The Plaintiff cannot be deemed to have deducted the amount from the sales price by putting the foundation on the purchase price account to purchase the amount received from the purchaser.

The Plaintiff’s 379,500,000 won received from the purchaser from 2011 to 2014 is deemed as the account book submitted by the Plaintiff, and cannot be deemed as having been deducted from the sales cost at the time of the return of the income tax. The Plaintiff’s reliance on the account submitted by the Plaintiff, such as frequently correcting the Plaintiff’s account book. Thus, the instant disposition is lawful.

Article 19 of the Income Tax Act

2017Guhap86613 and revocation of disposition of global income

Section AA

II Head of the Tax Office

on 17, 2018

October 05, 2018

1. The plaintiff's claims are all dismissed.

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

Cheong-gu Office

32,583,320 global income tax for the year 201 owed to the Plaintiff on February 8, 2017 (including additional taxes);

The imposition of global income tax of KRW 21,63,690 (including additional tax), global income tax of KRW 48,060,080 (including additional tax) for the year 2012, and global income tax of KRW 23,580,130 (including additional tax) for the year 2013 shall be revoked.

1. Details of the disposition;

1. Details of the disposition;

A. From May 2007, the Plaintiff is operating a bB pharmacy in Seoul Special Metropolitan City, Nowon-gu.

B. From August 13, 2015, the director of the Central Regional Tax Office confirmed the fact that the transfer of taxation data was 379,50,000 won (67,500,000 won, 72,000,000 won, and 120,000,000 won in 20,000 won in 2013, 2012, 120,000,000 won in 20,000 won in 20, 2014, 120,00,000 won in 20,000, 20,000 won in 20, 2014, 120,000,000,000 won in 20,000,000 won in 20,000 won in hereinafter referred to as “the instant money”).

C. On February 8, 2017, the Defendant imposed global income tax and additional tax, as stated in the Plaintiff’s claim, on February 8, 2017, adding the instant money to the Plaintiff’s business income in 2011 or 2014 (hereinafter collectively referred to as “instant disposition”).

D. On May 8, 2017, the Plaintiff filed a request for review with the Commissioner of the National Tax Service for the instant disposition, and the Commissioner of the National Tax Service dismissed the Plaintiff’s request on September 12, 2017.

Facts that there is no basis for recognition, Gap's 1, 2, and Eul's 1 to 5, before oral argument

The purpose of body

2. Related statutes;

It is as shown in the attached Form.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff reflected all of the instant money received from FV from FV from 2011 to 2013 in the business income through the “purchase discount account” (the Plaintiff did not receive any purchase discount from other FF medicine, and thus, the amount appropriated in the “purchase discount account” account at the time of the initial return is all received from FF medicine). In other words, the Plaintiff appropriated the instant money to the “purchase discount account” and deducted the amount of money from the sales cost. As long as the sales cost reduces, as such, the Plaintiff’s increase in the Plaintiff’s income (business income) is inevitable, the Plaintiff reported and paid the comprehensive income tax on the instant money at the time of the initial return.

2) At the time of the tax investigation, the Plaintiff filed a request for correction or a revised return on the tax base and tax amount of global income tax in 2011 to 2014 for the purpose of confirming and correcting errors in the year to which part of the instant money reverts. At the time, the Plaintiff adjusted the year to which the instant money belongs, while eliminating the instant money, which was included in the “purchase discount account” account, to correct erroneous accounting, and then included it in the “compensation (proceeds) account.”

3) There is no change in the fact that the Plaintiff had already paid the comprehensive income tax on the instant money, regardless of whether the instant money was reflected in the cost or reflected in the profit. Therefore, the instant disposition is an unlawful disposition that imposes double taxation on the Plaintiff on the Plaintiff.

(b) Fact of recognition;

The following facts are acknowledged by taking into account each entry of Gap evidence 3 to 6, Eul evidence 2 to 20, the whole purport of the pleadings.

1) From 2011 to 2014, the Plaintiff received the instant monetary amount of KRW 10 million from JeonD as benefits.

2) After being notified of taxation data from the director of the Central Regional Tax Office, the Defendant conducted a tax investigation with respect to the Plaintiff. The main contents of the questionnaire prepared in the course of the tax investigation are as follows:

Table 1: The major answers made on November 10, 2015

There is no wage, etc. from JeonD while operating a pharmacy.

