Seoul Administrative Court 2016Guhap2076 (O7. 2016)

The disposition in this case to which the 10-year exclusion period is applied in accordance with the amended provisions is legitimate.

Since the initial date of the exclusion period of imposition of global income tax for the year 2008 is June 1, 2009, it can be seen that the revised provision was enacted on December 31, 201, and the existing exclusion period of imposition has not expired again on December 31, 201, and therefore, it is reasonable to view that applying the exclusion period of imposition for 10 years in accordance with the amended provision as it constitutes an in personam retroactive legislation.

Article 26-2 of the National Tax Basic Act

2016Guhap2076 Revocation of Disposition rejecting a claim for rectification of global income tax (Refund)

Park AA

Head of the District Tax Office

June 16, 2016

July 7, 2016

1. The plaintiff's appeal is dismissed.

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

Cheong-gu Office

The judgment of the first instance shall be revoked. The defendant's rejection disposition against the plaintiff on October 28, 2015 against the plaintiff shall be revoked as to the claim for correction of KRW 359,717,478 of global income tax for the year 2008.

1. Quotation of judgment of the first instance;

The reasons for the judgment of this court are as follows. Paragraph (2) is the same as the reasons for the judgment of the court of first instance, except for the addition of the plaintiff's assertion by this court, and thus, it is cited in accordance with Article 8 of the Administrative Litigation Act and the main sentence of Article 42

○○ 2nd 15th ' June 23, 2015' is changed to ‘ June 30, 2015'.

○ Parts 4, 10 to 17 shall be advanced as follows:

Article 26-2 (1) 1 of the Framework Act on National Taxes provides that "if 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," which is amended by Act No. 11124 on December 31, 201, if a taxpayer evades a national tax, obtains a refund or deduction by unlawful means, it shall be ten years from the date on which the income tax or corporate tax can be imposed on the amount disposed of under Article 67 of the Corporate Tax Act in relation to the corporate tax." In addition, Article 2 of the Addenda provides that "the amended provisions of the latter part of Article 26-2 (1) 1 of the Corporate Tax Act shall apply to the amount treated under Article 67 of the Corporate Tax Act for the first time after January 1, 2012."

Meanwhile, according to the purport of Articles 38 and 59 of the Constitution that provides for no taxation without the law, a provision imposing new tax liability or previous tax liability may be applicable only when the requirements for imposition are met after its enforcement (see, e.g., Supreme Court en banc Decision 2008Du17363, Sept. 2, 201). The retroactive application of tax-related provisions that provide for new tax liability or previous aggravated tax liability is limited to cases where the taxpayer’s trust at the time of the act of realizing taxation requirements lacks reasonable grounds and there is no need to protect the more serious principle of fair taxation or where it is inevitable to realize public welfare (see, e.g., Supreme Court Decision 81Nu423, Apr. 26, 1983). Furthermore, the principle that retroactive legislation can be applied only to the cases where it is possible to ex post facto limitation of individual’s trust in the process of legislation, which is an individual’s legal protection, based on the principle of no ex post facto law.

In light of the circumstances of the above disposition, it is difficult to recognize that B made a false report that B made a payment of brokerage service expenses to C in the business year 2008, and then received a transfer to Korea through the borrowed account managed by the Plaintiff can be seen as an act to evade B corporate tax in view of the circumstances, etc., and it is difficult to recognize that the Plaintiff, the actual owner of B, in fact, anticipated that the tax authority’s disposition should be carried out in the future, and thereby, he/she could not be recognized as an act to evade income tax on the bonus to be reverted to himself/herself (the Plaintiff voluntarily stated in the investigation agency that he/she received a transfer to Korea through several borrowed accounts as above, as the Plaintiff was investigated under suspicion of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (property flight), etc. of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (property flight). Accordingly, the exclusion period for global income tax for the year 2008 shall be five years pursuant to Article 26-2(1)3 of the former Framework Act on National Taxes,

However, the issues applicable from the amount disposed of under Article 67 of the Corporate Tax Act for the first time after January 1, 2012, which was newly established by Act No. 111124, December 31, 2011, are stipulated that the exclusion period of imposition of income tax, etc. on the amount disposed of in accordance with Article 67 of the Corporate Tax Act shall be 10 years, in cases where national taxes evaded, refunded, or deducted by unlawful act are corporate tax. As to global income tax on the Plaintiff for the year 2008, the exclusion period of imposition for five years has not yet lapsed at the time of January 1, 2012, where issues were to be enforced. Accordingly, applying the exclusion period of imposition for ten years to the Defendant’s disposition in this case, it is permitted in principle as a so-called so-called so-called retroactive legislation that is applied to facts in the past, but not yet completed.

