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서울행정법원 2017. 02. 09. 선고 2016구합64241 판결
사업관련성의 유무는 지출의 목적과 경위, 사업의 내용 등에 비추어 그 지출이 사업의 수행에 필요한 것이었는지 개별적으로 판단하여야 함[국승]
Title

The existence of business relevance should be determined individually as to whether the expenditure is necessary for the performance of the project in light of the purpose and details of the expenditure, the contents of the project, etc.

Summary

In light of the depth of legal disputes between a corporation and the overall circumstances at the time, the appointment fees for the attorney may be paid at the expense of a corporation only when there is a special need to conduct a lawsuit or respond to a complaint for the interest of the corporation

Related statutes

Article 19 of the Corporate Tax Act and Article 17 of the Value-Added Tax Act

Cases

2016 Gohap64241 Revocation of Corporate Tax Imposition, etc.

Plaintiff

○○ Co., Ltd.

Defendant

○ Head of tax office

Conclusion of Pleadings

on October 10, 2010

Imposition of Judgment

on October 017, 2010

Text

1. The part concerning the request for revocation of imposition of each corporate tax among the lawsuits in this case shall be dismissed.

2. The plaintiff's remaining claims are dismissed.

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

Cheong-gu Office

1. The Defendant’s disposition of imposing corporate tax of KRW 00,000,000 on the Plaintiff on October 00, 2014, exceeding KRW 00,000,000,000, which was imposed by the Plaintiff for the business year 2012, shall be revoked.

2. The Defendant’s disposition of imposing corporate tax of KRW 00,000,000 on the Plaintiff on October 00, 2016 exceeds KRW 00,00,000,000, which was imposed by the Plaintiff for the business year 2012 shall be revoked.

3. On October 00, 2014, the Defendant imposed an additional tax exceeding KRW 000,000,000 on the first term portion of the value-added tax for the year 2012 against the Plaintiff and KRW 00,000,000 on the Plaintiff, and imposed an additional tax of KRW 00,000,000.

The cancellation shall be revoked.

4. On October 00, 2014, the Defendant’s imposition disposition of KRW 00,000,000 on the second term portion of value-added tax for the year 2012 against the Plaintiff is revoked as well as the imposition disposition of KRW 00,000,000 on the penalty tax exceeding KRW 00,000,000.

Reasons

1. Details of the disposition;

A. Since May 2012, the Plaintiff received investigation into the suspicion of occupational breach of trust as a suspect with respect to the creation of extra funds, etc., the Plaintiff spent 00,000,000 won in total as attorney fees (hereinafter “instant attorney fees”) and added 00,000,000 won in total as well as value-added taxes in the business year 2012, and included the pertinent attorney fees in the deductible expenses. The value-added tax was deducted as input tax amount, and reported and paid for the first period of 2012 and the second period of value-added tax.

B. The Defendant: (a) deemed that the instant attorney’s fees did not meet the requirements for deductible expenses under the Corporate Tax Act on the grounds that there was no business relevance; and (b) deemed that the said value-added tax did not meet the requirements for the deduction of the input tax amount under the Value-Added Tax Act; and (c) accordingly deducted the Plaintiff’s corporate tax for the business year 2012, which was revised as KRW 00,000,000 on October 0, 2014 (hereinafter “Disposition imposing corporate tax on October 00, 2014”); and (d) on October 00, 2014, the Plaintiff issued a notice of imposition of the value-added tax amounting to KRW 00,000,000 for the first year of 200,000,000 for the second year of 200,000,0000 for the penalty tax and KRW 00 for the second year of 200,000 for each of the instant dispositions (hereinafter referred to as “instant notice”).

C. Thereafter, on October 00, 2016, the Defendant adjusted the corporate tax of the business year 2012 to KRW 00,000,000 against the Plaintiff (hereinafter referred to as “assessment disposition of corporate tax as of October 00, 2016”), and subsequently corrected the amount on October 00 and October 00, 2016 to KRW 00,000,000,000, respectively.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, Eul evidence No. 1 (including paper numbers), the purport of the whole pleadings

2. Whether the part requesting revocation of imposition of each corporate tax among the lawsuits in this case is legitimate

A. On October 0, 2014, the part of the claim for revocation of imposition of corporate tax as of October 0, 2014

Where a correction disposition is made after a tax disposition has been made, the correction disposition is not an additional determination on only the portion exceeding the tax base and amount in the original disposition, but a single tax base and amount as a whole by including only the tax base and amount in the original disposition. Thus, the original disposition is naturally extinguished due to absorption of the correction disposition, and only the correction disposition is subject to appeal litigation (see Supreme Court Decision 2006Du17390, May 14, 2009).

