Seoul High Court 2014Nu68722 (2015.03)

The instant malicious surgery constitutes a personal service provided by utilizing knowledge or skills.

Recognizing the total sales of X-cell files confirmed at the time of investigation as the Plaintiff’s revenue amount cannot be deemed as a violation of the principle of taxation based on the ground. The instant malicious surgery constitutes a personal service provided by utilizing professional knowledge or skills, and is deemed as the cash receipt date, whichever is earlier, the date when the service was paid or the date when the service was provided is completed.

2015du529444 Revocation of disposition of revocation of comprehensive real estate holding tax

Gangwon A

head of Sung Dong Tax Office

Seoul High Court Decision 2014Nu68722 Decided September 3, 2015

All appeals are dismissed.

The costs of appeal are assessed against the Plaintiff.

1. Regarding ground of appeal No. 1

This part of the ground of appeal is that the defendant's "TM sales status" found at the time of the tax investigation is unlawful against the principle of base taxation or the rules of evidence since the court below erred in recognizing the plaintiff's total sales amount based on the data although it is not the plaintiff's account book.

However, such allegation in the grounds of appeal is merely an error in the selection of evidence or fact-finding, which belongs to the lower court’s exclusive jurisdiction, and thus cannot be a legitimate ground of appeal. Furthermore, even if examining the lower court’s decision in light of the records, it did not err by misapprehending the legal doctrine regarding the principle of taxation based on evidence, or by exceeding the bounds of the principle of

2. As to the grounds of appeal Nos. 2 and 3

Article 48 of the Enforcement Decree of the Income Tax Act provides that "the receipt date of business income shall be any of the following dates." The main sentence of subparagraph 5 stipulates that "the date when the provision of construction, manufacturing and other services (including contracting and pre-contract sales) is completed (in the case of delivery of objects, the date when the objects are delivered)", and "the provision of personal services" in the main sentence of subparagraph 8 stipulates that "the date when the payment of services is made or the date when the provision of services is completed, whichever comes earlier."

The court below acknowledged the following facts based on the adopted evidence. 1) The court below acknowledged the following facts: ① the Plaintiff’s operation of the instant hospital, which is a dental clinic specializing in cosmetic, constitutes medical practice as a professional surgery; ② the patient’s condition is not determined; the doctor in charge is difficult to verify as a result of the surgery; and the patient’s subjective satisfaction or doctor’s fault is also an issue; ② the Plaintiff requires a period of time for 6 months to remove the fixed board after the surgery and determine success; ② the Plaintiff has a strong post management aspect to assist the Defendant’s recovery after the surgery; ③ the Plaintiff was paid in full prior to the surgery; ③ negotiation of additional surgery expenses if it is necessary; and the patient was informed of the outcome of the surgery, not refund expenses if the patient was dissatisfied with the surgery; and ② the Defendant agreed to provide the Plaintiff’s special knowledge or skills by taking advantage of the nature of the work or other similar method, and determined that the Plaintiff’s performance of the surgery is legitimate, not the Plaintiff’s fee for the surgery, but the Plaintiff’s fee for construction or other method to receive the work.

Furthermore, the lower court determined that: (a) even if the Plaintiff received full medical expenses from the patients in 2010 and carried out correction treatment in 2011, the Defendant’s imposition of tax on the amount of business income from such correction treatment on the ground that it is difficult to view that the Plaintiff received an advance payment for correction treatment, as the Plaintiff was paid in cash in full and discounted based on the total amount of medical expenses; and (b) even if the surgery and correction treatment were conducted by different doctors, counseling and treatment were conducted under the single purpose of Maternity in a single place of business operated by the Plaintiff, i.e., a single place of business operated by the Plaintiff, and that the surgery and correction treatment were conducted by a series of acts, the Plaintiff was lawful.

In light of the relevant legal principles and records, the above fact-finding and determination by the court below are justifiable. Contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles regarding the receipt of business income, or by exceeding the bounds of the principle

3. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.