Cho Jae-2013-China-3553 ( November 07, 2013)

If business rights are transferred along with business facilities, temporary property income subject to taxation;

If a cable broadcasting company transfers its business rights together with all of the facilities, etc. of the cable broadcasting company, which is a business property other than real estate and rights related thereto, the price of such business rights may be taxed as temporary property income.

Article 20-2 of the Income Tax Act

Suwon District Court 2014Guhap886 global income and revocation of disposition

MaximumO

OO Head of the tax office

oly 2015.14

2015.06.04

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposing global income tax of KRW 306,317,040 on the Plaintiff on May 10, 2013 is revoked.

1. Details of the disposition;

A. On June 10, 2002, the Plaintiff agreed to transfer the cable broadcasting business rights and cable broadcasting facilities, related equipment, tools, and all vehicles in the business area indicated in the △△ Cable Broadcasting’s license certificate to the △△△△△△△△△△△△△, and received a total of KRW 1.97 billion until December 30, 2002, a total of KRW 1.97 billion was paid until December 30, 2002. The Plaintiff decided to settle the remainder of KRW 30 million with an advance payment, etc., and did not report the amount of the issue at the time of filing the global income tax return for the year 2002, even though the Plaintiff and the △△△△△△△△△△△△△△△△△△△, prepared a full-sum certificate of the transfer price.

B. On May 10, 2013, the Defendant deemed that the key amount falls under the temporary property income in consideration of the transfer of business rights along with the fixed property for business purposes, and calculated the amount calculated by deducting 113,230,442 won, which is the amount appropriated in the balance sheet in 2002, from the key amount, as necessary property income, and calculated the amount excluding 80% as necessary property income. The Defendant corrected and notified the Plaintiff of KRW 306,317,040, the global income tax base for global income tax for the year 2002, when summing up the amount of KRW 70,059,828, which was reported. (hereinafter “instant disposition”).

C. The Plaintiff appealed and filed an appeal on August 7, 2013. However, the Tax Tribunal dismissed the appeal on November 7, 2013.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Around May 2002, the Plaintiff agreed to operate a business of the △△△, the △△△△△ and the CATV relay broadcasting business.

It is not subject to taxation because it is merely a contingent income, since it is received the key amount as premium, and it is not received as a reward for transferring the goodwill of △△ Cable Broadcasting.

2) Even if the issue amount falls under temporary property income as consideration for transfer of goodwill along with the business fixed assets, the issue amount shall be calculated after deducting the amount of the temporary property income, as well as the fixed assets in balance sheet, as the 497,543,060 won paid out of the price of optical cable network construction.

3) In addition, the Plaintiff did not simply add the issues at the time of filing a global income tax return, but did not evade national taxes due to “Fraud or other unlawful acts”, and the exclusion period for imposition of national taxes should be deemed five years. Therefore, the instant disposition is null and void as it was imposed with the exception period.

B. Relevant statutes

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

C. Determination

1) Whether the issue amount constitutes temporary property income

Article 20-2 (1) of the former Income Tax Act (amended by Act No. 8144 of Dec. 30, 2006) provides that the income accruing from the transfer of the goodwill and other similar assets or rights generated during the current year shall be the temporary property income. Article 40-2 (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19890 of Feb. 28, 2007) provides that the goodwill under the above provision of Article 94 (1) 1 and 2 of the Income Tax Act shall not be included in the scope of the temporary property income, and Article 94 (1) 1 and 2 of the Income Tax Act provides that the goodwill shall be the income accruing from the transfer of the real estate and the right to acquire real estate, superficies, lease on a deposit basis, and the right to lease the registered real estate shall be the transfer income, and ultimately, if the goodwill is transferred together with the assets related to the real estate and the assets related to such transfer, it shall be imposed on the other temporary property income.

According to the above provisions, in a case where the Plaintiff transferred the business rights to the △△△△△△△, along with the entire facilities of the △△△△△△, a business asset other than the real estate and the right related thereto, the consideration for the business rights may be taxed as temporary property income. Accordingly, barring any special circumstance, barring any special circumstance, the existence and content of the expression of intent should be recognized (see Supreme Court Decision 2009Da92487, May 13, 2010, etc.). In full view of the arguments in the evidence Nos. 8, 3, and 4, the Plaintiff prepared a transfer contract with the △△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△, a business asset other than the real estate and the right related thereto, and barring any special circumstance, it is recognized that the Plaintiff transferred the business rights of the △△△△△△△△△△’s cable broadcasting.

