Cho High Court Decision 2010Du4071 ( October 31, 2011)

The defect in the notice of change in the amount of income is only a ground for revocation, and shall not be deemed a ground for revocation.

Even if the determination by the disposition authority on the person to whom the service price belongs was erroneous, such defect is only a ground for revocation of the notification of change in the amount of income, and cannot be deemed a ground for invalidation. Thus, unless it is null and void as a matter of course, it cannot be deemed unlawful for the disposition of collection by the tax authority on the ground that it fails to perform

2011Guhap28202 Revocation of Disposition of Imposing corporate tax, etc.

XX Investment Company

The Director of Gangnam District Office

April 25, 2012

May 18, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of collecting KRW 000 as earned income tax for the year 2006 against the Plaintiff on September 1, 2010 shall be revoked.

1. Details of the disposition;

A. On August 28, 2006, the Plaintiff received a purchase tax invoice of KRW 000 (hereinafter “instant service price”) under the pretext of management consulting fees from Co., Ltd. (OO on November 22, 2006, hereinafter “Nonindicted Company”) and filed a corporate tax return by including it in deductible expenses when calculating the amount of income in the business year of 2006.

B. On June 1, 2010, the Defendant notified the head of the tax office having jurisdiction over the non-party company's place of business that "the contract for management fees" constitutes a processing transaction, and notified the Plaintiff of the change in the amount of income that the Plaintiff disposes of the Plaintiff's total amount of KRW 000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00

C. The Plaintiff did not withhold and pay the instant service charges from KimB, on September 1, 2010, the Defendant imposed and notified the Plaintiff of KRW 000 of the withholding tax on the instant service charges (hereinafter “instant collection disposition”).

D. The Plaintiff dissatisfied with the instant collection disposition and filed an appeal with the Tax Tribunal on December 1, 2010. On May 31, 2011, the Plaintiff was dismissed by the Tax Tribunal.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 9, 16, 17, 22 (including paper numbers), Eul evidence Nos. 1 through 4 (including paper numbers), the purport of the whole pleadings

2. Determination on this safety defense

A. The Defendant asserts that the instant collection disposition is unlawful, on the grounds of the defect in the notice of change in the amount of income in this case.

B. However, if there is a defect in the invalidity of the notification of the change in the amount of income in this case, the collection disposition in this case, based on which it was based, may be revoked illegally and thus cannot be deemed unlawful.

3. Whether the collection disposition of this case is legitimate

A. The plaintiff's assertion

Since management consulting services are provided and the service price in this case is paid, the service price in this case should be included in deductible expenses, and even if it cannot be included in deductible expenses, it belongs to the largestCC and RedD, so the notice of change in the income amount in this case to which KimB belongs has serious and apparent defects. Accordingly, the collection disposition in this case based on it is unlawful and should be revoked.

B. Determination

(1) Where a tax authority’s disposition of income and a notice of change in the amount of income accrued therefrom are issued, a tax-free corporation is deemed to have paid the relevant amount to the person to whom the income recorded on the notice was given on the date of receipt of the notice of change in the amount of income and becomes final and conclusive at the same time, and thus, the notice of change in the amount of income is subject to appeal litigation as an act of the tax authority that directly affects the corporate tax liability (see, e.g., Supreme Court en banc Decision 2002Du1878, Apr. 20, 2006). Furthermore, the tax-free notice issued by the tax authority as a result of the failure of the tax-free corporation to perform the tax liability withheld by the tax-related corporation to pay the amount of income constitutes a disposition ordering the payment of the finalized amount of income, and even if the defect is found in the notice of change in the amount of income which is a prior disposition, it shall not be succeeded as it is as it is, unless the defect does not constitute grounds for invalidation.

(2) In light of the above, the Plaintiff did not dispute the inherent defects of the collection disposition of this case and did not dispute only the defects of the notice of change in the amount of income. Thus, the collection disposition of this case cannot be deemed unlawful unless the notice of change in the amount of income is null and void as a matter of course.

Therefore, it constitutes a matter that can only be clarified only when the facts are accurately examined, such as whether there is a ground for invalidation of the notification of change in the income amount of this case, whether the plaintiff was provided with management consulting services, whether the service price of this case was paid based on the service contract, and whether the service price of this case was reverted to anyone if the service price of this case was leaked out. Thus, even if the defendant's judgment was erroneous, such defect constitutes a ground for revocation of the notification of change in the income amount of this case, and it does not constitute a ground for invalidation of the validity of the validity of the validity of the validity of the notification, the plaintiff's assertion is without merit without further review.

4. Conclusion

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