the instant case:

A) Whether the instant sales promotion expenses constitute necessary expenses

In a lawsuit seeking revocation of global income tax disposition, the burden of proof on the tax base, which is the basis of taxation, is on the tax authority, and the tax base is deducted from necessary expenses. Therefore, the tax authority shall, in principle, bear the burden of proof on revenue and necessary expenses. However, as necessary expenses are more favorable to the taxpayer, and most of the facts generating necessary expenses are located within the territory under the control of the taxpayer and the tax authority is difficult to prove. Thus, in a case where it is reasonable to prove the taxpayer by taking into account difficulty in proof or equity between the parties, it accords with the concept of fairness (see, e.g., Supreme Court Decision 2006Du16137, Oct. 26, 2007).

In the instant case, the sales promotion expenses alleged by the Plaintiff to be paid to the sales employees are deemed to significantly exceed the brokerage fees prescribed by the Gyeonggi-do Ordinance on Real Estate Brokerage, etc., and the burden of proving the occurrence of necessary expenses and the amount thereof is deemed to have been borne by the Plaintiff. Thus, in full view of the overall purport of the pleadings as to whether the Plaintiff’s payment of sales promotion expenses as necessary expenses for selling real estate indicated in [Attachment 1] can be acknowledged, the following facts are acknowledged. According to the above facts, the sales promotion expenses paid by the Plaintiff to the sales employees falls under the direct introduction expenses paid by the Plaintiff for the purpose of transferring the land, and thus, the amount of tax on land gains should be deducted as necessary expenses in calculating the amount of tax on land gains in calculating the sales promotion expenses, and the head of the team and the head of the headquarters who did not directly sell the land can be deemed to have contributed to the sales promotion through the formation of the team members and the promotion of activities. Accordingly, the sales promotion expenses paid to them should also be included in the necessary expenses.

① The Plaintiff prepared a commission contract with the sales staff to sell the real estate of ○○ Si and ○○ Gun, and sold the said real estate to the sales staff, and paid KRW 201,650,419,28 to the sales staff at sales promotion expenses. The Plaintiff withheld and paid the sales staff’s business income tax on the sales promotion expenses.

② The sales employees, by posting a telephone call from a large number of people who grasped the telephone number in the office of sales in order to induce the purchase by explaining the location of the land subject to sales, future potential and conditions of sales, etc., and directly visiting and explaining the site, such as the contact manager and team leader, etc. with customers who have an interest.

(3) Sales agency business is divided into five teams with five to eight members. If sales workers have sold the pertinent land by selling it in units, a certain ratio of sales proceeds to sales workers shall be paid as sales promotion expenses according to the terms of a commissioning contract, and the head of the team and the head of the headquarters shall also be paid a certain ratio of sales proceeds.

④ From December 2, 2013 to December 20, 2013, the Defendant’s employees conducted a tax investigation on the Plaintiff and its wife for 19 days from December 20, 2013, and the Plaintiff concluded a commission contract with sales employees and paid sales promotion expenses to sales employees. However, the Plaintiff did not deduct the sales promotion expenses as necessary expenses on the ground that the sales promotion expenses do not constitute the introduction expenses prescribed by the relevant statutes.

B) Whether a double deduction is made

The Defendant asserts to the effect that the sales promotion fee paid by SS, which is the wife, for the sales promotion fee paid by the Plaintiff, includes double sales promotion fee paid to sell its own real estate.

However, in light of the following circumstances acknowledged by comprehensively considering the respective statements in Gap evidence Nos. 11 through 65 and the purport of the entire pleadings, it cannot be deemed that the sales promotion fee reported by the plaintiff as necessary expenses included the sales promotion fee for the real estate owned by SS.

① Each disbursement resolution and receipt submitted by the Plaintiff contain specific real estate and includes employee and sales promotion expenses involved in the sale of the pertinent real estate, and each of the above statements is consistent with the details of sales promotion expenses transferred from the account (*********************) (Evidence 26 through 65).

② In addition to the transfer of sales promotion expenses from the above **** AA Bank Account in the name of SS (J development) in addition to the transfer of sales promotion expenses from the above ****, due*, due*, due*, due**, last*, this*, Kim*, etc., alleged by the Defendant, it appears that the sales promotion expenses have been paid even through the AA Bank Account (2*****-**********) in the name of the Plaintiff (Evidence A).

③ Therefore, the Plaintiff and SS appears to have paid sales promotion expenses through their separate accounts while running a separate real estate sales business. Therefore, the necessary expenses for calculating global income tax against the Plaintiff cannot be deemed to have included sales promotion expenses for real estate sales owned by SS in the necessary expenses for calculating global income tax.

3. Conclusion

Thus, the plaintiff's claim of this case is reasonable, and it is so ordered as per Disposition by admitting it.

shall be ruled.