A representative of the other party account of processing costs shall be deemed to be a outflow from the company.

The calculation of the provisional payment by the representative in the counter account following the appropriation of processing costs shall be deemed to have been out of the company, and since the appropriation of processing costs constitutes an unfair method under Article 47-3 (2) of the Framework Act on National Taxes, the imposition of unfair under

Article 67 of the Corporate Tax Act

2017Guhap6895 Revocation of Corporate Tax Imposition Disposition, etc.

○○○ Incorporated Company

000 director of the tax office

March 8, 2018

April 26, 2018

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

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

Cheong-gu Office

The disposition of imposition of corporate tax of KRW 99,05,160 (including additional taxes) accrued for the business year 201, July 1, 2016, the Defendant issued to the Plaintiff, and the disposition of notification of change in the amount of income of KRW 813,06,153, as of July 6, 2016, shall be revoked, respectively.

1. Details of the disposition;

A. The Plaintiff is a stock company established around July 15, 1994 for the operation of automobile parts manufacturing business, etc.

B. In the business year 2011, the Plaintiff appropriated 950,000,000 won in total, including raw material costs, for 154 times in total as indicated below (hereinafter “the instant processing costs”), and appropriated 950,000,000 won in total, which is the representative of each corresponding account, for the corresponding corresponding short-term loans (hereinafter “the instant processing costs”).

C. As of December 31, 2011, KRW 136,933,847 out of the provisional deposit received by the representative of the instant case was disposed of, and the balance of the provisional deposit became KRW 813,066,153 (hereinafter “the balance of the provisional deposit”).

D. On August 23, 2013, the Plaintiff received a notice of submission of corporate tax explanatory data and a notice of revised return from the Defendant on November 4, 2013, and received a revised return and paid corporate tax of KRW 230,071,810 as corporate tax in non-deductible expenses. The Plaintiff disposed of the total amount of KRW 136,93,847, which was treated as bonus, as bonus, and the total amount of KRW 813,06,153, which is the remainder of the provisional collection amount, as internal reserve, respectively.

D. In handling the same as described in the foregoing paragraph (d) above, the Plaintiff entered the accounts as indicated below. In other words, the balance of the instant provisional revenue is included in the Plaintiff’s debt on the balance sheet for the business year 2011, but it appears that it was replaced by the carried-over surplus in the business year 2013.

E. From December 8, 2015 to December 24, 2016, the National Tax Service’s regular business audit was conducted against the Plaintiff. As a result, the Commissioner of the National Tax Service ordered the Defendant to take corrective measures on the ground that the amount of the above KRW 813,06,153 (the balance of the provisional amount in this case, which was disposed of as retained earnings, is also reasonable to be disposed of as bonus. Accordingly, the Defendant issued an order to take corrective measures against the Plaintiff on July 1, 2016, issued an additional notice of correction and imposition of corporate tax of KRW 9,05,160 (including additional tax) that reverts to the Plaintiff for the business year of 2011, and issued a notice of change in the amount of income for the business year of 813,06,153 (hereinafter referred to as “each of the above dispositions”).

F. On September 28, 2016, the Plaintiff filed a tax appeal against the Defendant seeking revocation of each of the instant dispositions, but the Tax Tribunal rendered a decision to dismiss the Plaintiff’s claim on July 25, 2017.

Facts without any dispute, Gap evidence 3, Eul evidence 4-1 through 7, Gap evidence 5-1 through 3, Gap evidence 6-1, 2, Gap evidence 7 through 13, Gap evidence 14-1, 2, Gap evidence 15-1 through 3, Gap evidence 16-1 through 3, Eul evidence 16-1 and 2, the purport of the whole pleadings, and the purport of the whole pleadings.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The balance of the provisional deposit of this case was not actually treated as a nominal obligation that was not planned to be anti-indembied to the representative director from the beginning, and was corrected and deleted, so it does not constitute the outflow from the company. Therefore, each disposition of this case by the defendant, which was premised on the balance of the provisional deposit of this case was unfair.

