Seocho 2013west 4438 ( October 27, 2014)

No tax credit for global income tax shall be granted on the basis of the source tax return of a corporation not falling under a withholding agent.

A corporation that paid an amount of the global income tax may not be deducted because it has reported the source tax, but the reported place of payment is not a person who received the amount of the tax, but is not a withholding agent of the person who received the amount of the tax.

Article 127 of the Income Tax Act, Scope of business income subject to withholding under Article 184 of the Enforcement Decree

Seoul Administrative Court 2015Guhap1809 ( October 15, 2016)

United StatesA

BB Director of the Tax Office

December 18, 2015

on 15, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of global income tax of KRW 000,000,000 on November 13, 2014 against the Plaintiff on November 13, 2007, exceeding KRW 00,000,000, shall be revoked.

1. Facts of recognition;

(a) Results of tax investigation by the director of the Regional Tax Office;

From September 25, 2012 to January 23, 2013, the Director of the BB Regional Tax Office conducted a tax investigation with respect to the plaintiff.As a result, the Director of the BB Regional Tax Office determined that the plaintiff's transfer and management of funds for the high-ranking personnel of the EE International Petroleum Corporation (hereinafter referred to as the "CCC"), D Heavy Industries Co., Ltd. (hereinafter referred to as the "DDR"), the RDR Inc. (hereinafter referred to as the "RR"), the SSS S.A. (hereinafter referred to as the "SS"), the PPPPPPPPD. (a Singapore corporation; hereinafter referred to as the "PPP") from 208 to 2011, the plaintiff notified the defendant of the amount of 00's tax withholding "0,000,0000,0000,0000,0000,000,0000,000.

1) At the beginning, D Heavy Industries dealt with the expenses of USD 0,00,000 in the corresponding amount in the A, and USD 0,000 in the corresponding amount in the attached Table 1, and USD 0,000 in the corresponding amount in the same Table, and USD 1 in the corresponding amount in the account in the payment. On December 3, 2012, when the tax investigation with the Plaintiff was in progress, D Heavy Industries dealt with the expenses of USD 0,00,000 in the corresponding amount in the corresponding amount in the corresponding table, and reported and paid the corporate tax for each business year by modifying the corporate tax for the pertinent business year.

(2) On January 9, 2013, when the tax investigation was conducted against the Plaintiff, D Heavy Industries: (a) around 2012; (b) around January 10, 2013; (c) around 200,000,000 won as other income not necessary expenses in GGG; and (b) around 0,000,000 won as other income not necessary expenses in MM (hereinafter referred to as “MM”); and (c) around 10, 200,000 won as other income calculated by applying the income tax rate of 20% to the above other income in GGG; and (d) paid 0,000,000 won as the total of the local income tax withheld at the tax rate of 10,000,000 won; and (e) paid 0,000 won as 0,000 won for local income tax; and

As a result of the tax investigation conducted by the commissioner of BB regional tax office, the Defendant considered KRW 0,00,000,000 as the Plaintiff’s other income, and determined and notified the Plaintiff on March 8, 201, the amount indicated in the column of “amount received by the Plaintiff” in attached Table 1 (excluding KRW 00,000,000,000 for the amount corresponding to February 10, 2012) as the amount received by the Plaintiff in attached Table 1 (hereinafter referred to as “disposition 1”).

(d) Procedures of the previous trial; and

On April 29, 2013, the Plaintiff filed an appeal with the Tax Tribunal on September 11, 2013 on the first imposition disposition.

(e)decision of the Tax Tribunal;

On October 27, 2014, the Tax Tribunal rendered a decision as follows.

Summary of Reasons

1) In light of the fact that in order for the Plaintiff to run the Embrym business, the Plaintiff appears to have established MaM on October 17, 2006, and October 27, 2007, the Plaintiff appeared to have continued to receive MaM on March 2008, when the Plaintiff started the Embrym business, it was the time that the Plaintiff did not keep the Embrym business in March 2008, the Plaintiff appeared to have continuously provided brokerage and advisory services over several years, and the amount in the attached Table 1 received by the Plaintiff is large enough to raise 20 times of the Plaintiff’s annual salary, and that the Plaintiff is also providing various services other than the above amount, and it is reasonable to view the Plaintiff as the Plaintiff’s separate business income in the attached Table 1 of the Income Tax Act as the Plaintiff’s separate business income in the status of GG and MM for a long time.

