There is no procedural defect in the tax investigation, and the processing costs of this case should be regarded as the outflow from the company due to the processing of the representative director's provisional payment.

Furthermore, it is difficult to view that the Plaintiff extended the scope of the tax investigation, and furthermore, the amount equivalent to the processing costs of the instant case was leaked out of the company at the time of accounting transfer by account transfer in 2009.

Article 67 of the Corporate Tax Act

2015Guhap1810 Revocation of Disposition of Imposition of Corporate Tax, etc.

▲▲해운 주식회사

The Director of Incheon Tax Office

September 8, 2016

October 13, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of KRW 15,223,00 on November 27, 2014 and the imposition of KRW 79,558,653 on the Plaintiff on November 27, 2009 and the imposition of KRW 15,223,00 on the corporate tax shall be revoked.

1. Details of the disposition;

A. The Plaintiff, a legal entity that runs the shipping transport business, included the processing costs of up to 245,374,145 won in total in the account book from January 20, 2009 to December 31, 2009 (hereinafter “processing costs of this case”) as shown in the attached Table, and recorded the counter account in the account book as a deposit (hereinafter “the accounts accounts of this case”).

B. On December 31, 2009, the Plaintiff substituted the account with the shareholders, officers, and employees’ long-term loans (hereinafter “long-term loans”) equivalent to the processing costs of the instant case as indicated below.

C. The entry records from 2009 to 2013 by the Plaintiff’s Note . . . Had on a long-term loan.

The same shall apply to the entry in the Schedule.

D. The Plaintiff filed a return on the tax base and tax amount of corporate tax for the business year 2009, which included the processing cost of the instant case in deductible expenses, in the Incheon Tax Office.

E. Around May 2014, the Plaintiff was investigating the instant processing costs as a suspicion of embezzlement, and the accounting records of the instant case were revealed, state, and state, forest, and forest. The Plaintiff appropriated the long-term loan from the long-term loan account into other earned surplus accounts to substitute the account as substitute for the account. On May 28, 2014, the Plaintiff filed a revised corporate tax return for the business year 2009, which includes the tax base and tax amount calculated by applying the general under-reported additional tax to the non-deductible reserve in the business year of 2009.

F. From September 18, 2014 to October 17, 2014, the Defendant investigated the Plaintiff’s corporate entrepreneur integration without giving a prior notice of tax investigation pursuant to the proviso to Article 81-7(1) of the Framework Act on National Taxes for the business year of 2011. The Defendant: (a) deemed that the Plaintiff was unjustly under-reported with regard to the portion reverted to the year 2009, not the amount reverted to the year 2011 after the tax investigation; (b) notified the Plaintiff on November 27, 2014 of the rectification of the penalty tax on the corporate tax for the business year 2009; and (c) notified the Plaintiff on November 27, 2014; (d) denied the reservation on the processing cost of the instant case; and (e) deemed that the accrual was unclear, disposed of as a bonus for the business year 2009 of the representative AA; and (e) notified the Plaintiff that the amount of income should be withheld as income tax.

1) As seen earlier, substitution of the accounts of provisional deposits equivalent to the processing costs of this case into the accounts of full-time ... Long-term loans.

2) Transfer 30,388,440 won to another account of the balance of the long-term loan account until December 31, 2010

3) By December 31, 2011, the balance of the Account for Long-term Loans shall be offset by KRW 18,800,000.

4) By December 31, 2012, the balance of the account for long-term loans shall be offset by KRW 6,000,000.

5) By December 31, 2013, the balance of the account for long-term loans 29,620,369 Won .

G. On February 23, 2015, the Plaintiff filed an objection with the Tax Tribunal on March 10, 2015 (hereinafter “instant disposition”), and subsequently filed an administrative appeal on April 17, 2015, but the Tax Tribunal dismissed the said disposition on October 6, 2015.

[Reasons for Recognition] 1-4, 8, 9 (including branch numbers, if any; hereinafter the same shall apply), 1-3

Statement, the purport of the whole pleading

2. Whether the instant disposition is lawful

(a) Relevant statutes;

It is as shown in the attached Form.

B. Whether prior notice to expand the scope of tax investigation is unlawful

(1) Summary of the assertion

㈎ 원고

The defendant shall conduct a tax investigation on the plaintiff's 201 business year corporate tax

Since a tax investigation was conducted on corporate tax for 2009 business year without prior notice of expansion, the instant disposition is unlawful.

