Whether the instant transaction is a processed transaction or not

The circumstance alleged by the Defendant alone is insufficient to deem that the instant corporation did not have received approximately KRW 110 million services from the customer in the year 2015.

Article 47-2 of the National Tax Basic Act

2018Guhap6488

AA

BB Director of the Tax Office

May 30, 2019

August 23, 2019

1. On December 6, 2016, the Defendant revoked a disposition imposing global income tax of KRW 4,332,030 (including additional tax) on the Plaintiff in 2015.

2. The plaintiff's remaining claims are dismissed.

3. Of the costs of lawsuit, 2/5 shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

Paragraph 1 of Article 1 of the former Office and the defendant's disposition of imposition of global income tax of KRW 3,149,200 (including additional tax) against the plaintiff on December 6, 2016 shall be revoked.

1. Details of the disposition;

A. Status of the plaintiff and related persons

1) ① The JJ (hereinafter referred to as the “JJ”) established on November 20, 2013 for the purpose of human resources supply services and other contracting services, and SS was appointed as the representative director on June 17, 2014, and closed down March 31, 2015 without paying the value-added tax of KRW 569,28,950. ② The JS Co., Ltd. (hereinafter referred to as the “JS”) was established on August 8, 2014 with its business purposes as the human resources supply services and other contracting services, and CCC was appointed as the representative director on August 26, 2014; ③ OOO Co., Ltd. (hereinafter referred to as “OO”) was established as the representative director on June 17, 2014, and each ES was established as the ESF director on March 21, 2013; and ESF director on March 21, 2015, respectively.

2) The PPcomer Co., Ltd. (hereinafter referred to as “PPPP”) established on January 20, 2014 with human resources formation business as its business objective. The Plaintiff’s mother-friendly GG was concurrently an internal director and a representative director on November 11, 2014, but retired from the representative director on December 1, 2014, and retired from the internal director on January 22, 2016. At the time of the establishment of the PPP, HH and III acquired each 2,00 shares among the 4,000 shares, and HH acquired all shares on November 13, 2014, and III transferred the entire shares to each of the representatives on December 10, 2014, the Plaintiff transferred the PPP’s shares to the Plaintiff on December 20, 2015, and the Plaintiff transferred the PPPP’s shares to the Plaintiff on December 20, 2015.

3) (1) SS is a personal business entity, the type of business of which was operated on March 1, 2012, using it as a manufacturing business and a type of business, and the name of ○○○○○○. (2) WW (hereinafter referred to as “WW”) is a company incorporated on November 13, 2014 with its business purposes as labor management and employment agency business purposes. (3) MM (hereinafter referred to as “MM”) is a company incorporated on February 13, 199 with its business purposes as mining fiber and mining elements manufacturing business, etc.

(b) Conclusion of subcontract agreements and declaration of corporate tax of PPP and JJ;

1) On March 1, 2014, PPP and J entered into a contract with the JJ to the effect that the PPP will subcontract simple labor works, etc. conducted in any plant that the PPP is required to perform under a contract with the manufacture company, and that the JJ shall recruit workers and perform simple labor works in the above plant, and the PPP will calculate the contract cost from the first day of the month to the last day of the following month and pay it to the JJ in cash or designated account (contract duration from March 1, 2014 to February 28, 2015).

2) PP reported to the head of the tax office having jurisdiction over the place of tax payment the amount of income for the business year 2014 to KRW 876,035,605, tax base-85,832,189, and ② the amount of income for the business year 2015, March 30, 2016 to KRW 2,047,071,478, and the tax base-41,32,940, respectively.

C. The Defendant deemed that the sales revenue of SS, WW, TT and M (hereinafter referred to as “SS et al.”) from the revenue amount of the PP for the business year 2014 as the processed sales amount of KRW 476,056,641, and excluded the amount of KRW 506,38,982 from the JJ as the processed sales amount. Accordingly, the Defendant excluded the amount of KRW 506,38,982 from the deductible expenses.

Defendant: (i) KRW 30,332,341 (= KRW 506,38,982 – KRW 476,56,641) of the PP-201 business year plus KRW 33,365,575,00,000 (= KRW 30,332,341 x 0.1) of the value-added tax; (ii) it is obvious that the amount of the PP-204 business year was leaked to the Plaintiff; and (iii), 3,365,575,00,00 won, deeming that the amount of ownership is unclear; (iii) Article 67 of the former Corporate Tax Act (amended by Act No. 1608, Dec. 24, 2018; hereinafter the same shall apply); and (iv) Article 106(1)1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 26981, Feb. 12, 2016).

