It is difficult to recognize special circumstances to deem that the issue amount is not leaked to others;

In the case of taxation by constructive income from the disposal of income, if the corporation is exempted from the debt equivalent to the key amount of the obligation to return, but did not include the key amount in the gross income on the account book, the total amount of the issue amount is presumed to have been leaked, barring special circumstances.

Article 106 (Disposition of Income)

2015Guhap6968 Notice of Change in Amount of Income, etc.

○○ Development Co., Ltd. and one other

○ Head of tax office

March 31, 2016

April 28, 2016

1. The plaintiff's action shall be dismissed.

2. The plaintiff ○○ Development Claim is dismissed.

3. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

On March 11, 2013, the Defendant issued a notice of change in the amount of income at KRW 00 billion with respect to Plaintiff ○○ Development Co., Ltd. (hereinafter “Plaintiff”) on March 11, 2013 and revoked the disposition of imposition of KRW 00 of global income tax against Plaintiff A on May 8, 2013.

1. Details of the disposition;

A. The Plaintiff Company is a juristic person engaged in an engineering work, real estate sale and lease work, etc., and the Plaintiff Ansan is the representative director of the Plaintiff Company.

B. On July 5, 2007, the Plaintiff Company entered into a joint investment agreement with the CCC (hereinafter “CC”) on the apartment housing project with the ○○○○○○○○○○○, Nam-gun, and received KRW 200 million from CCC as the pre-investment cost for the initial project cost in accordance with the agreement.

C. After December 31, 2007, CCC terminated the above joint investment agreement, and the Plaintiff Company entered into an investment reduction agreement with CCC to the effect that it is exempt from the obligation to return the total amount of 500 million won of the aforementioned prior investment cost already received from CCC on the same day (hereinafter “instant agreement”).

D. Meanwhile, in relation to the amount at issue, the Plaintiff Company dealt with the accounts as indicated below.

E. From February 25, 2013 to March 16, 2013, the Defendant: (a) performed the corporate tax investigation of the Plaintiff Company from around February 25, 2013 to around March 16, 2013, deeming the key amount as the result of the instant agreement to be extinguished on December 31, 2007, and included it in the gross income; (b) accordingly, on March 21, 2013, the Plaintiff Company issued a notice of the change in the amount of income (hereinafter “instant first disposition”) in relation to the Plaintiff Company by disposing of the key amount as a bonus to the Plaintiff Company as the representative director, and issued a notice of the change in the amount of income (hereinafter “instant second disposition”). (c) on May 8, 2013, the Plaintiff Ansan imposed the disposition of imposition of the global income tax on the Plaintiff Company ○ (hereinafter “instant second disposition”).

F. On May 22, 2013, the Plaintiff Company filed an objection against the instant Disposition No. 1 with the Defendant, but the foregoing objection was dismissed on June 20, 2013, the Plaintiff Company filed an appeal with the Tax Tribunal on September 30, 2013, but the said appeal was dismissed on April 23, 2015.

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1 through 6, Eul evidence Nos. 1 through 5 and 8, the purport of the whole pleadings

2. Judgment on the defendant's main defense of safety

Since the Defendant did not go through the pre-trial procedure with respect to the instant disposition No. 2, the Defendant asserted that the revocation claim of the instant disposition No. 2 in the instant lawsuit is unlawful.

However, even if the Plaintiff Company had gone through the pre-trial procedure on the instant disposition No. 1, and the Plaintiff Company did not go through the pre-trial procedure on the instant disposition No. 2, as seen earlier, the corporate tax and global income tax are entirely different from the tax items, and even if corporate income was generated, even if it was reserved or leaked to a corporation, it does not necessarily belong to the representative. Thus, even if the Plaintiff Company had gone through the pre-trial procedure on the disposition No. 1, it cannot be deemed as going through the pre-trial procedure on the disposition No. 1, which is the instant disposition No. 1, for the Plaintiff Ansan, even if it did not go through the pre-trial procedure on the disposition No. 2, and thus, it does not constitute a case where the pre-trial procedure is not necessary (see, e.g., Supreme Court Decision 2005Du4106, Dec. 7, 2006).

