Gangnam branch support-2017-Gu Partnership-47 ( November 09, 2017)

In case of intentional omission in cash sales, both corporate tax and income disposition are subject to the exclusion period of 10 years.

The exclusion period of imposition is 10 years because an act of omitting cash sales is an act of false recording in the book, such as preparation of double-entry ledger under Article 3 (6) 1 of the Punishment of Tax Evaders Act, which makes it impossible or considerably difficult to impose and collect taxes.

Article 26-2 of the National Tax Basic Act

(Chuncheon)Revocation, etc. of Disposition of Imposing Corporate Tax, 2017Nu1143

O high-speed stock company

O Head of the tax office and one other

Chuncheon District Court Decision 2017Guhap47 Decided November 9, 2017

August 22, 2018

September 19, 2018

1. The plaintiff's appeal against the defendant OO director is dismissed.

2. The primary claim shall be dismissed by this Court against the Director of the Regional Tax Office of defendantO corrected by this Court.

3. The plaintiff's preliminary claim against the Director of the Regional Tax Office added by this Court is dismissed.

4. The costs of appeal between the Plaintiff and Defendant OO director and the costs of lawsuit between the Plaintiff and Defendant OO director are fully borne by the Plaintiff.

The judgment of the first instance shall be revoked.

1. On December 1, 2015, the head of the competent tax office imposed corporate tax (including additional tax) 191,900,130 won on the Plaintiff in 2006, imposed corporate tax (including additional tax), 532,45,790 won in total, and 541,058,68,680 won in special agricultural and fishing villages tax (including additional tax) in total, and 541,05,68,680 won in total, and 723,47,478,550 won in corporate tax (including additional tax) in 2008, imposed corporate tax (including additional tax) in 747,939,060, and special agricultural and fishing villages tax (including additional tax) in 1,51,180 won in total, 749,490,240 won in total, shall be revoked.

2. (a) On December 1, 2015, the commissioner of the regional tax office having jurisdiction over Defendant OOO shall revoke the notification of the change in the amount of income of KRW 358,871,960, the notification of the change in the amount of income of KRW 358,871,960, the notification of the change in the amount of income of KRW 1,033,621,00, the notification of the change in the amount of income of KRW 1,368,619,850, the notification of the change in the amount of income of KRW 1,708,118,530, the notification of the change in the amount of income of KRW

B. On December 1, 2015, the commissioner of the regional tax office of defendant OO confirms that a disposition of 358,871,960 won for the plaintiff on December 1, 2006, a disposition of 1,033,621,00 won for the year 207, a disposition of 1,368,619,850 won for the year 2008, a disposition of 1,368,619,850 won for the year 2008, and a disposition of 1,708,118,530 won for the year 209 is null and void.

1. Quotation of judgment of the first instance;

(4) The reasoning for the judgment of the court is as follows: (1) additional tax returns on the Plaintiff’s assertion that additional tax had been imposed by the court of 00, 2000, 1) and 2) were identical to the statement of reasons for the judgment of the court of first instance other than those attached to the Plaintiff’s conjunctive claim by the court of 00, 2000, 1) and 420 of the Civil Procedure Act were not applicable to the omission of part of the cash sales between 206 and 209, 2000, 2000, 2000, 2000, 2000, 2000, 2000, 2000, 2000,000, 200,000,000,000,000,000,000,000,000,000,000,00,000,00.

○ The Director of the Regional Tax Office of OO under the 11th, 17th, and 3th of the judgment of the first instance court shall respectively be changed to "the Director of the Regional Tax Office of OOO".

○ The 2nd, the 14th, 15th, and 20th, the 2nd, the 15th, and the 20th, respectively, shall be changed to the "the head of the Defendant OO."

○ The second instance judgment "3,173,716,010 won" is changed to "10,801,730,660 won" in the second instance judgment.

○ It is changed to “4,469,696,930 won” in the fourth sentence of the first instance judgment to “4,469,231,340 won.”

○ The 3rd judgment of the first instance court is changed to “Defendant’s assertion” in the 17th judgment.

○ From 4th to 13th, the first instance court's decision shall be deleted.

○ The fourth 14th m. of the judgment of the first instance shall be changed to “(a)”, and the sixth m. 3rd m. shall be changed to “B.”, respectively.

