Seoul Administrative Court 2007Guhap34118 ( October 15, 2008)

The time when patent attorney fees are paid to a foreign client;

Income tax shall be levied on a foreign client on the basis that the patent attorney's receipt of the cost of patent attorney's service is not the date of issuing a written request to the foreign client, but the payment is promised or actually transferred by the foreign client.

The contents of the decision shall be the same as attached.

Article 48 (Receipt Date of Business Income)

Article 9 of the Value-Added Tax Act

1. The following part of a judgment in the first instance shall be revoked:

2. The part of global income tax and value-added tax among the dispositions imposed by the Defendant against the Plaintiff on November 1, 2006 in the separate sheet of imposition shall be revoked.

3. The total costs of the lawsuit shall be ten minutes, which shall be borne by the plaintiff, and the remainder shall be borne by the defendant.

1. Purport of claim

Each disposition taken by the defendant against the plaintiff on November 1, 2006 in the separate sheet of imposition shall be revoked.

2. Purport of appeal

The same shall apply to the order.

1. Details of the imposition;

A. The Plaintiff is a business operator who runs a patent-related legal service business under the trade name of ○○○○○○-dong ○○○○○-dong ○○○○○○○ Office.

B. Around September 2006, the head of ○○○ Tax Office conducted a consolidated investigation of personal tax for the Plaintiff from 2003 to 2005, and notified the Defendant that the Plaintiff failed to report KRW 489,782,801 out of the patent attorney fee and KRW 49,582,800 out of the domestic litigation cost for the patent attorney’s patent attorney’s patent attorney’s patent attorney’s patent attorney’s patent attorney’s patent attorney’s patent attorney’s patent service fee and KRW 49,800 out of the patent attorney’s service fee for the foreign client and KRW 184,453,698 as necessary.

C. Accordingly, on November 1, 2006, the Defendant issued a notice of correction and notification of each global income tax and resident tax for the year 2003 to 2005, and each value-added tax for the year 1 to 2003 to 1, 2006 based on the above taxation data (hereinafter “instant disposition imposing global income tax and value-added tax”).

D. The plaintiff appealed and filed an appeal with the National Tax Tribunal on December 4, 2006, but was dismissed on August 28, 2007.

[Ground of recognition] Evidence Nos. 1-1 to 13, Evidence Nos. 2, Evidence Nos. 1 through 3-1 to 7, Evidence Nos. 4 through 10, and 12, Evidence Nos. 13-1, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) Plaintiff

In light of the following circumstances, the time when the Plaintiff’s payment of patent attorney’s patent attorney’s service fees for foreign clients is the date of payment of service fees. Therefore, the instant disposition of this case where the issue date of a written request for foreign clients is deemed the time of payment of service fees is unlawful on different terms

(A) The decision of the National Tax Tribunal and the Supreme Court Decision 94Nu4608 delivered on August 12, 1994 ruled that the time when the payment for patent attorney’s service to foreign clients should be based on the date when the patent attorney issues a written request to foreign clients, not on the date when the patent attorney issues a written request to foreign clients.

(B) The Plaintiff has received the payment date of patent attorney service fees according to the practice so far and filed a tax return. However, since the competent tax authority did not raise any objection, the Plaintiff’s trust formed thereby should be protected.

(C) If the client is a foreigner, the client cannot agree on the consideration for the entrusted affairs in advance because there is no concept of advance or contingent remuneration, unlike the case where the client is a national. In particular, the delegated affairs of patent attorneys, such as patent applications, etc., such as patent applications, are practically impossible to determine the amount of remuneration by predicting the required time, etc. in advance. Therefore, the delegated affairs of patent attorneys such as patent applications, etc., such as patent applications, etc., need to determine the amount of remuneration by sending a written request to the client after handling the entrusted affairs at each stage, and the procedures for the client to confirm the entrusted affairs and to notify

(d) When the receipt date of a request is to be the date of issuance, if any, the cost of services that cannot be actually paid will be treated as losses. This would result in unfair consequences if the exchange loss occurs between the date of issuance of the request and the date of payment of the services.

(2) Defendant

For the following reasons, the time when the provision of services to a foreign client is received shall be deemed to be the date of issuance of a written request to a foreign client.

