Cho Jae-2017-Mining-3442 (Law No. 29, 2017)

The provision of construction services for educational facilities is obliged to issue a tax invoice.

In the event that construction services are provided, even if the other party to the service is an educational facility, the provisions that are exempt from value-added tax and the provisions that are exempt from the duty to issue tax invoices shall not apply.

Article 26 (Exemption from Supply of Goods or Services)

Article 143 of the Enforcement Decree of the Income Tax Act

2017Guhap2476 Revocation of a taxation disposition

○ ○

○ Head of tax office

June 28, 2018

August 9, 2018

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s assessment of value-added tax on September 20, 2017; the comprehensive income tax on September 20, 2013; and the quarterly value-added tax on September 15, 2017; and the global income tax on September 15, 2017; the global income tax on September 15, 2017; and the quarterly value-added tax on September 15, 2017; and the quarterly value-added tax on July 30, 2017, is revoked.

1. Details of the disposition;

A. From August 11, 2011 to December 15, 2014, the Plaintiff operated a construction business with the trade name “AAA” in ○○○○-gu, ○○○○ from August 11, 201 to December 15, 2014.

B. On May 13, 2013, the Plaintiff entered into a contract with KimB for the construction of the ○○○○○○-dong childcare center (hereinafter “instant construction”). Even after the instant childcare center obtained approval for use on December 30, 2013, the Plaintiff entered into an additional construction of approximately KRW 150 million up to February 2014 at the instant childcare center.

C. The Plaintiff filed a lawsuit against KimB, etc. for the claim for construction cost as ○○○ District Court 2015Gahap000, and asserted that the Plaintiff completed the instant additional construction work after being awarded a contract with KimB, etc., and received only a part of the construction cost, and received a favorable judgment from the said court for the remainder of the construction cost. As a result, the Plaintiff received a total of KRW 156,61,000 from KimB, etc. for additional construction cost (see the reasoning of the following judgment).

A. Determination on the cause of the claim

In full view of the aforementioned facts, Defendant KimB’s agreement that Defendant KimB, who supervised the construction site on behalf of Defendant KimB, agreed to KRW 150 million on January 17, 2014, and agreed to KRW 150 million for the additional construction work of this case, and concluded that the Plaintiff completed the additional construction work of this case at KRW 50 million, and that the Plaintiff received KRW 85 million from Defendant KimB the additional construction work of this case at KRW 150 million, barring any special circumstance, Defendant KimB is obligated to pay KRW 150 million for the additional construction work of this case at KRW 50 million and KRW 50 million for the additional construction work of this case at KRW 150 million, 50 million for the additional construction work of this case at KRW 50 million and KRW 500 million for the additional construction work of this case at KRW 50 million, 50 million for the additional construction work of this case (i.e., the additional construction work of this case at KRW 20 million).

D. The Defendant pointed out the omission of the return of value-added tax on the instant construction and additional construction, added the income amount as revenue for the omitted sales, and corrected the estimated income amount, and corrected the value-added tax base as follows:

Gu Sector

Omission of Sales

(Supply Price)

non-higher

(Contents of Certificate)

1, 2013

from 1.1 to 6.30

322,659,090

322,659,090 = (a contract deposit of KRW 130,00,000 + progress payment of KRW 224,925,00) ±1.

Second Period, 2013

between 7.1 and 12.31

313,704,540

313,704,540 won = (the second progress payment of KRW 73,80,000 + the third progress payment of KRW 135,00,000 + 136,275,000) ¡À1.

In the 2013 Socs;

636,363,630

1, 2014

from 1.1 to 6.30

142,374,180

142,374,180 won = (20,00,000 won for additional construction - Expenses for non-construction and repair of defects 43,38,400 won) ¡À1.

In the 2014 Socs;

142,374,180

Consolidateds

78,737,810

* Proceeds from supply (including value-added tax) ¡À1 = Value-added (excluding value-added tax)

E. Since July 3, 2017, the Defendant issued a disposition to correct and notify the Plaintiff the value-added tax of KRW 57,024,570 on July 3, 2017; KRW 23,291,850 on August 23, 2017; KRW 25,93,530 on global income for the year 2014; KRW 55,861,50 on September 1, 2017; and KRW 75,382,70 on global income for the year 2013 (hereinafter “value-added tax imposition disposition”); and KRW 25,93,530 on global income for the year 2014; and each of the said dispositions is referred to as “each of the instant global income tax imposition disposition”).