○ It amends the first instance court’s judgment No. 6. 4 to “influence or illegality” as “influence”.

○ Attached Form 2 of the Judgment of the first instance court shall be changed to Attached Form 2 of this Judgment.

2. Additional determination

A. The plaintiff's assertion

On February 26, 2016, the Plaintiff filed a request for examination with the Board of Audit and Inspection as to the disposition of income in the instant case with the Commissioner of the Regional Tax Office, but the Board of Audit and Inspection did not make a decision to the Board of Audit and Inspection to the effect that the period of deliberation expires for three months. In such cases, even if the Board of Audit and Inspection did not make a decision, the Plaintiff ought to be deemed to have passed the procedure

B. Determination

Article 46 (3) of the Board of Audit and Inspection Act provides that the determination of the Board of Audit and Inspection on the request for examination shall be made within three months from the date of receipt of the request, except in extenuating circumstances. Article 46-2 of the Board of Audit and Inspection Act provides that "the applicant may file an administrative lawsuit against the head of the administrative agency who has undergone a request for examination or a decision under Articles 43 and 46 within 90 days from the date of receipt of the notification of the relevant decision by the relevant disposition agency." Meanwhile, the Board of Audit and Inspection does not have the same provision as Article 56 (3) of the Framework Act on National Taxes that an administrative litigation may be filed from the date the period for determination expires even before the notification of the decision, and it is difficult to view that the above provision of the Framework Act on National Taxes can be applied by analogy to the request for examination of the Board of Audit

3. Determination as to the conjunctive claim that the plaintiff added in this court

A. The plaintiff's assertion

1) The latter part of Article 26-2(1)1 of the Framework Act on National Taxes shall be interpreted to apply to cases where an independent fraud or other unlawful act concerning the evasion of income tax, other than fraud or other unlawful act to evade corporate tax, is recognized. Since the Plaintiff did not engage in fraud or other unlawful act with respect to the evasion of income tax, the latter part of Article 26-2(1)1 of the Framework Act on National Taxes does not apply, and accordingly, the exclusion period for exclusion of five years shall apply to income tax, not with the exclusion period for exclusion of ten years. The instant disposition of income taken against the Plaintiff by Defendant OOO regional tax office on December 1, 2015 is null and void since the exclusion period for exclusion of five years has already lapsed.

2) The latter part of Article 26-2(1)1 of the Framework Act on National Taxes newly enacted by Act No. 111124, Dec. 31, 201 under the principle of prohibition of retroactive legislation and the principle of protection of trust, shall apply to the portion to which the exclusion period begins after January 1, 2012, the enforcement date of the amended Act, and the same shall not apply to the portion to which the exclusion period is in progress at the time of the enforcement of the amended Act. Accordingly, the exclusion period for exclusion of five years shall not apply to the income tax reverted to the Plaintiff in 2006 through 209. Accordingly, the exclusion period for exclusion of five years shall apply, rather than the exclusion period for exclusion of ten years, to the income tax reverted to the Plaintiff in December 1, 2015. The instant disposition of this case made by Defendant OO head office against the Plaintiff on December 1, 2015 is null and void since

B. Determination

1) Article 26-2(1)1 of the former Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 201) provides that “where a taxpayer evades a national tax, obtains a refund or deduction by fraudulent or other unlawful means, it shall be ten years from the date on which the national tax can be imposed, and where a taxpayer does not fall under subparagraph 1, subparagraph 3 of the same Article, it shall be five years from the date on which the national tax can be imposed.”

However, Article 26-2(1)1 of the Framework Act on National Taxes (amended by Act No. 111124, Dec. 31, 2011) newly established a provision that "if the national tax evaded, refunded, or deducted due to an unlawful act is corporate tax, it shall be for ten years from the date on which the income tax can be imposed on the amount disposed of pursuant to Article 67 of the Corporate Tax Act (hereinafter referred to as "amended provision"). In relation to the application of the amended provision, Article 2(1) of the Addenda of the Framework Act on National Taxes (amended by Act No. 26-2(1)1 of the amended provision provides that "the latter part of Article 26-2(1) of the same Act shall apply from the amount disposed of pursuant to Article 67 of the Corporate Tax Act for the first time after January 1,