Even if the balance of the provisional payment of this case was out of the company, it is merely an excessive appropriation of the expenses that the plaintiff calculated, and thus, it does not constitute an "unfair method" under Article 47-3 (2) of the former Framework Act on National Taxes. Therefore, it is unreasonable for the defendant to impose an unfair under-reported additional tax

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

For the following reasons, the balance of the provisional payment in this case was reverted to the plaintiff's representative and was out of the company. The plaintiff's act of writing out and appropriating the processing costs in this case constitutes "unfair method" under Article 47-3 (2) 1 of the former Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 201; Article 5 (1) of the Addenda of the Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 201); therefore, it is reasonable to view that the balance of the provisional payment in this case constitutes "unfair method" under Article 47-3 (2) 1 of the Addenda of the Framework Act on National Taxes. Accordingly, the defendant's respective dispositions

① The Plaintiff asserted that the amount of provisional receipts by the representative of the instant case was not counted in the outflow of the company. However, as seen earlier, the Plaintiff actually dealt with KRW 136,93,847 out of the provisional receipts by the representative of the instant case.

② Article 106(1)1 of the Enforcement Decree of the Corporate Tax Act provides that “where the attribution of the amount included in the calculation of earnings is unclear, it shall be deemed that it has been reverted to the representative of the corporation.” In addition, the act of using the corporation’s funds by the representative director, etc., who is the actual manager, is not based on the premise of early recovery, barring special circumstances, and thus, it constitutes an outflow from the corporation as an expenditure itself for such amount (see Supreme Court Decisions 2007Du23323, Nov. 13, 2008; 2007Du20959, Jan. 28, 2010).

③ As to the process costs of the instant case and the process costs of the instant representative, the Plaintiff asserted to the effect that “the Plaintiff was forced to reduce the supply rate by manufacturing, processing, and supplying assembly facilities, such as engines and transmission machines, to HH automobiles, and that it was anticipated that the Plaintiff would have an excessive delivery rate reduction pressure from the side of HH automobiles in comparison with the Plaintiff’s operating profit rate in the immediately preceding business year in 2011.” However, it is insufficient to deem the balance of the instant processing costs and the amount of the instant representative’s provisional revenue to be not included in the outflow of the company. In addition, as indicated in the Plaintiff’s assertion, it appears that the appropriation of the instant processing costs and the amount of the instant representative’s provisional revenue was derived from the attempt to lower the return on the financial statements for the business year 2011 (in fact, the Plaintiff’s operating profit rate for the business year 2011 was not included in the processing costs of the instant case, 20% in the calculation of the processing costs of the instant case).

④ Since the Plaintiff’s withdrawal of the instant processing costs was 154 times in total during the period from January 1, 201 to December 30, 2011, it is difficult to deem that such withdrawal was merely an excessive appropriation of the cost incurred by mistake.

⑤ In addition to the above circumstances: (3) In addition to the Plaintiff’s financial statements according to the appropriation of the processing costs of this case and the Plaintiff’s financial statements by the representative of this case, the purpose of tax evasion is sufficiently recognized.

6) Although the Plaintiff acknowledged the false entry in the books, the Plaintiff also argued the illegality of each disposition of the instant case on the grounds that the tax authority could easily know the false entry, according to the aforementioned evidence, it appears difficult for the tax authority to easily understand the Plaintiff’s false entry from the standpoint of the tax authority (as seen earlier, the withdrawal of the processing costs of the instant case was made over 154 times for a long period of time, and the items are diverse, and it seems difficult for the tax authority to easily detect such false entry. It is difficult for the Plaintiff to regard the same amount as the Plaintiff’s assertion on the sole ground that it is difficult to view that the difference between the difference between whether it is easy to understand from the standpoint of the tax authority and whether it constitutes the “unfair method” is difficult.

3. Conclusion

Therefore, each of the claims of the plaintiff in this case is dismissed as it is without merit, and it is so decided as per Disposition.