Seoul Administrative Court 2014Guhap50606 ( October 16, 2015)

In a lawsuit seeking revocation of a tax imposition disposition, the burden of proof on the facts of taxation requirements is on the tax authority.

(1) In a lawsuit seeking the revocation of a tax imposition disposition, the tax authority bears the burden of proving the facts of taxation requirements. Thus, if the tax authority directly proves the facts of taxation requirements in the specific lawsuit process or declares the presumed facts of taxation requirements in light of the empirical rule, the said taxation disposition constitutes an illegal disposition that fails to meet the taxation requirements.

Article 52 of the Corporate Tax Act

2014Nu6687 Revocation of Disposition of Corporate Tax Imposition

○ Stock Company

○ Head of tax office

on 16, 2015

on January 13, 2015

1. The defendant's appeal is dismissed.

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

1. Purport of claim

The Defendant’s disposition of imposing corporate tax of KRW 00,00,000 for the business year 2007 against the Plaintiff on March 5, 2013, the corporate tax of KRW 00,000,000 for the business year 2008, and the corporate tax of KRW 0,000,000 for the business year 2010 shall be revoked.

2. Purport of appeal

The part of the judgment of the court of first instance that lost is revoked. The plaintiff's claim corresponding to the above revocation is dismissed.

1. Scope of adjudication of this court;

As stated in the purport of the claim, the plaintiff filed a claim for revocation of both the disposition imposing corporate tax of KRW 00,000,000 for the business year of 2007, KRW 00,000 for the business year of 2008, and KRW 0,000,000 for the business year of 2010. The court of first instance rejected the lawsuit concerning the claim for revocation of the disposition imposing corporate tax of KRW 0,000 for the business year of 2010. The plaintiff did not file an appeal, which is subject to the judgment of this court, is limited to each claim for revocation of the disposition imposing corporate tax of KRW 00,000 for the business year of 207, KRW 000 for the business year of 200,000 for the business year of 208.

2. Quotation of judgment of the first instance;

The reasoning of this court's ruling is as follows, and the defendant added some of the following contents to the appellate court's decision, and it is identical to the reasoning of the first instance court's decision except where the defendant added the judgment of the first instance in the appellate court as set forth in paragraph 3.

O The following shall be added under the U. 25th judgment of the first instance court:

Article 43 (Non-Inclusion of Bonuses in Calculation of Losses)

(4) Remuneration paid to executives of a non-permanent corporation shall be excluded from cases falling under Article 52 of the Act and shall be included in the calculation of losses.

O The following shall be added below the 13th judgment of the first instance court:

6. Where cash and other assets or services are provided with no compensation or at an interest rate, tariff, or rental rate lower than the market price (excluding the short sentence omitted);

3. Judgment on the defendant's assertion

A. The defendant asserts that the above evidence has a strong probative value, and that the confirmation document (Evidence No. 4) of the family affairs shall not be deemed false, inasmuch as the evidence is insufficient to support that BB had performed its duties as an auditor, and that AA, a three-way obligor, had never worked as an auditor in the door-to-door (Evidence No. 3-1) prepared by BB with the defendant's employee.

Generally, in a lawsuit seeking the revocation of a tax imposition disposition, the tax authority is liable for proving the facts requiring taxation. As such, if the tax authority fails to directly prove the facts requiring taxation in the specific lawsuit or disclose the facts that are not subject to taxation in light of the light, such taxation disposition constitutes an unlawful disposition that does not satisfy the requirement for taxation (see, e.g., Supreme Court Decision 2010Du20805, Mar. 28, 2013; Supreme Court Decision 2013Du26194, Apr. 10, 2014). Meanwhile, the determination on whether to deny the wrongful calculation of the definition of the lawsuit under Article 52 of the Corporate Tax Act is based on an objective and unreasonable method, not based on a reasonable method of a person with a special relationship, but on a case where it seems reasonable in light of the overall transaction practices enumerated in each subparagraph of Article 88(1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 17457, Dec. 31, 2001).

In light of the above legal principles, this case is examined.

In the case of AA’s written response (No. 3-1 of the evidence No. 3-1), it is true that BB was old at the time when BB was registered as the auditor (7 to 80 years of age) and that it was difficult for AB to easily reject its credibility since it was the person liable for tax payment. However, several lawsuits have been repeated over several years between AA and DD and BB, and the AA has been criminal complaints against DD that is a relative relative, etc. In particular, BB filed a civil suit claiming payment of large retirement allowance against CCC in which BB was a representative director, and the AB did not appear to have served as the auditor in the above civil procedure; the first instance court rendered the judgment in favor of the Plaintiff at the first instance court; the AA was unable to respond to the above evidence No. 1 in light of the fact that the AA and DD were repeatedly filed several times during several years of time, and that it was hard for BB to verify its credibility in the first instance court’s response to the above investigation.

In light of the fact that in the case of the EE Certificate (No. 4), and that it appears that the EE had not been in a position to verify whether BB had worked in the office or performed the audit as the manager of the closed room in the underground of the company's building before division, it is difficult to believe it as it is.

Furthermore, as shown in the Defendant’s argument, although the FF document (No. 6-3) is written in the FF document as evidence, and even according to the statement itself, the FF visits the FF document as an employee of the tax office that vicariously conducts the tax affairs of the company prior to the division to the company prior to the division only for November and February of one year. Therefore, it is difficult to view the FF document as being in a position to verify whether BB performed the audit affairs of the company prior to the division.

Therefore, this part of the defendant's argument is without merit.

B. The defendant asserts to the purport that since the lawsuit against BB's claim for retirement allowance payment against BB differs from the administrative litigation of this case as a separate civil lawsuit from the issues and facts of requirements, it shall not be used as the ground for the plaintiff's assertion in this case, since the lawsuit against BB differs from the administrative litigation of this case.

The fact that BB did not perform audit in relation to the legitimacy of the instant disposition constitutes a major fact. The fact that BB took an attitude of BB in a claim for direct prohibition of retirement against the period in which BB worked as a director and auditor constitutes an indirect fact that can prove the existence of the above major fact. In regard to an indirect fact, the court may freely recognize such indirect fact by evidence submitted, regardless of whether the principal state exists (see Supreme Court Decision 278, Apr. 20, 1971).

In light of the above legal principles, the health team, and AA actively asserted the fact that BB had not been in office as an auditor during the period in which BB claimed that B had worked as an auditor in the lawsuit for the payment of retirement allowances. Proof, even though it appears that BB could effectively defend BB’s claim, only asserted that BB had not been in office as an auditor. This may constitute an important indirect fact regarding the amount of retirement allowances without any assertion that BB had not served as an auditor. This may be a significant fact that BB could be viewed as a literature at the time of performing audit. Accordingly, the above indirect fact can be employed as one of the grounds for rejecting the Defendant’s assertion.

Therefore, this part of the defendant's assertion is without merit.

4. Conclusion

If so, the plaintiff's claim should be accepted due to the reasons, and the judgment of the court of first instance is just, and the defendant's appeal is dismissed. It is so decided as per Disposition.