Galll Liber beverage Co., Ltd. (Law Firm Pacific, Attorney Kim Jong-ho, Counsel for defendant-appellant)

Head of Seocho Tax Office

June 11, 2004

Seoul Administrative Court Decision 2002Guhap42336 delivered on June 11, 2003

1. Revocation of a judgment of the first instance;

2. The defendant's disposition of rejection against the plaintiff on November 12, 2001 exceeds 156,409,290 won among the disposition of imposition of corporate tax of KRW 211,161,970 for the business year of 1996, the amount exceeding 233,819,130 won among the disposition of imposition of KRW 295,93,40 for the business year of 1997, the amount exceeding 836,834,650 for the business year of 1998, the amount exceeding 739,141,250 won among the disposition of imposition of corporate tax of KRW 67,037,850 for the business year of 199, the amount exceeding 24,267,590 won among the disposition of imposition of corporate tax of KRW 47,489,530 for the business year of 200, the amount exceeding 239,251,200

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

【Unstrifics without dispute over evidence, evidence Nos. 3 through 6, 1 and 2, respectively, 1-5, and the purport of the whole pleadings

A. During the period from January 1, 1996 to December 31, 200, the Plaintiff provided that the head of the branch office, the vice-head, the head of the division, and the head of the kindergarten (hereinafter “the head of the branch office of this case, etc.”) transferred from his own home to a long distance impossible to commute to and from his workplace from his workplace among his employees shall be granted the company subsidy in accordance with the Plaintiff’s provision on the payment of the company subsidy to 47 employees in 1996, the 1997 to 64 employees, the Gangwon-do et al. in 1997, the Gangwon-do et al. in 1997, the Gangwon-do et al. to 55 others in the year 199, and the 17 million won in the name of the company subsidy (hereinafter “instant company subsidy”).

B. In filing a return on corporate tax for the business year 196 or 2000 to the Defendant, the Plaintiff filed a return on the tax base and tax amount with the amount indicated in the “tax base” and the “total amount of tax” column for the pertinent taxable year in the item of the “report” as indicated in the “report”, and made a voluntary payment at the same time.

C. On November 12, 2001, the Defendant deemed the payment of the instant company housing subsidy to be subject to the avoidance of wrongful calculation, and included the recognized interest amount in the gross income for each business year, and did not recognize the loan interest and the amount as deductible expenses, and rendered a decision of correction of the tax base and tax amount according to the relevant taxable year in the item of “revision” in the same list as indicated, “tax base”, “total tax amount”, “tax amount to be paid”, and notified the Plaintiff of the additional payment of the amount indicated in the “amount of tax to be paid” for each corresponding taxable year in the same item of the same item, which is calculated by deducting the amount of tax to be paid from the above tax amount, by which the amount of tax to be paid is determined to be less than 10 won as stated in the “amount of tax to be paid at the difference”

D. Accordingly, the Plaintiff filed an appeal with the National Tax Tribunal on January 10, 2002. On September 25, 2002, the National Tax Tribunal: (a) prohibited the diversion of the instant company subsidy for other purposes while lending it without compensation to the head of the instant branch, etc. transferred to an area where it is difficult for the Plaintiff to remove or retire from his/her own house by personnel order; and (b) determined that the instant subsidy was operated with the same quality as the instant company subsidy by re-lending it to the head of another branch, etc. transferred to an area where it is impossible for the Plaintiff to withdraw or retire from his/her own house without compensation for the purpose of performing his/her duties; and (c) determined that the Defendant’s request for the disposition of reducing the amount of the instant subsidy for less than 10 taxable year as deductible expenses was erroneous by misapprehending the amount of the tax to be paid for each of the said items, and that the Defendant did not pay the remaining amount of the said subsidy for 20 taxable years as deductible expenses.”

E. Meanwhile, on December 10, 2001, the Plaintiff paid KRW 114,150,910 to the Defendant on November 12, 2001, which was calculated in accordance with the purport of the Defendant’s notice of change in the amount of income. On November 28, 2002, the Plaintiff deemed that the amount equivalent to the interest recognized as the instant company subsidy belongs to the head of the instant branch, etc., and thus disposed of as a bonus, filed a claim for correction and application for refund of the tax withheld income tax on the ground that it is unreasonable to dispose of it as a bonus. However, on the 30th of the same month, the Defendant notified the Plaintiff that the above request for correction and application for refund cannot be accepted (hereinafter “instant notification”).