(A) Article 48 subparagraph 8 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15969, Dec. 31, 1998) at the time of the judgment of the above Supreme Court asserted by the plaintiff that "the time of receipt of the service cost under the agreement was stipulated as the time of payment of the service cost under the agreement (if the payment date is not determined, the date of completion of the service)" but Article 48 subparagraph 8 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20618, Feb. 22, 2008; Presidential Decree No. 20618, Feb. 22, 2008) provides that "the earlier

(B) In the case of a general taxpayer, the amount of money which is not paid for the provision of goods or services under corporate accounting standards and tax-related Acts shall be treated as the account receivable but shall be treated as losses if any cause, such as default, occurs. Therefore, deeming only the Plaintiff as the receipt date of the service payment would be contrary to the tax equity.

(C) In the case of the provision of services to foreign clients, the Plaintiff asserted that it is necessary to notify the client of the provisional decision on the amount of remuneration claimed by the Plaintiff. However, it should be deemed that there was an agreement between the Plaintiff and the foreign clients to comply with the fee code set by the Plaintiff on the ground that most of the cost of services provided by the Plaintiff to foreign clients was paid as requested by the Plaintiff.

(b) Related statutes;

○ Calculation of the total amount of income under Article 24 of the Income Tax Act (wholly amended by Act No. 4803, Dec. 22, 1994)

(1) The total amount of income of a resident shall be calculated on the basis of the total amount received or received during the relevant year.

(2) In cases under paragraph (1), if any income other than money is imported, such income shall be calculated according to the value at the time of transaction.

(3) Matters necessary for the scope of the amount received or to be received, and the calculation or confirmation period shall be prescribed by Presidential Decree.

○ Article 39 of the Income Tax Act for the year to which the total amount of income and necessary expenses are reverted (amended by Act No. 4803, Dec. 22, 1994)

(1) The year to which the total income and necessary expenses of a resident are reverted shall be the year in which the total income and necessary expenses are determined.

(4) Matters necessary for the year to which the total amount of income and necessary expenses under paragraph (1) are reverted, calculation of acquisition value under paragraph (2), or evaluation of other assets, debts, etc. shall

○ Calculation of the total amount of income under Article 28 of the Income Tax Act (pre-amended by Act No. 4803, Dec. 22, 1994)

(1) The total amount of income of a resident shall be calculated on the basis of the total amount received or received during the relevant year.

(2) In cases under paragraph (1), if any income other than money is imported, such income amount shall be calculated according to the value at the time of transaction.

(3) Matters necessary for the scope of the amount received or to be received, and the calculation or confirmation period shall be prescribed by Presidential Decree.

○ The receipt date of business income under Article 48 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 20618, Feb. 22, 2008)

The receipt date of the total amount of the business incomes shall be the following dates:

8. Provision of personal services;

The earlier date between the date scheduled to receive the price for services or the completion date of the provision of services;

Article 48 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15969, Dec. 31, 1998; Presidential Decree No. 17825, Dec. 30, 2002)

The receipt date of the total amount of the business incomes shall be the following dates:

8. Provision of personal services;

Date of completing the provision of services;

Article 48 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15969 of Dec. 31, 1998)

The receipt date of the total amount of the business incomes shall be the following dates:

8. Provision of personal services;

The date of payment of service charges under the agreement: Provided, That if the payment date is not fixed, the date of completing the provision of the relevant personal services shall be the date

○ Time of transaction Article 9 of the Value-Added Tax Act

(2) The time when services are supplied shall be the time services are provided or goods, facilities or rights are used.

(3) Where an entrepreneur receives all or part of the price for goods or services before the time provided in paragraph (1) or (2) arrives, and at the same time issues a tax invoice provided in Article 16 or a receipt provided in Article 32 with respect to such price, the time of such issuance shall be deemed the time of supply for the goods or services concerned, respectively.

(4) Matters necessary for the time of supply under paragraphs (1) and (2) shall be prescribed by Presidential Decree.

○ Application of zero tax rate Article 11 of the Value-Added Tax Act

(1) The zero tax rates shall apply to the supply of the following goods or services:

1. Exported goods;

2. Services supplied overseas;

3. International navigation services by ships or aircraft; and

4. Goods or services for earning foreign currencies other than those under subparagraphs 1 through 3, which are prescribed by Presidential Decree.