3. Whether the first disposition in this case is lawful

A. The plaintiff company's assertion

The Plaintiff Company received the key amount from the Plaintiff’s principal transaction account and used it in full as the company’s operating funds, such as repayment of loans of KRW 102,909,590, and purchase of land of KRW 180,024,364, etc. The said usage was confirmed by documentary evidence and cash was leaked out, and the accounting of the Plaintiff Company is merely a simple accounting error of the employee in charge. Therefore, the instant disposition is unlawful against Article 67 of the Corporate Tax Act, Article 106 of the Enforcement Decree of the same Act, and against the substance over form principle.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

In a case where a taxation is conducted as deemed income from the disposal of income, if a corporation is exempted from a debt equivalent to the key amount of the obligation to return, but did not include the key amount in the gross income on the account book, barring any special circumstance, the total amount of the key amount is presumed to have been leaked, and the burden of proof on special circumstances to deem that it was not leaked from the account book exists in the corporation asserting it (see, e.g., Supreme Court Decision 2001Du2560, Dec. 6, 2002).

In light of the following circumstances, the facts that the Plaintiff Company did not include the amount in the gross income on the account books do not conflict between the parties, and thus, the total amount of the issue amount is presumed to have been leaked out of the company. In light of the aforementioned evidence and the following circumstances, the evidence submitted by the Plaintiff Company is not sufficient to recognize a special circumstance that the issue amount is not leaked out of the company. Accordingly, the Plaintiff Company’s above assertion is without merit.

1) Each statement of Gap evidence Nos. 7, 8, and 10 (Account Transaction Details, Receipt, etc.), alone, is insufficient to recognize that all the amounts deposited from the Plaintiff Company’s account were disbursed as its operating funds, and that the source of the funds is a key issue amount. It does not coincide with the statement of Gap evidence No. 9 (Account No. 9). In addition, according to the statement of Gap evidence No. 11 (Use of Corporate Card), the statement itself alone is confirmed that some of the uses unrelated to the operation of the company are irrelevant to the operation of the company.

2) As of December 31, 2007, the date of the agreement in this case in relation to KRW 300 million in the book, the Plaintiff accounted for the same amount as the same day as the date when the representative director appropriated the on-site advance payment (property) in the book as of December 31, 2007, which is the date of the agreement in this case. Of the issues, the Plaintiff appropriated the same amount as KRW 200 million in relation to KRW 200 million in the on-site advance payment (property), and disposed of the same amount as of December 31, 2007, which is the date of the agreement in this case, as of December 31, 2018, the representative director managed the same amount as of December 31, 2007, which is the date of the agreement in this case, by offsetting the amount of KRW 500 million in return for exemption from the duty to return, and thereby, the Plaintiff Company extinguished the Plaintiff’s obligation to the Plaintiff Company by having received KRW 500 million from the representative director.

3) The Plaintiff Company confirmed the error in the above accounting and confirmed the Defendant’s tax audit period.

Around January 1, 2013, the former applicant asserted that he reported the corporate tax for the business year 2013, which reflects the revised accounting process and reflect it. However, there is no evidence presented at the time of filing an objection and a request for a trial after the tax investigation period or after the tax investigation period, and it is not confirmed that the Plaintiff company filed a revised return of corporate tax for the business year 2013.

4) The principle of substantial taxation is a practical principle for realizing the principle of equality, which is the basic ideology of the Constitution, in a tax legal relationship. In a case where any unreasonable form or appearance different from the substance of the taxation requirement is taken for the purpose of evading the tax burden, the main purpose of this principle is to regulate unfair acts of tax avoidance and to enhance equity in taxation by imposing tax on a place with the tax-bearing capacity according to the substance regardless of the form or appearance, and thereby to realize the tax justice. As seen earlier, the Plaintiff Company did not include the key amount in the gross income, as a result, not include the key amount in the gross income, thereby making profits equivalent to the key amount of the issue amount by extinguishing its obligation against the Plaintiff A, who is the representative director, and thereby, disposing of it as a bonus to the Plaintiff A, who is the actual benefit, and accordingly, taking the instant disposition No. 1 as a result, accords with the principle of substantial taxation.

4. Conclusion

Thus, the plaintiff's lawsuit of this case is unlawful and dismissed, and the plaintiff company's lawsuit of this case is dismissed.

The claim is dismissed for lack of reason.