Changwon District Court 2009Guhap506 ( October 11, 2010)

Cho High Court Decision 2008Da2660 ( December 10, 2008)

Making false contracts and reporting capital gains tax shall constitute fraudulent or other unlawful acts.

The exclusion period for imposition shall be ten years or at least seven years for a taxpayer who has filed a return of capital gains tax in the name of a third party by fraudulent or other unlawful means, or for a taxpayer who has failed to file a return of capital gains tax within the statutory due date for return.

2010Nu1538 Disposition of revocation of imposition of capital gains tax, etc.

Yellow AA

Head of tax office

Changwon District Court Decision 2009Guhap506 Decided February 11, 2010

April 27, 2011

June 8, 2011

1. The plaintiff's appeal is all dismissed.

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

The decision of the first instance shall be revoked. The defendant shall revoke the disposition of imposition of 38,99,90 won for the plaintiff on January 2, 2008 and global income tax of 5,773,790 won for the year 2001, global income tax of 17,53,680 won for the year 203, global income tax of 17,53,680 won for the year 2003, global income tax of 9,419,930 won for the year 2004, global income tax of 7,764,540 won for the year 205, global income tax of 5,051,440 won for the year 206, respectively.

1. Circumstances of each disposition of this case;

A. On February 12, 2001, the Plaintiff and ParkB purchased 00-0 (OO2.9 (hereinafter referred to as the “instant land”) 00-0 (O262.9 (hereinafter referred to as the “instant land”) from CC on 97,000,000, and completed the registration of ownership transfer under the name of YB's PossiD on 3 March 2, 2001, and newly constructed two-story housing (hereinafter referred to as the “instant housing”) with construction cost of KRW 174,000,000 on her ground. The Plaintiff and ParkB sold the instant land and housing to KimE, a ice, at KRW 390,000,000,000.

B. The Plaintiff owned 00-0 above ground 00-0 of Changwon-si, Changwon-si ○○○○○○-gu, ○○○○-dong, and 00 O-dong O-dong 00-0 FFacc 00, Changwon-si, and operated a real estate rental business.

C. On November 13, 2007, the Defendant conducted a tax offense investigation from November 13, 2007 to the 30th of the same month, and confirmed that “The Plaintiff did not report any transfer income belonging to the year 2001 for the instant land and housing, and omitted any real estate rental income of 136,516,000 won from January 2002 to December 2006 and any OO-dong O-dong 00-0-0, FFta 30303 from September 2003 to December 2006 from December 2006 in each global income tax for each of the year to which 26,310, and 00 won belong.”

D. Accordingly, on January 2, 2008, the Defendant imposed and collected capital gains tax of 38,949,90,900 for the transfer of the instant land and housing (hereinafter “instant disposition of imposition of capital gains tax”), global income tax of 2002, global income tax of 5,773,790, global income tax of 2003, global income tax of 17,533,680, global income tax of 2004, global income tax of 9,419,930, global income tax of 204, global income tax of 7,764,540, global income tax of 205, global income tax of 7,764,540, global income tax of 206, global income tax of 5,051,400 for global income tax of 206 (hereinafter “instant disposition of imposition of capital gains tax”).

[Ground of recognition] Facts without dispute, Gap evidence 1, Gap evidence 2-1 to 6, Gap evidence 3-1, 2, Eul evidence 5-1, and the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

(1) The allegation that the instant disposition of capital gains tax was unlawful

(A) Since the Plaintiff did not evade national taxes due to fraud or other unlawful act, five years have elapsed since the date on which the transfer income tax of this case was imposed, the exclusion period of the transfer income tax was set. The right to collect the transfer income tax of this case was expired five years from August 2, 2001 after the Plaintiff’s preliminary return of tax base of transfer income tax, which was based on the transfer margin of 9,000,000, and the right to collect the transfer income tax of this case, which was already extinguished by prescription prior to the

(B) At the time of the investigation of the tax offense against the Plaintiff, the Defendant abused the right to conduct the tax investigation including the transfer of the instant land and building, which was conducted around 2001, even though the business year subject to the investigation by the Plaintiff was the end of January 1, 2003, and December 31, 2006.

