Examination-corporation-2018-12 (Law No. 23, 2018)

The disposition rejecting correction of corporate tax, etc. is legitimate because it is not verified after filing a revised return on corporate tax, etc.

Where a request for correction is filed after filing a revised return, such as corporate tax omitted in sales of the borrowed account, it is not permissible to calculate the tax base by mixing the actual and estimated tax base. Therefore, the application of simple expense rate cannot be recognized for the omitted response costs.

Article 66 of the Corporate Tax Act, and Article 104 Estimation and Correction

Disposition of revocation of imposition of global income tax and corporate tax

gold 0.00

00. Head of tax office

on 1, 2019

on October 2018 00

1. All of the plaintiff's claims are dismissed.

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

The defendant's refusal disposition of correction of corporate tax and earned income tax against the plaintiff on January 1, 201x is revoked.

1. Details of the disposition;

A. The plaintiff is a corporation that conducts the manufacture and sales business such as show standout and show-out, etc., and the representative director is 00.

B. On January 20, 201x, the Plaintiff, as the bonus for the omission of sales (hereinafter referred to as the “in this case’s omission amount”), included the instant omission amount in the account for the personal business under the name of xx in the total amount of corporate tax, xx,xx,xx, and the total sum of the value-added tax, xx,xx,x,x,x, and the total sum of the wage and salary income tax on the tax withheld portion, x,x, andx, x, x, and x in the total sum of the corporate tax on the portion of 00 which is the representative director, was reported. Since the Plaintiff did not pay the above tax amount, the Defendant corrected and notified the above amount of tax on April 7, 201.

C. On x. 5, 201x. x. 5, the Plaintiff omitted response costs for the omitted amount in this case, and applied an unfair under-reported penalty tax on the grounds that it was unlawful. However, a claim for correction against value-added tax for the first time of 201x was withdrawn on the grounds that it was the intention of the deadline for request. The Defendant rejected all the remainder of the Plaintiff’s request for correction on x. 21, 201x. hereinafter “the previous disposition”).

D. The Plaintiff dissatisfied with the instant previous disposition and filed a request for examination with the Commissioner of the National Tax Service on October 23, 201x. On January 23, 201, the Commissioner of the National Tax Service cited the portion on which the penalty tax for unfair underreporting was applied among the previous dispositions in the instant case, and dismissed the remainder. Accordingly, the Plaintiff’s total sum of the penalty tax for the year 201x through 201xxx,xx,xxxx, and the total sum of the penalty tax for the year 201xx or value-added tax for the year 201xx was reduced or corrected.

E. The omitted amount of this case, the amount of request for correction, the details of reduction correction, etc. by taxable period are as listed below [Attachment 1] through [Attachment 3].

[Attachment 1] Amount omitted in sales and details of revised corporate tax, request for correction, reduction, and correction

[Attachment 2] Details of Value-Added Tax Return, Correction Request, and Reduction Correction

[Attachment 3] A revised return on earned income tax and details of request for correction due to bonus disposal

[Ground of recognition] Facts without dispute, entry in Eul evidence Nos. 1 through 5 (including each number; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

For the following reasons, the portion of corporate tax and wage and salary income tax on the remainder after reduction or correction in the previous disposition of this case (hereinafter referred to as the "disposition of this case") is illegal.

1) Regarding the outflow from the company of the omitted amount

The entire omitted amount of this case was deposited in the Plaintiff’s ordinary deposit or current account and used for the purchase of raw materials and the operation expenses of the company, and thus, it was not leaked out of the company. Although the provisional deposit in the business year 201x or 201x was disbursed for 00, it was merely conducted in order to resolve the excess or shortage of cash in the account.

2) As to the omitted amount of the instant case and the additional cost corresponding thereto

It is reasonable to include the omitted amount in deductible expenses as the amount of transaction partner or the Plaintiff’s operating funds, and it is reasonable to include the expenses corresponding to the omitted amount in deductible expenses by applying simple expense rate, even though the detailed use is not certain.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) The plaintiff was a corporation whose business purpose is the display stand and the manufacturing and selling business of 2*-2"OO of Seoul OOO on x. 26. x. 200x. x. 26. x. 200 as the plaintiff's representative director around February 18, 2008.

2) On November 6, 2008, Lee x filed a registration of business with the same trade name as the Plaintiff on the foregoing address, and the Plaintiff moved its business to "OO*8 and 101 of Seoul O-gu, Seoul around January 27, 2015, and later moved its business to the above domicile.

3) Meanwhile, the defendant confirmed that Lee 00, the representative director of the plaintiff, was suspected of using Lee x's account in the name of borrowed account, and found that the plaintiff was guilty of using Lee x's account in the name of borrowed account, and found that the plaintiff was guilty of the plaintiff's "information on the explanation of the name of borrowed account", during the period from 201x to 201x, the plaintiff filed a revised return on corporate tax and value-added tax on the amount of tax base increased by the amount equivalent to the omitted sales amount on January 20, 201x, and the amount of corporate tax and value-added tax on the aggregate of the omitted sales was the bonus for the representative Lee 00 on the premise that the total amount of the omitted sales was released from the total amount.

4)x,xx, andxx which the Plaintiff recognized as the omitted sales amount was deposited into the Plaintiff’s ordinary deposit account and the party deposit account.

5) The basic balance, the final balance, etc. of the Plaintiff’s provisional payment account and the provisional payment account are as listed below.