F. The Plaintiff, who was dissatisfied with each of the instant taxation dispositions, filed an appeal with the Tax Tribunal on July 12, 2017 and September 8, 2017, but the Tax Tribunal dismissed all of the aforementioned applications on September 29, 2017.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, Eul evidence Nos. 1 through 2, 4, and each statement of family evidence (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Summary of the plaintiff's assertion

A. In the case of value-added tax in the first and second quarter of 2013, the owner refused to receive a tax invoice and failed to pay value-added tax on the ground that the owner is exempted from value-added tax, and in the case of value-added tax during the first quarter of 2014, the instant additional construction is pertaining to the instant additional construction. The instant additional construction is not a contract for the Plaintiff, but it was paid to the person who arranged the additional construction and performed the construction, and thus, there is no fact that the instant additional construction is concluded, and the instant disposition of value-added tax should be revoked unfairly.

B. In the case of global income tax assessment, even if the Plaintiff’s revenue amount in 2013 is sufficiently calculated, the amount of tax assessed in KRW 75,382,70 that the Defendant calculated and notified to the Plaintiff in 2013 as KRW 636,363,625 is unreasonable, and the amount of tax assessed in KRW 75,382,70 is nothing more than that of the Plaintiff in 2014. However, even though there is no construction that was completely implemented in the case of 2014, it is nothing more than mediating the instant additional construction, the amount of tax assessed in KRW 25,93,530 that was deducted from the Plaintiff after correcting the amount of revenue by deeming the Plaintiff’

C. The Defendant’s disposition of this case is unlawful and unfair as it imposes the comprehensive income tax on the Defendant by arbitrarily calculating the Defendant’s income based on the estimation without deducting the construction material cost, wage, and necessary expenses from the above revenue amount, and without deducting the construction material cost, wage, and necessary expenses.

3. Relevant statutes;

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

4. Determination

A. Determination as to whether the disposition of value-added tax is legitimate

1) Relevant legal principles

The main sentence of Article 32(1) of the Value-Added Tax Act provides that "where an entrepreneur supplies goods or services (excluding the supply of goods or services exempt from value-added tax), he/she shall issue an invoice stating the following matters (hereinafter referred to as "tax invoice") to the person who receives the supply, and Article 33(1) of the same Act provides that "in cases prescribed by Presidential Decree, such as where the issuance of a tax invoice is difficult or unnecessary, etc., a tax invoice may not be issued." However, Article 71(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 28475, Dec. 19, 2017; hereinafter the same shall apply) lists the cases in which the obligation to issue a tax invoice is exempted in detail as each subparagraph (see attached

2) Whether the instant construction is eligible for exemption from the issuance of tax invoices

On the other hand, even if examining each subparagraph of Article 71(1) of the Enforcement Decree of the above, it is recognized that the services supplied by the Plaintiff do not constitute a ground for exemption from the duty to issue a tax invoice for construction services. Thus, the owner of a child-care center refuses to receive a tax invoice on the ground that the child-care center is exempt from value-added tax, and even if the value-added tax was not paid, it does not constitute a justifiable ground for exemption from the duty to issue a tax

In this regard, the plaintiff argued that the contractor's refusal to receive the tax invoice because it constitutes a non-value-added tax-free building is against the principle of equity and it is against the principle of equity to regard only the plaintiff as omitting purchase. However, according to Article 26 (1) 6 of the Value-Added Tax Act and Article 36 of the Enforcement Decree of the Value-Added Tax Act and Article 26 (1) 6 of the Enforcement Decree of the Value-Added Tax Act, where the plaintiff provides students, etc. with knowledge, skills, etc. at a private teaching institute, teaching school, or other non-profit organizations, etc. as an education service, it is subject to value-added tax exemption. However, in the case of the construction of this case done by the defendant, it is irrelevant to the provision of educational services, which is subject to value-added tax exemption for the place of the provision of the construction service, even if the other party to the service is an educational facility, it cannot be applied to the plaintiff. This part of the plaintiff'

3) As to the assertion that there was no contract for mediating the instant additional construction work