In addition, it is reasonable to estimate the amount of income in light of the following: (a) while providing brokerage and consulting services for project recipients, the Plaintiff failed to produce accounting books and evidence documents, etc. to estimate the amount of income and necessary expenses other than the data received from each account; and (b) the Plaintiff appears to have traveled overseas on several occasions to encourage the brokerage between CCC and DD industries; and (c) so it is not possible to confirm by on-site investigation because most of the necessary expenses are not equipped with evidence, it is reasonable to correct the tax base and tax amount by estimating it.

2) Of the amounts stated in the column of “amount received by the Plaintiff” in the attached Table 1, the phrase “non-assumed amount” refers to ①, ② as to the receipt time of each corresponding amount, Article 48 Subparag. 8 of the Enforcement Decree of the Income Tax Act provides personal services, or as to the receipt time of each corresponding amount, the date on

The date of the earlier of the date stipulated as the time of the import of the total amount of the business income. The plaintiff received the amount corresponding to the above ①, ② from 2008 to 2012, but the plaintiff entered into a contract on December 18, 2007 with respect to the construction of four LNG carriers in relation to the pertinent amount, between DNG carriers and CCC, and entered into a contract on December 28, 2007 between DD Heavy Industries and MM (Plaintiff) to pay the pertinent amount.

② In light of the fact that RR and CCC concluded a contract on November 1, 2007 for the construction of three LNG carriers with respect to the pertinent amount, and entered into a contract for the payment of USD 0 million for the service on September 20, 2007 between RR and GG (Plaintiff) on September 20, 2007, it can be deemed that the Plaintiff’s brokerage, representation, and advisory services have been completed at the time of concluding the contract between RR and DCC, it is reasonable to view the receipt time related to each of the pertinent amounts as 207.

3) The plaintiff asserts that "non-fixed" portion of the amount stated in the "amount received by the plaintiff" in the attached Table 1, among the amounts stated in the "amount in the attached Table 1, should be deducted as the already paid tax amount since it paid the source tax as a withholding agent related to the corresponding amount. However, D Heavy Industries, as a withholding agent, include the fact that ① the pertinent amount-related income earner is withheld at source by having the relevant income earner, not the plaintiff, but MM, and Sam Telecommunication Industries paid to GG to the third intermediary, and the plaintiff stated that EE senior personnel received KRW 00,000 for the case of D Heavy Industries by dividing it into GG and MM, it is difficult to accept the plaintiff's above assertion. Therefore, it is difficult to accept the plaintiff's above assertion.

The Defendant’s imposition of KRW 0,00,000,000, total global income tax for the year between 2008 and 2011, against the Plaintiff on March 8, 2013, is the amount received by the Plaintiff ($ 0,000,000) as business income. The amount received by the Plaintiff through MM from the D Heavy Industries is the receipt time of USD 0,000,000 and USD 00,000,000,000,000, which was received through GG from RR in 2007, and the tax base and tax amount by estimating the amount of income, and the remainder of the appeal is dismissed.

F. The defendant's decision of correction following the decision of the Tax Tribunal

According to the above decision of the Tax Tribunal, "amount received by the plaintiff in attached Table 1" was included in the "amount received by the plaintiff in attached Table 1 (U.S. dollars)" as the "amount received by the plaintiff in attached Table 1: ① the receipt time of each corresponding amount was corrected to 2007, and ② the above amount was converted into Korean won according to the exchange rate as at the time of importation, and ② the above amount was converted into Korean won according to the exchange rate as at the time of importation, ② the total income amount being the basis for calculating the global income tax for the year 2007, which is the basis for calculating the global income tax for the plaintiff's global income tax for the year 2007. As a result, the total income amount, which serves as the basis for calculating the global income tax for the year 2007,000,000 won added each of the above amounts to the existing earned income amount.

