It shall not be deemed that the taxation of other tax items is restricted.

The rectification of corporate tax other than the tax items subject to the investigation notified at the time of the tax investigation cannot be deemed to be based on the function of the tax invoice and thus it cannot be deemed to have expanded the scope of the tax investigation.

Article 81-9 (Restriction on Extension of Scope of Tax Investigation)

2016 Gohap6460 Revocation of Corporate Tax Imposition Disposition, etc.

AAAA

BB Director of the Tax Office

March 9, 2017

March 30, 2017

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

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

Cheong-gu Office

The Defendant’s imposition of KRW 46,463,380 of corporate tax for the business year 2010, which was made on December 1, 2015 against the Plaintiff and the disposition of notification of change in the amount of income of KRW 248,742,00, which was made on December 7, 2015, respectively, shall be revoked.

1. Details of the disposition;

A. The Plaintiff is a company established on May 13, 2009 to engage in agricultural products distribution business, etc., and CCC is a person who has served as the representative director of the Plaintiff from the date of establishment to the date of establishment.

B. On August 20, 2015, the Defendant issued a notice of tax investigation stating the following to the Plaintiff, and commenced the tax investigation on the same day (hereinafter “instant tax investigation”).

· Subject of Investigation: Value-Added Tax

· The taxable period subject to investigation: July 1, 2010 to December 31, 2010

The reasons for investigation: It was selected as a person subject to investigation to verify the appropriateness of the report due to the failure to comply with the actual details of the return, such as the absence of an exchange of tax invoices or the exchange of tax invoices different from the fact in February 2010.

C. The Defendant, through the instant tax investigation closed on October 13, 2015, issued or received the purchase account statement of KRW 000,000,000 in total and the purchase account statement of KRW 000,000 in total and KRW 00,000 in total without real transactions, and confirmed the fact that the Plaintiff omitted filing a report on the purchase of KRW 00,000,000 in total and KRW 00,000.

D. On December 1, 2015, the Defendant issued a notice that the Plaintiff would pay KRW 00,000,000,000, which was already paid after deducting the amount already paid from the corporate tax amount calculated according to the tax base adjusted by the Plaintiff as of December 1, 2015, by including 00,000,000,000,000,000, in the gross income and the omitted amount in the return of purchase and sale, respectively, in the deductible expenses, and the amount of KRW 00,00,000,000,000,000 prior to the rectification of the corporate tax base for the business year 20,000,000 for the Plaintiff’s corporate tax base for the 200,000,000,000,000,000 as the corporate tax amount calculated according to the tax base adjusted by the Plaintiff (hereinafter “instant disposition”).

E. On the other hand, around December 7, 2015, the Defendant issued a notice of change in the amount of income (hereinafter referred to as “the notice of change in the amount of income”) to the effect that the Plaintiff’s representative director would dispose of it as the bonus of the CCC on the ground that it is unclear that the ownership of KRW 00,000,000 in the amount included in the income to the Plaintiff is attributed to the Plaintiff.

Facts that there is no dispute over recognition, Gap's evidence 1 through 5 (including branch numbers; hereinafter the same shall apply), Eul's evidence 1 to 4, and the purport of the whole pleadings.

2. The plaintiff's assertion

A. A tax official may extend a tax investigation if it is confirmed that specific suspicion of tax evasion exists to other items of taxation while conducting a tax investigation, but the reason and scope thereof must be notified in writing (Article 81-9(1) of the Framework Act on National Taxes). However, the act of a tax official whose scope is limited under the above provision is "tax investigation concerning other items of taxation, not the items of taxation notified as a result of the investigation," and it does not include any taxation regarding other items of taxation. In other words, the above provision merely limits the expansion of tax investigation by item of taxation, but does not limit the expansion of tax assessment by item of taxation. Therefore, even if other items of taxation are imposed based on the taxation data collected by the tax office through the tax investigation on the items of taxation notified as a result of the investigation by the tax office, it cannot be concluded that the taxation disposition is unlawful merely due to such reason. However, in order to mislead those to be polled in the tax investigation with the intent to conduct a tax investigation on other items of taxation, it is unlawful for other items of taxation.

2) Determination

The Defendant confirmed, through the instant tax investigation, that the Plaintiff issued or received a tax invoice for sales and purchase without real transactions from July 1, 2010 to December 31, 2010. Based on the fact that the Defendant confirmed as above, the fact that the Defendant calculated the deductible expenses and earnings for the instant business year again and corrected the tax base amount for corporate tax as seen earlier.

According to the following circumstances known from the above facts, it cannot be deemed that the grounds and scope of the investigation of this case were expanded. Thus, the second part of the plaintiff's second part that the above investigation violated Article 81-9 of the Framework Act on National Taxes cannot be accepted.

① The Defendant investigated only the processing of the tax invoice under the Value-Added Tax Act, which is the reason for tax investigation notified to the Plaintiff, and did not investigate the fact of taxation requirements of corporate tax separately.

② Although the Defendant, at the time of the tax investigation, corrected the tax base amount of corporate tax, which is not the value-added tax, which is the tax item subject to the investigation notified to the Plaintiff at the time of the tax investigation, this is merely based on the function of the tax invoice that facilitates the dissemination of income tax and corporate tax as well as the value-added tax by exposing transaction between the parties in the process of determining whether the corporate tax is satisfied after the completion of the tax investigation

③ Although the ultimate objective of the instant tax investigation is to impose corporate tax, it is difficult to view that the Defendant notified the Plaintiff of the tax items subject to investigation with the intent to mislead the Plaintiff as the value-added tax. Moreover, it cannot be deemed that the Plaintiff was unfairly deprived of the opportunity for explanation of the facts subject to investigation due to the above notification.

C. Judgment on the third ground for appeal

In full view of the purport of the argument in Gap evidence No. 4, the defendant prepared a tax payment notice stating the total tax amount to be paid for the year of reversion of taxation on December 1, 2015, the tax base, tax rate, calculated tax amount, additional tax amount, deducted tax amount, etc., and the plaintiff received the above tax payment notice around that time. According to the above acknowledged facts, the defendant attached the calculation statement under Article 70 of the Corporate Tax Act and Article 109 (1) of the Enforcement Decree of the Corporate Tax Act when notifying the plaintiff of the tax payment. Thus, the plaintiff's third chapter is without merit.

4. Conclusion

Thus, each disposition of this case is justified, and the plaintiff's claim of this case seeking its revocation is dismissed as it is without merit.