In addition, this case’s additional construction works are not arranged by the Plaintiff, but merely arranged for the conclusion of the contract. It is acknowledged that the Plaintiff did not assert or prove the fact that the Plaintiff has arranged for additional construction works, i.e., when filing a lawsuit against KimB for the payment of additional construction works, the Plaintiff did not claim or prove the fact that the Plaintiff has arranged for additional construction works. In the above related civil procedures, the Plaintiff did not submit any evidence to prove that the Plaintiff received additional construction works from KimB, etc., and the Plaintiff divided the additional construction expenses that the Plaintiff received through winning the winning of the related civil procedure into two parts. However, the Plaintiff did not submit any evidence to the Defendant. (3) If the tax office prepared a confirmation document that the Plaintiff is a processing trader in the process of conducting a tax investigation, it is difficult to conclude that the confirmation document was drafted against the intent of the originator, or that it is difficult to prove the specific facts due to lack of documentation or lack of content, etc. (see, e.g., Supreme Court Decision 201Du56161, Feb. 26, 2001).

4) Sub-committee

Therefore, the disposition of value-added tax in this case, which the Defendant rendered a correction and determination of the value-added tax by adding the non-issuance tax invoice, general underreporting, and additional tax for unfaithful payment, to the Plaintiff’s omission in filing the return of value-added tax on the instant construction project

B. Determination on the legality of the global income tax taxation

1) Facts of recognition

Year

Classification of Income

Income Sources

Revenue amount

Necessary expenses

Amount of income;

2013

Reversion

Business Income:

Key Business Place

526,363,635

521,962,586

4,401,049

EE Office

168,709,090

187,982,950

-19,273,860

F. F.F. Association

0

2,287,159

-2,287,159

Wage and salary income

GG Schools

5,400,000

4,200,000

1,200,000

Total

700,472,725

716,432,695

-15,959,970

2014

Reversion

Business Income:

Key Business Place

82,170,000

90,418,144

-8,248,144

EE Office

305,689,405

217,882,642

87,806,766

F. F.F. Association

606,779

468,270

138,509

Total

388,466,184

308,769,056

79,697,131

A) The details on which the Plaintiff filed a return on comprehensive income tax for the year 2013 and 2014 are as indicated in the said table (the portion on which the dispute place of business is reported in relation to the instant construction project).

B) In imposing the Plaintiff’s global income tax according to the correction of the tax base of value-added tax as seen earlier, the Defendant calculated the Plaintiff’s global income tax as KRW 636,363,630 in total, and the amount omitted from global income tax for the year 2013 in total as KRW 636,363,625 in total, and the amount omitted from income tax for the instant additional construction work as KRW 142,374,180 in total.

C) Although the global income tax return amount was KRW 526,363,635, the income amount of KRW 4,401,049, the income amount of KRW 636,363,635, and the income amount of KRW 636,363,625, plus the income amount of KRW 636,363,625, the income amount of KRW 162,727,260, and the income amount of KRW 640,764,674. The global income tax return amount of KRW 82,170,000, the income amount of KRW 82,248,144,180, but the income amount of KRW 142,374,180, plus the income amount of KRW 134,126,036.

D) Calculation of estimated income amount under Article 143 of the Enforcement Decree of the Income Tax Act

Standard expense rate (i.e., the lesser amount)

(1) The amount of income = The amount of income £­ Major expenses (purchase cost + rent + personnel expenses +) - (Income amount 】 (Income amount)

Standard expense rate)

*The person obliged to book-keeping by double-entry shall calculate income by multiplying income by 1/2 of standard expense rate.

(2) Income amount = [Income amount £­ (income amount 】 simple expense rate) ¡¿ multiple (3 times: Persons liable to make a double entry).

* 1.7%, simple expense rate 94% in 2013, 94.3% in 2014 (Evidence 6)

(1) Calculation of standard expense rate by estimation of global income tax in 2013;

(1) The income amount shall be 572,745,130 won.

0

(2) The income amount shall be 209,290,906 won.

0

**, ② 209,290,906 won of income.

(2) Calculation of standard expense rate by estimation of global income tax in 2014;

(1) The income amount shall be 120,99,202 won.

0

(2) The income amount shall be 38,397,054 won.