㈏ 피고

In the process of taxation data processing, the Defendant found and corrected errors in the Plaintiff’s revised corporate tax return for 2009 business year and did not conduct a tax investigation for the business year 2009 business year. Even if a tax investigation was conducted in relation to corporate tax for 2009 business year, the tax liability for the business year 2009 was established on December 31, 2009, and Article 81-9 of the Framework Act on National Taxes, which stipulates the duty of prior notification of the tax authority when the scope of the tax investigation was extended, was enforced on April 1, 2010. Therefore, the above provision is not applicable and it is not illegal even if the prior notification was not made. Furthermore, even if Article 81-9 of the Framework Act on National Taxes applies, the lack of prior notification is so serious that the lack of illegality is so serious that the Plaintiff cannot be deemed illegal.

(2) Determination

Article 81-9 (1) of the Framework Act on National Taxes provides that "tax officials shall not extend the scope of tax investigation under investigation except in cases prescribed by Presidential Decree such as where it is confirmed that specific suspicion of tax evasion exists for several taxation periods or is related to other items of tax," and Article 81-9 (2) of the same Act provides that "if a tax official expands the scope of tax investigation pursuant to paragraph (1), he/she shall notify in writing the taxpayer of the

In light of the above facts, Gap 3-4's facts and the overall purport of the pleadings, the plaintiff added the processing costs of this case to deductible expenses and investigated the processing costs of this case as a suspicion of embezzlement on May 28, 2014 after filing a corporate tax return for the business year 2009, and added the processing costs of this case to gross income (non-deductible expenses) and filed a revised corporate tax return for the business year 2009. After the commencement of the consolidated investigation into the corporate tax for 2011, the defendant did not undergo prior notification procedures with the plaintiff pursuant to the proviso of Article 81-7 (1) of the Framework Act on National Taxes. Meanwhile, it is recognized that the defendant has secured data that the plaintiff appropriated the processing costs of this case as the processing when filing a corporate tax return for the business year 2009, and there is no clear evidence to deem that the defendant investigated the data of the plaintiff in addition to the above data.

According to the above facts, regardless of the above tax investigation, it is highly probable that the defendant issued taxation by correcting the error of corporate tax in the year 2009, which was initially reported and paid by the plaintiff on the basis of the plaintiff's revised tax return data (in this case, the correction disposition is irrelevant to the illegality of the tax investigation), and the defendant cannot be deemed to have expanded the scope of the tax investigation in overall in 2009.

Even if the Defendant deemed to have expanded the scope of the tax investigation, in light of the series of circumstances leading to the instant revised tax return, the Plaintiff recognized the accounting of the instant case, and the fact that it appears that the Plaintiff could have sufficiently predicted the relevant tax investigation (no particular dispute over the grounds for extension of the scope of the tax investigation), etc., it is difficult to view that the procedural defect that the Plaintiff failed to receive the prior notice on the grounds for extension of the scope of the tax investigation would have an impact on the illegality of the instant disposition.

The plaintiff's assertion on this part is not accepted.

(c) Whether to outflow from the company;

(1) Plaintiff’s assertion

The Plaintiff, by appropriating the processing costs of this case as the expenses for processing, prepared financial statements that the net income for the pertinent case was actually reduced, and submitted them to the Customer for the purpose of entering into a contract in favor of the customer, and thereby conducting the accounting of this case. The processing costs of this case are merely a nominal obligation that is not anticipated to counterinteinate, and thus, the processing costs of this case did not have

The processing costs of this case are the week. From the time when the long-term loan was appropriated in the account, to the time when the account is replaced with other profits surplus.The total amount of the long-term loan exceeds the processing costs of this case at all times, and therefore, the state is the week. Among the long-term loan, all the money that the representative director paid as a half of the receipts and disbursements should be deemed to have been appropriated for the half of the receipts and disbursements by other representative directors, not for the processing costs of this case.

Therefore, the disposition of this case, which was disposed of as a representative bonus, is unlawful because the processing cost of this case was deemed to have been leaked out of the company.

Even if there was a outflow from the processing costs of this case, the Plaintiff is the main week of the processing costs of this case around May 28, 2014, and the Plaintiff is the main week of the long-term loan.In addition, the Plaintiff deleted the long-term loan account from the long-term loan account and recovered the amount leaked to the company outside of the company as a method of filing a revised corporate tax return after removing it from the long-term loan account. As such, the disposition of income as to the processing costs of this case under Article 106 (

(2) Determination

Where a corporation fails to record its sales in the account book despite the fact of sales or appropriates the cost of processing in the account book, barring any special circumstance, it shall be deemed that the profit of the corporation equivalent to the whole amount of the omission of sales or the cost of processing has been leaked out to the private company. In such cases, the special circumstance that the omission of sales or the cost of processing is not leaked to the private company shall be proved by the corporation asserting it (see, e.g., Supreme Court Decisions 97Nu19151, May 25, 1999; 2001Du2560, Dec. 6, 2002). Meanwhile, even if a corporation liable to pay corporate tax includes the cost of processing in the deductible expenses in the account book while filing a report on the tax base and amount of corporate tax, it shall not be deemed that the amount equivalent to the cost has been leaked to the private debt, unless there is any change in the net assets of the relevant corporation, and thus there is no other circumstance to recognize the outflow of the company (see, e.g., Supreme Court Decision 2010Du382).

