Cho High Court Decision 2014Do297 ( April 30, 2014)

With respect to global income tax on income generated by disposal of income, it does not constitute a case where a taxpayer evades, receives a refund or deduction of national taxes by fraud or other unlawful means.

Even if the representative of a corporation has committed an act such as manipulating the books of a corporation in the course of embezzlement, it is difficult to see that the income tax on the bonus to be reverted to him is to be evaded, and it does not constitute "the case where the taxpayer evades the national tax by fraudulent or other unlawful act."

Article 26-2 of the Framework Act on National Taxes (Period for Excluding Assessment of National Taxes)

Article 67 (Disposition of Income)

2014Guhap62548 Notice of Change in Amount of Income

AAA Corporation

0. Director of Regional Tax Office

October 31, 2014

December 5, 2014

1. On September 13, 2013, the Defendant’s notification of change in the amount of income as stated in the attached Table 1 that the Plaintiff reported to the Plaintiff shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

As set forth in the text.

1. Details of the disposition;

A. From June 14, 2013 to August 12, 2013, the director of ○○ Regional Tax Office: (a) conducted an investigation into the portion of corporate tax for the business year from June 14, 2013 to August 12, 2013 with respect to the Plaintiff; (b) deemed that the Plaintiff appropriated the processing cost through a false table, etc.; and (c) deemed that the person to whom the instant income amount belongs was the representative director of the Plaintiff, disposed of as a bonus and notified

B. Meanwhile, on July 18, 2013, the representative director: (a) in collusion with the employees in charge of finance, accounting, and financing affairs, he/she operated the sales promotion expenses, welfare expenses, meeting expenses, school expenses, research and study expenses, etc. as if the Plaintiff had paid them normally; (b) operated the accounting book by using the manual credit card terminal, computer program set, etc.; and (c) arbitrarily using the Plaintiff’s funds from January 1, 2003 to December 2005 by arbitrarily reducing the Plaintiff’s funds for the personal purpose; and (d) committed a violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (Embezzlement) against which the Seoul Central District Court convicted the Defendant on February 14, 2014; (b) however, the appellate court (Seoul High Court 2014No00) declared the Defendant not guilty on September 12, 2014 as the prosecutor of the final appeal to the Supreme Court (hereinafter referred to as the first instance court).

위 부외자금의 조성 경위와 관리 방법 및 실제 사용용도, 특히 검사가 공소장을 통해 이◌◌이 부외자금을 개인적 용도로 사용한 예로 적시한 항목들(생활비, 카드대금, 차량・미술품・와인 구입대금, 차명 주식과 같은 개인자산 매입대금 등)에는 대부분 대표이사 ○○○의 개인재산이 사용된 것으로 보이고, 그 밖에 부외자금이 대표이사○○○의 개인적 용도에 사용되었음을 입증하는 직접적인 증거는 없으며, 오히려 부외자금으로 접대비ㆍ선물비, 경조사비, 명절휴가비, 현장방문 격려금, 포상금(성과 격려금), M&A; 경비 등 회사를 위한 용도로 상당 금액이 사용된 것으로 보일 뿐만 아니라, 부외자금의 지출이 집계된 일계표상(원고 회장실 재무2팀의 실무자들이 대표이사 ○○○의 재산현황을 한눈에 파악할 수 있도록 수입과 지출 현황을 나타내기 위헤 작성한 것)의 '회장님' 계정에는 회사를 위한 용도로 지출된 부분을 포함하고 있고, 게다가 부외자금이 조성된 기간 동안 그 부외자금 액수를 초과하는 일반 격려금의 지급을 위하여 대표이사 ○○○이 개인재산을 출연하기까지 한 점 등을 종합하여 보면, 검사가 제출한 증거들만으로는 적어도 2003년부터 2005년까지 원고의 부외자금이 조성될 당시 대표이사 ○○○에게 그 자금을 빼내어 착복할목적이 있었는지에 관하여 합리적 의심의 여지가 없을 정도로 입증이 되었다고 보기 어렵다. 결국 이◌◌에게 유죄의 의심이 간다 하더라도 그 기간에 해당하는 공소사실에 관하여는 이◌◌의 이익으로 판단할 수밖에 없으므로 위 공소사실은 범죄의 증명이 없는 경우에 해당하여 무죄를 선고하여야 한다.

