Jeju Bank, Inc.

Head of the tax office;

March 5, 2003

1. The plaintiff's claim is dismissed.

2. Litigation costs shall be borne by the plaintiff.

The Defendant’s disposition of imposition of corporate tax of KRW 8,954,390 for the business year of 1998, corporate tax of KRW 6,564,580 for the business year of 1999, corporate tax of KRW 6,564,580 for the business year of 199, and corporate tax of KRW 1,065,810 for the business year of 200.

1. Details of the disposition;

A. The Plaintiff submitted to the Defendant a list of individual suppliers’ account statements received from the supplier after being supplied with value-added tax exemption services, etc. as follows. At this time, the account statements received from the supplier below were submitted by entering the list of individual suppliers’ account statements and omitting them.

본문내 포함된 표 사업년도 제출한 매입처별계산서합계표 금액 매입처별계산서합계표 제출 때 누락한 용역등의 공급자 누락한 용역등의 공급가액 합계 1998년 8,130,158,337원 한국감정원등 895,442,067원 1999년 3,614,851,254원 한국아이비엠 주식회사등 656,459,347원 2000년 4,008,232,891원 금융결제원등 106,583,805원 합계 15,753,242,482원 ？ 1,658,485,219원

B. Upon finding the above facts, with respect to the submission of a list of total tax invoices by seller for the business year 1998, the defendant calculated the above total tax invoices by seller under Article 41(14)2, Article 66(2) of the old Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998), Article 76(9)2, and Article 121(3) of the old Corporate Tax Act (amended by Act No. 6558 of Dec. 31, 2001), with respect to the submission of a list of total tax invoices by seller for the business year 1998, the defendant found the above disposition of total tax amount to be reverted to 190,000,000,000 won for the business year 1960,60,7967,7969,60,7969, and the defendant found the above disposition of total tax amount to be reverted to 10/100 of the corporate tax amount for the plaintiff.

【The basis for recognition-1-3(each notice), B-1 through 4-1(the corporate tax base and amount of tax), 2(the correction statement of corporate tax base and amount of tax), 1, 3, 4-Each 3(the correction statement of the list of the total amount of tax to be submitted), 2-3(the correction reason and calculation basis), 2-3(the correction reason and calculation basis), 5-7(the submission of the list of the total amount of account), and the whole purport of the pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

① Under the principle of excessive prohibition, the Act that limits property rights of the people violates the principle of proportionality, the method of propriety, the principle of minimum damage, and the principle of balance of legal interests. The provisions of the Corporate Tax Act of this case: (a) first, if the purchaser does not submit the supply value of goods and services omitted from the list of total accounts by customer; (b) if the list of accounts by customer is not omitted from the list of accounts by customer; (c) it violates the principle of reasonable taxation or the purport of the provisions of the Corporate Tax Act, which provides for the training of tax base, and thus, it violates the legitimacy of the purpose; (d) the purpose of the provision of the Corporate Tax Act and the training of tax base are to achieve the basic taxation to be achieved; (e) it is appropriate to achieve the purpose of the provision of the Corporate Tax Act through the method of giving profits to the persons who prepare and submit the list of accounts by customer; (c) it violates the principle of excessive taxation, and thus, (e) it is against the law that imposes penalty tax on the company that has little possibility to omit sales with the Plaintiff bank.

② The provisions of the Corporate Tax Act, regardless of whether or not submitting a sum table of account statements or submitting a sum table of account statements intentionally do so for the purpose of tax evasion, uniformly impose penalty taxes regardless of whether or not the submission of a sum table of account statements is merely a simple business performance or for the purpose of tax evasion. The case of value-added tax, such as this case, where the non-issuance of tax invoices or the submission of a sum table of account statements, leads to the omission of tax evasion, requires that the same amount of penalty taxes should be imposed as the amount of penalty tax imposed upon the non-issuance of tax invoices or the submission of a sum table of account statements under the Value-Added Tax Act. Accordingly, the provisions of the Corporate Tax Act are in violation of the Constitution and the disposition of this case, which

③ In the instant case, the suppliers that provided the Plaintiff with the services, etc. submitted a list of total invoices by customer, including the supply price of services, supplied to the Plaintiff, to the head of the competent tax office, and the sales by customer was omitted. The Plaintiff merely omitted the invoice and omitted the supply price in the list of total invoices by customer, and submitted a list of total invoices by customer to the Defendant. Therefore, the Plaintiff did not engage in any act contrary to the purport of the provision of the Corporate Tax Act that establishes the basis taxation by data and develops the tax base. In light of such circumstances, the Plaintiff’s uniform disposal by applying the provisions of the instant Corporate Tax Act ought to be revoked as contrary to the purport of the provisions of the instant Corporate Tax Act.

B. Relevant statutes

Old Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998)

Article 41 (Additional Tax)

(14) In case a corporation (excluding such corporation as prescribed by the Presidential Decree) falls under any of the following subparagraphs, an amount equivalent to 1/100 of the value of supply shall be added to the corporate tax and collected. In this case, the additional tax shall be collected even if there is no calculated tax amount, and the part on which the additional tax is imposed under Article 22 (2) through (4) of the Value-Adde

2. Where a list of total tax invoices by seller under Article 66 (2) is not submitted within the period under the same Article, or the list of total tax invoices by seller is submitted, and all or part of the matters to be entered as prescribed by Presidential Decree are not entered or differently entered from the fact;

Article 66 (Preparation, Delivery, etc. of Account Statement) (1) When a corporation supplies goods or services, it shall prepare an account statement or receipt (hereinafter referred to as "Account Statement, etc.") as prescribed by Presidential Decree and deliver it to the person receiving the goods or services

(2) A corporation shall submit a list of total sales and individual suppliers (hereinafter referred to as "lists of total sales and individual suppliers") issued or received under paragraph (1) to the head of the tax office having jurisdiction over the place of tax payment within the period prescribed by Presidential Decree.