○ Article 22 of the Value-Added Tax Act

(7) If the tax base to which the zero-rate tax rate applies is not reported under Article 18 (1) and (2) (proviso) or 19 (1), or the reported tax base is short of the tax base to be reported, the amount equivalent to 1/100 of the returned tax base (if the reported tax base is short of it, the deficient tax base) shall be added to the payable tax amount or deducted from the refundable tax amount (in case of the deficient return, the tax base).

○ Time of supply for services under Article 22 of the Enforcement Decree of the Value-Added Tax Act

The time of supply of services under Article 9 (2) of the Act shall be as follows:

Provided, That where the time of supply for services supplied before closure of business arrives after such closedown, the time of such closedown shall be deemed the time of supply.

1. In the case of ordinary supply, when the offer of the service is completed;

2. Where services are supplied on the basis of the standard payment, interim payment, long-term installment or under other conditions, or services are continuously supplied on the basis of which the unit of supply is not possible, when each part of the price is received;

3. Where the provision of services is completed and the value of supply is determined, in case where the provisions of subparagraphs 1 and 2 are not applicable.

C. Determination

(1) Order of determination

The key issue of this case is whether the time when the service cost under the Income Tax Act and the time when the service cost under the Value-Added Tax Act are supplied to a foreign client should be seen as the time when the service cost is paid or the time when the service is supplied to a foreign client is to be considered as the date of written request for the foreign client. Accordingly, the following is examined in order to examine the purport of the above Supreme Court decision, the amendment process under Article 48 subparagraph 8 of the Enforcement Decree of the Income Tax Act, the Plaintiff’s patent attorney’s status of the service provision to the foreign client, etc., and then, the determination of when the payment

(2) The purport of the Supreme Court Decision 94Nu4608 delivered on August 12, 1994

The Plaintiff was a patent attorney who has been delegated with the duties of patent, trademark, etc. in Korea by a foreign client. The Supreme Court held that the patent application procedure was conducted through various stages, such as application, request for examination, examination, publication of application, patent ruling, patent registration, etc. The remuneration of a patent attorney for the vicarious performance of patent registration affairs is customary when he/she enters into an agreement on the payment of remuneration between the client and the patent attorney in case of a domestic case. On the other hand, in case of a foreign case, it is customary to receive a separate contingent fee when he/she enters into a patent registration. On the other hand, unlike domestic cases, when he/she receives letter and power from a foreign client upon request from the foreign client, he/she immediately commences the delegated duties and submits documents to the Korean Intellectual Property Office for each stage of fact-finding, referring to the minimum remuneration standard prescribed by the Patent Attorneys Association, and the amount of remuneration for the patent attorney’s patent attorney’s patent attorney’s license and the amount of remuneration for each stage of fact-finding, and even if it is concluded that the claim amount entered in the next schedule is reasonable and reasonable until the next time to transfer or change the amount.

(3) The amendment process under Article 48 subparagraph 8 of the Enforcement Decree of the Income Tax Act

Article 24 (3) of the Income Tax Act (wholly amended by Act No. 4803, Dec. 22, 1994) (Article 28 (3)), which provides for the receipt time for providing personal services, was amended as follows: Article 48 (3) of the Enforcement Decree of the Income Tax Act, which provides for the receipt time for providing personal services.

쇠지지 300 쇠지지지 3000

쇠지鹬 300 Pois u3000

Amended by Presidential Decree No. 15969, Dec. 31, 1998

Date of payment of service charges under an agreement: Provided, That if the payment date is not fixed, the date of completing the provision of the relevant personal service;

The amendments to the Presidential Decree No. 15969, Dec. 31, 1998

Date of completing the provision of services;

December 20, 2002 amended by the Presidential Decree No. 17825, Dec. 20, 2002

The earlier date between the date scheduled to receive the price for services or the completion date of the provision of services;

(4) The actual status of the Plaintiff’s patent attorney’s provision of services to foreign clients

(A) The Plaintiff, a patent attorney-at-law and a patent attorney-at-law, upon receipt of a request from a foreign client for services on behalf of a patent application from the foreign client (or a patent law office located in a foreign country), filed a claim with a foreign client for the cost of patent attorney services by referring to the minimum remuneration standards set by the Patent Attorneys Association for each stage of business, such as submitting documents filed with the Korean Intellectual Property Office to handle the delegated affairs, and the cost incurred up to that point. Most foreign clients pay the cost of services requested by the Plaintiff, but some foreign clients may request the reduction. There is no written agreement between the Plaintiff and the foreign client in advance

(B) In most cases, a foreign client would pay the service payment one to six months after receipt of a request, but there are cases where a foreign client would pay the service payment more than two years later, and there are cases where no payment is made.