In light of the following circumstances, based on the relevant legal principles, comprehensively taking into account the facts and the purport of the entire arguments in the facts and the evidence presented by the Plaintiff, it is reasonable to view that the evidence alone, which was presented by the Plaintiff, does not constitute a nominal processing obligation for which the instant processing cost is not set up, and at least, the amount equivalent to the instant processing cost was leaked from the time when the instant processing cost was accounted as a transfer of account in 2009, at least by the time when it was accounted as a transfer of account.

(1) The Plaintiff appears to have been entering into the account of a long-term loan with the representative director. The Plaintiff appears to have been entering into the account of a long-term loan and seems to have reached KRW 1,126,448,130 as of December 208.

The Plaintiff seems to have appropriated the processing costs of this case 17 times from January 2009 to December 2009, and the representative director's account in the counterpart account is deemed to have appropriated the receipts and disbursements account (it is not clear whether cash has been deposited in the counter account of the above provisional receipts and disbursements account in the record). Meanwhile, during the period from May 2009 to December 2009, there was a provisional receipts and disbursements amounting to KRW 1,412,640,00 in excess of the processing costs of this case 13 times over 13 times from December 2009 (the separate provisional receipts and disbursements transaction during that period is not confirmed, and it is not specified as a counter-written guidance on the balance, etc. of the above previous provisional receipts and disbursements in addition to the criminal transactions as of August 10, 2009).

In the instant case where there is no objective data on the authenticity of the transaction of provisional receipts and disbursements as to the balance of the previous provisional receipts and disbursements, in view of the fact that the provisional receipts and disbursements account, the counterpart account of the processing costs of the instant case, as shown in the attached Table, do not coincide with the amount thereof (the degree of three times is counted only without the counter account), and the state. In addition, the account was replaced with the long-term loan account, and there was a preliminary deposit amount of KRW 755,646,000 in total over four times, there is a large room to deem that the said provisional receipts and disbursements were made in relation to the processing costs of the instant case.

Article 28(1) of the former Act provides that the Plaintiff shall be deemed to have the actual obligation to pay the processing costs of the instant case on December 31, 2009, and the representative director, who exceeds the processing costs of the instant case after 2010, shall be deemed to have been entered in the account for the long-term loans of this case, and the latter shall be deemed to have been entered in the account for the long-term loans of this case (the balance of the long-term loans of this case shall be zero won).

Applicant If the representative director is able to withdraw funds easily and frequently used for the creation of corporate non-financial resources, it is reasonable to select other processing debt accounts which are not the receipts and disbursements account as the counter party account of the instant processing costs, if the purpose was to reduce profits only on the account books without the outflow of funds as alleged by the Plaintiff.

(v) the circumstances that the Plaintiff substituted the instant processing costs for the instant processing costs. The circumstances that the instant long-term loans were replaced by other earned surplus accounts at the time of settlement of accounts for the business year 2014 are merely after the instant processing costs were leaked out of the company.

⑹ 본래 사외유출되어 당해 법인의 대표자 등에게 귀속된 금액에 관하여 일단 소득세 납세의무가 성립하면 사후에 그 금액이 당해 법인에 환원되었다 하더라도 이미 성립한 소득세납세의무에 영향을 미칠 수 없으므로(대법원 1999. 12. 24. 선고 98두7350 판결 등 참조), 법인세법 시행령 제106조 제1항 제1호에 따라 소득처분을 하는 것이 원칙이다. 다만 같은 조 제4항 본문은 당해 법인인 소정의 기한 내에 자발적인 노력에 의하여 그 금액을 회수한 경우에는 그 금액이 사외유출되지 아니한 것으로 보아 위 원칙에 따른 소득처분을 하지 아니함으로써 당해 법인에게 자발적인 자기시정의 기회를 주고 있으나, 같은 항 단서는 당해 법인이 사외유출된 금액을 회수하더라도 그것이 당해 법인의 자발적인 노력에 의한 것이 아닌 경우에는 다시 원칙으로 돌아가 소득처분을 하도록 규정하고 있다(대법원 2011. 11. 10. 선고 2009두9307 판결 참조).