A. BB pharmacy was unable to operate the pharmacy due to the very unfavorable disadvantage of consumers compared to theCC pharmacy in front of the road. Accordingly, the Plaintiff promised to compensate for the Plaintiff’s loss. The instant money is that the NAD compensates for the Plaintiff’s loss.

3) On May 16, 2016, the Plaintiff filed a request for correction of the global income tax for the year 2011 through 2013 and a revised return of the global income tax for the year 2014 (hereinafter referred to as “the first revised return”) and filed a revised return of the global income tax for the global income tax for the year 201 through 2013, and filed a revised return of the global income tax for the global income tax for the year 201 through 2013, and filed a revised return of the global income tax for the year 2014 (hereinafter referred to as “the second revised return”) on July 29, 2016, and additionally paid KRW 25,094,640 as global income tax for the year 2014.

4) The main contents of this case are as follows: income statement (hereinafter referred to as "first account statement") 2, income statement (hereinafter referred to as "second account statement") 1 and 2 submitted by the Plaintiff at the time of the initial report, income statement (hereinafter referred to as "second account statement") 3, income statement for the reported portion (hereinafter referred to as "third account statement"), and income statement for the reported portion (hereinafter referred to as "third account statement") 4:

Table 2. Income statements and principal contents (unit: source)

Year

Account Titles

First Statement

Second Statement

3. Statement

2011

Sales

1,111,709,162

Dong-dong

Dong-dong

Cost of sale

Basic Inventory Amount

364,724,227

Dong-dong

Dong-dong

Amount of price per purchase;

913,727,473

1,064,220,249

Dong-dong

Purchase-price

-

150,492,776

-

End Inventory Amount

374,650,819

Dong-dong

Dong-dong

Cost of sale

903,800,881

Dong-dong

1,054,293,657

Non-business profits

Interest Income

2,265

Dong-dong

Dong-dong

Other profits (miscellaneous profits)

1,789,850

Dong-dong

Dong-dong

Compensations

-

Dong-dong

67,500,000

Non-business profits

1,792,115

Dong-dong

69,292,115

net income

76,694,811

Dong-dong

-6297,965

2012

Sales

927,822,474

Dong-dong

Dong-dong

Cost of sale

Basic Inventory Amount

374,650,819

820,480,779

Dong-dong

Amount of price per purchase;

670,480,779

150,000,000

Dong-dong

Purchase-price

-

Dong-dong

-

End Inventory Amount

240,303,302

Dong-dong

Dong-dong

Cost of sale

804,828,296

Dong-dong

954,828,296

Non-business profits

Interest Income

2,264

Dong-dong

Dong-dong

Other profits (miscellaneous profits)

2,139,664

Dong-dong

Dong-dong

Compensations

-

Dong-dong

72,000,000

Non-business profits

2,141,928

Dong-dong

74,141,928

net income

16,016,100

Dong-dong

-61,983,900

2013

Sales

800,953,843

Dong-dong

Dong-dong

Cost of sale

Basic Inventory Amount

240,303,302

Dong-dong

Dong-dong

Amount of price per purchase;

580,600,627

680,600,627

Dong-dong

Purchase-price

-

100,000,000

-

End Inventory Amount

120,568,945

Dong-dong

Dong-dong

Cost of sale

700,334,981

Dong-dong

800,334,984

Non-business profits

Interest Income

2,528

Dong-dong

Dong-dong

Other profits (miscellaneous profits)

1,057,439

Dong-dong

Dong-dong

Compensations

-

Dong-dong

120,000,000

Non-business profits

1,059,967

Dong-dong

121,059,967

net income

28,705,887

Dong-dong

121,059,967

2014

Sales

764,793,201

Dong-dong

Dong-dong

Cost of sale

Basic Inventory Amount

120,568,945

Dong-dong

Dong-dong

Amount of price per purchase;

646,166,820

Dong-dong

Dong-dong

Purchase-price

-

Dong-dong

Dong-dong

End Inventory Amount

18,756,824

Dong-dong

Dong-dong

Cost of sale

647,978,941

Dong-dong

Dong-dong

Non-business profits

Interest Income

1,546

Dong-dong

Dong-dong

Other profits (miscellaneous profits)

64,700

Dong-dong

Compensations

-

Dong-dong

120,000,000

Non-business profits

66,246

Dong-dong

120,666,246

net income

41,178,041

Dong-dong

161,178,041

5) The president of the account of "sales incentive" submitted by the Plaintiff at the time of the first and second request for correction (Revised Return) shall include the same amount as the amount appropriated in the "purchasing the second statement of account" account. The main contents of the "sales incentive" account president submitted by the Plaintiff at the time of the first request for correction (Revised Return) are as shown below, and 5) at the time of the second request for correction (Revised Return) are as listed below.