2) The Defendant deemed that the total amount of KRW 1,865,854,565 of the sales revenue of PPP for 4 companies such as SS among the revenue amount, ○○○○, △△△, Co., Ltd., Ltd., Maa and bbb Co., Ltd. (hereinafter referred to as the above 9 companies after combining them) was processed sales, and excluded from the income amount of KRW 1,865,85,565 as the processed sales. ② JS, OO, hh(hereinafter referred to as “hhh”), ttt (hereinafter referred to as “S”), △△△65,756, 985, 986, 196, 2985, 2986, 2985, 2986, 365, 1986, 196, 2985, 2986, 2985, 2986, 29865, 19865, 3666665, , etc.

3) On December 6, 2016, the Defendant issued the Plaintiff a disposition imposing global income tax of KRW 3,149,200 (including additional tax) (hereinafter referred to as “instant disposition”) in 2014, global income tax of KRW 4,332,030 (including additional tax), global income tax of KRW 4,332,030 (hereinafter referred to as “instant disposition”) in 2015, and “each of the instant dispositions” in combination with the first disposition. The calculation method of each global income tax is as follows, and each of the above global income tax is the amount less than KRW 10,00 from the total amount of tax calculated as listed below. The fact that there is no dispute between the Plaintiff and the Plaintiff, Gap’s evidence Nos. 1, 2, 4, and 3, evidence No. 15-1, 2-2, 16-2, and 16-2, and the purport of the entire pleadings as a whole.

2. The plaintiff's assertion

Each disposition of this case is unlawful on the following grounds.

A. PPP was supplied by the JJ in 2014 to five workers, including JS, during the business year of 2015, by each of the five companies that entered into a contract with the PP and supplied them to the companies that entered into the contract with the PP. The PP was paid service costs from the companies that entered into the contract with the PP and paid them to five companies, such as JJ and JS, so that the five companies, including JJ and JS, should pay them to each of the recruited workers.

B. Although the Plaintiff received the Plaintiff’s deposit from the PPP to the Plaintiff’s EE Bank account (Account Number**********************, hereinafter referred to as the Plaintiff’s EE Bank account), the said money was deposited and used in the Plaintiff’s account for convenience instead of the bonus received from the PP, and was merely for the operation of the PP’s funds. Thus, the imposition of the Plaintiff’s comprehensive income tax is against the substance over form principle.

(c) From May 13, 2014 to December 10, 2015, the Plaintiff deposited KRW 111,860,321 in total from the Plaintiff’s EE bank account (Account Number***********-********; hereinafter referred to as “PP bank account”) to the Plaintiff’s EE bank account. From February 17, 2014 to July 31, 2014, the Plaintiff deposited KRW 5,350,00 in cash in the account of the PP bank from February 17, 2014 to July 31, 2014, each of the above entry amounts must be deducted from the Plaintiff’s revenue amount.

D. The Plaintiff did not report the fact that it did not receive bonuses from the PPP.

It is unreasonable to impose additional tax on the ground that the Plaintiff in bad faith caused the payment of global income tax without filing a report on it under the premise that the amount received from the PP is a bonus.

3. Relevant statutes;

It is as shown in the attached Form.

4. Determination

A. Criteria for determining the legitimacy of each of the dispositions of this case

According to the former Corporate Tax Act, income for each business year of a domestic corporation shall be the amount calculated by deducting the total amount of deductible expenses belonging to the business year from the total amount of gross income which is included in the business year (Article 14(1)); and income shall be the amount of earnings generated by transactions which increase the net assets of the corporation, except as otherwise provided for in this Act, excluding the payment of capital or financing and the payment of contributions (Article 15(1)); and deductible expenses shall be the amount of losses incurred by transactions which reduce the net assets of the corporation, except as otherwise provided for in this Act (Article 19(1)).

4. The Defendant: (a) considered the sales amount of the PPP’s 2014 business year to be the processed sales amount of KRW 476,056,641; (b) considered the purchase amount of KRW 506,38,982 from the JJ as the processed sales amount; (c) deemed the purchase amount of KRW 506,38,982 from the JJ as the processed sales; (b) considered the sales amount of the PP’s 2015 business year as the processed sales amount of KRW 1,865,854,565, and excluded the total sales amount of KRW 1,898,724,546 from the five companies, such as the JS, as the processed sales; and (c) considered the purchase amount of KRW 1,898,724,546 from the five companies, such as the JS, as the non-processed sales amount

Although the Plaintiff asserts that each of the above sales of the PPP is not a processed sales, if the above sales are true sales, the increase in earnings of the PPP for each business year in 2014, 2015 increased, and thus, the amount of income subject to the disposition of income increases. Therefore, the Plaintiff’s above assertion is not a ground for illegality of each of the dispositions of this case, but is beyond the scope of the grounds for each disposition of this case.