(2) The allegation that the instant global income tax disposition was unlawful

(A) The Plaintiff is running a real estate rental business with the ○○○○○○○○○-gu, Changwon-si 397-1 ground-based building and the 00-0 FFari 303 place of business in Changwon-si, ○○○○○-si, ○○○○○○○○, ○○○○-dong, 00-00 above ○○○○○○-dong, Busan, ○○○○○○, 00-00 place of business as its place of business, while running a lodging business with the ○○○○○○, Busan, ○○○○○, ○○○-dong, ○○○○, ○○○, ○○○, ○○○-si, ○○○, ○○○-si, and ○○○○, ○○-si, ○○-si.

(B) Since the Plaintiff did not evade national taxes by fraud or other unlawful act, five years have passed since the date on which the Plaintiff was entitled to impose the global income tax in 2002, the exclusion period of the imposition right was exceeded, and the collection right was terminated by prescription prior to the imposition of the global income tax in this case, since five years have passed from the year 2002, the pertinent year.

(C) At the time of the investigation of the tax offense against the Plaintiff, the Defendant abused the right to conduct the tax investigation by including the comprehensive income tax for the year 2002 in the investigation, although the business year subject to the investigation from January 1, 2003 to December 31, 2006.

B. Relevant statutes

It is as shown in the attached Form.

(c)a recognition;

(1) Acquisition and transfer of the instant land and housing

(A) On February 12, 2001, the Plaintiff and ParkB purchased the instant land in KRW 97,000,000,000, the Plaintiff and ParkB completed the registration of ownership transfer in the name of ParkB’s RD on March 3, 2001.

(B) On March 2001, the Plaintiff and ParkB entered into a contract for the instant new housing construction project with ParkJ around 2001, wherein the construction cost is KRW 174,000, and KRW 00, and ParkJ newly built the instant housing by doing construction work from around that time to July 2001.

(C) The purchase fund of the instant land and the construction cost of the instant housing were jointly borne by the Plaintiff and ParkB.

(D) On June 27, 2001, before obtaining approval for the use of the instant house, the Plaintiff and ParkB sold the instant land and housing in the name of DaDD to KimE in the name of 390,000,000, and KimE completed the registration for the preservation of ownership of the instant house, and, if not, the seller entered into a special agreement to complete the registration for the preservation of ownership, the seller completed the registration for the transfer.

(E) On August 7, 2001, KimE obtained approval for the use of the instant housing, and completed the registration of ownership transfer on September 3, 2001, and the registration of ownership preservation on September 5, 2001, respectively.

(f) On September 30, 2001, the Plaintiff and ParkB filed a tax base return on capital gains tax for the instant land and housing under the name of Doddddd, and prepared a false sales contract with the exception of the portion on the instant housing, which acquired at KRW 79,000,000, and transferred to KimE in KRW 79,000,000, and filed a false sales contract, thereby reporting that there was no capital gains for the instant land and housing.

(2) Method of reporting global income tax on new construction of the instant cartel and business income

(A) On March 22, 2002, the Plaintiff and ParkB purchased from Busan Metropolitan City the commercial area of 000-00 Blux O-dong O-dong O-dong O-dong O-dong O-dong-O-dong-O-dong-O-dong-O-dong-O-dong-O-dong-O-dong-O-dong-O-dong-O-dong-O-dong-O-dong-O-dong-dong-dong-dong-dong-dong-si(hereinafter referred to as "the instant apartment site") of 445,527,000 won in price and completed the registration of ownership as 1/2 shares on April 12, 2003.

(B) On May 27, 2002, the Plaintiff and ParkB entered into a construction agreement between the construction company of △ Integrated Construction Co., Ltd. with the construction period of construction from June 8, 2002 to December 31, 2002, with the construction cost of construction of 1,230,000,000, to operate accommodation business by constructing the instant apartment on the ground of the above site.

(C) On April 11, 2003, the Plaintiff and ParkB obtained a bank loan of KRW 721,00,000,000 from the Busan Bank as collateral for the instant apartment site, and on April 12, 2003, the Plaintiff and ParkB set up a collateral on the said site with the maximum debt amount of KRW 865,200,00,00, and the debtor as the Plaintiff and ParkBB.

(D) The Plaintiff and ParkB completed the registration of initial ownership on May 29, 2003, each of 1/2 shares around the time of the completion of the instant franchise.

(E) On May 29, 2003, ParkB took out a loan from ○ Agricultural Cooperative with 1,000,000,000,000, and with a credit card of 300,000,000, from ○ Agricultural Cooperative, the apartment mortgage was established with respect to the above building with 1,820,000,000, and 1,820,000,000, and 1,820,000,00.

