Since a significant portion of the amount disposed of as an outflow from the company is likely to have been recovered, the amount of notice of changes in legitimate income shall not be calculated.

There is a possibility that a significant portion of the amount of dispositions taken as a outflow from the company has been recovered, and the evidence alone submitted by the parties can not be grasped as much as the amount actually leaked out of the processing purchase price, so the amount of notice of changes in the income amount cannot be calculated. Therefore, the entire disposition

Article 67 of the Corporate Tax Act

2015Guhap63273 Notice of change in income amount

○○○○ Corporation

○ Head of tax office

2017.02.07

2017.02.14

1. Of the instant lawsuit, the part demanding a change of the results of a tax investigation shall be dismissed.

2. As to July 16, 2012, the Defendant’s issuance of a notice of change in the amount of income stated in the separate sheet against the Plaintiff

2. Cancellation

3. One-fifth of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

Cheong-gu Office

Paragraph 2 and the defendant on July 16, 2012, processed sales in notice of the results of the tax investigation conducted against the plaintiff on July 16, 2012

The parts of KRW 00,000,000,000 shall be modified to KRW 00,000,000.

1. Details of the disposition;

A. On January 24, 1998, the Plaintiff was established for the purpose of manufacturing and selling ○○ Exhaust gas reduction devices. ThisA served as the Plaintiff’s representative director from March 28, 2001 to July 13, 201.

B. ○○○ Director of the Regional Tax Office conducted a tax investigation with respect to the Plaintiff (3) from January 2006 to December 2008, 2008. As a result, the Director of the Regional Tax Office decided that the Plaintiff included the processed sales amount of KRW 00,000,000 in total, even though there were no actual sales or actual sales amount for BB electronic andCC construction from 2005 to 2008 (hereinafter the above processed sales amount of KRW 00,000,000 in total) and then included the processed sales amount of KRW 00,000 in total (hereinafter the above processed sales amount of KRW 00,000 in this case), from 2006 to 2008, the Director of the Regional Tax Office notified the Defendant of the processed sales amount of KRW 00,000,000 in total (hereinafter the above processed sales amount of KRW 00,000 in total,00 in this case).

C. Accordingly, on July 16, 2012, the Defendant excluded 00,000,000 won from deductible expenses and, on the same day, deemed that the amount was leaked to a private company but it was unclear that it would have been reverted to the private company, and thus, the Defendant notified the Plaintiff of the change in the amount of income arising from the disposition of this case as stated in the separate sheet (hereinafter referred to as the “disposition”). The Defendant issued a notice of the change in the amount of income arising from the disposition of this case, as stated in the separate sheet, on the ground that the amount of the processed purchase in this case was leaked to a private company.

D. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on October 12, 2012. On November 26, 2014, the Tax Tribunal rendered a decision that the amount exceeding KRW 0,00,000,00,000, which was recognized as embezzled by thisA in criminal litigation with respect to this case out of the key amount at issue at issue at issue at issue at issue at issue at issue at issue at issue by re-audit through the Plaintiff’s corporate account, account, etc., and then rectify the notified amount of the change in the amount of income according to the result thereof (hereinafter “instant re-audit decision”).

E. On November 26, 2014, the director of ○○ Regional Tax Office decided to dispose of the instant issue amount as bonus to thisA as originally decided on November 26, 2014, and notified the Plaintiff of the result. The notice of the result of re-audit reached the Plaintiff on February 4, 2015.

[Ground for recognition] Unsatisfy, Gap evidence 1 to 3, Eul evidence 1 and 2

Each entry, including each number, hereinafter the same shall apply) and the purport of the whole pleading

2. Determination on the part of the instant lawsuit claiming a change in the results of a tax investigation

In the instant lawsuit, the Plaintiff sought to change the amount recognized as a processed sales among the notice of the results of the tax investigation conducted against the Plaintiff on July 16, 2012.

The existence of an administrative disposition, which is the object of a lawsuit in an administrative litigation, shall be deemed a lawful requirement for the lawsuit, so the lawsuit shall be dismissed in a case where the plaintiff's dispute does not exist (see, e.g., Supreme Court Decision 96Nu6707, Aug. 26, 1997). As alleged by the plaintiff, although the defendant notified the plaintiff of the result of the tax investigation that he/she recognized the processed sales from July 16, 2012 to the business year 2008 from 2005 to 200,000,000 won, it does not in itself result in any change in the existence or scope of the plaintiff's rights and obligations, and thus, it does not constitute an independent administrative disposition subject to an administrative litigation.