First of all, there is a lack of evidence to deem that the Plaintiff actually recovered the amount equivalent to the processing costs of this case (such as the Plaintiff’s assertion, even if the circumstance that the amount included in the calculation of earnings was deleted from the long-term loan account is recognized, it shall not be deemed otherwise). Even if the representative director of AA returns the amount out of the company, it may not affect the liability to pay income tax of the AA already established even if the amount was returned. Furthermore, as seen earlier, AA et al. would have anticipated the disposal of income equivalent to the processing costs of this case, which was revealed in criminal investigation as seen earlier, and filed a revised return by adding the processing costs of this case to the gross income (non-deductible)

D. Whether an additional tax for underreporting was illegal

(1) Plaintiff’s assertion

The plaintiff merely entered the processing expenses on the account books, and did not intentionally perform an active act such as preparing false evidence for the purpose of tax evasion, and did the accounting of this case for the purpose of entering profits only in the account books for the purpose of negotiating favorable to the contract process with the customer. Thus, it is illegal for the defendant to impose an unfair under-reported penalty tax by deeming the plaintiff's report of the corporate tax for the business year 2009 as not a general under-reported return but an unfair under

(2) Determination

Article 47 of the former Framework Act on National Taxes (Amended by Act No. 9911, Jan. 1, 2010; hereinafter the same shall apply)

-3 In the case of underreporting the tax base by an unjust method, which is the requirement for an unfair penalty tax for underreporting under Article 2(1) of the Act, means underreporting the tax base by an affirmative act, such as making it difficult to discover the taxation requirement of the national tax or forging false facts, which results from the purpose of tax evasion, such as evading the progressive tax rate and applying the provisions on carried forward losses (see Supreme Court Decision 2013Du12362, Nov. 28, 2013).

First of all, according to the facts and the purport of the statement and arguments in the above 1.3, even though the Plaintiff did not actually have paid the amount equivalent to the processing costs of this case, the Plaintiff actively drafted false appearance such as preparing the deposit slips in Chapter 17 and keeping false expenses in the account book, and underreported the corporate tax base and tax amount for 2009 business year based on this. Accordingly, the Defendant reported the modification after including the amount equivalent to the processing costs of this case’s gross income from May 28, 2014, the Plaintiff entered false accounting books, such as the Plaintiff’s slips, and it appears to have been known that the processing costs of this case was included in deductible expenses. The Plaintiff evaded corporate tax corresponding to this by making the Plaintiff enter the processing costs of this case’s account book in the false account book, and therefore, it is reasonable to deem that the Plaintiff underreporting the tax base by actively committing an unlawful act in accordance with Article 27(2)1 of the former Enforcement Decree of the Framework Act on National Taxes, such as preparing a false account book, etc.

Furthermore, even if the principal purpose of the Plaintiff’s principal purpose of accounting of the instant case was to prepare financial statements containing less profit than the actual amount of corporate tax to be shown to the Customer in order to negotiate a contract favorable to the Customer, insofar as the Plaintiff was aware of the fact that the Plaintiff would be liable for corporate tax less than the appropriate amount of corporate tax by underreporting the said amount based on the accounting of the instant case, it can be deemed that the purpose of tax evasion was also deemed that the Plaintiff was also the object of tax evasion (it is deemed that the Plaintiff was subject to a non-suspect disposition as to the charge of embezzlement of the instant processing costs, but it is difficult to view that the requirements of the penalty tax for underreporting were not satisfied solely on

The plaintiff's assertion on this part is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

Relevant statutes

Basic Act

Article 81-9 (Restriction on Extension of Scope of Tax Investigation)

(1) A tax official shall not extend the scope of a tax investigation under progress, except in cases prescribed by Presidential Decree, such as where it is confirmed that specific suspicion of tax evasion exists for several taxable periods or is related to other items of tax.

(2) Where a tax official expands the scope of a tax investigation pursuant to paragraph (1), he/she shall notify the taxpayer of the reason and scope in writing.

Corporate Tax Act

Article 67 (Disposal of Income)

When filing a report on the corporate tax base on the income for each business year under Article 60 or determining or revising the corporate tax base under Article 66 or 69, the amount included in the calculation of earnings shall be disposed of as bonus, dividend, other outflow from the company, internal reserve, etc. to the person to whom the income belongs, as prescribed by Presidential Decree.

