Cho High 201luminous355 ( November 29, 2011)

Making a false double lease agreement constitutes a fraudulent or other unlawful act.

The Plaintiff’s act of preparing a tax invoice and a false double contract stating the lower than the actual rent and submitting it to the Defendant constitutes fraud and other fraudulent acts, as it significantly makes it difficult to impose and collect taxes by means of active deception. It does not change even if the lessee was deducted from the actual rent.

Article 26-2 of the National Tax Basic Act

2012 disposition of revocation of imposition of value-added tax, etc.

Republic of Korea, Republic of Korea and one other

The director of the tax office

November 8, 2012

December 13, 2012

1. On June 23, 2011, the Defendant’s revocation of the part exceeding KRW 000 out of the value-added tax of the second half-year value-added tax for the Plaintiffs on June 23, 2006.

2. Each of the plaintiffs' remaining claims is dismissed.

3. The costs of lawsuit are assessed against the plaintiffs.

The Defendant’s imposition disposition of KRW 00 on June 23, 201 against the Plaintiffs (including additional tax; hereinafter the same shall apply), KRW 000 on the first quarter value-added tax for the year 2003, KRW 00 on the second quarter value-added tax for the year 2004, KRW 00 on the second quarter value-added tax for the year 2004, KRW 000 on the first quarter value-added tax for the year 205, KRW 000 on the second quarter value-added tax for the year 2005, KRW 00 on the second half year value-added tax for the year 2006, KRW 00 on the global income for the year 200, KRW 00 on the global income for the year 205, KRW 200 on the global income for the year 200 on each of the above imposition disposition of KRW 30 on the global income for the year 206, KRW 200 on each of the Plaintiffs.

1. Details of the disposition;

A. The plaintiffs as joint business operators around November 2002, when they newly built a building of the size of the first floor and the sixth floor above the ground level in XX 951-14, and registered as a accommodation business on June 12, 2003, the plaintiffs changed the type of business from June 12, 2003 to a real estate rental business and closed down the business on November 30, 2006, the first floor main store above the above building (hereinafter referred to as the "main store in this case") with a deposit of KRW 00 won and the second floor (hereinafter referred to as the "the main store in this case") with a deposit of KRW 00 and KRW 000,000.

B. On June 23, 2011, the Defendant rendered a disposition to rectify value-added tax and global income tax, as stated in the column of “value-added tax and global income tax,” by applying 10 years to the exclusion period for the imposition of national taxes under Article 26-2(1)1 of the former Framework Act on National Taxes (amended by Act No. 10405, Oct. 27, 2010; hereinafter the same) to the Plaintiffs, by setting up a double lease agreement different from the actual one.

C. On September 16, 2011, the Plaintiffs were dissatisfied with the aforementioned disposition and filed an appeal with the Tax Tribunal, but the Tax Tribunal rendered a ruling dismissing the Plaintiffs’ claims on November 29, 201.

D. Meanwhile, on June 25, 2012, the Defendant, in the instant lawsuit, re-revision a disposition to reduce the amount of KRW 000 among the value-added tax for the second period portion of the value-added tax for the year 2006 and the global income tax for the year 2006. On July 2, 2012, the Defendant issued a disposition to reduce the amount of KRW 000 among the value-added tax for the first period portion of the value-added tax for the year 2006 (hereinafter referred to as the “final tax amount in the attached disposition”), which is described in the “final tax amount” column as of July 2, 2012, including the increased amount of value-added tax for the first period portion of the value-added tax for the year 100 on July 2, 201, and the remaining amount after reduction.

[Ground of recognition] Facts without dispute, Gap evidence 1, Eul evidence 1, Eul evidence 1, 2, 3, 5, 6, 14 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiffs' assertion

1) The exclusion period of the imposition of national taxes for the following reasons is not ten years but five years, and thus, the instant disposition was unlawful as it was conducted with the exclusion period of the imposition of national taxes imposed.

① The Plaintiffs’ report on the reduction of the rent to the tax authorities by setting up a double lease agreement that is less than the actual rent when leasing the instant Moel to thisCC, etc. was made upon the request of the lessees to reduce the burden of value-added tax. This is an industry practice at the time, and thus, the Plaintiffs do not evade, refund and deduct national taxes by fraud or other unlawful means as stipulated in Article 26-2(1)1 of the former Framework

② Even if the Plaintiffs filed a double lease agreement and filed a declaration under the same amount as the actual output tax amount, the lessee is also entitled to deduct the input tax amount less than the actual output tax amount, thereby resulting in a decrease in the tax amount to be collected. Therefore, it cannot be deemed that there exists a evasion of national tax under Article 26-2 (1) 1 of

2) Even though the exclusion period of the imposition of national tax on household affairs did not exceed the exclusion period, the Defendant calculated the rental income omitted on the basis of the rental agreement despite the Plaintiffs received a total of KRW 000,000 from the rent for the instant franchise. Therefore, the portion of the instant disposition in excess of the legitimate tax amount is unlawful.