(F) In filing a global income tax return after the start of the instant franchise business, the Plaintiff made a final return on global income tax base by applying the simplified expense rate to each necessary expense in the business year 2003-2004, without any account books and other documentary evidence kept and kept in the place of business. The Plaintiff made a final return on global income tax base by applying the standard expense rate to the estimated income calculation report for calculating the amount of income, and the specific details are as follows.

(3) Investigation of tax offense against the Plaintiff

(A) As a result of occasional investigations, the Defendant discovered suspicions of evading capital gains tax and real estate rental income, such as the Plaintiff’s short-term transfer, by acquiring several real estate proposals, including the instant land, etc., with the ParkB, under the name of another person, and conducted a tax offense investigation against the Plaintiff and ParkB as follows.

(B) On January 14, 2008, the Defendant confirmed that the Plaintiff acquired several real estate including the instant land under the name of another person and operated the benefits accrued from underreporting transfer income in the instant franchise business along with ParkB, and filed an accusation against the Plaintiff and ParkB to the Chang-won Branch of Saryaryary Office (U.S.) on January 14, 2008, with the content of “tax evasion due to fraud or other unlawful act.”

(C) On May 26, 2008, the Changwon District Court: (a) conspired with the Plaintiff on May 26, 2008; (b) purchased O200-0 odong O2, 322.5 around July 30, 2001, which is the Plaintiff’s father; and (c) registered the Plaintiff’s name under the name of YK and YA YD, the Plaintiff’s father; (b) newly constructed a house on the ground and sold the said site and house on the said ground, but (c) issued a tax base return on capital gains tax on August 20, 200, issued a false contract and submitted it by unlawful means; (d) the Plaintiff purchased O0-0-0 OB-6 at Changwon on the said site and sold the said house to 00,000 won, and (e) the said 200,000 won, and 200,000 won, after reporting the tax base return to 200,200,00.

[Reasons for Recognition] In the absence of dispute, entry of Gap evidence 3-1. 2. 4. 6 Gap evidence 11-1, 2 Eul evidence 3 (except for the part which is not partially trusted), and Eul evidence 4- 9;

The exclusion period of the right to impose national taxes was seven years if a taxpayer fails to file a return of tax base within the due date for filing a return or the due date for filing a return on a tax amount, and the day following the due date for filing a tax payment notice was the starting date of extinctive prescription if the government determines the tax base and the tax amount on the notified tax amount.

(B) Comprehensively considering the facts and the purport of the pleading as seen earlier, the Plaintiff and BB had no tax base return on the 20th of March 3, 2001, 170, and 1700, and 1.300 won on the ground of the Plaintiff’s new construction of the instant house with no tax base return on the 20th of June 27, 2001, 390,000, and 1.300,000 won on the 2nd of June 27, 2001. The registration of ownership on the instant house was made under a special agreement that the 390,000,000 won would be less than 0,000,000 won and less than 2nd of the tax base return on the instant house. The Plaintiff and BB had no tax base return on the 1st of September 30, 201, 000 won and less than 00,000 won.

(C) Meanwhile, according to Gap evidence No. 2-1, the payment deadline of the transfer income tax notice of this case is recognized as of January 31, 2008. The extinctive prescription of the right to collect the transfer income tax of this case shall run from February 1, 2008, which is the day following the payment deadline by the relevant tax payment notice. It is clear that the statute of limitations of the right to collect the transfer income tax of this case has not expired at the time of the imposition of the transfer income tax of this case.

(D) Therefore, since the part of the transfer income tax in this case cannot be deemed to have lapsed between the exclusion period of imposition or the extinctive prescription period of the right to permit a permit, this part of the Plaintiff’s assertion on a different premise is without merit. However, if the amount of income cannot be calculated by books or other documentary evidence for reasons as prescribed by the Presidential Decree, the amount of income can be determined by estimation investigation and determination as prescribed by the Presidential Decree

2) Article 55(1)13 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19890, Feb. 28, 2007; hereinafter “Enforcement Decree”) includes “interest paid on a debt directly used to obtain the total amount of income as necessary expenses corresponding to the total amount of income in each year of real estate rental income and business income.” Article 143(1) of the Enforcement Decree provides that, in calculating the tax base, where there is no necessary account books and documentary evidence in the calculation of the tax base, or where there is insufficient or important part is insufficient or false, it may be determined by an estimated investigation at the time of correcting the tax base and tax amount, and Article 143(3) of the Enforcement Decree provides that “Where the estimated determination or correction of the amount of income is made pursuant to the proviso of Article 80(3) of the Act, the provisions of subparagraph 1-2 shall apply only

