Global Income Detailed Disposition Cancellation

○ A person exclusively carrying out construction works related to ○ must be disposed of as bonus to ○, a person who is actually reverted.

Article 14 [Real Taxation] of the Framework Act on National Taxes

1. On July 1, 2005, the Defendant’s taxation disposition of KRW 19,346,280 against the Plaintiff on July 1, 200 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

The following facts are not disputed between the parties, or can be acknowledged by comprehensively taking into account the whole purport of arguments in each of the statements in Gap evidence Nos. 1, 2, 4, 19, 20-1, 2, 3, 4-1, 3 and 4-1, 2, and 7-9.

A. The ○○ General Construction Co., Ltd. (hereinafter referred to as “○ General Construction”) was established on September 8, 1997 at ○○○○○○○dong, and was engaged in the domestic construction and overseas construction business under the Framework Act on the Construction Industry, and closed on May 21, 2002. The Plaintiff was jointly with Kim○○, from June 20, 200 to August 3, 2000, and was solely entrusted with the representative director from August 4, 200 to September 19, 200.

B. ○○ integrated construction received three copies of purchase tax invoices of KRW 80 million (hereinafter referred to as “instant tax invoice”) as listed below from ○○○○○○○○○○○○○○○○○○○○, during the two taxable periods in 2000s, and filed a return of the tax base and tax amount for the business year 2000, as stated in the following table, in addition to the amount of supply value of KRW 80 million (hereinafter referred to as “instant tax invoice”).

Suppliers

Date of issuance

Value of supply (excluding won and value added tax)

Items, etc.

○ ○ Metal

July 20, 200

28,000,000

Flags

August 20, 200

27,500,000

Construction Primarys

September 20, 200

24,500,000

Trinse (raws for construction)

Total

80,000,000

C. The head of ○○○ Tax Office, the head of the competent tax office of ○○ integrated construction, notified the Plaintiff, who was the representative director of ○○ integrated construction, of the fact that the instant tax invoice was issued and issued without a real transaction and that the instant tax invoice was issued and issued without a real transaction. In addition, the amount of supply of the instant tax invoice was corrected and notified of corporate tax for the year 200 of ○○ integrated construction by adding the value of supply to the amount of supply of the instant tax invoice. The head of ○○ Tax Office, the head of the competent tax office of ○○ integrated construction, disposed of the total value of 88 million

D. On July 1, 2005, the Defendant notified the Plaintiff of the foregoing taxation data that the amount of KRW 88,00,000, which was disposed of as bonus was added to the Plaintiff’s earned income amount of KRW 3.3 million, and notified the Plaintiff of the amount of global income for 2000 as global income for 37,950,210 for 200 years (the first time was the amount of global income by the Plaintiff’s report) (the amount of KRW 3.3 million is less than the amount of income deduction, and there was no global income tax to be imposed on the Plaintiff according to the tax base

E. After that, the head of ○○ Tax Office notified the Defendant of the reduction and correction of the amount of 54,862,500 won, which was disposed of as bonus to the Plaintiff, by dividing the above 88 million won by the period of service of the representative director of ○○ Comprehensive Construction, and then notified the Defendant of the reduction and correction of the amount of 54,862,50 won, which was disposed of as bonus again on August 1, 2005, the Defendant issued the instant disposition of which the amount of 54,862,50 won was added to the Plaintiff’s labor income amount of 19,346,280 won

F. The Plaintiff appealed and filed a request for examination with the Commissioner of the National Tax Service on July 28, 2005. However, the Commissioner of the National Tax Service dismissed the said request on November 23, 2005.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) When ○○○ Co., Ltd. (hereinafter “○○○”) actually supplies KRW 132 million to ○○ Comprehensive Construction, it issued the instant tax invoice for the issuance of ○ Metals, as if ○ Metal was supplied, with regard to the amount equivalent to KRW 88 million among them, and issued ○○ Tax invoice for the remaining amount of KRW 44 million to the Plaintiff. The instant tax invoice for the issuance of ○○ Construction was issued after actually purchasing the goods specified in the instant tax invoice. Since the instant tax invoice was received after having actually purchased the goods on the instant tax invoice, the instant tax invoice on the premise that the instant tax invoice is not accompanied by real transactions is unlawful.

