Plaintiff (Law Firm Jeong, Attorney Park Ha-soo, Counsel for the plaintiff-appellant)

The director of the tax office

December 12, 2017

Seoul Administrative Court Decision 2016Guhap9640 decided July 14, 2017

1. All appeals filed by the plaintiff and the defendant are dismissed.

2. The costs of appeal shall be borne by each party.

1. Purport of claim

On January 11, 2016, the Defendant confirmed that each disposition of imposition of KRW 36,844,22, additional tax on global income tax on global income tax on the Plaintiff for the year 2010, including additional tax on negligent tax returns on global income tax, KRW 92,681,642, and KRW 34,108,179, additional tax on negligent tax on global income tax on global income tax for the year 2011 is null and void.

2. Purport of appeal

[2] Of the judgment of the court of first instance, the part against the Plaintiff is revoked. The Defendant confirmed that each disposition of imposition of KRW 34,108,179 for additional tax returns on global income tax for the global income tax for the year 2010 reverted to the Plaintiff on January 11, 2016 is null and void.

[Defendant] The part against the defendant among the judgment of the first instance is revoked, and the plaintiff's claim corresponding to the revocation part is dismissed.

1. Quotation of the first instance judgment

The reasoning for the judgment in this case is as stated in the reasoning of the judgment of the court of first instance, except for the parts to be used or added below, and thus, it shall be quoted in accordance with Article 8(2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

○ From 3 pages of the judgment of the first instance, 5 to 6 “2016Gadan5292400” was added to “2017Gahap55766.”

○ The following is added to the 5th two pages of the first instance judgment:

Article 70(4) of the former Income Tax Act (amended by Act No. 11146, Jan. 1, 2012; hereinafter the same shall apply) provides otherwise for interest income, business income, expenses to be deducted from earned income, etc. which constitute the source in determining the global income tax base (see Articles 16, 19, 20, etc. of the former Income Tax Act). Under Article 70(4) of the former Income Tax Act, when filing the final return on global income, the tax base shall be prepared and submitted by submitting a tax return on global income, documents necessary for calculating the total amount of global income and necessary expenses, statement of accounts, etc. prepared by applying mutatis mutandis the corporate accounting standards for business income, and the liability for the appropriate amount of such return and payment to the person liable for tax payment. According to Article 70(5) of the same Act, the head of a tax office having jurisdiction over the place of tax payment may request the tax base return on global income to be prepared and revised separately from other documents submitted pursuant to paragraph (4) of the same Article 4).

○○ The 5th written judgment of the first instance court is used as “the same,” and the following overall parts of the former Income Tax Act are deleted.

○ The 5th day of the first instance judgment and the 14th day of the 14th day of the 14th day are referred to as “the right to impose tax.”

○ The 6th page of the first instance judgment and the 6th four pages were added “(see, e.g., Supreme Court Decision 2007Du23200, Jan. 14, 2010).”

○ From the 6th bottom of the judgment of the first instance, the “tax amount already paid” is added to the “amount of global income tax already paid by the Plaintiff.”

○ From the 7th bottom of the judgment of the first instance, “non-performance” is added to “non-performance” following the 6th below.

○ From the 11st bottom of the first instance judgment, the following shall be added at least three:

(3) "Final return on global income" in paragraph (1) shall be referred to as "final return on global income."

(4) When filing a final return on the tax base of global income, it shall be submitted to the head of the tax office having jurisdiction over the place for tax payment, along with the following documents. In such cases, if a person subject to double-entry bookkeeping pursuant to Article 160 (3) fails to submit the documents specified in subparagraph 3,

1. Documents prescribed by Presidential Decree, attesting that he/she is entitled to personal deductions, pension contribution deduction, interest expenses deduction for reverse annuity mortgages, and special deduction;

2. Documents prescribed by Presidential Decree, which are necessary for the calculation of the total income amount and necessary expenses forming the basis of global income calculation;

3. Where the amount of business income is calculated on the basis of the books and documentary evidence kept and recorded pursuant to Articles 160 and 161, the statement of financial position, the income statement and the documents attached thereto, the total trial balance sheet prepared by applying mutatis mutandis the corporate accounting standards, and the adjusted account statement prepared, as prescribed by Presidential Decree: Provided, That in cases of a business operator who keeps records pursuant to Article 160 (2), the account statement of the amount of income by simple bookkeeping prescribed by Presidential Decree;