Therefore, it is not determined whether the above sales of the PPP are false or not, but it is determined whether each purchase of the PP is false or not.

B. Whether the first disposition is lawful

The judgment of Gap's evidence 6-1, 2, Gap's evidence 7, 8, 10, 12 through 15, Eul's evidence 1, 4, 5, Eul's evidence 6-1, 2, Eul's evidence 13 and 14, and the purport of the whole pleadings 2)

A) the existence of the reasons for the action

Comprehensively taking account of the aforementioned evidence and the following circumstances revealed, it is reasonable to view that the PPP was not provided with services of KRW 506,388,982 from the JJ in the year 2014. Therefore, the ground for disposition No. 1 is recognized inasmuch as the PP’s payment to the JJ does not constitute deductible expenses under Article 19 of the former Corporate Tax Act.

(1) Comprehensively taking account of the following circumstances, most of the tax invoices issued by J appears to be false tax invoices issued without supplying goods or services.

(A) In full view of the following circumstances, it is reasonable to deem the FF to have led to the issuance of tax invoices under the name of the FF while substantially operating JJ, JS andOO.

① According to FF F F’s prosecutorial statement, FF made DD, which is a wife, as the representative director of the OO, and it actually operated the OO. The representative director of JJ himself is FF’s wife’s relative relationship, and JS’s inside director is FF’s relative relationship, and CCC’s relative director is FF’s preference. FF stated that FF was the intention to marry and marry in the tax office’s suspicion examination, and FF stated that FF was its male-child-child relationship in the SS tax office’s criminal charge examination.

② Prior to the appointment as the representative director of the JJ, SS had no business experience in the human resource contracting business, and the police only lent FF only in the name of 5 million won, and the fact of establishment of the JJ was stated to the FF that the FF had been unaware of the fact of establishment of the JJ. EE, who worked as auditor and employee at the JJ, stated in the police that the police was able to have himself/herself in the office of the JJ and did not seem to be almost SS. The above EE was also working as an internal director of the OOO.

③ From January 1, 2014 to March 31, 2015, FF’s account to AAB bank account, KRW 2,273,450,00 was deposited by JJ in KRW 745,725,00 from JS, and KRW 206,013,00 from OO in the occurrence of a disaster.

④ The FF transferred money from JJ and JS to the PE bank account of the FF from J and JS to the FF bank account. The FF transferred money from the FF to the Plaintiff’s PE bank account of the FF to the actual operator of the PP bank account.

⑤ JJ, JS andOO used the same IP and CPU in issuing electronic tax invoices, and FFF’s e-mail.

The cable telephone of the JS, which is contacted by the customer of the JS, is the wire telephone opened by the FF.

(B) However, the JJ issued to the OO a tax invoice of KRW 86,364,00 for the first period of 2014, KRW 169,364,00 for the supply price for the second period of 2014, KRW 146,72,00 for the second period of 2014, and KRW 146,72,00 for the supply price for the second period of 2014 to the JJ, the JJ, the JS, and the OOOO that is substantially controlled and operated by the FF, barring any special circumstance, each of the above tax invoices issued by the JJ shall be deemed to be the false tax invoices issued without the supply of the service.

(C) In addition, the JJ issued a tax invoice of KRW 7,08,964,00 in total supply value only for the year 2014 after its establishment on November 20, 2013. Employees working in the JJ appear to have been only EE, and it is difficult to gain a formal payment of KRW 7 billion more than one year after its establishment.

(2) The human resources supplier is a business that recruits workers and supplies them to companies that need human resources, such as manufacturers. As such, the human resources supplier is somewhat unusual and there is a case where the human resources supplier is the most rare to allow another human resources supplier to obtain input tax deduction. JJ and PP both are human resources suppliers.

(3) If the JJ actually supplied human resources to PP pursuant to the instant contract, it is common to keep data on the list of the supplied human resources, details of work, etc. However, SS did not file a list of contracting human resources being managed due to a tax office’s questioning of suspected criminal offenders, and stated that it did not prepare a human resources management ledger, and the instant lawsuit did not submit the aforementioned data.

