Since 90% of the subscription fee was paid to the customer and only 10% of the remainder was paid as an allowance, it is reasonable to deem that only the income equivalent to such amount was paid.

Since it is deemed that it is necessary to provide a customer with incentives in a certain manner for the smooth attraction of customers, it is reasonable to deem that only 10% of the loss incurred by the game of the soliciting customer was paid to the customer as allowances for the remaining 10% of the loss.

Article 27 of the Income Tax Act

2015Guhap57369 global income and revocation of such disposition

Park AA

Samsung Head of Samsung Tax Office

December 4, 2015

January 29, 2016

1. The Defendant’s imposition of global income tax of KRW 1,164,870 for the year 2009, KRW 238,236,130 for the Plaintiff on July 17, 201, and all imposition of global income tax of KRW 49,869,410 for the year 2010 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. From March 4, 2009 to November 30, 201, the Plaintiff entered into a customer brokerage contract (hereinafter “instant contract”) with a content that, from March 4, 2009 to November 30, 201, the Plaintiff recruited customers to a foreigner-only casino operated by BBBBB corporation (a name CCC casino, hereinafter “instant casino”) and that, at the time of customer’s termination of the game, 10% of the loss incurred as a broker fee for the settlement of the game performance.

“B. The Defendant: (a) deemed that the Plaintiff received from the instant casino a total of KRW 2,281,91,91,91,700 and paid KRW 2,281,9,700 in the amount of brokerage commission for the instant contract; and (b) paid KRW 2,281,91,9,700 in the amount of KRW 840,780,000 in the amount of brokerage commission for the instant contract; and (b) that there was business income equivalent to the amount of the said amount; (c) determined and notified the amount of income by applying standard expense rate; and (d) determined and notified each of the comprehensive income taxes for the years 2009 through 2011 as described in paragraph (1) of this case (hereinafter referred to as the “instant disposition”); (d) [Grounds for recognition]] without dispute; (d) the entry of KRW 1, 2 (including serial numbers; hereinafter the same shall apply); and (e) the purport of the entire pleadings and arguments.

2. Whether the instant disposition is lawful

In light of the following facts and circumstances, it is reasonable to view that the Plaintiff’s payment of 90% (i.e., 9% of losses) out of 10% of the total losses incurred from the game of the soliciting customer to the customer as an allowance for 10% (i.e., 1% of losses) of the remainder of 10% of the total losses incurred from the game of the soliciting customer, and that the Plaintiff received the payment as an allowance and paid income equivalent to that amount. On a different premise, the prior disposition of this case was unlawful.

① A customer who is placed in a casino by introducing a customer solicitor such as the Plaintiff (hereinafter referred to as “transfer”) is distinguished from the general customer, and is managed as a VIP customer, and the person in charge of the customer is also designated, and all of the game performance are recorded and managed in books. The instant casino needs to be managed separately for the settlement of fees under the instant contract by the Plaintiff, and is considered to have been involved in the management of the Plaintiff and the Plaintiff recruitment.

② At the instant casino, DDR, in charge of the settlement and payment of fees to the Plaintiff, paid only 1% of the amount of loss to the Plaintiff, and the remaining 9%, testified that it was directly paid to the customer who visited the casino at the Plaintiff’s request, and EE, the representative of the instant casino, submitted to the tax authority a confirmation document stating that “E, in accordance with the practice of casino marketing, is aware that the commission to the professional solicitor received from the casino operator is paid to the customer at a certain rate.” (No. 4).

③ The Plaintiff appears to have the need to provide customers with incentives in a certain way for a smooth inducement of customers. In other words, from the customer’s perspective, the Plaintiff sought to activate the customer solicitation business by returning a certain portion of the commission he/she agreed to receive, i.e., a certain portion of the game result loss to the customer, and the commission amounting to KRW 2,281,913,70 between three years and three years is the result of returning a certain portion of the fee and attracting the customer.

④ The instant contract and the withholding receipt stipulate that 10% of the amount of loss shall be paid to the Plaintiff. The said amount shall be paid to the Plaintiff in accordance with the terms and conditions of the contract. Of them, the Plaintiff returned a certain portion of the amount to the Plaintiff under an individual agreement with the customer. Since the Plaintiff was aware of such individual agreement, it can be deemed that the casino was paid directly from the casino for the convenience of payment to the customer and that the casino was paid by proxy.

3. Conclusion

The plaintiff's claim is justified and accepted.