0

**, 2. (2) Application of income amount of 38,397,054

E) To arrange the results calculated earlier, the amount of income calculated by each method for correcting the omitted revenue amount of the instant construction is as listed in the following table:

Reversion

Year

Applicable Methods

Revenue amount

Necessary expenses

Amount of income;

Jinay

2013

Exclusion from Estimation Correction

1,162,727,260

521,962,586

640,764,674

Estimation Correction 1

1,162,727,260

589,982,130

572,745,130

Estimated Correction ②

1,162,727,260

953,436,354

209,290,906

Amount of income subject to taxation

2014

Exclusion from Estimation Correction

24,544,180

90,418,144

134,126,036

Estimation Correction 1

24,544,180

103,553,978

120,990,202

Estimated Correction ②

24,544,180

186,147,126

38,397,054

Amount of income subject to taxation

[Ground for recognition] Facts without dispute, entry u300 in the evidence No. 1-4 and 5, and the purport of the whole pleadings

2) Specific determination

A) Relevant provisions

According to Article 80 (3) of the Income Tax Act, when the head of a tax office or the director of a regional tax office having jurisdiction over the place of tax payment determines or revises the tax base and amount of income in the relevant taxable period pursuant to paragraphs (1) and (2), he/she shall base the account books or other evidentiary documents: Provided, That where it is impossible to calculate the amount of income by means of account books or other evidentiary documents on the grounds prescribed by Presidential Decree, he/she may make an estimated investigation into the amount of income, as prescribed by Presidential Decree," and pursuant to Article 143 (1) of the Enforcement Decree of the Income Tax Act, "where a cause prescribed by Presidential Decree of Article 80 (3) of the Act falls under any of the following subparagraphs" means a case where the necessary account books and evidential documents are nonexistent or false in calculating the amount of income, such as purchase cost, employee's wages, and income amount are calculated by multiplying the amount of income by standard expense rate (in cases of a person subject to double-entry bookkeeping, the amount calculated by multiplying the amount of income by standard expense rate by one half).

B) Specific determination

(1) As to the part of 2013

The Plaintiff asserts that the amount of the Plaintiff’s revenue in 2013 shall not exceed 3-40 million won even if it is sufficiently calculated. As such, the Defendant calculated by adding the amount of KRW 636,363,625 to the amount of the Plaintiff’s increase in the amount of revenue in 2013, and then assessed the amount of KRW 75,382,70, which was later deducted, is unreasonable. However, there is no evidence to prove that the Plaintiff’s revenue cannot exceed 3-4,000 won.

Meanwhile, the global income tax assessment of this case is based on the supply value omitted for the return of value-added tax on the instant construction project as seen earlier, and the Defendant calculated the Plaintiff’s omitted amount of income accrued in the year 2013 as KRW 636,363,625, and the above amount of KRW 636,363,625 is not a dispute between the parties, and the Defendant calculated by applying the standard expense rate to the Plaintiff, who is a person with double liability pursuant to Article 143 of the Enforcement Decree of the Income Tax Act, as stated in the table of Paragraph (e).

In addition to the above facts, the defendant pointed out the omission of value-added tax on the construction of this case and applied 209,290,906 won, which is the smaller amount after calculating the estimated income amount pursuant to Article 143 of the Enforcement Decree of the Income Tax Act, as the income amount subject to taxation, based on reflecting 636,363,625 won after the plaintiff pointed out the omission of value-added tax on the construction of this case, and reflecting the omitted amount of income for the year 2013, the defendant ordered the plaintiff to present necessary expenses corresponding to the omitted amount of income at the time of explaining the taxation data, but it appears that the plaintiff failed to submit the revised tax return (it appears that the plaintiff did not submit all necessary account books or documentary evidence at the time of filing the application for tax judgment prior to the filing of the lawsuit in this case). (3) The defendant did not have any necessary account books or documentary evidence in calculating the global income tax base without deducting necessary expenses, and the defendant did not have any further asserted that the amount of tax calculated by multiplying the estimated income amount by the estimated amount by necessary expense amount under Article 143(1).