(C) The Plaintiff sent a written application to a foreign client for the cost of providing services at each stage (the cost required and patent attorney’s fee), and prepared and managed the details of the claim in the order of claim number, claim amount, deposit date, deposit amount, etc., and managed the amount of the outstanding amount in accordance with the statement of the outstanding amount, such as demanding the transfer of the outstanding amount to a foreign client as soon as possible.

(D) In providing patent attorney services requested by a foreign client, the Plaintiff spent all of the expenses, such as the official payment, translation, and investigation fees, paid to the Korean Intellectual Property Office related to the patent application, as the Plaintiff’s funds, and reported global income tax, etc. by appropriating it as necessary expenses at the time

(E) In the case of patent attorneys other than the Plaintiff, the Defendant did not conduct specific fact-finding as to how to report the time of receipt of the service cost provided to the foreign client in any manner.

[Reasons for Recognition] Facts without dispute, Gap evidence 2, Eul evidence 5-1 to 11-2, Eul evidence 12, 17, Eul evidence 13-1 to 8, Eul evidence 15, 16-1 to 4, respectively, and the purport of the whole pleadings

(5) The plaintiff's receipt time of income tax on service charges for foreign clients

(A) Article 39(1) of the Income Tax Act provides that “The year to which the total amount of income and necessary expenses of a resident accrue shall be the year in which the total amount of income and the necessary expenses are determined shall be the year to which the date when the income accrued belongs.” The right confirmation principle, which is the principle of determining the time when the income accrues under the Income Tax Act, adopts the principle of determining the time when the right to the cause of income accrues and the time when the income accrues when there is time interval between the time when the right to the income is determined and the time when the income is realized, shall be deemed the time when the right that is not the time when the income is realized, and shall be deemed the time when the income accrues, and the method of calculating the income of the pertinent year is to allow a prior taxation on the premise that the future income is realized. In order to realize that the income has become subject to taxation, even if it is not necessary to realize the income, the right to the income should be considerably mature and finalized, and therefore, it shall not be determined uniformly by taking into account the nature and nature of the right to the individual income (see, 2016).

(B) As to the instant case, although most of the costs and fees of a patent attorney paid to a foreign client upon the request of the Plaintiff after completing the service of the Plaintiff’s patent attorney service by phase, it is reasonable to view that: (a) the Plaintiff did not have separately agreed upon the cost and fees of the patent attorney before or after the foreign client; (b) it is not easy to settle disputes arising in the case of a foreign client unlike domestic customers; and (c) it is difficult for a patent attorney, such as patent application, to accurately estimate the time required for payment, etc. to determine the amount of fees; and (b) it is reasonable to consider that the fees requested by the Plaintiff are considerably mature and fixed at the time of making a provisional decision; (c) the above decision was made by the Supreme Court after examining whether the fees requested by the Plaintiff were reasonable; (d) it is reasonable to determine that the Plaintiff’s fees were paid to the foreign client upon receipt of the patent application, etc. by phase of delegation from the foreign client; and (e) it can be deemed that the Plaintiff’s most of the above fees were paid to the Plaintiff and the Plaintiff’s client’s fee agreed to be determined by excluding the time limit.

