Seocho 2012west 3733 (2014.08)

Administrative fines imposed as sanctions on non-issuance of cash receipts shall be excluded from necessary expenses.

Fines for negligence imposed under the Punishment of Tax Evaders Act due to sanctions on non-issuance of cash receipts shall be excluded from necessary expenses.

Article 33 of the Income Tax Act [Non-Inclusion of Necessary Expenses]

2014Guhap64629 global income and the lawsuit demanding revocation of such disposition

Park 00

*The Director of the Tax Office

November 14, 2014

November 21, 2014

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

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

Cheong-gu Office

The Defendant’s disposition of imposing global income tax of KRW 00,00,000 on April 9, 2012 exceeds KRW 00,000 among the disposition of imposing global income tax of KRW 00,000,000 for the year 207, the portion exceeding KRW 000,000 among the disposition of imposing global income tax of KRW 00,000,000 for the year 208, the portion exceeding KRW 000,000 among the disposition of imposing global income tax of KRW 00,000 for the year 209, and the portion exceeding KRW 00,000,000 among the disposition of imposing global income tax of KRW 00,000 for the year 200 for the year 200.

1. Details of the disposition;

A. The Plaintiff is a business operator who runs the Doldong dental clinic in Doldong 00,000-dong 00,000, Doldong 00 (hereinafter referred to as the “instant clinic”).

B. On April 9, 2012, the Defendant corrected and notified the Plaintiff of KRW 00,00,000, global income tax for 2008, global income tax for 2008, global income tax for 000,000,000, global income tax for 2009, global income tax for 2000,000,000, global income tax for 2000,000,000, global income tax for 2009, global income tax for 2000,000,000, global income tax for 2010, global income tax for 2010, global income tax for 200,000,000 for 200,000,000 global income tax for 2010.

다. 한편, ▲▲지방국세청장은 '원고가 건당 거래금액이 300,000원 이상인 용역 제공 대가를 현금으로 받고 현금영수증을 발급하지 않았다'는 이유로 2012. 4. 5. 원고에 대하여 과태료 000,000,000원을 부과하였다(이하 '이 사건 과태료'라고 한다).

D. On July 4, 2012, the Plaintiff dissatisfied with the disposition of imposition as of April 9, 2012, and filed a request for a trial with the Tax Tribunal on July 4, 2012, and the Tax Tribunal rendered a decision to the effect that the disposition of imposition as of May 8, 2014 was rendered on the basis of the Plaintiff’s medical fees, work fees, etc. to re-examine the cost of materials and to correct the tax base and tax amount according to the result.

E. According to the above decision, the Defendant issued a correction and notification of the total income tax for the year 2007 to the Plaintiff on June 20, 2014 as KRW 00,000,000, the total income tax for the year 2008 as KRW 00,000,000, the total income tax for the year 2009 as KRW 00,000,000, and the total income tax for the year 2010 as KRW 00,000,000 (hereinafter “instant disposition”).

[Reasons for Recognition] Unsatisfy, entry in Gap evidence 1 to 5 (including each number), pleading

The purport of the whole

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) If the instant administrative fine is not recognized as necessary expenses, the part imposed on the instant administrative fine cannot be deemed as having actually accrued, and thus, is contrary to the principle of substantial taxation, and as administrative fine and income tax are imposed on the same income, it would be contrary to the principle of the competent taxation and the principle of the prohibition of double taxation, and is also contrary to the principle of excessive prohibition by excessively infringing the taxpayer’s property right. Accordingly, the instant administrative fine ought to be deducted from necessary expenses.

2) Since the revenue amount reported by the Plaintiff himself/herself in the name of 00 includes part of the revenue amount acquired through the instant borrowed account, the revenue amount reported by the Plaintiff from the omitted revenue amount to other cash sales should be deducted.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination on the first argument

A) Article 33(1)2 of the former Income Tax Act (amended by Act No. 10408, Dec. 27, 2010; hereinafter referred to as the "former Income Tax Act") provides that "if a resident falls under a fine, penalty, or fine for negligence among the amounts paid or to be paid by him/her in the pertinent taxable period, it shall not be included in necessary expenses when calculating business income or other income." This is because if a fine, penalty, or fine for negligence is included in necessary expenses, it would result in the State preserving a certain portion of the fine, penalty, and fine for negligence in the form of tax refund.

B) As to this, the Plaintiff asserts to the effect that the amount of the instant administrative fine imposed cannot be deemed as having actually accrued, and thus, it would be contrary to the principle of substantial taxation if not recognized as necessary expenses. However, according to Article 15(1) of the former Punishment of Tax Evaders Act (amended by Act No. 11873, Jun. 7, 2013; hereinafter “former Punishment of Tax Evaders Act”) and Article 162-3(4) of the former Income Tax Act, the instant administrative fine was imposed on the Plaintiff by failing to issue cash receipts in cash for the provision of services, the transaction amount of which is at least 300,000 won per transaction, and thus, it cannot be deemed that there was no income from the instant administrative fine imposed

In addition, the Plaintiff asserts to the effect that an administrative fine and income tax are imposed on the same income when it is not recognized as necessary expenses for the instant case, and thus, are contrary to the principle of competent taxation and the principle of prohibition of double taxation, and that the taxpayer’s property rights are excessively infringed and thus, the excessive prohibition principle is also contrary to the principle of excessive prohibition. However, since an administrative fine and income tax are not imposed on the same income as a sanction imposed to maintain administrative order, it cannot be deemed as contrary to the principle of competent taxation and the principle of prohibition of double taxation, on the ground that an administrative fine and income tax were imposed on the same income, and thus, it cannot be deemed as contrary to the principle of excessive prohibition. Furthermore, under Article 15(2) of the former Punishment of Tax Evaders Act and Article 81(11)2 of the former Income Tax Act

C) Therefore, the Plaintiff’s assertion on this part is without merit.

2) Determination on the second argument

In general, the burden of proving the facts of taxation requirements should be imposed on the taxable person in a lawsuit seeking revocation of taxation, but if the facts alleged in light of the empirical rule are revealed in the course of a specific lawsuit, it cannot be readily concluded that the other party is an illegal disposition that failed to meet the taxation requirements, unless the other party proves that the pertinent facts at issue were not eligible for the application of the empirical rule (see Supreme Court Decision 2002Du6392, Nov. 13, 2002).

On the other hand, as seen earlier, the Plaintiff omitted the amount of revenue acquired through the instant borrowed account, and as long as the Plaintiff asserts that part of the revenue acquired through the instant borrowed account was omitted while not omitted from the return on the part of the revenue acquired through the instant borrowed account, the Plaintiff’s assertion that part of the revenue acquired through the instant borrowed account was not omitted. As to the fact that part of the revenue acquired through the instant borrowed account is included in the revenue amount, it is necessary to establish that the Plaintiff filed a report on the revenue amount for the pertinent taxable period and manage the instant borrowed borrowed account to produce all materials. The evidence submitted by the Plaintiff alone is insufficient to acknowledge that the Plaintiff reported a part of the revenue amount acquired through the instant borrowed borrowed account, and there is no other evidence to acknowledge this otherwise. Accordingly, the Plaintiff’s assertion on this part is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.