(2) As to the part of 2014

The Plaintiff asserted that the tax assessment of KRW 25,933,530 of the amount of tax that was erroneously calculated and notified as the Plaintiff’s revenue amount is unreasonable, although the construction was entirely not carried out in the case of 2014 and it was merely the intermediation of the additional construction. However, as seen earlier, the Plaintiff’s assertion on a different premise is without merit, so long as it is recognized that the additional construction was completed after being awarded a contract, and that the amount of tax is set out in the method of

3) Sub-decisions

Therefore, each of the instant global income tax dispositions is legitimate, and the Plaintiff’s assertion against this is not accepted.

5. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.

The details of the disposition of imposition of the value-added tax and global income tax in this case

(1) Disposition imposing value-added tax of this case

(unit: Won)

Classification

1, 2013

Second Period, 2013

1, 2014

Amount of increase or decrease of tax bases

322,659,090

313,704,540

142,374,180

Amount of tax increase or decrease

32,265,909

31,370,454

14,237,418

Additional tax increase or decrease amount

23,595,600

25,654,120

9,054,438

Additional Tax on Non-issuance of Tax Invoice

6,459,181

6,274,090

2,847,483

General Underreporting Additional Tax

3,226,590

3,137,045

1,423,741

Additional Dues

13,909,829

16,242,985

4,783,214

Amount of tax notified after deduction

5,861,500

57,024,570

23,291,850

(2) Disposition imposing global income tax of this case

(unit: Won)

Classification

2013

2014

The increased or decreased amount of revenue

636,363,625

142,374,181

Amount of increase or decrease of tax bases

182,382,634

63,805,171

Amount of increase or decrease of calculated tax

48,933,921

18,840,703

Additional tax increase or decrease amount

26,448,784

7,092,831

Additional Tax on Non-Filing

9,786,784

2,739,596

Additional Dues

16,662,00

4,353,235

Amount of tax notified after deduction

75,382,700

25,933,530

2

Related Acts and subordinate statutes

Article 26 of the Value-Added Tax Act (Exemption from Provision of Goods or Services)

(1) The supply of the following goods or services shall be exempted from value-added tax:

6. Educational services prescribed by Presidential Decree;

Article 31 of the Value-Added Tax Act (Collection)

Where an entrepreneur supplies goods or services, the value-added tax calculated by applying the tax rate under Article 30 to the value of supply under Article 29 (1) shall be collected from the person supplied goods or services.

Article 32 of the Value-Added Tax Act (Tax Invoice)

(1) Where an entrepreneur supplies goods or services (excluding the supply of goods or services exempt from value-added tax), he/she shall issue an invoice stating the following matters (hereinafter referred to as a "tax invoice") to the person who receives the supply:

1. Registration number, name or denomination of the businessman who provides;

2. Registration number of the person who receives: Provided, That where the person is not an entrepreneur or is not an entrepreneur, a unique number or resident registration number prescribed by Presidential Decree;

3. Supply value and value-added tax;

4. Date of preparation;

5. Other matters prescribed by Presidential Decree.

Article 33 of the Value-Added Tax Act (Exemption, etc. from Duty to Issue Tax Invoice)

(1) Notwithstanding Article 32, in cases prescribed by Presidential Decree, such as where the issuance of a tax invoice (including an electronic tax invoice; hereinafter the same shall apply) is impracticable or unnecessary, the issuance of a tax invoice may be omitted.

Article 49 of the Value-Added Tax Act (Final Return and Payment)

(1) A business operator shall report to the head of the competent tax office having jurisdiction over the place of tax payment, as prescribed by Presidential Decree, within 25 days (in cases of closure of business, the 25th day of the month following the month in which the date of closure under Article 5 (3) falls) after the tax base, amount of tax payable or refundable amount for each taxable period expires: Provided, That no business operator who has made a preliminary return pursuant to Article 48 (1) and (4) or who has filed a return to receive early refund pursuant to Article 59

Article 36 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 28475, Dec. 19, 2017)

(1) Educational services referred to in Article 26 (1) 6 of the Act means teaching knowledge, skills, etc. to students, students, trainees, learners or learners at any of the following facilities, etc.:

1. Schools, private teaching institutes, training centers, training centers, teaching schools or other nonprofit organizations which are licensed or authorized by, registered with, or reported to, the competent authorities;

2. Juvenile training facilities under subparagraph 1 of Article 10 of the Juvenile Activity Promotion Act;

3. An industry-academic cooperation foundation under Article 25 of the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act;

