early 208west2737 (Ob. 12, 2009)

The validity of the exclusion period and exclusion period of national tax due to processing purchase;

As long as it is recognized that the processing sales have been in practice by the customer, it is reasonable to accept the false tax invoice and deduct the input tax amount as the input tax amount at the time of the return of the corporate tax and the act of including it in the loss is a fraud or other improper means.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposition of global income tax amounting to KRW 126,198,910 for the year 2001, the amount of 84,263,270 for the year 2002, and the amount of 218,03,970 for the year 2003 shall be revoked.

1. Details of the disposition;

A. The plaintiff's status, etc.

(1) AADDD 1687-31 in Gwanak-gu in Seoul Special Metropolitan City (hereinafter referred to as 'BD 2007.19.12.19. hereinafter referred to as 'BD 2007 company') had been engaged in the wholesale and retail business of pharmaceutical products, which was closed ex officio on November 6, 2006 and re-registered on December 13, 2007. On December 24, 2007, the location of the principal office was transferred to 863-7, Seocho-gu Seoul Metropolitan Government CC.

(2) The plaintiff served as the representative director of the non-party company from November 23, 1995 to June 23, 2004.

B. Return and payment of the value-added tax and corporate tax of the nonparty company

The non-party company received purchase tax invoices of KRW 1,009,380,000 (hereinafter referred to as the "each of the tax invoices of this case") from EE medication in the taxable period of value-added tax from January 2001 to February 2003, after deducting the input tax amount equivalent to the supply value of each of the above tax invoices from the output tax amount, and filed and paid the value-added tax and corporate tax for the pertinent taxable period by including each of the supply values in deductible expenses.

(c) Conduct of tax investigation and notification of taxation data with respect to EE drugs by the director of the Seoul Regional Tax Office;

(1) On April 2007, the director of the Seoul Regional Tax Office: (a) conducted a tax investigation on EE drugs, and found that the EE drugs issued and delivered each of the instant tax invoices to the non-party company without real transactions; and (b) notified the head of the Geumcheon District Tax Office having jurisdiction over the non-party company as taxation data.

(2) On December 24, 2007, the non-party company moved its head office to 863-7, Seocho-gu, Seoul, Seocho-gu, and the head of the Geumcheon District Tax Office notified the director of the tax office of distribution of relevant data as taxation data on January 23, 2008.

D. Submission of a revised report on value-added tax and corporate tax of the non-party company

On November 2007, the non-party company received the notice of pre-announcement of taxation from the head of the Geumcheon Tax Office, submitted the revised return of value added tax which deducts the amount equivalent to the value of supply of each tax invoice of this case as the input tax amount for the pertinent taxable period, and submitted the revised return of corporate tax on the amount of processed transaction as the provisional payment for the representative director.

E. Notice of rectification of value-added tax and corporate tax on the non-party company

The director of the tax office, on February 14, 2008, excluded the input tax amount equivalent to the value of supply of each of the tax invoices of this case, and included the amount equivalent to the value of supply (the amount included in the gross income of this case) in the gross income for the business year 228,628,400, the business year 2002, and 544,170,000 won in the business year 203, and hereinafter referred to as the "amount included in the gross income of this case") in the non-party company’s correction and notification of value-added tax and corporate tax

F. Notice of change in income amount to the plaintiff

(1) The director of the distribution tax office deemed that the amount included in the instant income was reverted to the Plaintiff, which was the representative director of the non-party company, and disposed of as a bonus to the Plaintiff during the pertinent taxable

(2) Pursuant to the proviso of Article 192(1) of the Enforcement Decree of the Income Tax Act, Article 86(1)4 of the National Tax Collection Act, and Article 83(1)1 of the Enforcement Decree of the same Act, the director of the tax office having jurisdiction over the possibility of collecting the income tax from the non-party company. On February 12, 2008, the director of the tax office determined that it is not possible to collect the income tax from the non-party company, and notified the Plaintiff who was

G. The Defendant’s correction and notification of global income tax on the Plaintiff

On May 1, 2008, the Defendant notified the Plaintiff of the amount of global income tax of KRW 126,198,910, the amount reverted to the year 2002, KRW 84,263,270, the amount reverted to the year 2003, and KRW 218,03,970, the amount reverted to the year 2003 (hereinafter “instant disposition”).