2. Whether notice of the change in the income amount in this case is lawful

A. The plaintiff's assertion

(i) the first argument;

대표이사 ○○○에 대한 형사사건에서 이 사건 소득금액과 관련된 특정범죄가중처벌등에관한법률위반(횡령)에 대해 무죄가 선고됨으로써 이◌◌이 이 사건 소득금액을 횡령하지 않았다는 것이 밝혀졌다. 따라서 횡령에 의해 이 사건 소득금액이 사외유출되어 대표이사 ○○○에게 귀속되었음을 전제로 대표이사 ○○○에게 상여로 소득처분하고 한 이 사건 소득금액변동통지는 위법하다.

(ii) the second argument;

The Plaintiff’s obligation to withhold income tax following the notice of change in the income amount of this case is premised on the Plaintiff’s obligation to pay income tax by the representative director ○○○, a source taxpayer, and the Plaintiff’s obligation to withhold income tax naturally does not exist if the Plaintiff’s obligation to pay income tax expires due to the excess of the exclusion period of imposition. Therefore, if 00 representative director, a source taxpayer, issued the notice of change in income amount of this case after the exclusion period of imposition expires

However, the defendant deemed that the income amount of this case out of the company in 2003 through 2005 belongs to the representative director ○○○○○○○, and disposed of it as a bonus for the representative director ○○○○○○○○○, and accordingly notified the change in the income amount of this case. The initial date of the exclusion period for imposition of global income tax for the representative director ○○○○○○, which was caused by the disposition of this case, was June 1, 2004; June 1, 2005; and June 1, 2006; and the exclusion period for imposition of the above income tax was five years pursuant to Article 26-2 (1) 3 of the former Framework Act on National Taxes (amended by Act No. 8139, Dec. 30, 2006; hereinafter the same). Thus, the notice of the income amount of this case made by the defendant against the plaintiff on September 13, 2013 is unlawful.

B. Relevant statutes

Attached Table 2 shall be as stated in the relevant statutes.

C. Determination

1) Relevant legal principles

"Fraud and other unlawful acts" under Article 26-2 (1) 1 of the former Framework Act on National Taxes are interpreted as the same meaning as "Fraud and other unlawful acts" under Article 9 of the Punishment of Tax Evaders Act. "Fraud and other unlawful acts" under Article 9 of the Punishment of Tax Evaders Act refer to deceptive and other unlawful acts which make it impossible or considerably difficult to impose and collect taxes, and the crime of tax evasion is committed by a person liable for tax payment, recognizing that his act constitutes fraud and other unlawful acts, and recognizing that the act of tax evasion results in tax evasion (see Supreme Court Decision 2004Do817, supra).

Meanwhile, the amount of income disposition as a result of the recognition of the representative of a corporation under the provisions of the Corporate Tax Act is deemed to have been paid by the corporation on the date of receipt of the notice of change in the amount of income, but this is merely a legal fiction, rather than a payment to the representative in reality. Thus, in order to establish the withholding obligation of the corporation which received the above notice of change in the amount of income, it must be deemed that the source taxpayer received the income tax at the time of receipt of the above notice of change in the amount of income, and if the source taxpayer already extinguished due to the lapse of the exclusion period for imposition of income tax, it cannot be established. Thus, the notice of change in the amount of income is unlawful. In addition, in case where the representative of the corporation received a false tax invoice and concealed the amount of income in excess of the purchase amount in the book, it is difficult to deem that the corporation received the income tax disposition as the representative of the corporation, and thus, it is difficult to view that it was conducted in order to evade the imposition of income tax as a result of such act, which constitutes a fraudulent act under Article 26-2(1).3).

In addition, it is necessary to conceal the fact that the representative of a corporation engaged in the act of manipulating the accounting books of a corporation in the course of embezzlement of the corporation's funds, and it is difficult to see that the taxation authority's disposal of the embezzlement funds should be carried out in the future, and it is difficult to view it as a purpose of evading the income tax on the bonus to be reverted to him/her. Thus, it does not constitute "cases where the taxpayer evades the national tax by fraudulent or other unlawful acts (see Supreme Court Decision 2007Du20959, supra).