4. Social enterprises certified under Article 7 of the Social Enterprise Promotion Act.

5. Science museums registered pursuant to Article 6 of the Act on Establishment, Operation and Promotion of Science Museums;

6. Museums and art galleries registered under Article 16 of the Museum and Art Gallery Support Act;

(2) Notwithstanding paragraph (1), lessons provided by any of the following private teaching institutes shall be excluded from the education services referred to in Article 26 (1) 6 of the Act:

1. Dance institutes under Article 10 (1) 2 of the Installation and Utilization of Sports Facilities Act;

2. A driving school provided for in subparagraph 32 of Article 2 of the Road Traffic Act;

Article 71 of the former Enforcement Decree of the Value-Added Tax Act (Exemption from Duty to Issue Tax Invoice)

(1) "Cases prescribed by Presidential Decree, such as where the issuance of a tax invoice is impracticable or unnecessary" in Article 33 (1) of the Act means the supply of any of the following goods or services:

A person shall be eligible for the payment of taxes under paragraph (1) of this Article.

1. Goods or services supplied by a taxi transport business entity, a person holding a street store, or any other business entity prescribed by Ordinance of the Ministry of Strategy and Finance;

2. Goods or services supplied by a person who runs a retail business, beauty art business, bathing service, or similar service business: Provided, That in the case of retail business, this shall be limited to where the person supplied does not request the issuance of tax invoices;

3. Goods under Article 10 (1), (2), and (4) through (6) of the Act;

4. Goods or services under Articles 21 (excluding goods supplied through a local letter of credit or a purchase confirmation under Article 31 (1) 5, and goods supplied to the Korea International Cooperation Agency, the Korea International Healthcare Foundation, and the Korean National Red Cross under Article 31 (2) 2 through 4), 22, and 23 (limited to the overseas navigation services of aircraft and commercial document delivery services under Article 23 (2) of the Act, among overseas navigation services under Article 23 (2) of the Act, for which a person to be supplied is a nonresident or a foreign corporation having no place of business in the Republic of Korea) of the Act;

5. Goods or services provided under Article 33 (2) 1, 2, 5 (limited to cases where a person to whom a supply is made is a nonresident or a foreign corporation that has no place of business in the Republic of Korea), 6, and 7 (limited to cases where a general travel agency is a general travel agency), and goods or services provided to diplomatic missions, etc. under Article 24 (1) 1 of the Act;

6. The portion to which Article 65 (1) and (2) applies among the real estate leasing services;

7. Services that a licensed certification authority defined in subparagraph 10 of Article 2 of the Digital Signature Act issues an authorized certificate pursuant to Article 15 of the same Act: Provided, That the foregoing shall not apply where the person supplied with the relevant service requests the issuance of

8. Electronic services provided in Korea by a business operator registered as a simplified business operator under Article 53-2 (3) of the Act;

9. Other goods or services supplied to a nonresident or foreign corporation with no domestic place of business: Provided, That this shall not apply where the nonresident or foreign corporation requests the issuance of a tax invoice after presenting a document certifying that the nonresident or foreign corporation is a private individual or corporation

Article 80 of the Income Tax Act (Determination and Correction)

(1) Where a person liable to file a final return on the tax base pursuant to Articles 70, 70-2, 71 and 74 fails to file such return, the head of a regional tax office or the head of a regional tax office having jurisdiction over the place of tax payment shall determine the tax base and amount of tax for the relevant taxable period of the relevant resident.

(2) The director of a regional tax office or the director of a regional tax office having the jurisdiction over the place of tax payment shall Articles 70, 70-2, 71 and

Where a person who has filed a final return on the tax base (including a person who fails to file a final return on tax base pursuant to Article 73 in cases falling under subparagraphs 2 and 3) falls under any of the following cases, the tax base and amount of tax in the relevant taxable period shall be corrected:

1. Where an omission or error exists in the return;

2. Where any omission or error exists in the withholding of income tax pursuant to Article 137, 137-2, 138, 143-4, 144-2, 145-3 or 146, and where it is deemed difficult for a withholding agent to collect tax from a withholding agent due to the discontinuance, missing, etc. of a withholding agent or it is difficult for a withholding agent to collect tax from a withholding agent due to retirement

