National High Court Decision 2007Du2742 ( December 27, 2007)

The propriety of the disposition of inclusion in the calculation of earnings and the bonus of the representative by the date of closure;

The restriction on the issuance of this loan income to the plaintiff who had been the representative director at the time on the balance sheet before the closure of business by stating that there is no evidence that the money was collected as short-term loans by stockholders, officers and employees, is legitimate unless there are special circumstances.

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

Article 20 of the Income Tax Act / [Labour Income]

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 of KRW 296,587,100 for the Plaintiff on June 14, 2006 shall be revoked.

1. Details of the disposition;

A. On June 1, 1991, ○○○○○ Co., Ltd. (hereinafter “Nonindicted Company”) opened a business and closed the business on January 9, 2004. The Plaintiff was working as the representative director of the Nonparty Company from around 1994, and the Plaintiff was working as the representative director of the Nonparty Company. On the balance sheet of the business year immediately before the closure of the Nonparty Company, 658,876,128 won as a short-term loan of shareholders on the balance sheet of the business year 2003.)

B. The Defendant did not objectively prove that the non-party company had justifiable grounds for not collecting the instant money at the time of the closure of its business, or that it was collected from the non-party company, and disposed of as bonus with its representative’s provisional payment. On June 13, 2006, the Defendant issued the instant disposition imposing global income tax of KRW 296,587,100 (including additional tax) on the Plaintiff for the global income tax of 2003.

[Ground of recognition] Facts without dispute, Gap 1, 9 evidence, Eul 1, 2, 7 evidence (including above numbers), the purport of the whole pleadings

2. Determination on the legitimacy of the instant disposition

A. The plaintiff's assertion

“The instant money constitutes a claim for the outstanding amount of subcontracted construction works, which the non-party company owned by the non-party company against the non-party company ○○○○○○○○ corporation (hereinafter referred to as “○○○○○○○○○”) and the ○○○○ corporation (hereinafter referred to as “○○○○○”) and it is merely an account of the representative’s provisional payment because it was not properly reflected in the process of preparing the balance sheet even though the entire amount was seized by the creditors of the non-party company, and it was unlawful for the instant disposition since the Plaintiff did not actually receive the said money.”

(1) Around October 26, 2002, the non-party company received a subcontract from ○○○○○○○○○○○○○○-dong located in ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○,

B. On February 19, 2003, 203, the notary public of the non-party company made a claim amounting to KRW 1,272,484,00 based on the executory exemplification of the notarial deed in the case of No. 113 among the year 2003, and applied for the attachment and assignment order of claims against the non-party company's ○○○○○ (third debtor) as the Seoul District Court 2003TTTT1306 on the above claim amount among the remainder amount of the construction work against the non-party company's ○○○○○○ (third debtor). The above court was decided on February 19, 2003 by the above court. The notary public of the non-party company was requested to order the attachment and assignment order from the above court as to the remainder amount of claims against the non-party company's ○○○ (the above ○○○○) as the executory exemplification of the case of No. 32,400,000.3.

The details of deposit of KRW 1,266,080,000 paid by ○○○○ to ○○○○ in accordance with each assignment order above, and the deposit of KRW 224,00,000 paid by ○○○○○○○○○○ in accordance with each assignment order above are as follows:

A short-term loan out of the current debt amounting to KRW 278,00,000 on the balance sheet in the business year 2002 of the non-party company, but the content of the second second second second second third third third third third third third third third third third third third third third third third third third third third third third third third third third third third third third third third party, which was prepared on the basis of evidence submitted under the circumstance that the above assignment order was

(v)the details of the initial shareholder short-term loans made by the Plaintiff in relation to the balance sheet in 2003 are as follows:

⑹ 한편, 위 대차대조표 작성의 근거가 된 소외 회사의 2003 사업연도의 현금출납장에는 수입액 3,747,715,649원(전기이월 2,851,981원), 지출액 3,731,313,586원으로 되어 있으며, 소외 회사의 2003 사업연도 손익계산서에는 매출액이 1,716,981,819원, 매출원가 1,348,909,033원, 판매비와 관리비 132,119,564원이 계상되어 있다.

[Ground of recognition] Facts without dispute, Gap 3, 4, 6, 9, 10 evidence, Eul 1 through 7 evidence (including above numbers), the witness Kim ○'s partial testimony, and the purport of the whole pleadings

C. Determination

In general, the burden of proving the facts of taxation requirements in tax litigation should be imposed on the person liable for taxation, but if it is proved that the facts in question were presumed to be eligible for the application of the empirical rule in light of the empirical rule in the specific litigation process, it cannot be concluded that the other party is an illegal disposition that failed to meet the taxation requirements unless the other party proves that the facts in question were not eligible for the application of the empirical rule. Thus, in this case where there is no evidence to prove that the amount stated in the shareholder short-term loan was recovered in the balance sheet before the closure of the business, the disposition of this case restricting the Plaintiff, who was the representative director of the non-party company, to whom the above loans

According to the above facts, ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ and paid the payment to ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ on the day on which the payment was made, or there was no fact that the payment was made as revenue or expenditure (this is also the same in the case of No. 7-1, No. 7-7, No. 7-3, which was presented by the Plaintiff that the accounting error in cash was corrected to be treated as the original amount of the construction work, and that an outstanding amount was paid to ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○.

In the end, considering the above, the disposition of this case, based on the bonus disposition, cannot be deemed unlawful on the basis of the term loan funds of the stockholders' officers stated in the balance sheet in the business year 2003. The plaintiff's assertion is insufficient to recognize that the submitted evidence alone conforms to the reasonable accounting formula, and thus, it cannot be accepted.

3. Conclusion

Thus, the plaintiff's claim seeking revocation on the ground of illegality of the disposition of this case is dismissed as it is without merit.