(2) In addition, the transaction under the tax invoice of this case was related to the purchase of materials required for the new construction of ○○ Livestock Cooperative Complex, which was ordered by the ○○ Integrated Construction from the ○○ Livestock Cooperative. The new construction of the ○○ Complex is ordered by the ○○○○ Construction, which is an on-site official of the construction site, and the actual owner of the profits and losses arising from the construction as the person responsible for the construction is the ○○○ Construction, and thus, the disposition of this case was unlawful on the premise that the representative of ○○ Integrated Construction is the person to whom the profits

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

The evidence mentioned above, Gap evidence 3, Gap evidence 5, 11-1 through 3, Gap evidence 12-14, Gap 21 through 23, Gap 24-1, Gap 26, Gap 27-1, 27-2, Gap 28-1 through 78 (including additional numbers), Gap evidence 29-1, 29-1, 30-1 through 141 (including additional numbers) can be acknowledged by integrating the whole purport of the pleadings.

(1) On June 27, 200, 000, ○○ Integrated Construction entered into a contract for construction works between ○○ Livestock Cooperative and ○ Livestock Cooperative by setting the construction cost of KRW 2.26 billion and the construction period from June 27, 200 to December 31, 200, respectively.

(2) Newly constructed multiple-sale works consisting of a astronomical structure construction and a wedding facility construction; KRW 1.50 million for a astronomical structure construction; KRW 750 million for a wedding facility construction; and KRW 7.50 million for a wedding facility construction. However, the aforementioned costs of construction are included in the purchase cost of KRW 1.50 million for the said astronomical structure construction, which is equivalent to KRW 1.595 million for the said material (including value-added tax).

(3) The ○○ integrated construction itself procured a ceiling that will be required for the said ceiling construction and subcontracted only the construction of the said ceiling construction to Canadian ○○○○○○, and the said ceiling construction was completed on December 200.

(4) Meanwhile, ○○○○○○○ Bank’s deposit account (number: ○○-○-○○○○○○) in the name of ○○○○ Bank’s ○○○○○○○○○○○○○○○○○○○○ Construction on behalf of the ○○○○○○○ Construction, ○○○○○’s auditor’s KRW 60 million on August 28, 200, and Kim○○○, the ○○○’s representative director, remitted KRW 2,695 million on September 29, 200, respectively. The money deposited in the said deposit account was entirely deposited on the deposit day.

(5) The list of the total tax invoices (from July 1, 200 to December 31, 200) and the corresponding tax invoices submitted by ○○ Construction upon filing a return of value-added tax for the second period of 2000 (including value-added tax) correspond to all the details such as the total amount of transaction companies and supply prices, and the purchase of tax invoices. A tax invoice on each of the above tax invoices, which is written with "Tta (construction)", which can be viewed as a transaction related to the above astronomical structure construction, can be seen as a transaction related to the above items, shall be the tax invoice with the amount of 29 million won issued in addition to the tax invoice in this case, the total amount of 00 won (including the "value-added tax", No. 30, 118-3), 400, 300, 3000, 3000, 3000, 3000, 400,000 won (including the value-added).

(6) 한편, ○○종합건설은 캐나다로부터 2000. 8. 7. 378,706,606원 상당의 텐트모듈(tent modular)을 ○○세관을 통하여 수입하였고, 2000. 8. 12. 16,642,860원 상당의 박공(牔栱, gable)을, 2000. 8. 29. 1,832,374원 상당의 지붕 덮개 마감재(cover extrusion roof)를 각 ○○세관을 통하여 수입하였으며, ○○종합건설의 2000년 2기분 매입처별세금계산서합계표에서 수입거래 내역으로 볼 수 있는 거래는 위 3건의 거래만이 있다.

D. Determination

(1) Generally, the burden of proving the fact of taxation requirements in a lawsuit seeking revocation of a tax disposition is to be borne by the taxation authority. However, if it is revealed that the other party is presumed to have been subject to taxation requirements in light of the empirical rule in the specific litigation process, it cannot be readily concluded that the pertinent tax disposition was an unlawful disposition that failed to meet the taxation requirements unless the pertinent fact is proven that the other party is not eligible to be subject to the application of the empirical rule (see, e.g., Supreme Court Decision 2003Du10343, Jan. 13, 2005). If a tax invoice on some of the expenses reported by the taxpayer is proved to have been falsely prepared by the defendant who is the tax authority without real transactions, and it is argued that the tax invoice has been prepared without real transactions, and if it has been proved that the other party to the tax payment was proved to have been false, the purpose of the cost claimed by the taxpayer and the other party to the payment, it is necessary to prove it in the taxpayer’s side of the account books and evidence (see, etc.).