(3) Where the head of a regional tax office or the head of a regional tax office having jurisdiction over the place of tax payment determines or revises the tax base and amount of tax in the relevant taxable period pursuant to paragraphs (1) and (2), he/she shall calculate the amount of income on the basis of books and other evidentiary documents: Provided, That where the calculation of income is impossible on the grounds prescribed by Presidential Decree,

(4) If any omission or error is found after the tax base and amount of tax are determined or corrected, the director of a regional tax office or the head of a regional tax office having jurisdiction over the place of tax payment shall immediately correct

Article 143 of the Enforcement Decree of the Income Tax Act (Estimated Decision and Correction)

(1) "Grounds prescribed by Presidential Decree" in the proviso to Article 80 (3) of the Act means any of the following cases:

1. Where necessary account books and documentary evidence are missing or important parts are incomplete or false in the calculation of the tax base;

2. Where the contents of the entry are obviously false in light of the scale of facilities, number of employees, raw materials, market prices, various charges, etc. of goods or products.

3. Where the contents of the captain are obviously false considering the quantity of raw materials used, electric power used and other operational conditions.

(2) Where the tax base is estimated, determined or revised pursuant to the proviso to Article 80 (3) of the Act, the amount of tax base shall be calculated by making personal deductions and special income deduction under Articles 50, 51, and 52 of the Act from the amount of income calculated pursuant to paragraph (3).

(3) The determination or correction of income amount under the proviso to Article 80 (3) of the Act shall be made by the following methods: Provided, That subparagraph 1-2 shall apply only to persons subject to the application of the simple expense rate:

1. The method of determining or revising, as the relevant amount of income (hereafter in this Article, referred to as the "amount of standard income"), the amount obtained by deducting the following amounts from the amount of income. In such cases, if the amount to be deducted exceeds the amount of income, the amount in excess shall be deemed non-existent: Provided, That where the standard amount of income is in excess of the amount calculated by multiplying the amount of income under subparagraph 1-2 by the multiple factor prescribed by Ordinance of the Ministry of Strategy and Finance, the amount calculated by multiplying such multiple factor may be determined as the amount of income until the amount of income is determined

(a) Purchase costs (excluding those for fixed assets for business: hereafter the same shall apply in this Article) and rent expenses on the fixed assets for business which are paid or payable by the documentary evidences;

(b) The amount paid or payable by the relevant documentary evidence as wages and retirement benefits for employees;

(c) The amount obtained by multiplying income by standard expense rate: Provided, That if income is subject to double-entry bookkeeping, the amount obtained by multiplying income by 1/2 of standard expense rate;

1-2. The method of determining or revising as income amount the amount obtained by deducting the amount obtained by multiplying the income amount by the simple expense rate;

1-3. The method of determining or correcting the amount calculated by multiplying the amount of business income under Article 73 (1) 4 of the Act (hereinafter referred to as "business income subject to year-end settlement") by the income rate for business income subject to year-end settlement under Article 201-11 (4) as the amount of such

2. Omission;

3. Other reasonable methods recognized by the Commissioner of the National Tax Service.

(4) The term "persons subject to the application of simple expense rates" in the proviso to the part other than the subparagraphs of paragraph (3) means any of the following business operators:

1. A business operator who starts a business anew in the relevant taxable period and whose revenue in the relevant taxable period falls short of the amount referred to in the items of Article 208 (5) 2;

2. A businessman whose aggregate amount of income in the immediately preceding taxable period (including the amount of income increased by determination or revision) falls short of the amount in the following items:

(a) Agriculture, forestry, fishery, mining, wholesale and retail business (excluding commodity brokerage business), real estate sales business under Article 122 (1), and other business not falling under items (b) and (c): 60,000 won;

(b) Manufacturing, lodging and restaurant business, electricity, gas, steam and water service business, sewage, waste disposal, raw material recycling and environment restoration business, construction business (excluding non-residential building construction business, but including residential building development and supply business), transportation business, publication, image, broadcasting and telecommunications and information service business, finance and insurance business, goods brokerage business: 3.6 million won;

(c) Real estate leasing business, real estate-related service business, leasing business (excluding real estate leasing business), professional, scientific and technical service business, business facility management and business support service, educational service, health and social welfare service, service business related to art, sports and leisure, associations and organizations, repair and other personal service business, and in-house employment activities under Article 45 (2) of the Act: 24 million won.