Seoul Administrative Court 2012Guhap34860 ( October 12, 2013)

(1) The Plaintiff’s employment income constitutes earned income in relation to a certain correlation or economic rationality with the Plaintiff’s employment provided to a corporation.

The instant income is paid to the Plaintiff by the parent company directly or indirectly affecting the management and the performance of the business of the BB E, and it is reasonable to deem that there is a quid pro quo relationship between the Plaintiff and the labor provided to BB E, and thus, the instant income falls under the earned income under Article 20(1) of the Income Tax Act.

Article 20 of the Income Tax Act

2013Nu13725 global income and revocation of disposition

Chapter AA

Samsung Head of Samsung Tax Office

Seoul Administrative Court Decision 2012Guhap34860 decided April 12, 2013

March 21, 2014

May 2, 2014

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

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

1. Claim: The Defendant’s disposition of imposition of OOO (including additional tax) of global income tax on August 1, 201 against the Plaintiff on August 1, 201 shall be revoked.

2. Purport of appeal: It is so ordered;

1. Details of the disposition;

A. BBE, Inc. (hereinafter referred to as the “BE”) was established around May 1987 and operated the BBE sales business and electronic equipment. The Plaintiff entered the BBE on May 1, 2004, and worked as the head of the accounting team. (c) BBE trading was established on January 26, 2005 with the acquisition, management, and disposal of various assets including securities, and 100% of the BBE’s shares to the Plaintiff. On the other hand, CC CE Holdings (hereinafter referred to as the “CCC”) was substantially 10% of the shares of the BEE, which were 200, and the Plaintiff was in possession of 30% of the shares of the BEEM and 30% of the shares issued by the EEM 20,000,000,000,000,0000,000,0000,000,000,000.

B. Relevant statutes

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

(c) Fact of recognition;

(1) The Plaintiff, as a certified public accountant, participated in the business stabilization work before and after the sale and acquisition of the III BE, in the sale and acquisition of the JJ Mutual Savings and Finance Company, in the KK Telecommunication foreign capital inducement, and LLPC acquisition work.

(2) ThisG had been employed on April 6, 2005 by LG and on November 1, 2005 by LH, respectively, on the part of BB, and as the Plaintiff, retired on February 29, 2008.

(3) The Plaintiff, as the head of the accounting team, prepared a profit and loss statement and reported it to the general meeting of shareholders or the board of directors, and submitted it to EE every month.

(4) According to the proposal of EE, the Plaintiff prepared investment proposal containing BBE sales, cash flow analysis, future financial estimates (from 2006 to 2011) and delivered it to the FFO.

(5) After selling, CCC Holdings paid bonus, etc. to the executives and employees of BBE as indicated in the following table. The Plaintiff received the instant income from CCC Holdings on February 15, 2008, and bonus OOE from BBE on February 21, 2008. The instant income was other income, and bonus was reported as earned income.

(6) The Plaintiff has received the annual salary of OOO from BBE.

(7) To deal with the above sales business, thisG, the HH, and the Plaintiff leased at their own expense, from July 16, 2007, 00 to September 14, 2007, MOM hotel 812, located in O-Gu O-dong 159, O-dong 159.

(8) ThisG, LH, and the Plaintiff discussed FFO employees and cooperation with the Plaintiff, and the Plaintiff and HH had a duty to assess the company value of BBE through future financial estimates among the investment proposals, and this GG had a contact with potential buyers.

Each entry of evidence Nos. 3 through 6, 9, 11-1, 18, 19, and the purport of the whole pleadings for recognition;

D. Determination

(1) Article 20 (1) 1 (a) of the Income Tax Act (amended by Act No. 9270 of Dec. 26, 2008) provides that "the salary, salary, remuneration, remuneration, wage, bonus, bonus, and other benefits of a similar nature that are received due to the provision of labor as Class A earned income, and subparagraph 2 (b) provides that "the wages received from a foreigner in a foreign country or a foreign corporation in a foreign country" as Class B earned income. Meanwhile, Article 20 (1) of the Income Tax Act provides that "the wage and salary income, regardless of the form or name of payment, shall include not only all economic benefits which are related with the provision of labor in terms of the nature of the labor, but also those which form working conditions closely related to the provision of labor on the premise of the direct work payment (see Supreme Court Decisions 71Nu222, Apr. 28, 197; 2007Du1934, Oct. 25, 2007).

(A) EE is a financial investor who completed the acquisition of 100% of BBE shares on April 2005 as an executive officer or employee of BBE, and intended to sell BBE at a high price between 10,000, so the executive or employee of BBE controlled by CCC Holdings is bound to be favorable for sale. In this regard, EE decided to sell BBE shares held by CCC Holdings and selected FFO as a manager of the sale of shares. In order for FFO to prepare investment proposal, it is necessary to independently submit data such as BBE’s sales, cash flow analysis, future estimates, etc., but, in order to make such data, there is no relevant financial information that BBE could have been disclosed from the outside of the BBE corporation (at that time, there is almost no relevant financial information that would have been disclosed to the outside of the BGE corporation). Accordingly, the Plaintiff cannot be viewed as an internal sales of BG HGE’s shares, regardless of the relevant internal sales of BG HGE’s shares.

“(B) The Plaintiff asserted that the Plaintiff carried out e-mail independently regardless of BB E-mail, such as: (a) the Plaintiff carried out the said duties by leasing the hotel guest room at his own expense; and (b) the use of personal e-mail without using the e-mail of BBE company; (b) as seen earlier, the Plaintiff leased the hotel guest room; (b) however, it is insufficient to recognize that the entry of No. 9 alone was insufficient to recognize that the Plaintiff actually carried out the hotel guest room cost; and (c) there is no other evidence to prove that there was no other evidence to prove that there was no other evidence to prove that the Plaintiff exchanged and exchanged with the FO’s person in charge of the FFO, while the Plaintiff used the company’s e-mail account; and (d) the FFO’s person in charge of the FFO’s e-mail and the head of H and HA.

In light of the fact that the Plaintiff’s assertion is called “Nriju”, it is difficult to view that the Plaintiff, the largest HB, and Chapter BBA independently performed its duties regardless of BBE. Rather, the fact that the sale was promoted as BBE is not always known domestically or externally, but it is inappropriate to work at the company’s office in view of the nature of its duties. Therefore, the Plaintiff appears to have leased hotel rooms to perform its duties to maintain confidentiality in relation with other employees of BBE and used personal e-mail. (c) The Plaintiff unilaterally received the instant income from the Plaintiff’s independent position, but the Plaintiff did not unilaterally prepared a contract for the sale of the 20 OEE and the 200 OE contract for the sale of the 200 OE. The Plaintiff did not appear to have been able to have been able to sell the 200 OE and the 20 OE contract for the sale of the 20 OE. This was determined by the Plaintiff.

(E) Meanwhile, according to the evidence No. 24, PN, the representative director of BBE, entered into an agreement with EE to sell the entire BBE shares including one’s BBE shares and minority shareholders’ shares in the process of negotiations. In the future, EE entered into an agreement with EE to receive 13.7% of D’s shares from EE in the process of negotiations. In the process of re-sale of BBE, EE entered into a further agreement to receive OOOO in the process of selling BBE, which led to the crime of breach of trust against BBE and minority shareholders. According to the above facts charged, PN appears to have closely participated in the process of selling BBE shares to BBE companies, and thus, the Plaintiff appears to have a common interest in the process of selling the NBE’s shares.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance with different conclusions is unfair, and the plaintiff's claim is dismissed. It is so decided as per Disposition.