In addition, this part of the claim is 00,000,000,000

It is sought to change from Won to KRW 00,000,000, which is not included in the type of administrative litigation as stipulated in Article 3 of the Administrative Litigation Act. The interpretation of the current Administrative Litigation Act is interpreted in addition to the type provided in Article 3 of the Administrative Litigation Act.

Inasmuch as the said lawsuit is not permissible, it is unlawful (Supreme Court Decision 192 February 11, 1992).

91Nu4126, see, e.g., Supreme Court Decisions

Therefore, among the lawsuits in this case, the part of the claim for modification to the notification of tax investigation results is unreasonable.

3. Determination on the legitimacy of the instant disposition

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case should be revoked illegally for the following reasons.

1) Despite the decision of the Tax Tribunal on the reexamination of this case, the Defendant’s maintaining the instant disposition is against the binding force of the decision of the Tax Tribunal.

2) The Plaintiff’s former representative director, in the process of withdrawing false sales in order to support the share price, included the processed sales price in excess of the amount of the instant issues appropriated as the processed sales price, and as the amount withdrawn from the Plaintiff’s account in response to the processed sales amount was deposited in the Plaintiff’s account in the Plaintiff’s name in the name of the place of sales in order to pretend the sales, the key issue amount of this case cannot be deemed to have been leaked to the Plaintiff’s account. Thus, this should be treated as “in a case where the amount included in the profit under Article 106(1)2 of the Enforcement Decree of the Corporate Tax Act has not been leaked to the company,” and it cannot be disposed of as “in the case where the amount included in the profit under the Plaintiff’s gross income has not been leaked

B. Determination

1) Determination on the first argument

Article 80 of the Framework Act on National Taxes only provides for the binding force of the Tax Tribunal on the rejection, dismissal, and decision of reexamination, and does not provide for the provisions on the decision of reexamination. In addition, the decision of reexamination constitutes a modified decision in which the agency has expressed its intent to take part in the decision on the request for a trial, etc. by re-inspection of the matters pointed out in the decision. Therefore, the decision of reexamination takes effect as a decision on the request for a trial, etc. by supplementing the contents thereof by subsequent disposition of the agency (see Supreme Court en banc Decision 2007Du12514, Jun. 25, 2010). As such, it cannot be deemed that any effect takes effect solely on the decision of reexamination, since the agency has a legal obligation to conduct re-audit of the matters pointed out in the decision of reexamination, and it cannot be deemed that even after re-audit has maintained the original disposition or made a new disposition in accordance with the purport of the decision of reexamination even after re-audit

In light of the above legal principles, it cannot be readily concluded that the binding force such as rejection, dismissal, and acceptance of the re-audit decision of this case is recognized. In addition, when adding the whole purport of the pleadings to the statements in Gap evidence Nos. 2 and Eul evidence Nos. 6 through 9, the Tax Tribunal rendered the re-audit decision of this case to the purport that this case must re-examine whether the amount exceeding the amount of embezzlement recognized as embezzlement by using the plaintiff's funds in criminal proceedings was actually leaked out of the company in fact, and the 00 regional tax office reviewed the judgment of the embezzlement case of this case from December 8, 2014 to December 31, 2014 by receiving data such as a copy of the check, etc., and even if the contents of the re-audit decision of this case include "re-audit through the plaintiff's corporate account and account books, etc.", this cannot be deemed contradictory to the purport of the re-audit decision of this case, even if it was presented in one way to investigate the outflow of funds.

The plaintiff's assertion on this part is not accepted.

2) Judgment on the second argument

A) Article 67 of the Corporate Tax Act provides that when filing a report on the corporate tax base based on the income for each business year under Article 60 or determining or revising the corporate tax base under Article 66 or 69, the amount included in the calculation of earnings shall be disposed of as bonus, dividend, other outflow from the company, internal reserve, etc. as prescribed by the Presidential Decree. Accordingly, the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 19001, Feb. 28, 2007 for the business year 2006; for the business year 2007, the Act was amended by Presidential Decree No. 20619, Feb. 22, 2008; for the business year 2008, the Act was amended by Presidential Decree No. 21302, Feb. 4, 2009; for the business year 2009, for the representative, it is clear that the amount included in the calculation of earnings should be reverted to the employee or the employee.

Meanwhile, since the tax authority bears the burden of proving the fact of taxation requirements in a lawsuit seeking revocation of taxation (see, e.g., Supreme Court Decision 2003Du10343, Jan. 13, 2005). In order for the tax authority to take a disposition of income by excluding losses in deductible expenses on the ground that the corporation’s deductible expenses are processing expenses, the tax authority must prove the fact that the deductible expenses are the processing expenses, and the special circumstance that the processing expenses are not leaked should be proved by the corporation asserting such circumstance (see, e.g., Supreme Court Decision 2010Du14329, Sept. 27, 2012).