As to this, the Plaintiff asserts that Article 2(1) of the Addenda of the Framework Act on National Taxes (amended by Act No. 111124, Dec. 31, 201) applies only to cases where a person obligated to report and a tax authority take a disposition of income with respect to the corporate tax base reported after January 1, 2012. However, Article 2(1) of the Addenda of the Framework Act on National Taxes provides that "the amended provisions of the latter part of Article 26-2(1)1 of the Framework Act on National Taxes only provide that "the latter part of Article 26-2(1) shall apply from the amount of disposal pursuant to Article 67 of the Corporate Tax Act for the first time after January 1, 2012, as alleged by the Plaintiff, only the case where a disposition of income with respect to the corporate tax base reported after January 1, 2012 is limited. Therefore, the Plaintiff’s above assertion is not acceptable."

2. Additional Judgment of this Court - The applicability of ‘Fraud or other unlawful act'

A. The plaintiff's assertion

1) The mere fact that there is no documentary evidence to deem that the corporation was actually provided with brokerage service for the expenses paid as brokerage service charges cannot be deemed to have evaded corporate tax as B's "Fraud or other unlawful act". Thus, the exclusion period for imposition of ten years cannot be applied to B, and therefore, the exclusion period for imposition of ten years cannot be applied to the Plaintiff on the premise that B was "Fraud or other unlawful act."

2) Preliminaryly, on May 1, 2015, the Defendant imposed a disposition imposing global income tax of KRW 8,201,820 on the Plaintiff for the reason of omitting the return amounting to KRW 41,943,574 on the Plaintiff on May 1, 2015. However, this is merely a mere omission in filing a return, and it cannot be deemed an act of evading income tax due to fraud or other unlawful act. Therefore, the period for exclusion of imposition of five years is applied, and the Defendant’s disposition of imposition on May 1, 2015, which was five years after the lapse of the period for exclusion of imposition of five years.

B. Determination

1) Basic legal principles of "Fraud and other unlawful acts"

The legislative intent of Article 26-2(1) of the former Framework Act on National Taxes (amended by Act No. 10405, Dec. 27, 2010) is to: (a) the limitation period of the right to impose national taxes, in principle, is five years for the prompt determination of tax relations; (b) where there is any unlawful act, such as making it difficult to detect the taxation requirement of the national tax or writing out false facts, it is difficult to expect the tax authority to exercise the right to impose national taxes; and (c) it is difficult to expect the period of imposition of national taxes to extend to 10 years because it is difficult for it is difficult for the tax authority to discover that it is a tax evasion report; (d) the term “Fraud or other unlawful act” under Article 26-2(1) of the former Framework Act refers to a fraudulent act which makes it impossible or considerably difficult to impose taxes or collect taxes; (e) it is also difficult to impose and collect taxes by means of a fraudulent act or other active act which is considerably difficult to do so; and (e.g., it can be deemed that it is considerably difficult to impose and impose taxes or impose taxes.

2) As to the brokerage service fee paid to C

Comprehensively taking account of the following facts acknowledged by adding the purport of the argument in Eul evidence 6, the plaintiff was not merely a mere filing of a false return under tax law with regard to KRW 1,100,040,117, which was paid to C as brokerage service expenses, but it was impossible or significantly difficult to impose and collect taxes by actively concealing it by using the borrowed name account in the name of the relative in the name of the plaintiff managed for several years, and bringing into Korea most of them. Accordingly, the plaintiff's act constitutes "Fraud or other unlawful act" and thus ten years have passed from the exclusion period of imposition. The plaintiff's assertion cannot be accepted.

① After establishing the “C” for the purpose of obtaining loans in Singapore, the Plaintiff, from April 25, 2008 to December 31, 2008, transferred the amount equivalent to KRW 1,100,040,117 to the financial account in the name of C, from April 25, 2008 to December 31, 2008.

② Since then, in Singapore, the Plaintiff partially used the above amount as entertainment expenses, corporate maintenance expenses, employee pay, etc., and deposited approximately KRW 1,051,726,465 within three months the remainder into a domestic account in the name of relative and branch managed by the Plaintiff and carried them into Korea.

(3) There is no data that C has otherwise offered brokerage services to B.

④ In addition to the Plaintiff, the Plaintiff, along with D, arranged for the export of steel in China-U.S., to S Co., Ltd., and managed the total amount equivalent to KRW 810,401,290 from June 5, 2006 to March 11, 2008, by being deposited into the domestic account in the name of about 10 persons, such as the wife, sibling, number, type, and scam, which he managed through the bank account in the U.S. located in the U.S. of the intermediary in China-U.S.

3) As to the Plaintiff’s conjunctive assertion

According to the above quoted evidence, the Plaintiff’s 41,943,574 won, which the Plaintiff claimed to be simply omitted while filing a comprehensive income tax return, can be acknowledged as the sum of the Plaintiff’s commission from the steel exporter broker in the middle and South America from February 1, 2008 to March 11, 2008, to the Plaintiff’s type, number, and lighting account in the name of Cho Jong-k.

As seen above, as long as the Plaintiff actively concealed revenues through multiple borrowed account for a long time, and as long as the above KRW 41,943,574 is also included in this part, this part also constitutes “Fraud or other unlawful act,” the exclusion period for imposition of ten years shall apply. Therefore, the Plaintiff’s preliminary assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit. The judgment of the court of first instance with the same conclusion is just, and the plaintiff's appeal is dismissed as it is without merit.