(2) However, the Plaintiff asserts that the ○○ General Construction purchased the goods from ○○○ Construction with respect to the transaction of the instant tax invoice and received only the tax invoice as the issuance of ○ Metals. Therefore, the Plaintiff needs to prove that the actual transaction corresponding to the instant tax invoice was actually conducted.

(3) The following facts revealed by the above facts. As ○○○ Construction Co., Ltd. was a contract for new construction of ○○ Metal Co., Ltd., and the construction of 00,000,000 won was completed between June 27, 200 and December 31, 200, it was anticipated that the construction would take place as a material at the time of the contract for construction work. The total tax invoice for 0,000, which was submitted by the ○○ Construction Co., Ltd. upon reporting the value-added tax for 200,000, can be seen as a transaction concerning the construction of the above 0,000,000 won for 20,000 won for 16,000 won for 20,000 won for 20,000 won for 20,000 won for 20,000 won for 2,000 won for 2,000,000 won for 2,000 won for 3.

(4) Therefore, the instant disposition, based on the premise that ○○ Construction received the instant tax invoice without any actual transaction corresponding thereto, was unlawful without any need to further examine the Plaintiff’s other allegations.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by admitting it.

Relevant statutes

[Corporate Tax]

Article 19 (Scope of Loss)

(1) Deductible expenses shall be the amount of losses incurred by transactions which reduce the net assets of the concerned corporation, excluding return of capital or financing, disposition of surplus funds, and what is provided in this Act.

(2) The losses under the provisions of paragraph (1) shall be losses or expenses generated in connection with the business of a corporation which are generally accepted as normal or directly related to profit, except as otherwise prescribed by this Act and other Acts and subordinate statutes.

(3) Matters necessary for the scope and types of losses under the provisions of paragraphs (1) and (2) shall be prescribed by the Presidential Decree.

○ Article 66 (Determination and Correction) (amended by Act No. 6293 of December 29, 2000)

(2) Where a domestic corporation makes a report under Article 60 falls under any of the following subparagraphs, the superintendent of the district tax office having jurisdiction over the place of tax payment or the Commissioner of the competent Regional Tax Office shall correct the tax base and

1. Where there are errors or omissions in the contents of the report;

Article 67 (Disposition of Income)

In filing a report on the corporate tax base on the income for each business year under the provisions of Article 60 or in determining or revising the corporate tax base under the provisions of Article 66 or 69, the amount included in the calculation of earnings shall be disposed of as bonus, dividend, other outflow from the company, internal reserve, etc. according to the person to whom it reverts

[Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 17033 of Dec. 29, 2000)]

§ 19. Scope of losses

Losses under the provisions of Article 19 (1) of the Act shall be those under the provisions of each of the following subparagraphs, except as otherwise prescribed in the Act and this Decree:

1. The purchase value (referring to the corporate accounting standards falling under any subparagraph of Article 79; hereinafter the same shall apply) of raw materials for commodities or manufactured goods sold and incidental expenses thereof;

2. through 15 (Omission)

16. Losses other than those under subparagraphs 1 through 15 which accrue or will accrue to the corporation.

§ 106. Disposal of income

(1) The amount included in the calculation of earnings under the provisions of Article 67 of the Act shall be disposed of under the provisions of the following subparagraphs. The same shall apply to non-profit domestic corporations

1. Where the amount included in the calculation of earnings has clearly leaked out of the company, the dividends, bonuses from the disposition of profits, other income, and other outflow from the company under each of the following items according to the person to whom they accrue: Provided, That where the accrual is unclear, it shall be deemed as accrual to the representative (where the total number of stocks held by an officer who is not a minority shareholder under the provisions of Article 87 (2) and persons with a special relationship under the provisions of paragraph (4) of the same Article is 30% or more of the total number of stocks issued or total investment amount of the concerned corporation and the officer actually controls the operation of the corporation, he shall be deemed the representative, and where a corporation which has been exempted from withholding taxes under the provisions of Article 46 (12) of the Restriction of Special Taxation Act reports that there is a separate representative among the officers who are stockholders, the reported person shall be the representative, and

(a) Where the person of accrual is a stockholder (not including stockholders who are officers or employees), the dividends of the person of accrual;

(b) If the person to whom it belongs is an officer or employee, the bonus to the person to whom it reverts;

[Income Tax]

○ Article 20 Employment Income

(1) Employment income shall be the following incomes generated in the current year:

1. Class A:

(c) Amount treated as a bonus under the Corporate Tax Act;