이에 대하여 원고는 개인사업체인 △△유선방송을 폐업하기 이전에 원고, 오△△, 한 종국을 이사로 하는 ▰▰ 방송 주식회사(이하 '▰▰'라고 한다)를 설립하였음을 들어 쟁점 금액은 중계유선방송사업의 권리금으로 받은 것이라고 주장하나, 위 주장을 뒷받침하는 증거가 없을 뿐만 아니라 갑 제4 내지 6, 8, 14호증의 각 기재에 변론 전체의 취지를 종합하여 인정되는 다음과 같은 사정들 즉, 원고가 2002. 4.경 이 미 오△△, 한△△으로부터 양도대금의 일부를 수령하는 등 영업권의 양도를 검토하고 있었던 것으로 보이는 점, 원고와 오△△, 한△△ 사이의 양도계약서 제4조에는 잔금이 완납되면 원고가 양수인들에게 모든 경영권을 양도하는 것으로 기재되어 있고, 실제로 도 원고가 오△△, 한△△에게 완납증명서를 작성해준 직후인 2003. 1. 3. ▰▰의 대표자가 원고에서 오△△으로 변경된 점에 비추어 보아도 원고의 위 주장은 받아들이기 어렵다.

Therefore, the Plaintiff should be deemed to transfer all of the facilities and goodwill of relay cable broadcasting to the △△△ and the △△△△△△, and the part of the goodwill, out of the issues, constitutes temporary property income.

2) Whether the construction cost of optical cable cables should be deducted or not

The plaintiff asserts that the construction cost of the optical cable network, which was installed in the key amount, should be deducted and calculated as temporary property income. However, the construction cost of the above optical cable network is deemed to have been paid by the OO information and communication corporation. Since the above company is an independent corporation from the plaintiff who has operated relay cable broadcasting in the trade name of △△ Cable Broadcasting as a cable network operator, the above argument by the plaintiff is without merit.

3) Whether the exclusion period has expired

A) Relevant legal principles

Article 26-2 (1) of the Framework Act on National Taxes provides that in principle, the exclusion period of national taxes shall be five years, but the exclusion period of national taxes shall be extended to ten years from the date when the taxpayer can impose the national tax by fraud or other improper means. The legislative intent of the above provision is to extend the exclusion period of national taxes to ten years from the date when the taxpayer can impose the national tax, in principle, for the prompt determination of tax law relations, where there is such unlawful acts as making it difficult for the tax authorities to discover the taxation requirement of national taxes, or making it difficult for them to find out the omission report, and thereby it is difficult for them to exercise the exclusion period of national taxes. Therefore, the exclusion period of national taxes shall be extended to ten years. Therefore, the "Fraud or other unlawful acts" referred to in Article 26-2 (1) 1 of the Framework Act on National Taxes refers to fraudulent or other active acts that make it impossible or considerably difficult to impose and collect taxes, and it does not constitute a mere failure to report or false report under the tax law without accompanying any other acts (see, e.g., 2613).

In light of the following circumstances acknowledged by comprehensively taking account of the evidence Nos. 2, 3, and 4 as well as the overall purport of the arguments, the Plaintiff may be deemed to have committed deceptive schemes or other active acts that make it impossible for the tax authorities to exercise their right to impose by deceiving the taxable items or making it considerably difficult for them to exercise their right to impose by pointing out the taxable items. Therefore, the Plaintiff’s assertion on this part is groundless

① 한△△은 원고가 양도 당시 △△유선방송의 시설을 ▰▰의 부외자산으로 하고 잔금을 계좌이체 대신 수표로 지급하여 줄 것을 요청하였다고 진술하였는데, 만약 위 시설을 ▰▰의 자산으로 장부에 기재하였다면 2006년경 주식회사 ◐◐케이블 방송에 이를 양도하면서 그 매입액을 공제할 수 있었을 것으로 보이므로 양도인인 원고의 요청에 따라 이를 부외자산으로 하였다는 한△△의 진술은 신빙성이 있다.

(2) Overseas assets are not recorded in accounting books, but actually used for business, and the sale value of which is recognized and omitted in the items of assets on the balance sheet, so it is difficult for the tax authority to grasp the existence and value of such assets.

③ Although the Plaintiff, while transferring the entire facilities and operating rights of the △△△△ and received the key amount from the price for the transfer of the facilities and operating rights of the △△△△△ to the △△△△△△△△, the Plaintiff comprehensively transferred all of the above facilities and operating rights to the Plaintiff, the △△△△△△△△, and the Korea △△△△△△△△△△△△△△△△△△△△△△△△△△△△△, and subsequently, attempted to conceal the fact of tax evasion by disposing of all the above facilities

④ Since the Plaintiff transferred the entire facilities and goodwill of △△△△△ and Korea △△△△, the Plaintiff did not fully pay the transfer income tax or the comprehensive income tax, even though he did not know the specific details of the taxation.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

(c)