Old Corporate Tax Act (amended by Act No. 6558 of Dec. 31, 2001)

(9) The chief of the district tax office having jurisdiction over the place of tax payment shall, in case where a corporation (excluding such corporation as prescribed by the Presidential Decree) falls under any of the following subparagraphs, collect an amount calculated by adding an amount equivalent to 1/100 of the value of supply thereof as corporate tax. In this case, even if there is no calculated tax amount, the additional tax shall be collected, and the provisions of subparagraph 1 shall not apply to the portion to which the provisions of subparagraph 2 apply, and the portion on which the additional tax shall be imposed under the provisions of

2. Where a person fails to submit a list of total tax invoices by seller under Article 121 (3) within the time limit set under the same Article, or submits a list of total tax invoices by seller, and the whole or part of the matters to be entered in such list is not entered or differently entered from the fact;

Article 121 (Preparation, Delivery, etc. of Account Statement) (1) When a corporation supplies goods or services, it shall prepare an account statement or receipt (hereinafter referred to as "Account Statement, etc.") as prescribed by Presidential Decree and deliver it to the person receiving the goods or services

(3) A corporation shall submit a list of total invoices by seller and by seller (hereinafter referred to as "list of total invoices by seller and by seller") issued or received under paragraph (1) or (2) to the head of the tax office having jurisdiction over the place of tax payment within the period prescribed by Presidential Decree

(c) Markets:

(1) Determination on the assertion that the principle of excessive prohibition is violated

The provision of the Corporate Tax Act was enacted to establish the basis taxation based on the data and to train the tax base. Accordingly, the purpose of the provision of the Corporate Tax Act is deemed to be justifiable. In addition, even if the purchaser has omitted the invoice only and the sales office has submitted the list of total tax sources, the abstract risk that taxation data could be concealed due to the omission of the invoice is still found to remain. Therefore, imposing additional tax as a sanction is not contrary to the legitimacy of the purpose.

In addition, in order to achieve this objective, the obligation to issue an invoice and submit an invoice list to a corporation is not to give certain benefits to a corporation which has complied with the obligation, but to impose additional tax such as the provision of the Corporate Tax Act on a corporation which has not complied with the obligation.

In addition, the plaintiff's assertion that the provision of the Corporate Tax Act of this case shall not be applied on the ground that the company is a company with little possibility of omitting sales, and the penalty tax is imposed, regardless of intention or negligence, unless there is any justifiable reason not to mislead the failure to perform the duty (see, e.g., Supreme Court Decisions 2001Du8100, Feb. 14, 2003; 98Du3532, Dec. 28, 1999). It cannot be viewed that the provision of the Corporate Tax Act of this case does not necessarily constitute a justifiable reason not for the failure to perform the duty as alleged by the plaintiff. In light of the fact that the amount equivalent to 1% of the value of supply under the provision of the Corporate Tax Act of this case exceeds 20% of the calculated tax amount or 0.07% of the revenue amount, etc., it cannot be concluded that the provision of the Corporate Tax Act of this case is against the minimum principle of damage.

In addition, the provisions of the Corporate Tax Act in this case do not seem to be a law contrary to the balance of legal interests in the case where there is no evidence to see that the private interest infringed by the taxpayer is heavy because the provisions of the Corporate Tax Act are rather than the public interest, such as the basis taxation to be achieved through the provisions of the case.

In full view of the above facts, the pertinent provision of the Corporate Tax Act does not seem to violate the Constitution as alleged by the Plaintiff, and thus, the Plaintiff’s above assertion is rejected.

(2) Determination on the assertion that the principle of tax equality is violated

The phrase “additional tax is imposed, either intentionally or by negligence, unless there is any justifiable reason not to do so for neglecting the duty,” and the legislative purport of the provision of the Corporate Tax Act to secure taxation data and establish a base taxation is different from the legislative purport of the provision of the Value-Added Tax Act that demands the issuance of a tax invoice and the submission of a list of total tax invoices, and the omission of a tax invoice immediately lead to the omission of a value-added tax under the Corporate Tax Act, on the sole basis of the fact that the omission of issuance of a statement of account under the Corporate Tax Act leads to the omission of the corporate tax, etc., it cannot be deemed that the additional tax imposition rate under the provision of the Corporate Tax Act does not necessarily exceed the additional tax imposition rate due to the non-issuance of a tax invoice and the submission of a list of total tax invoices under the Value-Added Tax Act. This part of the Plaintiff’s assertion is rejected.

(3) Determination as to the assertion that there was no violation of the purport of the provision of the Corporate Tax Act

As a result of omitting an invoice only by the purchaser and submitting a list of total tax invoices in the sales office, even if the taxation data for the transaction of services, etc. have been disclosed, the risk of covering the taxation data due to the omission of the invoice is still deemed to exist, and the penalty tax is imposed regardless of intention or negligence as seen earlier. Therefore, even if the Plaintiff did not omit the invoice in the sales office as alleged by the Plaintiff, and the Plaintiff submitted a list of total tax invoices by simple business failure, it does not seem to be illegal to impose penalty tax pursuant to the provisions of the Corporate Tax Act of this case. The Plaintiff’s above assertion is rejected.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed, and it is so decided as per Disposition.

Judges Han River-ho (Presiding Judge)