(6) Time of supply for services under the Value-Added Tax Act;

Article 9(2) of the Value-Added Tax Act and Article 22 subparag. 1 and 3 of the Enforcement Decree of the Value-Added Tax Act provide that the time when the provision of services is completed in the ordinary case of supply (Article 22 subparag. 1 of the Enforcement Decree), where the provision of services is not applicable, the time when the provision of services is completed and the price of supply is determined (Article 22 subparag. 3 of the Enforcement Decree). In light of the above circumstances, the supply price of patent attorney services for the Plaintiff’s foreign client subject to value-added tax shall be determined only when the Plaintiff issued a written request stating the cost and the amount of remuneration to the foreign client, and the payment of all or part of the amount is promised or remitted by the foreign client. Thus, the time when the supply price is determined pursuant to Article 22 subparag. 3 of the Enforcement Decree of the Value-Added Tax Act shall be deemed the time of supply for the service (However, in this case, most of the Plaintiff’s patent attorney services are subject to zero tax rate set under Article 11 subparag. 4 of the Value-Adde

(7) Sub-determination

Therefore, among the disposition of this case, the part regarding the receipt time of service costs under the Income Tax Act and the time of supply for services under the Value-Added Tax Act regarding the patent attorney services provided to foreign clients is unlawful.

Furthermore, inasmuch as the scope of revocation cannot be calculated on the sole basis of the evidence submitted by the parties or the evidence presented by the court by the examination of evidence, the pertinent disposition of this case must be revoked in its entirety (see Supreme Court Decision 94Nu13527, Apr. 28, 1995).

3. Conclusion

Therefore, the plaintiff's claim of this case shall be accepted on the grounds of its reasoning, and the judgment of the court of first instance is unfair on the grounds of its conclusion, so the court of first instance shall accept the plaintiff's appeal and revoke the judgment of the court of first instance, and it is so decided as per Disposition.

List of Imposition

Sub-Items :

Year

(Taxable Period)

c) tax amount (cost) for the area;

Date of Notification

guidance.

Principal Tax

Resident Tax

Consolidateds

37,191,400

307,707,560

29,483,840

November 1, 2006

Global Income Tax

Sub-committees

324,322,320

294,838,480

29,483,840

November 1, 2006

203

103,589,900

94,172,6401

9,417,260

November 1, 2001

204

69,349,170

63,044,700

6,304,470

November 1, 2006

205

151,383,250

137,621,140

13,762,110

November 1, 2006

Value-added Tax

Sub-committees

12,869,080

12,869,080

-

November 1, 2006

203.1

804,550

804,550

-

November 1, 2006

203.2

1,513,950

1,513,950

-

November 1, 2006

204.1

2,209,840

2,209,840

-

November 1, 2006

204.2

4,648,330

4,648,330

-

November 1, 2006

205.1

2,381,710

2,381,710

-

November 1, 2006

205.2

47,810

47,810

-

November 1, 2006

206.1

862,890

862,890

-

November 1, 2006

[Seoul Administrative Court 2007Guhap34118 (O. 15, 2008)]

1. The part of the lawsuit in this case seeking revocation of the disposition of imposition of resident tax indicated in the attached list shall be dismissed.

2. The plaintiff's remaining claims are dismissed.

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

Cheong-gu Office

Each disposition on November 1, 2006 imposed by the defendant against the plaintiff on November 1, 2006 shall be revoked.

1. Details of the imposition;

A. The Plaintiff is an entrepreneur who runs a patent-related legal service business in the name of ○○○○-dong ○○○○○○○-dong ○○○○○○○○ Office.

B. Around September 2006, the head of ○○ Tax Office conducted an investigation of personal taxation for the Plaintiff from 2003 to 2005, and confirmed that the Plaintiff failed to file a return of KRW 49,800,000 among the patent attorney’s service cost for a foreign client and the patent attorney’s service cost for a domestic litigation amounting to KRW 49,80,582,80,000 among the patent attorney’s service cost for a foreign client and KRW 539,582,801 among the patent attorney’s service cost for a foreign client and included the necessary expenses in excess of KRW 184,45

C. Accordingly, on November 1, 2006, the defendant issued a correction and notification of each global income tax and resident tax (hereinafter referred to as the "income tax of this case") for the plaintiff from 2003 to 2005, and each of the value-added tax (hereinafter referred to as the "value-added tax of this case") for the first time from 2003 to 2006 on the basis of the above taxation data (hereinafter referred to as the "disposition for imposition of income tax of this case, except for the disposition for imposition of the resident tax of this case").

D. The plaintiff appealed and filed an appeal with the National Tax Tribunal on December 4, 2006, but was dismissed on August 28, 2007.