(g) Notice for advance taxation; and

Around November 13, 2014, the Defendant revoked the first imposition disposition and notified the Plaintiff of the pre-announcement of taxation that the aggregate of the global income tax for the year 2007 and the amount of 00,000,000 global income tax for the year 207, and the amount of 00,000,000 global income tax for the year 207, and the amount of 1,209,000,000 global income tax for the year 207.

H. Disposition of this case

On November 13, 2014, the Plaintiff applied for the determination and notification of the pre-assessment review according to the contents of the pre-assessment notice. As such, the Plaintiff applied for the determination and notification pursuant to the pre-assessment notice. Of the global income tax for 2008,000,000 and the global income tax for 200,000,000,000 in total among the global income tax for 200,000,000 and the global income tax for 200,000,000 as notified in accordance with the above pre-assessment notice, the Plaintiff appropriated the above pre-assessment notice to the global income tax for 200,000 and the global income tax for 207,200,000 and the total amount of value-added tax for 209,000,000,0000 as well as the above pre-assessment notice for 20,000 as well as 200,000.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 10, Gap evidence 15, 19, Eul evidence 1 through 4 (including each number), the purport of the whole pleadings

2. Judgment on the Defendant’s main defense

A. The defendant's assertion

1) The procedure of the previous trial

Since the instant disposition is a new disposition separate from the first imposition disposition, the Plaintiff must undergo a prior trial procedure, such as a request for adjudication, as prescribed by the Framework Act on National Taxes. However, the Plaintiff filed the instant lawsuit without going through the prior trial procedure, such as a request for adjudication, and thus, the instant lawsuit is unlawful.

2) The period for filing a lawsuit

The Plaintiff was served on October 29, 2014 with the decision of the Tax Tribunal. The Plaintiff filed the instant lawsuit on January 28, 2015, which clearly became 90 days thereafter, and thus, the instant lawsuit is unlawful as it is against the intention of the filing period.

B. Determination

1) The procedure of the previous trial

According to Article 56 (2) of the Framework Act on National Taxes, an administrative litigation against a disposition of national taxes may not be filed without going through a request for evaluation or adjudgment under the Framework Act on National Taxes and a decision thereon, notwithstanding the provisions of the main sentence of Article 18 (1), (2) and (3) of the Administrative Litigation Act: Provided, That in the case of tax administration, two or more dispositions of the same purpose are conducted in the course of step-by-step and development, and are related to each other, or the tax authorities have changed the taxation disposition subject to such disposition during the course of tax litigation and are common to the same reason. In the case where several persons are liable for the same obligation through the same administrative disposition, one of the persons liable for tax payment and one of them has provided the Commissioner of the National Tax Service and the Tax Tribunal with an opportunity to re-determine the basic factual relations and legal issues, and if there is a justifiable reason, such as where the person liable for tax payment appears to be harsh to go through the preceding trial procedure, he may file a request for the revocation of the disposition of tax assessment even without going through the preceding trial procedure (see, e.

The plaintiff has already filed an appeal with the Tax Tribunal on the first imposition disposition of global income tax for the year 2008 through 2011 on the basis of receipt of the amount stated in the attached Table 1. D Heavy Industries has already paid the source tax as a withholding agent in relation to the relevant amount. However, the Tax Tribunal dismissed the above claim on October 27, 201, "in the attached Table 1, the amount received by the plaintiff" in the attached Table 1, and decided to rectify the tax base and tax amount by the method of correcting the tax base and tax amount of the global income tax for the year 2007 and the amount received by the plaintiff as other income for the year 201, and the defendant revoked the disposition of imposition of global income tax for the year 201 through 207 as the purport of the decision of the Tax Tribunal on November 13, 2014, which recognized that the above disposition of imposition of global income tax for the year 201 through 207.

However, as to the disposition of this case, the ground for illegality alleged by the plaintiff is that D Heavy Industries paid the source tax as a withholding agent in relation to the corresponding amount under attached Table 1, and it should be deducted as the plaintiff's already paid tax amount. Thus, it is reasonable to view that there was an opportunity to reconsider and correct the facts and issues, which form the basis of the disposition, at the time of the decision of October 27, 2014 by the Tax Tribunal as to the first imposition disposition, as to the common reason, at the time of the decision of October 27, 2014, the above disposition of this case was made on November 13, 2014, which was immediately dismissed on October 27, 2014. Thus, even if the plaintiff had followed the procedure of the first instance trial as to the disposition of this case, it seems that the first instance court's decision and the first instance court's decision should be dismissed separately from the above disposition of this case.