6) The details on which a lump sum payment was made at the end of each business year are as follows:

[Ground of recognition] Facts without dispute, entry of Eul's evidence Nos. 1 through 6, purport of the whole pleadings

D. Determination

1) Regarding the outflow from the company of the omitted amount

A) Article 66 (2) of the former Corporate Tax Act (amended by Act No. 16008, Dec. 24, 2018; hereinafter the same shall apply) provides that "where a domestic corporation which has reported under Article 60 falls under any of the following subparagraphs, the head of the competent district tax office or the Commissioner of the competent Regional Tax Office having jurisdiction over the place of tax payment shall rectify the tax base and amount of corporate tax on the income of the corporation for each business year" and Article 67 provides that "where there is an error or omission in the details of the report" under subparagraph 1, the amount included in the calculation of corporate tax on the income for each business year under Article 60 or Article 66 or 69 shall be disposed of as prescribed by Presidential Decree, such as bonus, dividend, outflow and reservation of the total amount of corporate tax to the person to whom the corporation belongs, the amount included in the calculation of earnings shall be included in the calculation of earnings, and where the person is obviously not included in the calculation of earnings under Article 106 (2) of the former Enforcement Decree (amended by Presidential Decree No. 29529, hereinafter the same shall apply).

On the other hand, where a corporation fails to enter its sales in its account book despite the fact of sales, the total amount omitted in sales, including the cost of purchase of raw materials, shall be deemed to have been leaked out of the company, barring any special circumstances. In such cases, the special circumstance that the omission in sales is not leaked out of the company shall be proved by the corporation asserting such omission (see, e.g., Supreme Court Decision 2001Du2560, Dec. 6, 2002).

B) In light of the following circumstances, as seen above, the above facts of recognition, Gap evidence No. 3, Eul evidence No. 7, and the purport of the whole pleadings, the evidence submitted by the plaintiff alone cannot be deemed to have been out of the company, and therefore, the plaintiff's allegation in this part is without merit.

① The Plaintiff, despite the fact of sale, did not keep the omitted amount in the account book by means of using the borrowed name account in the name of thisx, the representative director, who runs the same kind of business at the same address.

② According to the Plaintiff’s ordinary deposit ledger (Evidence No. 3) and the ledger of the current deposit account (Evidence No. 4), the amount deposited in the Plaintiff’s ordinary deposit account or the current deposit account was deposited in or withdrawn from the account of 00, the representative director of the Plaintiff, and according to the Plaintiff’s ledger of the current deposit account (Evidence No. 7), a considerable amount of deposit and anti-deposit were continuously made. Thus, it is difficult to eliminate the possibility that the instant omitted amount would have reverted to the Plaintiff’s representative director.

2) As to the omitted amount of the instant case and the additional cost corresponding thereto

A) Article 66 (2) of the former Corporate Tax Act provides that "where a domestic corporation which has reported under Article 60 falls under any of the following subparagraphs, the head of a tax office or the Commissioner of the competent Regional Tax Office having jurisdiction over the place of tax payment shall correct the tax base and amount of corporate tax on the income for each business year of the relevant corporation," and subparagraph 1 of the same Article provides that "where the head of a tax office or the Commissioner of the competent Regional Tax Office having jurisdiction over the place of tax payment determines or revises the tax base and amount of corporate tax pursuant to paragraphs (1) and (2), he/she may estimate, as prescribed by Presidential Decree, the amount of income by books or other evidentiary documents: Provided, That Article 104 (1) of the former Enforcement Decree of the Corporate Tax Act provides that "where there is no necessary account book or evidentiary document or any material part is false or false," and Article 66 (3) of the former Enforcement Decree provides that "where the amount of income cannot be calculated by using books or other evidentiary documents, the amount of raw materials, products or other evidentiary documents, it is clearly false or clear that the market value of raw materials, etc."

On the other hand, if a person liable for tax payment finds any revenue of omitted sales, etc. in filing a return on the tax base of corporate tax, etc., the taxation office may include the omitted revenue in the gross income, and if there is a fact that the taxpayer has omitted the return on the revenue to be included in the gross income, not only the omission of the return on the revenue to be included in the gross income in filing a return on the tax base, etc., the existence of expenses and the amount of expenses to be included in the deductible expenses shall be added to the burden of proving the omission of expenses in filing the return on the inclusion of the expenses. Unless there is no such proof, it may be said that there is no additional expense, such as in fact. In this case, unlike the method of determining the total deductible expenses, only the deductible expenses corresponding to the omission portion shall not be calculated and deducted by means of an additional investigation, not by the on-site investigation (see, e.g.

B) In light of the following circumstances, which can be seen by the above facts of recognition and the purport of the entire pleadings, the evidence submitted by the Plaintiff alone cannot be recognized as additional cost corresponding to the omitted amount. Therefore, the Plaintiff’s assertion on this part is without merit.

① The Plaintiff asserts to the purport that the cost omitted should be recognized by applying simple expense rate, inasmuch as the usage statement corresponding to the omitted amount of the instant case was not certain. However, the Plaintiff’s assertion is a combination of on-site investigation and estimated tax assessment on a single taxable object, and it is not permissible to allow it pursuant to relevant Acts and subordinate statutes, such as Corporate Tax Act, etc.

② In light of the fact that the Plaintiff did not specifically specify the customer, amount paid, method of payment, timing for payment, etc. corresponding to the omitted amount, it is difficult to deem that the existence of additional cost corresponding to the omitted amount has been proven.

3. Conclusion

Therefore, the plaintiff's claim is dismissed in entirety as it is without merit. It is so decided as per Disposition.