The amount of embezzlement in this case cannot be deemed to have been used in repaying the borrowed money of the plaintiff corporation.

The burden of proof on the facts of taxation requirement in a revocation suit is imposed on the tax authority, and the amount of embezzlement is not clear that it is not clear that it should be attributed to the company, it shall be deemed as the outflow of the company and the disposition is illegal.

Article 67 of the Corporate Tax Act

2018Guhap1609 Notice of Change in Amount of Income

○○ Co., Ltd.

○ Head of tax office

2019.06.27

2019.08.22

1. On October 2, 2017, the Defendant’s notice of change in the amount of income stated in the attached Table 1 that the Plaintiff provided against the Plaintiff shall be revoked.

2. The costs of the lawsuit shall be borne by the Defendant, including the part resulting from the intervention.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff is a company aimed at manufacturing non-metallic mineral products, and the ○○○○, a co-litigants (hereinafter referred to as “participating”), from July 21, 2003 to March 25, 2014, served as the Plaintiff’s representative director, from March 26, 2014 to February 29, 2016 as the Plaintiff’s director. The Intervenor ○○ served as the Plaintiff’s representative director from April 7, 2005 to March 25, 2014, and from March 26, 2014 to February 29, 2016.

B. The Defendant conducted a tax investigation with respect to the Plaintiff, and determined that the Plaintiff leaked the purchase price to ○○ Transit, ○○○, ○○ Plant, ○○ Plant, ○○○, and ○○ Gas Station by the business year 2007 through 2015, and received the remainder after deducting value-added tax and fees from the actual purchase price, in the following manner: (a) shall include processing expenses of KRW 2,679,001,750, 750, excluding KRW 849,064,525, which appears to have been used in repaying the Plaintiff’s loan; and (b) then, the Defendant disposed of the Plaintiff’s income amount of KRW 1,829,937,225, 225, excluding KRW 2,679,01,750, KRW 849,064,525, Oct. 2, 2017, as indicated in the list of the Plaintiffs, 198,297.

C. The Plaintiff dissatisfied with the instant disposition and filed a request for review with the National Tax Service, but was dismissed on March 16, 2018.

2. The plaintiff's assertion

The instant disposition should be revoked on the grounds that it is unlawful for the following reasons.

A. The processing expenses related to the ○○ Transit and the ○○ Heavy (the amount Nos. 1 and 2 of the table 1 and 2 of the above Paragraph 1 (b) above; hereinafter referred to as the “first dispute amount”) were used in the repayment of the Plaintiff’s loan, and the criminal case in which the intervenors were indicted for embezzlement of the processing expenses related to the ○○ Transit and the ○○ Heavy Period was sentenced to not guilty for the same purport, so the above processing expenses were not out of the company.

B. The Plaintiff did not include processing expenses relating to ○ plant, ○○ gas station, and ○○ gas station (the amount Nos. 3 through 5 of the table of Paragraph 1(b) above; hereinafter referred to as “second dispute amount”).

3. Relevant Acts.

Attached Form 2 shall be as shown in attached Table 2.

4. Whether the disposition is lawful.

A. Relevant legal principles

1) Article 67 of the Corporate Tax Act (Amended by Act No. 16008, Dec. 24, 2018) Article 60

In filing a report on the corporate tax base based on the income for each business year under the provisions of Article 66 or 69, the amount included in the calculation of earnings in determining or revising the corporate tax base under the provisions of Article 66 or 69 shall be disposed of to the person to whom the income belongs as prescribed by the Presidential Decree, such as bonus, dividends, and other outflow from the company and internal reserve, and Article 106 (1) 1 (b) of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 29529, Feb. 12, 2019) provides that where it is clear that the amount included in the calculation of earnings has been leaked out of the company, the person to whom the income belongs shall be disposed of as bonus to the person to whom the income belongs and where it is unclear, it shall be deemed that the amount included in the calculation of earnings has been reverted to the

2) Meanwhile, the tax authority bears the burden of proving the facts of taxation requirements in a lawsuit seeking revocation of taxation disposition.