According to the background of the above disposition, the disposition of imposition of corporate tax on October 0, 2014, for which the Plaintiff seeks revocation, is added to the disposition of imposition of corporate tax on October 0, 2016, which was subject to the disposition of imposition of increased corporate tax on October 0, 2016, and is not subject to appeal litigation. Therefore, this part of the lawsuit is illegal, and the defendant's main defense to the same effect

B. On October 0, 2016, the part of the request for revocation of imposition of corporate tax as of October 0, 2016

As a result, when a reduction or correction disposition is made, the effect of partially cancelling the amount of tax arises, a lawsuit seeking revocation of the amount of tax already cancelled by the above correction disposition is against an administrative disposition for which no lawsuit exists, and is unlawful as there is no benefit of lawsuit (see Supreme Court Decision 95Nu8904, Nov. 15, 1996).

According to the reasoning of the above disposition, since 00,000,000 won under the disposition of imposition of corporate tax as of October 00, 2016 was already reduced to 00,000,000 won by the disposition of reduction or correction as of October 00, 2016, there is no "tax amount exceeding KRW 00,000,000,000, which the plaintiff seeks cancellation" in this part of the lawsuit is unlawful ( regardless of the indication of the claim of this case, the claim of this case is sought to revoke the portion of corporate tax 00,000,000,000 won due to the non-deductible of the attorney's fees as of October 0, 206, since the expenses are not recognized as business relations as seen in the following 3, the plaintiff's claim cannot be accepted).

C. Sub-committee

Therefore, the part of the instant lawsuit seeking the revocation of the disposition of imposition of corporate tax as of October 00, 2014 and the disposition of imposition of corporate tax as of October 00, 2016 is unlawful.

3. Whether each disposition of value-added tax in this case is legitimate

A. The plaintiff's assertion

As a result of the investigation against the plaintiff's officers and employees, if the plaintiff made an illegal solicitation using extra funds, the plaintiff would be subject to sanctions for violation of the Framework Act on the Construction Industry. Thus, the attorney's fees in this case cannot be deemed to be unrelated to the plaintiff's business. The plaintiff's officers and employees raised extra funds according to the plaintiff's instructions, and there was no room to constitute occupational breach of trust under the legal principles, so the plaintiff was obligated to protect them. Accordingly, the imposition disposition of each of the value-added tax in this case conducted on the premise that the attorney's fees in this case

B. Relevant statutes

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

(c) Fact of recognition;

1) All criminal cases against the Plaintiff’s officers and employees related to the attorney fees in the instant case are related to the act of raising the Plaintiff’s extra capital by its officers and employees, and the appellate court rendered a judgment of not guilty on the ground that among the extra capital created by not guilty at the appellate court as above, it is difficult to conclude that the amount actually used as illegal capital, such as offering of a bribe to the design evaluation review committee members, is not large, and thus, it is difficult to conclude that the intention of illegal capital has yet been realized at the stage of raising the extra capital (the above decisions are pending in the final appeal).

2) Among the defense counsel, gambling**, 00, 00, 00, 00, 00, AAB, AAB, Law Firm BB,CC, Law Firm DD, EE, and F Office are written as defense counsel in the indictment of criminal cases against the officers and employees of the Plaintiff or in the written judgment, etc.

In appointing the above defense counsel, the Plaintiff prepared a draft for the payment of attorney fees, and the progress of the case described in part of the draft is consistent with the progress of criminal proceedings against the Plaintiff’s officers and employees (e.g., 00 ? 00). In addition, the part of the draft as to the legal professional, among the above draft, stated that the content of the advice is “judicial advice related to criminal cases, such as offering of bribe related to the officers and employees of the party.”