Furthermore, even if an administrative litigation is allowed without going through the pre-trial procedure in the above case, the purport of Article 56(2) of the Framework Act on National Taxes, which provides that if the tax authority uses professional knowledge and experience prior to filing a lawsuit on the grounds of mass redification, professional technical nature, and due formation of order, it is unlikely that the purpose of the provision of Article 56(2) of the Framework Act on National Taxes, which provides that a large amount of repeated tax administration can be achieved uniformly by granting a superior authority an opportunity for supervision and correction.

Therefore, the instant disposition ought to be deemed to be able to file an administrative suit seeking revocation of the disposition even without going through the pre-trial procedure. Ultimately, since the instant lawsuit was filed without going through the pre-trial procedure, the Defendant’s assertion that the instant lawsuit is unlawful is without merit.

2) Period for filing a suit

In the absence of any provision regarding the period of filing a lawsuit under the Framework Act on National Taxes, the Plaintiff has to file a lawsuit seeking revocation of the instant disposition within 90 days from the date on which it became aware of the disposition pursuant to Article 20 of the Administrative Litigation Act, which is the date of the instant disposition. However, it is evident in the record that the Plaintiff was aware of the instant disposition at the time of November 13, 2014, which is the date of the instant disposition, and the instant lawsuit was filed on January 28, 2015, which is apparent from the fact that it is within 90 days from the date of the instant disposition. Therefore, the Defendant’s assertion that the instant lawsuit was unlawful because

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

D Heavy Industries received from the Plaintiff in the attached Table 1 "amount in the attached Table 1" refers to ① the pertinent amount of USD 0,000,000,000 as other income which is converted into the won of the income earner, and paid KRW 0,000,000 as income tax and KRW 00,000 as local income tax, and KRW 00,000 as withholding tax. However, MM is limited to the conduit established by the Plaintiff in order to collect the above fee from D Heavy Industries. Since the above USD 0,00,00 paid to the Plaintiff actually, D Heavy Industries is eventually paid to the Plaintiff, and eventually, D Heavy Industries as income tax and local income tax are substantially the same as income tax and local income tax were paid as withholding tax.

Although the amount of withholding tax paid by the D Heavy Industries is formally paid as other income of MF, the income subject to withholding is substantially the same as the income of the Plaintiff. Therefore, in light of the purport of Article 85(4) of the Income Tax Act, which provides that the object of a lump sum refund or appropriation of other national taxes is for the convenience of taxpayers, the amount of withholding tax paid by the D Heavy Industries shall be allowed at the stage of the disposition of the instant case where the Plaintiff determines the amount of withholding tax for the year 2007.

Therefore, in calculating the comprehensive income tax on the plaintiff, the tax base and tax amount should be calculated by adding the total income amount of KRW 00,000,000,000, which is the sum of the income tax and the local income tax, to the total income amount, and the tax amount so calculated shall be added to the tax amount calculated by adding the withheld tax amount of KRW 00,00,000 paid by D

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) The D Heavy Industries paid withholding tax, such as income tax, on the Plaintiff’s income

whether such act may be deemed to be

A) The Defendant asserts that the amount of withholding tax paid by the D Heavy Industries in the year 2012 shall be deemed as other income belonging to MM in the year 2012, and the income tax, etc. is withheld and paid. As such, the income tax subject to global income tax for the year 2007 against the Plaintiff is different from the income subject to global income tax for the year 2007, the time of reversion, and the person to whom it belongs. Therefore, the amount of withholding tax paid by D Heavy Industries in the above manner cannot be deemed as the business income belonging to the Plaintiff in the year 2007. Thus, the Defendant asserts that even if the D Heavy Industries seeks the refund of withholding tax, the amount of withholding tax paid by the D Heavy Industries shall not be deducted from the global income tax for the year 2007 for the Plaintiff.