Therefore, (see Supreme Court Decision 2003Du10343, Jan. 13, 2005). In order for a corporation to take a disposition of income by excluding expenses in deductible expenses on the grounds that the tax authority’s deductible expenses are processed expenses, the tax authority must prove the fact that the deductible expenses are processed expenses, and the special circumstance that deeming that the processing expenses are not leaked should be proved by the corporation asserting it (see Supreme Court Decision 2010Du14329, Sept. 27, 2012).

B. Determination on the first issue amount

1) The fact that the first issue amount was appropriated as the processing expense does not conflict between the parties.

Unless there are special circumstances, the amount shall be deemed to have been leaked to the private sector, and the special circumstance that the first dispute amount was not leaked to the private sector shall be proved by the plaintiff who asserts it.

(ii) the facts of recognition

A) The loan amount entered in the Plaintiff’s account book and the Plaintiff’s loan amount recognized by the Defendant are indicated below.

In addition, on October 2, 2017, the Defendant rendered the instant disposition on the premise that KRW 849,064,525, out of the amount of the first and second disputes of this case, was used in paying the Plaintiff’s consolation money.

B) The Intervenor’s actual purchase price table when entering into a contract with “○○” and “○○○○”.

C. 1,858,600,000 won paid in excess of the purchase amount (i.e., 000)

1,262,400,000 won + 596,200,000 won which was returned to ○○○○ ○○ ○○○○○) and consumed it for personal purposes while in the course of carrying out business for the plaintiff, was prosecuted for the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement). However, on January 25, 2018, the judgment was acquitted for the following reasons. The judgment became final and conclusive on November 9, 2018 (Seoul District Court Decision 2017,000, Gwangju High Court 2018No00).

2. Determination

As to the above facts charged, the intervenors consistently asserted that the Plaintiff used the bonds for the Plaintiff due to difficulties in the finance of the Plaintiff from the investigation stage, and that the principal and interest of the money created in the same way as the facts charged have not been used individually. However, according to the records, there was a conviction on the charge of the facts constituting the facts that, as shown below, the Intervenor used some of the materials and circumstances consistent with the Intervenor’s assertion for personal purposes during the business custody of the Plaintiff, but this is irrelevant to the instant disposition since the Defendant was not calculated as processing expenses from the instant disposition.

On the other hand, there seems to be insufficient evidence to reject the Intervenor’s assertion. Accordingly, the evidence presented by the prosecutor alone cannot be said to have been proven to the extent that there is no reasonable doubt that the Intervenor embezzled the said money with an intent to obtain unlawful acquisition.

① After the Plaintiff’s establishment in around 1998, the Plaintiff entered the enemy’s -30,585,565 won in 2005, and -2,693,356,368 won in 2006, and became capital impaired. This conforms with the Intervenor’s assertion that the Plaintiff inevitably lent bonds as a company’s operating fund due to the aggravation of the Plaintiff’s financial position.

② According to the notarial deeds of the monetary loan contract, the president of each account, and the financial transaction details submitted to an investigative agency and a court, the following facts are confirmed: (a) the participants of the association and branch offices have lent the total amount of KRW 2.7 billion from 2005 to 2011 to 300 million to 30 million; (b) the said money was directly deposited into the Plaintiff’s account or deposited into the account of the Intervenor’s transfer to 40,000; (c) the intervenors of the Republic of Korea continuously transferred the money to the above Kim○, etc. from 2005 to 200,000,000 won (referring to the amount exceeding KRW 1.58,60,000,000,000, which is the aggregate of the embezzled amounts under the facts charged related to the ○○ and ○○ branch offices that provided rebates; and (d) the said money was immediately remitted to the creditor using the name of the representative ○○, a transaction company that provided rebates.

(3) As long as objective financial data, etc., which appear to be consistent with the Intervenor’s assertion, are submitted, the fact that the Intervenor repaid the said bonds with funds other than the rebates received as shown in the facts charged, and the Intervenor spent the said rebates in personal use, shall be proven by the prosecutor. There is no clear evidence to acknowledge this. The mere fact that the Intervenor was unable to keep accounts in connection with the loan and repayment of bonds or the Intervenor made an abstract statement that he/she was partly used by the investigative agency, may not be presumed to have used the money which the Intervenor received as the rebates for personal use regardless of the Plaintiff’s operation.