4. Where necessary expenses are included under Articles 28 through 32, the detailed statement thereof;

5. Where a business operator (excluding any small-scale business operator prescribed by Presidential Decree) has been supplied goods or services from another business operator (including a corporation) in connection with his/her business and has been verified as other than the supporting documents falling under any subparagraph of Article 160-2 (2), a detailed statement of the receipt (hereinafter referred to as "detailed statement of the receipt") prescribed by Presidential Decree;

6. Where the amount of business income is not calculated on the basis of the books and documentary evidence kept and recorded pursuant to Articles 160 and 161, the account statement of estimated income prescribed by Presidential Decree;

(5) Where defects or errors exist in the return and other documents submitted pursuant to paragraph (4), the head of a tax office having jurisdiction over the place for tax payment may request for supplementation thereof.

○ The following shall be added at the last stage of the 12th judgment of the first instance.

(1) The former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 23588, Feb. 2, 2012)

Article 130 (Final Return on Tax Base of Global Income) (1) The final return on tax base of global income under Article 70 (1) of the Act shall be based on the final return on tax base of global income and the

(1) The former Enforcement Rule of the Income Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 248 on December 28, 201)

Article 65 (Final Return, etc. on Tax Base of Global Income) (1) A final return on tax base of global income and a statement of tax payment pursuant to Article 130 (1) of the Decree shall be accompanied by a report on tax base of global income: Provided, That where a person liable to make a final return on tax base submits a report on tax base of income deduction of a wage and salary income prescribed in Article 140 (1) of the Act or a report on tax base of income

(2) "Documents prescribed by Ordinance of the Ministry of Strategy and Finance, such as specifications of income calculation" in Article 130 (3) of the Decree means the following documents: Provided, That where a resident acquires real estate in a foreign country or any right related thereto from among direct overseas investment under Article 3 (1) 18 of the Foreign Exchange Transactions Act and capital transactions under subparagraph 19 of the same paragraph, the documents under subparagraph 2 shall be submitted even if there is no tax base of global income in the relevant taxable period or there is no deficit:

1. A detailed statement of the following income amount:

(a) If there is any side business income of a farm household under subparagraph 2 (c) of Article 12 of the Act, the detailed statement on the calculation of non-taxable business income;

(b) Where the income tax is reduced or exempted under Article 59-2 of the Act, an account statement classified into the income subject to reduction or exemption of income tax and other incomes;

(c) If allowances, reserves, etc. are included in necessary expenses or total amount of income pursuant to the Act or other Acts, the specification thereof;

(d) Where the income amount for a joint business is calculated pursuant to Article 43 of the Act, a specification of distribution of the income amount by joint business proprietor.

(e) Where any deficit carried forward is disposed of under Article 45 of the Act, the detailed statement of deficit brought forward;

(f) Other reference documents necessary for calculating the total amount of revenue and necessary expenses;

2. The following documents determined by the Commissioner of the National Tax Service:

(a) A specification of overseas subsidiaries and the table of financial status of such overseas subsidiaries: Provided, That this shall be limited to residents determined and publicly announced by the Commissioner of the National Tax Service who have invested in foreign corporations as of the

(b) Detailed statement on overseas branch offices: Provided, That it shall be limited to a resident determined and publicly announced by the Commissioner of the National Tax Service, who establishes and operates a branch or office abroad;

(c) Detailed statement on acquisition, investment and management of overseas real estate: Provided, That it shall be limited to residents who have acquired, invested and leased overseas real estate or rights thereto during the relevant taxable period, and determined and publicly announced by the Commissioner of the National Tax Service;

3. Deleted;

(3) Where a business operator having two or more places of business records in books so that the details of transactions by place of business can be distinguished pursuant to Article 160 (5) of the Act, the documents referred to in Article 70 (4) 2 through 6 of the Act shall be prepared for each place of business and income and shall be accompanied by a list of total numbers

2. Conclusion

Therefore, the judgment of the court of first instance is just, and the appeal by the plaintiff and the defendant are dismissed.

Judges Doing and decorations (Presiding Judge)