[Reasons for Recognition] Unsatisfy, Gap evidence 1-2, Eul evidence l-3, Eul evidence 4-1-5,

each entry of evidence No. 10 and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The transaction of each of the instant tax invoices is trading FF, which is the main product of EE medication, and among them, it includes not only the processing transaction but also the normal transaction. Nevertheless, the Defendant, on the basis of the confirmation document, etc. unilaterally prepared by EE medication, deemed the said transaction as the entire processing transaction, and taken the instant disposition, which is in violation of the underlying taxation principle.

(2) Since the amount included in the gross income in the instant case was paid to the sales employees as sales promotion expenses and incentives, the said amount should be disposed of as bonus of the sales employees, not the Plaintiff.

"(3) The processing transaction of FF products has been conducted in practice with EE drugs and the Korean pharmaceutical wholesalers, and accordingly, the non-party company has been inevitably involved in the processing transaction. In this case, the exclusion period of global income tax is not ten years but five years, since the comprehensive income tax was not evaded by fraud and other unlawful acts. Therefore, the disposition of this case is subject to revocation of the disposition imposing global income tax for the year 2001, in which the exclusion period has lapsed." (4) If the non-party company is liable to withhold tax as bonus with respect to the amount included in the gross income so that the non-party company is liable to withhold tax, the head of the distribution tax office must notify the non-party company of the change in the amount of income. In addition, the non-party company has notified the non-party company of the change in the amount of income as a notice of change prepared by the head of the Geumcheon Tax Office without any authority to do so.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) On April 19, 2007, the ES Director Kim H prepared a written confirmation with the following contents. The head of the FF Support Team of the EEF Project Division stated to the same effect as the tax investigation.

(A) When selling the FF, an over-the-counter medicine manufactured by EE medicine, and selling it to a food distributor without a license for handling medicines, or to a retail shop refusing to receive a tax invoice, there are cases where a tax invoice according to FF supply is not issued. In this case, a tax invoice equivalent to the FF sales amount was not purchased by a wholesaler or retailer of medicines who wants to receive a purchase tax invoice in an amount higher than the actual transaction amount, but was supplied to them by those who want to receive a purchase tax invoice.

(B) According to the results of the EEM’s confirmation of FF sales data, etc. by each of the pharmaceutical wholesalers in charge of FF business, from 2001 to 2005, it issued and issued a processing tax invoice equivalent to the total amount of KRW 92,720,343,914 to 167 pharmaceutical wholesalers.

(C) Each of the instant tax invoices issued to Nonparty Company is also a processing tax invoice issued without a real transaction.

(2) On March 30, 2007, JinK and Kim JJ made a statement to the effect that, in order to achieve the FF business goals of EEF, they sold FF to distribution companies, etc. without a license for handling medicines, and prepared and delivered a statement of FF sales revenue equivalent to the FF sales revenue amount to the non-party company, etc., the FF wholesaler himself/herself traded, to the non-party company, etc.

(3) JK and Kim J prepared a specification sheet issued and issued a processed tax invoice to the non-party company on the basis of the several books held by JJ. The ECE was deemed to be a processed transaction of each of the instant tax invoices based on the said specification sheet, and was subject to tax investigation.

(4) On April 2007, the director of the Seoul Regional Tax Office notified the payment of penalty amounting to KRW 4,317,019,280 on the grounds that EE drugs were issued and delivered a false tax invoice. The EE drugs paid on May 1, 2007.

[Ground of recognition] Facts without dispute, Eul evidence 6-1 to 3, Eul evidence 7, Eul evidence 8 and 9-1, 2, Eul evidence 11 and 12, witness JK, Kim J's testimony and the purport of the whole pleadings

D. Determination

(1) Determination on the first argument

(A) Generally, in a lawsuit seeking the revocation of a tax imposition disposition, the burden of proof as to the facts requiring taxation exists, but if the facts alleged in light of the empirical rule are revealed in the course of a specific lawsuit, it cannot be readily concluded that the pertinent tax disposition was an unlawful disposition that failed to meet the taxation requirements, unless the other party proves that the facts in question were not eligible for application of the empirical rule (see, e.g., Supreme Court Decision 2005Du5604, Nov. 15, 2007).