B. Relevant statutes

Article 26-2 of the former Framework Act on National Taxes (Period for Excluding Imposition of National Taxes)

(1) No national tax may be levied after the period in the following subparagraphs expires: Provided, That where a mutual agreement procedure is in progress in accordance with the treaty for the prevention of double taxation (hereinafter referred to as "tax treaty"), Article 25 of the Adjustment of International Taxes Act shall apply:

1. Where a taxpayer evades any national tax, or obtains a refund or deduction by fraud or other improper means, for ten years from the date on which the national tax is assessable;

2. Where a taxpayer fails to file a tax base return by the statutory due date of return, for seven years from the date on which the national tax is assessable;

3. If a taxpayer does not fall under subparagraphs 1 and 2 above, for five years from the date on which the national tax is assessable;

C. Determination

1) Whether the instant disposition was taken with the lapse of the exclusion period for national tax assessment

According to Article 26-2 (1) 1 and 3 of the former Framework Act on National Taxes, the exclusion period for the imposition of national taxes may be five years from the date on which national taxes may be imposed, or where a taxpayer evades a national tax, obtains a refund or deduction by fraudulent or other unlawful means, national taxes may be imposed for ten years.

Therefore, in full view of the facts as to whether the plaintiffs committed fraud or other unlawful acts, the plaintiffs prepared a lease agreement of KRW 2,3,4,6, and 7 on April 30, 200 with ChoD, and reported value-added tax and general income tax on the basis of the lease agreement of KRW 00,000, which is set out between 00 and 00, and the above lease agreement of KRW 20,000,000, KRW 30,000,000, KRW 6,000,000, KRW 30,000,000, KRW 5,000,000, KRW 6,000,000, KRW 6,000,000, KRW 6,00,00,000, KRW 6,00,00,000, KRW 30,5,05,00,00,00,00,00.

Furthermore, as to whether there was a evasion of value-added tax or global income tax due to the Plaintiffs’ act, the Plaintiffs, as well as the Plaintiffs, prepared a false contract and made a false return and payment of the value-added tax and global income tax less than the actual amount, are subject to tax evasion equivalent to the difference between the legitimate tax amount. Moreover, even if the lessees reported the input tax amount less than the actual amount and received under-deduction

Therefore, the plaintiffs' assertion that the exclusion period of national tax should be applied 5 years since the plaintiffs' act was not fraudulent or other improper act, or there was no evasion of national tax.

2) Whether the Defendant rendered the instant disposition based on the amount higher than the leased income omitted by the Plaintiffs

A) Facts of recognition

From May 2003 to November 30, 2006, the amount of deposit and rent that the Plaintiffs received from lessees while leasing the instant main points to FF, EG, and Kim HH are as follows.

(Contents) The following:

[Ground of recognition] Facts without dispute, entry of evidence Nos. 1 through 9, 14, 15, 16 and the purport of the whole pleadings

B) Determination

On the basis of the above-mentioned facts from the actual lessee, the amount of deposit 00 won of the franchise of this case as originally reported by the plaintiffs, KRW 000 per month, KRW 000 and KRW 000 of the principal store of this case, and the deposit and the difference received from the actual lessee as seen in the above-mentioned facts, it is identical to each item of "the omitted amount of real estate rental income" in attached Form 365 (366) of Article 49-2 (1) of the Enforcement Decree of the Value-Added Tax Act, on the basis of the formula (number of days of taxable period)x (number of taxable period) x (number of days of the scheduled return period or taxable period) x one-year deposit interest rate (number of days of taxable period) x 1 year contract period (number of days of the scheduled return period or taxable period) x 365 (366) =

However, according to the evidence Eul evidence Nos. 1 and 14, the defendant calculated the omitted amount of real estate rent as stated in the "amount omitted from real estate rent" as stated in the "amount omitted from the first period to the first period of 2006, 2006", but the second period portion of 2006 calculated as 000 won more than the actual omitted amount. As such, the second period portion of 2006 calculated as 00 won more than the actual omitted amount, among the imposition of value-added tax 000 won, the value-added tax and additional tax for 00 won for the difference of the omitted amount of the rent rent revenue (00 won + penalty 100 won + penalty 100 won for failure to make payment) should be reduced.

Therefore, the portion exceeding 00 won (=000 won - 0000 won), which is a legitimate tax amount, out of the imposition disposition of value-added tax for the second period portion of 2006, is lawful since the remaining portion of the wife of this case within the scope of legitimate tax amount.

3. Conclusion

If so, the plaintiffs' claims are accepted within the above scope of recognition, and the remaining claims are without merit, and they are dismissed. It is so decided as per Disposition.