However, if the purport of the entire argument is added to the statement in Gap evidence Nos. 1 through 8 (including each number), it is already recognized by the Tax Tribunal. MM is merely a Do corporation established by the plaintiff to receive fees from D Heavy Industries while running the D Heavy Industries. D Heavy Industries paid the plaintiff the amount corresponding to "the amount received by the plaintiff in attached Table 1 to the plaintiff through Dominc Dominc Dominc Dominc Dominc Dominc Dominc Dominc Dominc Dominc Dominc, and there is no counter-proof, unlike the fact that the plaintiff received the above amount as fees, the total amount of USD 0,000,000, which is the basis for calculating the global income tax for the year 2007, which is the basis for calculating the global income tax for the plaintiff's total amount of USD 00,000 which is the basis for calculating the global income tax for 00,000 which is the basis for the plaintiff's global income tax amount of USD 00.

B) Meanwhile, the Defendant also issues the issue that D Heavy Industries did not withhold withholding taxes from the Plaintiff. However, the withholding system is a system indirectly realized by a source taxpayer through the procedure that the performance of the original tax liability that the source taxpayer assumes by substantive law, and the source taxpayer is exempted from the relevant tax liability in relation to the State due to the payment of withholding tax (see, e.g., Supreme Court en banc Decision 2006Da49789, Sept. 18, 2008). Therefore, whether D Heavy Industries actually withheld withholding taxes from the Plaintiff does not affect whether the amount equivalent to the amount of withholding tax paid by the Plaintiff could be deducted from the Plaintiff’s global income tax amount.

C) Ultimately, each of the above arguments by the defendant is without merit.

2) Whether D Heavy Industries are withholding agents in relation to the Plaintiff

A) However, if the purport of the entire argument is added to the statement of No. 8, it is acknowledged in the decision of the Tax Tribunal that the plaintiff's fee received as stated in the "amount received by the plaintiff" in attached Table 1 from D Heavy Industries as stated in the "amount received by the plaintiff" is deemed as business income other than the plaintiff's other income. Such business income is amended by Act No. 8825 of Dec. 31, 2007, and it is amended by Act No. 11611 of Jan. 1, 2013, Article 127 (1) 3 of the former Income Tax Act (amended by Presidential Decree No. 20720 of Feb. 29, 2008), Article 184 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 24638 of Jun. 28, 2013) and does not fall under the obligation of D Heavy Industries to withhold taxes.

There is no assertion or proof about the intentional burden of withholding tax on other income, and D Heavy Industries seems not to be a withholding agent on any income of the plaintiff.

B) Of course, as alleged by the Plaintiff, as regards the withholding taxes exceeding legitimate withholding taxes, such as the cases where the withholding agent withheld taxes on non-income subject to withholding or on the basis of the application of the tax rate, the calculation of the tax base, or the calculation of the tax amount in the course of withholding, and where the taxes are collected in excess of the amount of withholding taxes, there is a view that "where the taxpayer under the Income Tax Act has to pay again the tax amount less the amount of withholding tax under the provisions of Article 127 from the amount of calculated global income tax on the tax base for the corresponding year deducted from the amount of global income tax, etc. (Article 76 of the Income Tax Act), and where the tax amount withheld to the head of the tax office having jurisdiction over the place of tax payment exceeds the gross amount of global income determined, etc., the excess tax amount shall be refunded or appropriated for other national taxes, etc. (Article 85 (4) of the Income Tax Act)."

However, the above view appears to be premised on the fact that the person who paid the withholding tax to the tax authority is the withholding agent, and it is difficult to expand the above logic even if the person who paid the withholding tax does not have any obligation in relation to the person to whom the income belongs.

However, as acknowledged earlier, since D Heavy Industries does not fall under the withholding agent itself because it did not have any withholding obligation on the Plaintiff’s income, D Heavy Industries actually paid withholding tax on the Plaintiff’s business income. Thus, the amount of withholding tax cannot be deducted from the global income tax amount accrued in 2007 as already paid tax amount.

3) Sub-decisions

Ultimately, the Plaintiff’s assertion that the amount of withholding tax paid by D Heavy Industries should be additionally deducted from the global income tax for the year 2007 by adding the amount of withholding tax paid by D Heavy Industries as already paid tax amount is without merit.

4. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.