Schedule 3. Section B BB (Compensation) Account: Sales incentives

Date

도요

Customer

Amount

December 31, 2011

Set-off of the credit payment at the time of purchase

F. F. Drug

150,492,776 won

201. Sub-Section 201

150,492,776 won

December 31, 2012

Set-off of the credit payment at the time of purchase

F. F. Drug

150,000,000 won

2011. 10

150,000,000 won

December 31, 2013

Set-off of the credit payment at the time of purchase

F. F. Drug

100,000,000 won

2013 Sub-Sections.

100,000,000 won

Schedule 4. BB Pharmacy Account: Sales incentives

Date

도요

Customer

Amount

June 25, 2011

Sales incentives

HH Drugs

20,000,000 won

November 30, 2011

Sales incentives

HH Drugs

13,992,776 won

December 31, 2011

Sales incentives

HH Drugs

16,500,000 won

201. Sub-Section 201

150,492,776 won

December 31, 2012

Sales incentives

HH Drugs

150,000,000 won

2011. 10

150,000,000 won

December 31, 2013

Sales incentives

HH Drugs

100,000,000 won

2013 Sub-Sections.

100,000,000 won

C. Determination

1) Article 19(1) of the Income Tax Act provides that "business income shall be the income falling under any of the following subparagraphs generated during the pertinent taxable period, and subparagraph 7 of Article 19 provides that "business income shall be the income generated from wholesale business and retail business, and subparagraph 2 of Article 2 of the Income Tax Act provides that "the amount of business income shall be the amount calculated after deducting necessary expenses incurred in relation thereto from the total amount of income in the pertinent taxable period." In addition, Article 51(3) of the Enforcement Decree of the Income Tax Act, which provides for the calculation of the total amount of business income by delegation under Article 24(3) of the Income Tax Act, provides that "the calculation of the total amount of business income shall be calculated according to any of the following subparagraphs." subparagraph 2 provides that "the amount of incentives and other similar amounts received from the other party to the transaction shall be included in the total amount of income, and the amount which is related to the business, other than subparagraph 5, shall be included in the total amount of income."

2) The fact that DoD transferred the instant money under the name of "payment", and the fact that the Plaintiff did not pay the comprehensive income tax by reflecting the instant money under the name of "payment" or "compensation for losses in accordance with the Plaintiff’s argument at the time of the initial return and payment of global income tax" is as above. Thus, regardless of the nature of the instant money, the Plaintiff did not pay the said amount.

The Defendant, a tax authority, is in the area controlled and managed by the Plaintiff, and it is difficult to confirm whether the Plaintiff already reported and paid the comprehensive income tax by reflecting the instant money in the account book as it is, and the Plaintiff already paid the comprehensive income tax by reflecting it in the “purchase discount account of the income statement” account, etc. As such, unless the Plaintiff proves that the Plaintiff reported and paid the comprehensive income tax by reflecting the instant money in the income statement, it cannot be readily concluded that the instant disposition was an unlawful disposition that failed to meet the requirements for taxation (see, e.g., Supreme Court Decision 2006Du16137, Oct. 26, 2007).

3) However, according to the following circumstances acknowledged by comprehensively taking account of the purport of the entire pleadings, the data submitted by the Plaintiff alone is insufficient to deem that the Plaintiff reported and paid the income tax by reflecting the instant money from 2011 to 2014 in the “purchase discount account of the income statement.”

A) At the time of filing a return for correction, the Plaintiff submitted the second statement by dividing the account into the 'scheduled purchase amount' account at the time of filing the return for correction and the 'purchasing discount' account at the time of filing the return for correction. Of the 2nd statement, the sum included in the 'purchasing discount' account from 2011 to 2014 is 40,492,776 won (=150,492,776 won at the time of 201 + 150,00,000,000 won for the 150,000,000,000 won at the time of filing the return for correction and the 3rd statement as income statement at the time of filing the return for correction, and the sum included in the 'purchase discount from 2011 to 2014' account at the time of filing the return for correction and the 2nd statement was 400,400,000 won + the 2000,7100,20005 won.