2. Determination on this safety defense

A. The defendant's assertion

The notification of rejection of this case does not constitute a rejection disposition subject to appeal litigation, and this part of the lawsuit is unlawful.

B. Determination

In order for an administrative agency to make a rejection disposition or an illegal omission, which is the object of an appeal litigation, even after receiving an application from a citizen, the administrative agency's rejection of the application without complying with the application, there is a right of the citizen to demand that the administrative agency conduct an administrative act in compliance with the application (see Supreme Court Decision 87Nu438, Feb. 23, 198, etc.).

Article 45-2 (1) of the former Framework Act on National Taxes (amended by Act No. 7008 of Dec. 30, 2003) provides that the person who has filed a tax base return within the statutory due date of return may request the head of the competent tax office to determine or correct the tax base and amount of the national tax initially reported (where a determination or correction is made pursuant to the provisions of each tax law, referring to the tax base and amount of tax after such determination or correction) within two years after the statutory due date of return elapses. The person who has filed a tax base return within the statutory due date of return. The person who has filed a tax return within the statutory due date of return is a person who has filed a tax return within the statutory due date of return. In addition, the person who has filed a tax return within the statutory due date of return may file a request for correction if he files a tax return within the due date of return for the taxpayer's cooperative duty, and the "decision" among the contents that the person who has filed a request for correction may request the head of the competent tax office may be deemed as prescribed in the method of taxation.

However, as in the instant case, there is no room for a taxpayer to submit a tax base return within the statutory due date of return with respect to taxes that are determined by automatic final and conclusive simultaneously with the establishment of the income tax withheld at the same time, so the right to request for ordinary correction stipulated in Article 45-21 of the Framework

Furthermore, we examine whether the right to request correction in cooking is recognized for the plaintiff.

(1) In light of the substantial spirit of the no taxation without law, even if a withholding agent has a withholding duty under tax laws and regulations and pays withholding tax, if all or part of such withholding duty does not exist substantially, the State is obligated to return such tax amount to the withholding agent, corresponding thereto, and the withholding agent shall be deemed to have the right to claim the return of the tax amount. ② Since the State, a withholding agent, can rectify without limitation on the frequency of exclusion period, in response thereto, if there is any error or omission in the details of withholding tax by the withholding agent, it shall be fair to provide the withholding agent with an opportunity for actively claiming the correction of the due tax amount in addition to the rectification at the discretion of the State, and ③ The right of the withholding agent to request the correction of the due tax amount shall not be determined depending on whether there is any explicit provision in the law, but shall be recognized as a matter of course in light of the spirit of the Constitution guaranteeing the property right and the right to request a trial (see Supreme Court Decision 97Hun-Ma13, Feb. 24, 2000).

Therefore, in a case where the Plaintiff voluntarily pays the “income tax withheld” which is a tax automatically determined method and then the Plaintiff is dissatisfied with the relevant tax amount, the Plaintiff’s right to claim rectification recognized as reasonable is recognized within a reasonable period from the notice of change in the amount of income of this case. If the Defendant refuses it or does not respond within a reasonable period, an appeal against the refusal disposition or litigation for confirmation of illegality of omission may be instituted.

Therefore, the defendant's main defense is without merit.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

For the following reasons, the Plaintiff asserts that the instant disposition was unlawful, and sought revocation of the part of the instant disposition, which exceeds the legitimate tax amount of the allegation.

The Defendant deemed the subject of wrongful calculation that the instant private housing subsidy was gratuitously lent to the head of the instant branch office, etc. holding a house on the ground that the proviso of Article 46(2)7 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970, Dec. 31, 1998; hereinafter the same shall apply) excluded funds required for the lease of a house below national housing size from those subject to the revocation of wrongful calculation.