(B) In light of the above facts of recognition and the following circumstances revealed in the argument of this case, each of the tax invoices of this case is a tax invoice issued without real transactions. Thus, this part of the plaintiff's assertion is without merit.

The KK and Kim J, who traded with the non-party company while working as the representative director, Kim H, FF Support Team leader of the EE-H, the FF Support Team, and business employees, confirmed that all of the tax invoices of this case were the processed tax invoice issued without real transactions.

○ The non-party company recognized that each of the instant tax invoices was processed tax invoices, including submission of a revised tax return, which deducts the amount equivalent to the value of supply of each of the instant tax invoices as input tax amounts during the pertinent taxable period, on November 19, 207 upon receipt of the notice of pre-announcement of taxation.

○ The Plaintiff also recognized that a processing transaction for FF products without any real transaction has been customary between the EE medicines, and the EE medicines received a notice of payment of penalty and paid penalty on the ground that the EE medicines issued a processing tax invoice.

○ The Plaintiff did not submit any data to acknowledge that each of the instant tax invoices was not the processed tax invoices.

(2) Judgment on the second argument

(A) Article 67 of the Corporate Tax Act and the proviso of Article 106 (1) 1 of the Enforcement Decree of the same Act provide that "where it is clear that the amount included in gross income has been released from the company in determining or correcting the tax base of corporate tax, but the amount of which ownership is unclear shall be deemed to have been reverted to the representative." The recognition contribution system of representative under the Corporate Tax Act is not based on the fact that such income has accrued to the representative, but its purpose is to make certain facts that can be recognized as such act be deemed as a bonus to a de facto representative, regardless of its substance, in order to prevent unfair acts under the tax law. Therefore, the representative is liable to pay the Class A labor income tax regardless of whether the amount which he/she promised to prove that the above amount included in gross income is obviously attributed to himself/herself (see Supreme Court en banc Decision 2006Da49789, Sept. 18, 2008).

(B) The Plaintiff asserted that the non-party company paid the instant amount included in the gross income to the sales employees as the sales promotion expenses and incentives, etc. However, there is no evidence to acknowledge this, and this part of the Plaintiff’s assertion is without merit.

(3) Judgment on the third argument

(A) According to Article 26-2(1)1 of the former Framework Act on National Taxes (amended by Act No. 8139 of Dec. 30, 2006), in cases where a taxpayer evades national taxes, or obtains a refund or deduction by fraudulent or other unlawful means, the period for exclusion from imposition of national taxes shall be extended to ten years from the date on which the relevant national tax can be imposed. "Fraud or other unlawful acts" refers to fraudulent or other active acts that make it impossible or considerably difficult for the tax authority to impose and collect taxes.

(B) As seen earlier, it is reasonable to view that the act of including the value of supply in deductible expenses at the time of the corporate tax return by receiving a false tax invoice without a real transaction and deducting it as the input tax amount at the time of the return of corporate tax constitutes the active act that makes it impossible or considerably difficult for the tax authority to impose and quota taxes, and constitutes the “Fraud or other unlawful act” as stipulated in Article 26-2(1)1

The exclusion period of imposition of global income tax due to the bonus disposition in the amount included in the gross income of this case against the plaintiff is ten years, and the initial date of the exclusion period in the imposition of global income tax in 2001 is June 1, 2002. Thus, it is apparent in the calendar that the disposition of this case was made before the lapse of 10 years from this case. The plaintiff's assertion on this part is without merit.

(4) Judgment on the fourth argument

(A) In cases where the tax authority deemed that the amount of gross income out of the company belongs to an officer or employee and disposed of it as a bonus, it is reasonable to view that the defect of the notice of change in the amount of income does not belong to the disposition of imposing income tax in light of the fact that the person to whom the income belongs falls under the amount disposed of as a bonus pursuant to the Corporate Tax Act under Article 20 (1) 3 of the Income Tax Act if the disposition of income is made regardless of whether the notice of change in the amount of income was served on the corporation.

(B) Therefore, even if it is assumed that the notice of change in the amount of income to the Plaintiff was defective as alleged, this cannot be viewed as unlawful. The Plaintiff’s assertion on this part is without merit.

(5) Sub-decisions

The defendant's disposition of this case is legitimate.

3. Conclusion

The plaintiff's claim of this case is dismissed as there is no reasonable ground.