In light of the above legal principles, since there is no dispute between the parties that the issue amount of this case was appropriated as a processing purchase, the above amount shall be deemed to have been leaked out of the company, barring any special circumstances, and special circumstances to deem that the issue amount of this case was not leaked out of the company should be proved by the plaintiff.

B) In full view of the purport of the entire pleadings as stated in the evidence Nos. 4 through 9, 10, 12, 17, 21, 22, 24, 25, and 26, the following facts may be acknowledged.

(1) The Plaintiff, the largest shareholder of the Plaintiff, through the comprehensive stock exchange of thisA, was listed on the KOSDAQ market as a subsidiary of 100% of the FF (hereinafter referred to as “FF”) listed on the KOSDAQ market.

(2) At the time, thisA, the representative director of the Plaintiff, intended to cause processing and purchase to the Plaintiff for the purpose of supporting FF’s share price through the most recent transaction.

(3)For this purpose, thisA included false sales in the account book as if it sold products or provided services to BB electronics,CC Construction, GG Construction, FF panty, etc. (hereinafter referred to as “processing Sales”), and deposited the amount equal to the sales amount stated in the account book by entering the name of the Plaintiff’s employees in thisA and the remittance agent as the remittance agent in order to create a consistent financial evidence, into the Plaintiff’s account. For the processing purchase, this would include the processing purchase amount in the account book and include the amount in excess of the actual purchase amount in the account book, provide the purchaser with money equivalent to the purchase amount in the account book, and then make a financial evidence consistent with the processing purchase method consistent with which the purchaser would return the same amount as the actual purchase amount.

(4) Pursuant to the accusation by the director of the regional tax office of ○○○○○, a criminal investigation into thisA was conducted. This A was charged with the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) and the violation of the Act on External Audit of Stock Companies. On December 27, 2013, he was convicted of imprisonment with prison labor for ○○ and fine 00 billion won. On July 17, 2014, the appellate court (○○ High Court Decision 000No000) sentenced the Plaintiff’s imprisonment with prison labor and fine ○○○○○○○○○○○○○○○○○○○○○○○○○○○○ was dismissed on January 15, 2015 (Supreme Court Decision 00Do000,000; hereinafter collectively referred to as “related criminal judgment”). However, the criminal facts included the Plaintiff’s share purchase and sale of the Plaintiff’s shares out of 00 billion won to 200,0000 won.

(5) From August 7, 2007 to September 15, 2009, among the facts of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) in the relevant criminal judgment, it is difficult to recognize the intention of unlawful acquisition, since there is room to view that part of the amount that A withdraws from the Plaintiff’s account in 10 billion won on 10 occasions from August 7, 2007 to September 15, 2009 was paid as the Plaintiff’s operating fund, and it is difficult to recognize the intention of unlawful acquisition, and in the process of returning the difference after paying the purchase price in excess of the actual purchase price from the purchaser, it cannot be ruled out the possibility that the Plaintiff’s employees, other than thisA, would have used it individually.

(6) In the relevant criminal judgment, DD’s operator Kim H was present as a witness, and received a total of KRW 00,000,000 from the Plaintiff to the account, and among them, stated that “the remaining KRW 000,000,000,000,000,000,000, not including the actual transaction amount of KRW 0,000,000,000,000,000 was withdrawn as a check and returned to the Plaintiff’s employee.” In fact, at the investigative agency, it was found that the amount of KRW 0,000,000,000 was returned to the Plaintiff again.

(7)On the other hand, among the issues of this case which are considered as a processing purchase as a result of the tax investigation, include the details from the Plaintiff’s second bank account as follows:

The date of withdrawal by the order and the method of buying funds.

d 28.0 billion won on June 2, 12007

E Engineering Account Transfer of 29.0 billion won on October 29, 2007

E Engineering of 29.0 billion won on November 29, 32007

An increase in the amount of the total check recovered to the plaintiff on the date of withdrawal of the check.

on June 28, 12007, KRW 00,000,000,000 on July 2, 2007

On October 30, 2007, the sum total of KRW 4,300,100,000 on October 30, 2007 deposited by the Plaintiff on October 29, 2007 was paid KRW 2 billion.

3. 4.0 billion won on December 4, 2007, 2000 million won on December 5, 2007

As above, each of the above withdrawals deposited into the account of the purchaser was withdrawn from the account of the purchaser at the time of the deposit, and the Plaintiff possessed a copy of a part of the check and confirmed that the Plaintiff recovered the check at the investigative agency. Moreover, since the check is most deposited, it was not only only against the Plaintiff’s bank, the payment was presented to the JJBD branch of the second bank, the Plaintiff’s principal bank.