(4) The most of the money transferred from the FF FF to the Plaintiff EE bank account is equivalent to 50% of the amount equivalent to value-added tax out of the service cost transferred from the TPP’s account to the JJ’s account. The transfer was made on the same day as the date the service cost was transferred from the TPP’s account to the JJ’s AA bank account.

In relation to the above money, the Plaintiff stated that it was presumed that it was a precedent fee received by introducing the company that was unaware of whether it was deposited from the FF, and that FF was the most of the money that the Plaintiff paid or lent to the Plaintiff personal loans from the Plaintiff, and that the Plaintiff was remitted to OO, JS, and JJ as an audit and inspection of the Plaintiff’s introduction of the company. However, the Plaintiff and FF’s each of the above statements of the Plaintiff and FF were transferred to the 10 won unit, such as transfer of the amount calculated to the 10 won unit, etc. In addition, the JJ made it difficult to obtain the above statements from the Plaintiff on a regular basis. In addition, the JJ discontinued closed its business on March 31, 2015 without paying the value-added tax collected from the PP to the head of the tax office having jurisdiction over the place of tax payment, including value-added tax, and it is reasonable to view the FFF to have paid the amount equivalent to 50% of its transfer from the PP bank account to the AP bank account to the 50% account.

In conclusion, the FF and the Plaintiff issued a tax invoice as if the JJ did not supply human resources to the PP and received input tax deduction from the above purchase tax invoice, and the JJ did not pay to the head of the tax office having jurisdiction over the place of tax payment of value-added tax and did not pay the money received from the PP to the head of the tax office having jurisdiction over the place of tax payment. This is a sufficient circumstance to view that the JJ would have divided one of them into one another.

(5) The fact that the employee status of the workers submitted by the J in the course of the investigation shall be entered into PPP, the KJF, the KJF, the LABB, the KAB II, the KAB, the KAB, and the KABA(**) that the worker status of the JJ is not the JJ but the KJ has been supplied by the JJ.

Aa and H among the above workers stated that both JJ was aware of the company of JJ, and that MM or SS was working for PP by providing membership in PP.

B) As to the assertion on the violation of substance over form principle, the assertion on the amount deducted, and additional tax

The purpose of the former Corporate Tax Act is not to provide the representative with the basis of the fact that such income was generated, but to consider certain facts that can be recognized as such in order to prevent unfair conduct under tax law by a corporation as bonus to a unconditional representative regardless of their substance (see Supreme Court Decision 2005Du8030, Jan. 18, 2008).

Therefore, the first disposition is not based on the premise that the PPP paid a bonus of KRW 33,365,575 to the Plaintiff, but it does not violate the principle of substantial taxation by imposing a comprehensive income tax on the income recognized as a bonus to the representative pursuant to the proviso of Article 106(1)1 of the former Enforcement Decree of the Corporate Tax Act (see Supreme Court Decision 73Nu155, Apr. 30, 1974). Since the amount deposited by the Plaintiff to the AP bank account of the Plaintiff is not deducted from the Plaintiff’s global income, this part of the Plaintiff’s assertion is without merit.

C) Sub-determination

The Plaintiff’s assertion on the first disposition is without merit, and the first disposition is lawful. The second disposition is lawful.

1) Facts of recognition

A) Hhh was established on March 17, 2015 with the purpose of human resources formation, the entertainment business, etc., and the representative director is MM. Tt was established on July 24, 2015 with the aim of human resources supply services and other contract services, etc. The representative director was established on July 24, 2015, and the representative director was ○○○○, Company Directors EE, CHH. b) the money transferred from the AA bank account of PP to the Plaintiff’s EA bank account and the money sent by ○○○○ to the Plaintiff’s EA bank account is as follows.

Facts that there is no dispute over recognition, Gap evidence 7, 8, 19, Eul evidence 3, the purport of the whole pleadings, and the purport of the whole pleadings.

2) Determination

A) PP’s total purchase amount of KRW 1,898,724,546, including JS in the business year 2015, consists of KRW 1,122,60,000, KRW 11000,000, KRW 11000,000, KRW 267,000,000, KRW 3tt 267,000, KRW 40,000, KRW 279,000,000, KRW 5,000,000, KRW 15,000,000,000.

First, we examine whether the part of the above purchase amount with respect to hhh andt is a processed purchase.

B) The Defendant asserts that Hh is presumed to be a corporation established at will for the issuance of false tax invoices, on June 30, 2015, and Tt as an enterprise closed on April 11, 2016, respectively, by deeming that there was no specific purchase corresponding to the sales and that there was no specific purchase corresponding to the sales.