2) The history of amendment of the relevant statute

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 revised by Act No. 11124 on December 31, 201, "if a national tax is evaded, refunded or deducted by unlawful means, it shall be ten years from the date on which the income tax or corporate tax can be imposed, as to the amount disposed of in accordance with Article 67 of the Corporate Tax Act, if the national tax is a corporate tax, it shall be ten years from the date on which the income tax or corporate tax can be imposed." This is intended to improve and supplement some deficiencies in accordance with the existing Framework Act on National Taxes by 10 years, just as the corporate tax evades the exclusion period of national tax on the amount disposed of as bonus or dividend, etc. with respect to the corporate tax evaded by unlawful means. In the previous case, it seems that the above additional legislation was made because it is generally difficult to recognize the intention of income tax evasion

3) Applicable legislation

A) The Defendant asserts that Article 2(1)1 of the Addenda of the Framework Act on National Taxes (Act No. 11124, Dec. 31, 201) provides that “The amended provisions of the latter part of Article 26-2(1)1 of the Framework Act on National Taxes (amended by Act No. 11101, Jan. 1, 2012) shall apply from the amount disposed of pursuant to Article 67 of the Corporate Tax Act for the first time after January 1, 2012.” Thus, Article 26-2(1)1 of the amended Framework Act on National Taxes shall apply to the instant case where the income amount was disposed as a bonus and the change in

B) According to the purport of Articles 38 and 59 of the Constitution of the Republic of Korea which provides for no taxation without the law, a provision imposing new tax liability or previous tax liability may be applied only when the requirements for imposition are met after its enforcement (see, e.g., Supreme Court en banc Decision 2008Du17363, Sept. 2, 201). Retroactive application of the provisions of the tax law which provides for new tax liability or previous aggravated tax liability may be limited only to cases where it is inevitable to realize the principle of fair taxation or where it is necessary for public welfare (see, e.g., Supreme Court Decision 81Nu423, Apr. 1, 201). Furthermore, the aforementioned provision of Article 20 of the former Framework Act on National Taxes does not apply only to cases where the trust of the taxpayer at the time of the act of realizing taxation requirements is lacking in reasonable grounds, but also to cases where it is not applied retroactively to the aforementioned provision of Article 201 of the former Act, which can not be applied retroactively to cases (see, see, e.g. 2010).

4) Determination

A) In light of the above legal principles and the amendment history of Article 26-2(1)1 of the Framework Act on National Taxes, in this case to which the former Framework Act on National Taxes applies, the above provision shall be interpreted in accordance with the above legal principles. According to the above facts, separate from the intent of the representative director ○○○ to evade corporate tax, it is reasonable to view that it is difficult to view that it is difficult to view that the tax authority’s comprehensive income tax on the bonus to be attributed to itself is to evade corporate tax, as it is anticipated that the income amount in this case should be disposed of as a result of future embezzlement, etc. as to the income amount in this case is recognized. The intention to evade corporate tax depends on whether the ownership of the income amount in this case is clearly unclear.

Therefore, with respect to the global income tax on the representative director ○○○○ by the disposition of income in this case, it cannot be deemed that the taxpayer under Article 26-2 (1) 1 of the former Framework Act on National Taxes falls under the case where the taxpayer evades national taxes or obtains a refund or deduction by fraudulent or other unlawful means, so the exclusion period for imposition of five years shall apply pursuant to Article 26-2 (1) 3 of the same Act ( there is no circumstance that the exclusion period for imposition of seven years under Article 26-2 (2) of the same Act shall apply, and the plaintiff and the defendant

B) Meanwhile, under Article 70(1) of the former Income Tax Act (amended by Presidential Decree No. 19893, Dec. 31, 2005); a tax assessment conducted after the lapse of the exclusion period of the imposition of national taxes is null and void (see, e.g., Supreme Court Decisions 99Du3140, 2003Du1752, etc.); Article 26-2(4) of the former Framework Act on National Taxes; and Article 12-3(1)1 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 19893, Feb. 28, 2007), in the case of a national tax, such as global income tax base and tax amount, the day following the reporting period of the tax base and tax amount can be the date on which the national tax can be assessed, and accordingly, the reporting period of global income tax was until May 31, 200 of the following year, and the exclusion period of imposition of global income tax from June 16, 2001, 2005.

5) Sub-committee

Therefore, the notice of change in the income amount of this case should be revoked in an unlawful manner without considering the remaining arguments of the plaintiff.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by admitting it.