Enforcement Decree of Corporate Tax Act

§ 106. Disposal of income

(1) The amount included in gross income under Article 67 of the Act shall be disposed of as classified in the following subparagraphs. The same shall apply to non-profit domestic corporations and non-profit foreign corporations

1. Where the amount included in the calculation of earnings (including the amount not included in the calculation of losses under Article 27-2 (2) of the Act) is obvious that it has been leaked out of the company, it shall be deemed dividends, bonuses from the disposition of profits, other income, and other outflow from the company under the following items according to the person to whom it reverts: Provided, That where it is unclear to whom it reverts, it shall be deemed that it has been reverted to the representative (where the total number of stocks owned by an executive who is not a minority stockholder, etc. and persons with a special relationship under Article 43 (8) is 30/100 or more of the total number of stocks issued or total investment amount of the relevant corporation and actually controls the management of the relevant corporation, such person shall be deemed the representative

(b) If the person to whom it belongs is an officer or employee, the bonus to the person to whom it reverts;

2. Where the amount included in gross income has not leaked out of the company, it shall be deemed internal reserves;

(4) Where a domestic corporation recovers the amount illegally flown out of Korea, such as omission of sales and processing expenses, within the period for report of modification under Article 45 of the Framework Act on National Taxes and reports it to include in gross income as tax adjustment, the disposition of income

In any of the following cases, the same shall not apply where the amount of outflow from the company is included in the gross income with prior knowledge that correction is made:

1. Where it has received a notice of tax investigation;

2. Where it becomes aware of the commencement of the tax investigation;

3. Where a tax official takes a local business trip or starts confirmation affairs to collect taxation data or handle civil petitions;

4. Where he receives a notice of explanation of taxation data from the head of tax office having jurisdiction over tax payment.

5. Where the fact of outflow from the company is confirmed in the investigation or trial by an investigative agency;

6. Other cases similar to those referred to in subparagraphs 1 through 5, where it is deemed that the correction has become known in advance.

former Framework Act on National Taxes (Amended by Act No. 9911, Jan. 1, 2010)

Article 47-3 (Additional Tax for Underreporting)

(1) Where a taxpayer (excluding any person exempted from liability for tax payment pursuant to Article 29 of the Value-Added Tax Act) files a tax base return under the tax-related Acts within the statutory due date of return and the reported tax base falls short of the tax base that should be reported pursuant to the tax-related Acts, the amount equivalent to 10/100 of the amount calculated by multiplying the calculated tax by the ratio of the amount equivalent to the underreported tax base to the tax base by the calculated tax (hereafter referred to as "generally underreported penalty tax" in this paragraph) shall be added to, or refunded from, the amount of tax payable: Provided, That

(2) Notwithstanding the provisions of paragraph (1), where a tax base for underreporting exists by unjust means, the sum of the following amounts shall be added to the payable tax amount or deducted from the refundable tax amount:

1. The amount of additional tax on a underreported tax base by unlawful means: An amount equivalent to 40/100 of an amount calculated by multiplying the ratio of an amount equivalent to an underreported tax base by unlawful means (hereafter in this paragraph, referred to as "unfairly underreported tax base") to the tax base by the calculated tax amount (hereafter in this paragraph, referred to as "additional tax for unlawful underreporting"): Provided, That where the income tax base or corporate tax base reported by a person subject to double-entry bookkeeping or a corporation falls short of the tax base for income tax or corporate tax that should be reported under the tax-related Acts, it shall be the larger of an amount calculated by multiplying the amount of penalty tax for unlawful underreporting and the amount of revenue related to the underreported tax base (hereafter in this

2. The amount of additional tax on the portion other than that referred to in subparagraph 1: An amount equivalent to 10/100 of an amount obtained by multiplying the ratio that a tax base less the unjustly underreported tax base accounts for in the amount equivalent to underreported tax base by the calculated tax amount.

Enforcement Decree of the former Framework Act on National Taxes (amended by Presidential Decree No. 22038, Feb. 18, 2010)

Article 27 (Additional Tax on Non-Filing)

(2) The term "manner prescribed by Presidential Decree" in the main body of Article 47-2 (2) of the Act means any of the following manners:

1. Making a false entry in books, such as double entry;

2. Preparation of false evidence or false documents (hereafter in this Article, referred to as false evidence or other evidence);

3. Receipt of false evidence (limited to receipt knowing that it is false).

4. Destruction of books and records;

5. Concealment of property, or fabrication or concealment of income, profits, acts or transactions;

6. Other unlawful acts such as evading national taxes, obtaining a refund or deduction.