[Ground of recognition] Facts without dispute, Gap's statements in Gap's 5 to 25, 27 to 30 (including additional numbers), the purport of the whole pleadings

D. Determination

1) Relevant legal principles

A) Under the current method of imposing value-added tax, in order to ensure that only an entrepreneur’s self-production added value is imposed, the total amount of self-production added and purchased added value is the value of supply, and the basic structure is to deduct the input tax amount paid for the purchase added value from the output tax amount to be collected. Under such structure, Article 17 of the former Value-Added Tax Act (amended by Act No. 11608, Jan. 1, 2013; hereinafter “former Value-Added Tax Act”) provides that the input tax amount deducted from the output tax amount shall be deducted from the input tax amount as long as it falls under the tax amount for the supply or import of goods or services used or used for his/her own business, the standard is related to the business, while prescribing that the input tax amount, as one of the input tax amounts not deducted in subparagraph 3 of Article 2, cannot be deducted from the output tax amount as a matter of course, under the principle of value-added tax.

Therefore, the input tax amount for non-business-related expenditures cannot be deducted from the output tax amount under Article 17(1) and (2)3 of the former Value-Added Tax Act, but the existence of business-related relationship here should be determined individually by examining whether the expenditure was necessary for the implementation of the business in light of the purpose and circumstances of expenditure, the details of the business, etc. (see Supreme Court Decision 2010Du12552, Jul. 26, 2012).

B) As a matter of principle, attorney fees that can be paid at the expense of a legal entity are limited to cases where the legal entity itself becomes a party to a lawsuit, the expenses for civil and criminal attorney-at-law who is an individual of the legal entity cannot be disbursed at the expense of the legal entity. It is reasonable to deem that the legal relationship between the legal entity is recognized only in such cases where there is a special need to conduct a lawsuit or respond to a complaint for the benefit of the legal entity in light of the relevant legal dispute surrounding the legal entity and the overall circumstances at the time when the legal dispute is deep and present (see Supreme Court Decision 2004Do6280, Oct. 26, 2006).

2) In the instant case:

According to the above facts, the appointment of a counsel related to the attorney fee of this case was made after all the officers and employees were prosecuted against the plaintiff, while it can be confirmed that the above counsel served as the counsel of the plaintiff's officers and employees in the indictment, the decision, or the relevant written proposal, etc., on the other hand, the case in which the plaintiff was a criminal suspect is not found.

An attorney-at-law***, regular*, Park*, Park* does not explicitly express that the Plaintiff was appointed as a counsel of the Plaintiff’s officers and employees in the relevant documents, but in light of the fact that the Plaintiff was not directly admitted as a suspect and the time of appointment, etc., it can be inferred that the Plaintiff served the same role as other counsel. Examining these circumstances in light of the legal principles as seen earlier, the attorney fee in this case is a principle that the legal entity’s individual’s expense for civil and criminal cases cannot be acknowledged as a business relationship that constitutes the requirement for input tax deduction. In other words, if the Plaintiff was sentenced to a conviction against the Plaintiff’s officers and employees in the relevant criminal case, it may be subject to sanctions against the violation of the Framework Act on the Construction Industry even for the Plaintiff (in fact, there was no sanctions against the Plaintiff), or if the Plaintiff’s executive officers and employees were to pay the attorney fee in a criminal case in which the Plaintiff was liable for compensation.

In relation to the payment of attorney fees in this case, some expressions, such as ‘the suspicion of violating the Framework Act on the Construction Industry' or ‘the payment when us is subject to a disposition of non-prosecution or suspicion' (including evidence and number Nos. 12 through 25) are discovered in the draft prepared by the Plaintiff regarding the payment of attorney fees in this case. However, in light of the circumstances such as 00, 00, 00, 00, 00, 00, 100, 100, AAA law firm BB, DoD, NAD, Law Firm DD, HaH, etc.), as seen above, most of them were working as the attorney-at-law in most cases. The related draft also includes the progress of a specific criminal case against the Plaintiff’s officers and employees (including attorneys-at-law, 00, 00, DuB, etc.), detention of the Plaintiff’s officers and employees, and whether the sentence was imposed (Attorney B00 and HaBB).

Therefore, the disposition imposing the value-added tax of this case on the ground that the attorney fees in this case did not meet the requirements for input tax deduction under the Value-Added Tax Act due to lack of business relevance.

4. Conclusion

Therefore, the part of the claim for revocation of each corporate tax disposition among the lawsuits in this case is unlawful and dismissed, and the remaining claims of the plaintiff are dismissed as it is without merit. It is so decided as per Disposition.

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