[Reasons for Recognition] Gap evidence 1-1 to 13, Gap evidence 2, Eul evidence 1 to 3-1, Eul evidence 4 to 10, Eul evidence 12, Eul evidence 13-1, and the purport of the whole pleadings

2. Whether the lawsuit seeking revocation of the disposition imposing the resident tax of this case is legitimate

According to Article 177-4 (1), (2) and (5) of the former Local Tax Act (amended by Act No. 7843 of Dec. 31, 2005), the resident tax to be imposed is a local tax to be paid to the head of the Si/Gun (the head of the Gu in the case of the Special Metropolitan City/Metropolitan City; hereinafter the same shall apply) having jurisdiction over the place of payment of income tax. If the head of the tax office collects the income tax through the method of imposition and notification in accordance with the Framework Act on National Taxes or the Income Tax Act, it shall be deemed that the head of the relevant Si/Gun imposes and notifies the resident tax to be imposed and notified as well. Thus, the defendant of an appeal suit seeking the revocation of the disposition imposing the resident tax of this case shall be the head of ○○○-si, the head of the Gu having jurisdiction over the place of payment of the plaintiff's income tax (see Supreme Court Decision 2004Du11459, Feb. 25,

Therefore, the part seeking revocation of the disposition of resident tax of this case among the lawsuit of this case is unlawful as it is against a person who is not qualified as the defendant.

3. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

The time of receipt of patent attorney fees for foreign clients is not the date on which the Plaintiff issued a written request to foreign clients, but the date on which the service fees are paid from the foreign clients. This is unlawful in light of the following: (a) the Plaintiff’s trust, which has been handled as the date of payment of the service fees, should be protected; (b) the time of receipt should be determined as the date of payment; (c) the service fees which are not actually paid if the receipt of the written request is issued; and (d) the cost of exchange losses occurs between the date of issuance of the written request and the date of payment; and (e) the date of payment and the date of payment; and (e) there occurs unfair results.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) The Plaintiff, a patent attorney-at-law, has completed each stage of business, such as submitting documents filed with the Korean Intellectual Property Office to handle the delegated affairs immediately after being requested by a foreign client (the patent law office located in a foreign country). The Plaintiff, a patent attorney-at-law, filed a claim for the fees for patent attorney services with a foreign client by referring to the minimum fees standards for each stage prescribed by the Korean Patent Attorneys Association and the expenses incurred therefrom. The foreign client is paid most of the amount claimed by the Plaintiff, and there is no fact that there is no separate agreement between the Plaintiff and the foreign client after

(2) The Plaintiff sent a written application to a foreign client for the cost of providing services at each stage (the cost required and patent attorney’s fee). The Plaintiff prepared and managed the details of the claim in order of claim number, claim amount, deposit date, deposit amount, etc., and managed the outstanding amount by the statement of the outstanding amount by sending a note demanding the transfer of the outstanding amount to a foreign client as soon as possible. Upon request from a domestic company, the Plaintiff applied for a patent-related application to a foreign country from a domestic company, there is also the fact that the payment of the outstanding amount is offset and paid by the outstanding amount that the domestic company received from the foreign client.

(3) In providing patent attorney services requested by a foreign client, the Plaintiff spent all of the expenses incurred in connection with the patent application-related patent office’s payment, translation fees and investigation fees, etc. as the Plaintiff’s funds, and reported global income tax, etc. by appropriating them as necessary expenses at the time of disbursement.

(4) From January 1, 2003 to December 31, 2005, the Defendant considered KRW 489,783,000 as an omission in sales, deducting KRW 5,028,573,00 from the Plaintiff’s patent attorney’s patent attorney’s service payment claim from KRW 5,518,356,00 (turf less than KRW 1,000; hereinafter the same shall apply) for the Plaintiff’s patent attorney’s service payment claim from the foreign client. Since the amount appropriated as an omission in sales is KRW 101,365,00,000, the Plaintiff did not report it as a patent attorney’s service payment from the foreign client, the Plaintiff amounted to KRW 388,418,00,00.

(5) In revising and notifying each of the instant dispositions, the Defendant calculated the tax amount by appropriating the exchange loss between the date of issuance of the written request for foreign clients and the date of payment of the service fees in addition to the necessary expenses in each relevant year.