However, Article 7-2 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970, Dec. 31, 1998; hereinafter "amended Enforcement Decree") provides that "where a company house is leased to an executive officer or employee who is not an investor or a contributor, and his/her relatives, the company house is provided to an appropriate amount below the reasonable rent," and as a result of the opposite interpretation, "where the company house is leased to an executive officer or employee who is not an investor or contributor, the company house shall be excluded from the object of the wrongful calculation avoidance even if it is leased to an appropriate amount below the reasonable rent." The proviso of Article 88 (1) 6 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970, Dec. 31, 199; hereinafter "amended Enforcement Decree") excludes a

Therefore, in order to interpret the above provisions harmoniously, even if the company loaned the company house subsidy to an employee who owns a house without compensation, it shall not be deemed as subject to the rejection of unfair calculation, as a matter of course, and it shall be determined by examining whether the free loan of the company house is economic rationality compared with the provision of the company house from the Plaintiff’s point of view. From the Plaintiff’s point of view, it is economic rationality to lend the company house subsidy free of charge to the head of the instant branch, etc., and therefore, the Plaintiff’s lending the company house subsidy free of charge to the head of the instant

B. Relevant statutes

Attached Form 2 is as shown in the relevant statutes.

C. Determination

(1) Fact finding

(2) In full view of the overall purport of pleadings in the Housing Lease Protection Act, the Plaintiff is a juristic person established on November 29, 1967 for the purpose of manufacturing and selling soft beverages and sells them through the branches located in each country. The Plaintiff is operating 50 branches nationwide to secure sales network, and the Plaintiff is providing compensation or reprimands in accordance with the results of the assessment of the capacity and performance of the branch offices and the employees in charge of the business. The Plaintiff is required to provide the branch offices and the branch offices and the branch offices and the branch offices and the branch offices and the branch offices and the branch offices and the branch offices and the branch offices and the branch offices and the branch offices and the branch offices and the government offices and the branch offices and the branch offices and the government offices and the branch offices and the government offices and the branch offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government offices and the government.

(2) Determination

(A) Article 20 of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998; hereinafter the same shall apply) and Article 52 of the Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998) apply only to cases where a corporation’s denial of wrongful calculation is not based on a normal economic person’s reasonable method in trading with a person in a special relationship, and where a corporation evades or reduces tax burden by abusing all the forms of trade listed in each subparagraph of Article 46(2) of the former Enforcement Decree of the Corporate Tax Act and each subparagraph of Article 88(1) of the former Enforcement Decree of the Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998). Determination of whether an economic rationality exists should be made based on the following factors: (i) whether the person with authority to impose tax has denied it and there is an income objectively expressed in an objective and reasonable manner; and (ii) whether the pertinent transaction constitutes 7. 97.

(B) The part of the Plaintiff’s act lending the instant company house subsidy in the year 196 through 1998 falls under the main sentence of Article 46(2)7 of the former Enforcement Decree of the Act before the amendment, and the part of lending the instant company house subsidy in the year 1999 and 2000 constitutes the main sentence of Article 88(1)6 of the former Enforcement Decree of the Act.

However, the proviso of Article 46 (2) 7 of the former Enforcement Decree of the Act was deleted as of December 31, 1998 pursuant to the purport that "a corporation loans funds needed to acquire or rent a house below the scale of national housing under the Housing Construction Promotion Act to homeless employees," and it was amended as of December 31, 1998 by Presidential Decree No. 15970 in order to correct tax inequality arising between financial institutions with extensive funds and manufacturing business with insufficient financial resources and encourage corporate restructuring." Article 46 (2) 7-2 of the former Enforcement Decree of the Act provides that "where company houses are provided to investors, contributors, and their relatives as an appropriate amount of rent, it shall be deleted under the amended Enforcement Decree of the Act, and instead, the proviso of Article 88 (1) 6 of the former Enforcement Decree provides company houses to officers who are not shareholders or contributors (including minority shareholders under the provisions of Article 87 (2) of the former Enforcement Decree) and employees who provide company houses."

Therefore, the fact that the Plaintiff lent the instant private housing subsidy to the head of the instant branch office, etc. without compensation is recognized as above. Since there is no dispute between the parties that the head of the instant branch office, etc. who leased the instant private housing subsidy from the Plaintiff, the Plaintiff’s act of lending the instant private housing subsidy without compensation does not fall under the proviso to Article 46(2)7 of the former Enforcement Decree of the amended Act, and it does not fall under the case where the Plaintiff provided the private housing to an officer or employee who is not a shareholder or contributor under the proviso to Article 88(1)6 of the amended Enforcement Decree, and therefore, it is reasonable to view that it is subject to the avoidance of wrongful calculation under Articles 20 and 52 of the Act prior to the amendment.