1. The method of determining or revising, as the relevant income amount (hereafter in this Article, referred to as the “standard income amount”), the amount obtained by deducting the amount under the following items from the income amount:

(a) Purchase use (excluding those for fixed assets for business) and rent for the fixed assets for business which are paid or payable by documentary evidence;

(b) Pay of employees, wages and retirement benefits, which are paid or payable by documentary evidence; (c) The amount calculated by multiplying income by standard expense rate; and

(B) Determination

1) The following circumstances revealed by relevant statutes and facts recognized earlier, i.e., (i) the Plaintiff and ParkA’s entry in the final return on global income by the method of filing a return on estimated income tax base with the Defendant without any account books kept and kept at the workplace after the start of the instant franchise business, and without any other documentary evidence, were confirmed to have underreported real estate rental income of the Defendant’s tax offense investigation report; and (ii) the amendment of the Enforcement Decree of the Income Tax Act on December 29, 2000 to abolish the standard income rate system used as a means of tax saving by the accused self-employed, instead of eliminating the standard income rate system used as a means of tax saving by the account books and documentary evidence, where the account books cannot be kept due to unavoidable reasons to promote the settlement of the underlying taxation climate by the account books and documentary evidence, only the minimum expenses equipped with documentary evidence can

1. 1. Since the standard expense rate system has been implemented since the income accrued after the date, and 3. The interest paid on the debt directly used to obtain the total income amount in each year recognized as necessary compared to the total income amount of the real estate rental income and the business income under Article 55 (1) 13 of the Enforcement Decree is a provision which provides for the calculation of the tax base and the tax amount according to the actual amount method, and 4.4. When the amount of the income is estimated by simple expense rate or standard expense rate, the amount which is calculated by subtracting the amount of the principal expense from the income amount and the income amount by the standard expense rate shall be determined by the Commissioner of the National Tax Service after deliberation by the standard expense rate deliberation committee. The imposition of global income tax in this case is that the calculation of the tax base based on the plaintiff's transfer income and real estate rental income is estimated and revised pursuant to Article 143 (3) 1 (c) or 1-2 of the Enforcement Decree of the Income Tax Act, and the calculation of the amount of the tax can only be made by deducting the amount of the gross income amount of the tax base, but not included in the calculation standard expense rate.

2) Even if the Plaintiff’s assertion is necessary: 1:31 amount calculated as actual income, the tax authorities, in principle, bear the burden of proof regarding necessary income. However, since most of the facts constituting the basis of necessary expenses are in the control area of the taxpayer, the tax authorities are difficult to prove. Thus, if it is reasonable to enable the taxpayer to prove the above amount by taking account of difficulty in proof or equity between the parties, it is difficult to view the above facts and evidence, namely, the following facts revealed by the Plaintiff’s loan 1:2, and the Plaintiff’s loan 1’s loan 2, namely, the Plaintiff’s loan 0,000 total income amount, and the Plaintiff’s loan 1’s loan 2,000,000 total income amount, and the Plaintiff’s loan 2,000,0000 won and 1.7,000,000 won, and the Plaintiff’s loan 2,000 won and 1.7,000,0000 won, 7,000 won.

(4) Determination as to the exclusion period of the imposition right on global income tax for the year 2002 and the claim on the extinction of the statute of limitations of the imposition right

In the statement of Gap evidence 2-2 and Eul evidence 2, the following circumstances are integrated into the whole purport of argument, i.e., the exclusion period of the right to impose global income tax on the plaintiff who has business income for accommodation business in 2002 for the mother of this case is five years from June 1, 2003, which is the day following the filing deadline for the tax base of global income (Article 70 (1) of the Income Tax Act). Thus, the imposition of global income tax in 2002, which was imposed on January 2, 2008, was made within the five-year imposition period under Article 26-2 (1) 3 of the Framework Act on National Taxes, and the statute of limitations of the right to collect global income tax for the year 202, which is the day following the payment deadline by the notice of tax payment, cannot be viewed as the exclusion period and the imposition period of the plaintiff's right to impose global income tax for the year 200.

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed in its entirety as it is without merit, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed in its entirety as it is without merit, and it is so decided as per Disposition.