[Ground of recognition] Facts without dispute, Gap evidence 2, Eul evidence 12, Eul evidence 13-1 to 8, Eul evidence 14, the purport of the whole pleadings

D. Determination

(1) Part on imposition of income tax of this case

(A) Article 39(1) of the Income Tax Act provides that “The year to which the annual income and the necessary expenses of a resident belong shall be the year in which the total income and the necessary expenses are determined.” The principle of confirmation of rights is to determine the period to which the income is attributed under the Income Tax Act. In the event there is time interval between the time when the right to the cause of income is determined and the time when the income is realized, it shall be deemed that there is income at the time when the right that is not the time when the income is realized and the time when the income is realized, and it shall be deemed that there is income at the time when the income is determined. The method of calculating the income of the pertinent year is to allow the tax in advance on the premise that it would be realized in the future. In order to realize that the income has been subject to taxation, if there is no need until the income is realized, it shall be considerably mature and finalized until the income is realized, and therefore, it shall not be determined uniformly by taking into account the nature and nature of the right to the income and the contents of the right.

(B) Article 48 subparag. 8 of the Enforcement Decree of the Income Tax Act, which provides for the payment period of total income from the provision of personal services based on the principle of confirmation of right, provides for the receipt date of “the earlier day between the date when the payment was made or the date when the provision of services was completed.” In other words, the Plaintiff filed a claim for the payment of each stage of service with respect to patent attorney services requested by a foreign client by a fee list, and the Plaintiff completed the provision of services before the filing date, and there was no separate agreement with the foreign client on the payment of the service fees in advance or ex post facto. In light of the fact that most of the Plaintiff’s payment was made at the Plaintiff’s request, the payment for the service was made at the rate list set by the Plaintiff. Considering that the Plaintiff’s payment was made at the time when all expenses incurred from the service provided by the foreign client were paid to the foreign client, the Plaintiff’s patent attorney’s payment period should be deemed lawful and reasonable as the date when the Plaintiff completed the service and the Plaintiff’s claim for payment of this case was made to the Plaintiff.

(C) The plaintiff asserted that the actual date of payment is the time when the patent attorney's income is determined based on the Supreme Court Decision 94Nu4608 delivered on August 12, 1994. However, the above precedents are related to Article 48 subparagraph 8 of the former Enforcement Decree of the Income Tax Act prior to the amendment by Presidential Decree No. 15967 delivered on December 31, 1998, and it is difficult to view that the above precedents directly apply to the disposition imposing the income tax of this case. There is no evidence to deem that there was a practice of national tax administration that the cost of service provided to a foreign client was based on the date of actual payment in connection with the receipt of payment. The exchange loss between the date of issuance of the written request and the date of deposit was appropriated in the necessary expenses, and only the reason that the deduction of the cost of service cannot be viewed differently due to the fact that the cost of service payment should be the date of actual payment of the service payment.

(2) The part on the disposition imposing the value added tax in this case

Article 9(2) of the Value-Added Tax Act and Article 22 subparag. 1 and 3 of the Enforcement Decree of the Value-Added Tax Act stipulate that the time of supply for the service is the time when the provision of the service is completed, and if this is not applicable, the time when the provision of the service is completed and the value of the service is finalized. According to the above, the disposition of imposition of the value-added tax in this case, which the Plaintiff considers as the time of supply for the patent attorney’s service upon completion of the provision of the service and the time when the patent attorney’s service, which is subject to value-added tax, is already completed and the payment is finalized at the time when the Plaintiff requested the service from a foreign client for the payment of the service.

4. Conclusion

Therefore, the part of the lawsuit of this case seeking revocation of the disposition of resident tax of this case is unlawful, and it is so decided as per Disposition by the assent of all participating Justices on the ground that the remaining plaintiff's claim is without merit.

List of Imposition

Sub-Items :

Year

(Taxable Period)

c) tax amount (cost) for the area;

Date of Notification

guidance.