(C) However, as seen above, ① a company house is inevitably required for the efficient management and operation of a nationwide industrial accident point, and this is directly related to the sales business of soft drinks produced by the Plaintiff, ② the Plaintiff purchased or leased a company house to all employees working in the notice without delay, and the Plaintiff decided to lend the company house subsidy in lieu of the company house to the employees other than the officers and employees of Class 1 and 2, and ③ the Plaintiff is unable to use the company house subsidy for other purposes, ③ the Plaintiff is allowed to immediately recover and immediately transfer it to the workplace, and ④ the Defendant is also recognized as a fund directly used for the operation of the nationwide industrial accident, according to the decision of the National Tax Tribunal, and the Plaintiff’s act of leasing the company house subsidy in lieu of the company house is not subject to unfair calculation, in full view of the fact that the amount equivalent to the company subsidy in this case’s loan, the deductible expenses, and the decision of re-determination of the tax base of this case, which are the economic calculation decision, is revoked.

In addition, the officers and employees of the first and second level who are provided with the company house are not subject to any unfavorable disposition under the tax law on the ground that they do not fall under the wrongful calculation under the proviso of Article 88 (1) 6 of the amended Enforcement Decree, but in the lower class, they are not provided with the company house in the lower class, and impose income tax on the head of the instant branch, etc. who was given the company subsidy in this case by deeming the recognized interest and amount as the bonus as the bonus in equity.

(D) On the other hand, among the disposition of this case, the part of the disposition of this case where the corporate tax was imposed by including the recognized interest rate calculated as the provisional payment for the business year of 196,409,290 won for the business year of 1996, the part exceeding 233,819,130 won for the business year of 197, the part exceeding 739,141,250 won for the business year of 1998, the part exceeding 24,267,590 won for the business year of 1999, the part exceeding 22,519,320 won for the business year of 199, and the part which exceeds 24,267,590 won for the business year of 199, and the part which exceeds 22

D. Sub-committee

Therefore, the part which exceeds 156,40 won among the disposition of imposition of corporate tax belonging to the business year 1996 against the plaintiff on November 12, 2001; the part which exceeds 233,819,141,250 won among the disposition of imposition of corporate tax belonging to the business year 1996; the part which exceeds 24,267,590 won among the disposition of imposition of corporate tax belonging to the business year 1997; the part which exceeds 233,819,130 won among the disposition of imposition of corporate tax belonging to the business year 295,93,40 won; the part which exceeds 836,834,650 won among the disposition of imposition of corporate tax belonging to the business year 1999; the part which exceeds 24,267,590 won among the disposition of imposition of corporate tax belonging to the business year 200; the part which exceeds 22,2519 won shall be revoked.

4. Whether the rejection notification of this case is lawful

A. The plaintiff's assertion

The Defendant deemed that the amount equivalent to the recognized interest is reverted to the head of the instant branch, etc. on the premise that the gratuitous loan of the instant company loan is subject to the avoidance of wrongful calculation, and disposed of as a bonus, and then notified the Plaintiff of the change in the amount of income. However, the instant company loan is an act of economic rationality, which is not subject to the avoidance of wrongful calculation, and thus is not subject to the disposition of income equivalent to the recognized interest as a bonus

B. Relevant statutes

Attached Form 2 is as shown in the relevant statutes.

C. Determination

Since the Plaintiff’s lending of the instant company housing subsidy to the head of the instant branch, etc. without compensation is recognized as being not subject to the avoidance of wrongful calculation due to economic rationality, the Defendant deemed that the amount equivalent to the recognition interest of the instant company housing subsidy was reverted to the head of the instant branch, etc., and thus disposed of as bonus, and accordingly, was unlawful.

Therefore, as to the claim for correction and application for refund of withheld wage and salary income tax on the ground that the wage and salary income tax paid by the Plaintiff according to the Defendant’s notice of change in the amount of income is unreasonable, the Defendant’s refusal

5. Conclusion

Therefore, the part of the disposition of this case which imposed the loans of this case as the object of denial of unfair calculation, and the plaintiff's claim seeking revocation of the notification of this case is justified. The judgment of the court of first instance is unfair with different conclusions, and it is so decided as per Disposition.

Judges Yang Dong-hee (Presiding Judge)