C) Comprehensively taking account of the following circumstances revealed from the facts acknowledged earlier, it is reasonable to deem that the PP was not provided with a service of approximately KRW 267 million from the supply price from Tt in the year 2015. Therefore, it does not constitute a deductible expense under Article 19 of the former Corporate Tax Act.

(1) According to the above financial flow, the representative director GB oftt appears to have withdrawn the amount equivalent to the amount received by Tt from the PP as service costs and sent it to the Plaintiff EE bank account.

From August 5, 2015 to January 6, 2016, GB does not have any special circumstance to pay a large amount of KRW 185,629,620 in total to the Plaintiff. It is difficult to regard the last place of remittance as a financial transaction between ordinary private persons, such as KRW 1,2,3,7,8, and KRW 9, and it is presumed thatt returned part of the service cost received from the PP.

(2) Tt and PP both are human resources suppliers, and Tt was traded with PP from July 24, 2015 immediately after the incorporation of the company.

(3) The inside director EEE of Tt is an internal director of an OO and an employee who has worked as an auditor and an employee of JJ. The inside director of Ttt is a husband of FF DD and a husband of FF DD and an OO who was in charge of business management.

D) However, in full view of the following circumstances, it is insufficient to view that PPP was not provided with approximately KRW 110 million services from HH in the year 2015 due to the circumstance alleged by the Defendant. Therefore, it cannot be deemed that the above KRW 110 million, which the PP paid to HH, does not constitute a deductible expense under Article 19 of the former Corporate Tax Act.

(1) Although both hh and P are human resources suppliers, it cannot be readily concluded that human resources suppliers supply human resources to other human resources suppliers are false, and there should be additional indirect facts.

(2) The case holding that there is no reason to acknowledge that the Plaintiff’s deposit account was paid to the hhP as it did not have any reason to recognize that the hhhhhh is paid, and that the hhhhhh is paid to the employees recruited by the PP as it did not pay value-added tax, and that the hhhh is paid to the employees recruited by the PP as total sum of 80 million won, and that the hhhhh is paid to the Plaintiff without any reason to acknowledge that the hhhhh’s representative did not pay the value-added tax but distributed part of the cost to the Plaintiff. However, there is no reason to acknowledge that the hhhh is paid to the Plaintiff as its representative if the hhhhh’s representative did not pay any value-added tax, and that part of the cost was distributed to the Plaintiff.

(3) There is no evidence to acknowledge that there is a special relationship between the officers and the Plaintiff, and that there was no investigation or investigation conducted by an investigation agency or a tax office with respect to the executives and employees of the hhh [Article 19 of the Investigation Report (Evidence A) prepared on November 13, 2018 by ○○○ District Public Prosecutor’s Office, the assistant prosecutor’s office, Kimk-k, which belongs to the hhh public prosecutor’s office, did not constitute a case under investigation after an accusation against the hhh ortt, the counterpart company to which the PP received the tax invoice was received. According to the accusation report, the above company is deemed to have all discontinued companies, and there was no specific purchase corresponding to the sales, and thus it is deemed that there was no specific purchase corresponding to the sales, and thus it is merely a content that the processing transaction is finalized, and there

(4) Even if hhh discontinues its business with a delinquent amount of tax, there may be cases where the value-added tax, which was collected after the supply of human resources to PP, was discontinued without paying it to the head of the tax office having jurisdiction over the place of tax payment.

E) Therefore, the Defendant’s exclusion of the purchase amount of KRW 1110 million from hh in the business year 2015 from the deductible expenses is unlawful in view of the processing purchase.

However, if the above purchase amount is included in deductible expenses, the amount of 1,865,854,565 won that was excluded from deductible expenses due to processing sales, and the amount of 1,787,724,546 won that should be excluded from deductible expenses due to processing purchases (i.e., KRW 1,898,724,546 - approximately KRW 111,00,000) are included in deductible expenses, and the amount of excluding gross income is higher than the amount of excluding gross income. Thus, the TPP's increase in the 2015 business year is nonexistent, and there is no amount to be disposed of.

Therefore, the second disposition is unlawful without further review on whether each purchase amount from the 2015 business year JS, OO, △△△△△ is a processing purchase.

5. Conclusion

Thus, the disposition No. 2 should be revoked as it is illegal, and the disposition No. 1 is legitimate. The plaintiff's claim is accepted within the scope of the above recognition, and the remaining claims are dismissed as they are groundless.