Principal Tax

Resident Tax

Consolidateds

37,191,400

307,707,560

29,483,840

November 1, 2006

Global Income Tax

Sub-committees

324,322,320

294,838,480

29,483,840

November 1, 2006

203

103,589,900

94,172,640

9,417,260

November 1, 2001

204

69,349,170

63,044,700

6,304,470

November 1, 2006

205

151,383,250

137,621,140

13,762,110

November 1, 2006

Value-added Tax

Sub-committees

12,869,080

12,869,080

-

November 1, 2006

1, 2003

804,550

804,550

-

November 1, 2006

4, 2003

1,513,950

1,513,950

-

November 1, 2006

100 1. 1

2,209,840

2,209,840

-

November 1, 2006

204.2

4,648,330

4,648,330

-

November 1, 2006

1, 2005

2,381,710

2,381,710

-

November 1, 2006

2, 2005

47,810

47,810

-

November 1, 2006

1, 2006

862,890

862,890

-

November 1, 2006

-Finally -

Related Acts and subordinate statutes

○ Calculation of gross income amount under Article 24 of the Income Tax Act

(1) The total amount of income of a resident shall be calculated on the basis of the total amount received or received in the relevant year.

(2) In cases under paragraph (1), if any income other than money is imported, such income amount shall be calculated according to the value at the time of transaction.

(3) Matters necessary for the scope of the amount received or to be received, and the calculation or confirmation period shall be prescribed by Presidential Decree.

○ Article 39 of the Income Tax Act and the year to which the necessary expenses are reverted.

(1) The year in which the total amount of income and necessary expenses of a resident accrue shall be the year in which the total amount of income and necessary expenses are determined.

(4) Necessary matters concerning the year to which the total amount of income and necessary expenses under paragraph (1) are reverted, the calculation of acquisition value under paragraph (2) and the assessment of other assets, debts, etc. shall be

Article 48 (Receipt Date of Business Income)

The receipt date of the total amount of the business incomes shall be the following dates:

8. Provision of personal services;

The earlier date between the date scheduled to receive the price for services or the completion date of the provision of services;

○ Time of transaction under Article 9 of the Value-Added Tax Act

(2) The time when services are supplied shall be the time services are provided or goods, facilities or rights are used.

(3) Where an entrepreneur receives all or part of the price for goods or services before the time provided in paragraph (1) or (2) arrives, and at the same time issues a tax invoice provided in Article 16 or a receipt provided in Article 32 with respect to such price, the time of such issuance shall be deemed the time of supply for the goods or services concerned, respectively.

(4) Matters necessary for the time of supply under paragraphs (1) and (2) shall be prescribed by Presidential Decree.

Article 22 of the Enforcement Decree of the Value-Added Tax Act

The time of supply for services under Article 9 (2) of the Act shall be as follows: Provided, That if the time of supply for services supplied before closure of business arrives after such cessation of business, the time of supply shall be deemed the time of

1. In the case of ordinary supply, when the offer of the service is completed;

2. Where services are supplied on the basis of the standard payment, interim payment, long-term installment or on other terms, or services are continuously supplied on the basis of a unit of supply, when each part of the price is provided;

3. Where the provision of services is completed and the value of supply is determined, in case where the provisions of subparagraphs 1 and 2 are not applicable.

○ Return, payment, and imposition and collection of income tax under Article 177-4 of the former Local Tax Act

(1) When a person liable to pay income tax files a return, preliminary return or revised return on income tax under the Framework Act on National Taxes or the Income Tax Act, he/she shall file such return with the head of the competent tax office in a form prescribed by the Ordinance of the Ministry of Finance and Economy and pay it to the head of the competent Si/Gun (the head of the

(2) Where the head of a tax office collects the income tax (including the additional tax under Articles 81 and 115 of the Income Tax Act) according to the method of assessment and notice according to the Framework Act on National Taxes or the Income Tax Act, such income tax shall, notwithstanding the provisions of Article 177, be imposed and collected along with the income tax in the form prescribed by the Ordinance

(5) Where the head of a tax office receives a return on the pro rata income tax or imposes a notice or notice on imposition pursuant to paragraphs (1) and (2), he/she shall be deemed to receive a return

○ Receipt of business income under Article 48 of the former Enforcement Decree of the Income Tax Act

The receipt date of the total amount of the business incomes shall be the following dates:

8. Provision of personal services;

The date of payment of service charges under the agreement: Provided, That if the payment date is not fixed, the date of completion of the provision of the relevant personal services shall be the end.