(8) The ○○○ Regional Tax Office confirmed the tax invoice issued by the seller and the details of the export clearance declaration related to the seller, and confirmed that part of the amount deposited in the Plaintiff’s account was deposited by EA or the Plaintiff’s employees, and determined that the remainder, excluding the amount for which the tax invoice and the export clearance declaration exist, out of the amount deposited in the Plaintiff’s account. In relation to the processing purchase, the ○○ Regional Tax Office found the remainder of the amount deposited in the Plaintiff’s account as the processed sales amount, excluding the transaction in which the tax invoice was actually issued, out of the amount deposited from the Plaintiff’s account and deposited into the Plaintiff’s account

C) In full view of the following circumstances that can be recognized by adding up the above facts admitted, the key issue amount of the instant case was immediately paid on the premise that a considerable portion of the said amount would be immediately recovered to the Plaintiff, and the Plaintiff was actually returned to the Plaintiff, and the entire amount was not leaked.

(1) As recognized earlier, it is reasonable to view that the account transfer was made to the purchaser and some of them returned to the Plaintiff as a check, as recognized earlier, and that the amount was not leaked out of the company’s death. The amount exceeds KRW 0 billion only in the year, and this does not overlap with the part excluded from the key amount of the instant case, deeming that the Defendant was recovered out of the initial processing purchase price.

(2) On the premise that both the Defendant and the Plaintiff actually transferred funds from the Plaintiff’s account, the part not recognized by relevant documents was identified as the processing transaction. The amount of the processed sales identified in such a way exceeds the processing purchase amount. In other words, the amount exceeding the amount leaked from the Plaintiff’s account is deposited into the Plaintiff’s account.

(3) The Plaintiff asserts that the amount of the collected money was processed and sold around that time, and that the sales amount was deposited into the Plaintiff’s account by pretending that it was deposited from the processing sales office to the Plaintiff’s account. In light of the details of transactions in the Plaintiff’s account, etc., there seems to be considerable credibility in the foregoing assertion. In addition to the amount of the collected money, it appears that there were considerable amounts of money deposited under the processing sales.

(4) The investigative agency, which investigated the charge of embezzlement of thisA, appears to have charged thisA with the amount used for personal purposes by means of a check of the amount withdrawn for the processing purchase from the Plaintiff’s account, including the amount at issue in this case, after which it appears to have been charged with the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement). The specific amount used by thisA through the investigation is limited to part of the amount withdrawn for the processing purchase, and the remaining amount was considered to have been returned to the Plaintiff again, and was excluded from the amount of embezzlement. In the relevant criminal judgment, the verdict of innocence was pronounced to this purport.

(5)ThisA is deemed to be a series of accounts closely related to the deposit of processed sales and the withdrawal of processed sales to the Plaintiff for the purpose of supporting the F's share price. It cannot be deemed that the amount of the processed sales and the withdrawal of the processed sales were leaked out of the private company by separating it from the financial transaction unrelated to each other.

D) Scope of revocation

In a litigation for revocation of a taxation, even where the taxation disposition is deemed unlawful because it was erroneous in the process of calculating the amount of tax in the litigation for revocation of the taxation disposition, when the amount of tax to be imposed lawfully is calculated based on the data submitted until the conclusion of the pleadings at the fact-finding court, the court shall not revoke the entire amount of the taxation disposition as unlawful, but shall revoke only the unlawful portion by deeming the portion exceeding the reasonable calculated tax amount among the taxation disposition as unlawful (see, e.g., Supreme Court Decision 97Nu19496, Sept. 29, 2000). However, where a party cannot calculate the lawful amount of tax to be imposed lawfully because he/she failed to submit the arguments and materials supporting the objective tax base and tax amount by the time of the closing of pleadings at the fact-finding court, the court is bound to revoke the whole amount of the taxation disposition, and in such a case, the court does not have the duty to identify the amount of tax to be imposed actively on

As to the instant case, the instant disposition was conducted on the premise that all the key issues were leaked out of the company. As seen earlier, in light of the details of the Plaintiff’s deposit and withdrawal, etc., a considerable portion of the key issues in the instant case may have been recovered, and the evidence submitted by the parties alone cannot be calculated on the basis of the fact that the amount actually leaked out of the processing purchase price cannot be grasped as much as the amount actually leaked out of the processing purchase price, and thus, the entire disposition in the instant case

Therefore, the instant disposition should be revoked in its entirety as it is unlawful.

4. Conclusion

Thus, among the lawsuit of this case, the part of the request for a change of tax investigation result notification is unlawful and thus it is dismissed.

D. We decide to accept the remainder of the plaintiff's claim for the reason that it is reasonable, and it is so decided as per Disposition.