3) Determination

In an administrative litigation, even if the facts found in the criminal trial are not detained, the

The facts acknowledged in the judgment of a case cannot be acknowledged unless there are special circumstances where it is acknowledged that it is difficult to adopt a criminal judgment in light of other evidence submitted by the administrative court (see, e.g., Supreme Court Decisions 81Nu324, Sept. 13, 1983; 98Du10424, Nov. 26, 199).

In light of the aforementioned legal principles, the Plaintiff borrowed money exceeding KRW 2.9 billion from Kim○○○, and the intervenors borrowed money exceeding KRW 1,077,057,250 (i.e., KRW 558,246,390 + KRW 2 billion exceeding the much amount of KRW 558,246,390 (i.e., KRW 00,000 + KRW 518,810,860). A portion of the money appropriated for the processing expense of international ○○○○ and returned was directly remitted to the above obligees, and there is no evidence to deem otherwise that the Intervenor repaid borrowed money to the above obligees with the funds other than the first dispute amount.

Therefore, the first dispute amount was used in the repayment of the Plaintiff's loan and was leaked to others.

Therefore, the part related to the first issue amount among the disposition in this case should be revoked in an unlawful manner.

C. Determination on the second issue amount

The burden of proof on the facts of taxation requirement in the tax revocation lawsuit is against the tax authority.

The defendant must prove that the second dispute amount is processing expenses. However, the evidence Nos. 22 and 23, which corresponds to the amount of partial processing expenses concerning the 000 gas stations and the 000 gas stations, among the second dispute amount, is proved to the effect that "the plaintiff and the 000 gas stations and the 000 gas stations recognize that part of the monetary transactions between the plaintiff and the 000 gas stations are processing expenses." However, each of the above supporting statements does not contain the name and position of the originator, and it is difficult to believe that credibility is high and that it is not reliable because it does not have any signature. In light of the following circumstances, the evidence Nos. 23, 4, 9, and 11 through 15, which can be known in addition to the purport of the entire arguments and the whole arguments, it is insufficient to recognize that the second dispute amount is processing expenses. Therefore, each of the evidence No. 2000, among the dispositions in this case, it should also be revoked.

1) The certificate No. 21 No. 21 'B' received money by the plaintiff from ○ plant 's leave expenses, named rice rice sweet value, loan'

As an explanation, it is not a statement that ○ plant included processing expenses in relation to ○ plant.

2) The intervenors filed a complaint with the purport that they received excessive payment by appropriating processing expenses in relation to ○○ Transit, ○○○ Oil station, ○○ Industries, ○ Heavy Industries, ○○ Industries, ○○○○○, and ○ENG. After doing so, the intervenors were charged only on the part of embezzlement of processing expenses for ○○ Transit, ○○ Heavy, and ○○ Gas station, which are the second dispute points, and were not charged with the processing expenses for ○○ Plant, ○○ Oil station, and ○○ Gas station.

3) The instant disposition assumes that the processing cost related to ○ plant is KRW 198,03,50,000.

However, the representative heart of ○○ plant returned approximately KRW 3,00,000 to ○○○○ for five years, namely, a total of KRW 15,00,00,000 annually, and ○○○○○○ was a money borrowed from ○○○○ when examining the witness for tax offense. Meanwhile, even if it is assumed that KRW 15,00,000 for gold plant was proven based on the above ○○○’s statement, it is reasonable to deem that the above 15,00,000 was used to repay the Plaintiff’s loan, in light of the loan amount and the repayment amount of the loan to ○○○, etc., as seen earlier, and the details of the repayment.

4) The instant disposition is premised on the fact that the processing costs relating to the ○○ Gas station are KRW 444,00,000.

Although ○○○○○○, the representative of the ○○○○ station, sent an answer that “the Plaintiff received excessive expenses from the Plaintiff and returned them again, and that the Plaintiff provided KRW 1 million per month from January 2015 to January 2016 to maintain the ○○○○ Office,” and the Intervenor responded that most of the money received from the ○○○○○ station when questioning the witness of the tax offense.

5) The instant disposition is premised on the fact that processing expenses related to ○○ Gas station are KRW 959,911,000.

However, ○○○○○○○, a representative Kim○, did not receive excessive expenses from the Plaintiff and return them. The Intervenor, at the time of questioning the witness of the tax offense in the ○○ Station, was called as the borrowed money.

5. Conclusion

The plaintiff's claim is reasonable, and it is so decided as per Disposition.