The above amended provisions stipulate that even if the exclusion period of corporate tax is ten years due to a corporate fraud or other unlawful act, it is difficult to deem that the representative of a corporation has been expected to receive the bonus disposal or the constructive excess disposal due to the name of the portion to be reverted even if the exclusion period of corporate tax falls under ten years, and thus, the exclusion period of imposition of global income tax due to bonus disposal or the constructive excess disposal is five years in principle (see, e.g., Supreme Court Decisions 2007Du20959, Jan. 28, 2010; 2007Du11382, Apr. 29, 2010); and the exclusion period of imposition of income tax on the amount disposed of as bonus and dividend in relation to the corporate tax evaded by fraud or other unlawful act is set up for ten years as well as corporate tax.

However, inasmuch as it is recognized that the Plaintiff committed fraud or other unlawful act to evade corporate tax, the latter part of Article 26(1)1 of the Framework Act on National Taxes, even if the Plaintiff did not commit an independent fraud or other unlawful act regarding the evasion of income tax, the exclusion period for imposition of income tax becomes ten years. Therefore, the disposition of income in this case, which the director of the regional tax office of defendant OOO against the Plaintiff on December 1, 2015, was lawful since it was within the exclusion period for imposition of ten years.

2) Although it is not allowed to regulate the past facts and legal relations, it is not allowed to do so even when the so-called quasi-appeal legislation covering the fact relevance is in progress or the exclusion period is in progress at the time of the amendment (see, e.g., Supreme Court Decision 2005Du2612, Jul. 26, 2007). If the supplementary provision of the amended provision is interpreted only in accordance with the language and text, if the disposition of income under Article 67 of the Corporate Tax Act takes place after January 1, 2012, the exclusion period of imposition of income tax or corporate tax from the disposition of income may always be ten years, but as seen earlier, the said supplementary provision of the amended provision of the Corporate Tax Act cannot be applied if it is deemed that the income tax has already been reduced or exempted before the exclusion period of imposition expires (see, e.g., Supreme Court Decision 201Du26151, Mar. 27, 2014).

In addition, in order to determine whether the amendment of the statutes violates the principle of protection of trust by infringing the trust of the parties to the existence of the statutes, on the one hand, on the other, the purpose of public interest realized through the amended statutes should be comprehensively compared and balanced (see, e.g., Supreme Court en banc Decision 2003Du12899, Nov. 16, 2006). Even if the taxpayer’s trust is somewhat infringed due to the amended regulations, the amended regulations were established for the purpose of 10 years as well as income tax on the amount disposed of as bonus, dividend, etc. with respect to corporate tax evaded by fraud or other unlawful act, and thus, the purpose of public interest is apparent. The issues are merely extending the exclusion period of taxation from 5 years to 10 years under the expiration of the exclusion period of taxation without the expiration of the exclusion period of taxation. In light of the above, it is difficult to see that new tax liability is imposed on the taxpayer, and where a corporation evades corporate tax refund or deduction by unlawful act, it is more difficult to apply the amended regulations to protect its trust.

The amended provisions came into effect on January 1, 2012, before the expiration of five years from the exclusion period of income tax for the Plaintiff in the year 2006 through 2009. Since Defendant OOO regional tax office first received the instant income tax for the Plaintiff in the year 2006 through 2009, the exclusion period of imposition of income tax for the Plaintiff in the year 2006 through 2009 based on the instant income disposition is 10 years since the revised provisions apply. Accordingly, the instant income disposition that Defendant OOO regional tax office made against the Plaintiff on December 1, 2015 was lawful since the exclusion period of imposition of income tax for the Plaintiff in the year 2006 through 2009.

3. Conclusion

Therefore, the plaintiff's claim against the director of the regional tax office of defendant OO is dismissed as it is without merit. The judgment of the court of first instance is just, and the plaintiff's appeal against the director of the regional tax office of defendantOO must be dismissed as it is without merit. Since the part of the plaintiff's main claim against the director of the regional tax office of defendantOO corrected by the court is illegal, it is dismissed as it is not proper. The plaintiff's conjunctive claim against the director of the regional tax office of defendantOO added by this court is dismissed as it is