The former Enforcement Rule of the Income Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 407 of March 14, 2014) and attached Form 40-7 of the Enforcement Rule of the Income Tax Act do not have a separate account for the 'purchase price' account within the 'sale price' account. Thus, the Plaintiff may not separately file a return on the 'purchase price' account at the time of filing and paying the comprehensive income tax from 2011 to 2014. However, if the Plaintiff had properly reflected the instant amount in the 'purchase price' account from the beginning of the return and payment of global income tax, it would not have any reason for difference between the amount appropriated in the 'purchase price' account from the 'Purchase price' account at the time of attribution and the 'Purchase price No. 2.

B) In order to prove the fact that the Plaintiff reflected the instant money in the “purchase discount account from the time when the global income tax return was filed, it is necessary to explain how the Plaintiff could have been aware of the “purchase discount account” on the account books. However, even though the Plaintiff did not have any explanation on the method of accounting (or, after the Plaintiff received cash from DoD, recognizing cash (property) at the same time and, at the same time, recognizing sales incentive in Doctrine and preparing a separate account ledger, if the Plaintiff reflected the amount in the ledger of the sales incentive account at the end of the year in the “purchase discount account” account, regardless of the president of the account, it is difficult to believe that the Plaintiff made a statement of profit and loss as a means of convenience regardless of the head of the account, etc., and thus, the Plaintiff’s account book itself is difficult to believe.)

C) The Plaintiff alleged that the account books were reflected in the “purchase discount” from the time of the initial return and payment of global income tax, and that all of the account books submitted based on which the Plaintiff began to be submitted after the tax investigation on the Plaintiff was conducted. Furthermore, the director of the account “sale incentive” account submitted by the Plaintiff at the time of the first and second request for correction (Revised return) was changed from FF medicine to HH medicine, and the details are changed from FF medicine to HH medicine at the time of the change into the “sale incentive.” Nevertheless, there is no proof as to the reasons for change every time of the submission by the director of the account book. In light of this, it is doubtful that the Plaintiff did not prepare, revise, or change the account books from time to time after the tax investigation on the instant money. Moreover, even if the Plaintiff continued to receive more than a certain amount of money from former DD, it is doubtful whether the Plaintiff submitted the above account books based on the Plaintiff’s statement that the Plaintiff had received the money from each of the above accounts book “one or three times of the Plaintiff’s report and payment.”

D) It is doubtful whether the Plaintiff’s accounting book was properly prepared by reflecting the actual amount of input tax in the case of the Plaintiff’s purchase tax, as seen in the first and second correction requests, is corresponding to the sales cost on the income statement, and as long as the Plaintiff could not modify the “sales cost at the time of the initial return and payment of global income tax”, the Plaintiff cannot change or manipulate the final cumulative total amount on the president of the Bank of Korea of the Medical Services at the time of the initial return and payment of global income tax. However, it is questionable whether the Plaintiff’s accounting book was prepared by reflecting the actual amount of input tax as alleged in the Defendant’s claim. If there were other amounts, such as input tax amount, etc., corresponding to the Plaintiff’s initial sales cost, the Plaintiff can later make the account that is the deduction of the “pharmaceutical purchase account” by adjusting the same amount.

4. Conclusion

Therefore, all of the plaintiff's claims are dismissed. It is so decided as per Disposition.

1) The trade name was changed to GG Pamp Co., Ltd. thereafter.

2) The evidence Nos. 6-1 through 4 and the evidence Nos. 9-3, 10-3, and 11-3 submitted by the Plaintiff at the time of the first request for correction (Amended by Presidential Decree No. 407, Mar. 14, 2014) are the same contents. The evidence Nos. 6-1 through 3 are in accordance with the standard income statement form in attached Form No. 40-7 of the former Enforcement Rule of the Income Tax Act (Amended by Ordinance of the Ministry of Strategy and Finance No. 407, Mar. 14, 2014); the evidence No. 6-4 is in accordance with attached Form No. 40-7 of the Enforcement Rule of the Income Tax

3) At the time of the first request for correction (Revised return): Evidence No. 9-2, No. 10-2, No. 11-2, and No. 19

At the time of filing a second request for correction (Revised Return): Evidence No. 13-2, 14-2, 15-2, 16-2, and 20 evidence of No. 13-2, 14-2, 16-2

4) At the time of the first request for correction (Revised return): Evidence No. 9-4, evidence No. 10-4, evidence No. 11-4, and evidence No. 19

At the time of filing a second request for correction (Revised Return): Evidence of No. 13-3, 14-3, 15-3, 16-3, and 20 evidence of No. 13, 16-20

(v) evidence Nos. 9-5, 10-5, 11-5, 19

6) Eul evidence 13-4, 14-4, 15-4, 20, and 3-1 through 3