Cho High Court Decision 2010Du016 ( October 06, 2011)

It is reasonable to deem that the exclusion period for imposition of global income tax due to the disposal of the credit income tax is five years.

It is difficult to view that the representative director of the plaintiff has counted the processing labor cost as it is difficult to view that the representative director of the plaintiff has counted the processing labor cost due to the failure of the person to whom the income accrued from the outflow of the company was unknown. Therefore, it is reasonable to see that the exclusion period for global income tax

2011Revocation of disposition of revocation of imposition of corporate tax, etc.

XX Co., Ltd

Head of Seodaemun Tax Office and one other

November 23, 2012

December 7, 2012

1. As to the plaintiff:

A. In the disposition of corporate tax for the business year from September 1, 2009 to 2007 by the director of the Seoul District Tax Office, the part exceeding the principal tax as stated in the separate sheet of corporate tax imposition in the separate sheet of the attached Form ‘The details of corporate tax imposition', the imposition of additional corporate tax for the business year from 2003, the imposition of additional tax for the business year from 2004 to 2007, and the portion exceeding the additional tax as stated in the separate sheet of corporate tax imposition in the separate sheet of the attached Form ‘the details of corporate tax imposition ‘the legitimate tax amount', and ‘B.' The notification of the change of income amount for the business year from September 1, 2009 by the director of the Seoul District Tax Office of Seoul District Tax Office of the attached Form ‘the notification of change of Income Amount ‘the justifiable tax amount for the business year from 2005 to 2006', is dismissed.

3. Of the costs of lawsuit, 3/5 of the portion arising between the Plaintiff and the head of Seodaemun Tax Office shall be borne by the Plaintiff, the remainder by the head of Seodaemun Tax Office, and the part arising between the Plaintiff and the head of Seoul Regional Tax Office shall be borne by the head of

With the exception of the judgment that the disposition of imposition of each corporate tax for the business year of September 1, 2009 by the head of Seodaemun Tax Office is revoked against the plaintiff, paragraph (1) of this Article shall also apply.

1. Details of the disposition;

A. A. Around May 2009, the director of the Seoul Regional Tax Office conducted a corporate tax investigation against the plaintiff, notified the director of the Seoul Western District Tax Office of taxation data such as "the plaintiff processed the labor cost of 000 won, etc." and on September 1, 2009, he notified the plaintiff of the change in the amount of income as stated in the attached Table ‘The Notice of Change in Income Amount>. The notification of the change in the amount of income as stated in the attached Table ‘The Notice of Change in Income Amount' column. The notification of the change in the amount of income as stated in the notice of change in the income amount of this case is as stated in the following Table 1, and the detailed processing of the excessive appropriation in the bonus disposition is as stated in the following Table ‘The details of the change in the amount of income.' The head of the defendant Seodaemun District Tax Office imposed and notified the corporation tax (including additional tax) on the same day as stated in the "amount of imposed corporate tax imposed in the attached Table ‘the imposed corporate tax amount' column.

(3) The following table 1 omitted:

(2) The following Table 2 omitted:

B. On November 27, 2009, the Plaintiff filed an appeal seeking the notice of change in the amount of income and the revocation of the disposition imposing the above corporate tax. On January 8, 2011, the Tax Tribunal reviewed whether or not the foreign labor cost for the business year from 2004 to 2007, seeking an additional inclusion in deductible expenses, is paid and the other expenses are repeatedly appropriated, thereby correcting the tax base and the tax amount according to the result, and dismissed the remainder of the claim.

C. Accordingly, on February 22, 201, the director of the Seoul Regional Tax Office issued a notice to the Plaintiff on February 22, 201, that “the Plaintiff shall additionally verify the personnel expenses of 000 won for the business year 2006, the personnel expenses of 2007 for the business year 2007, and revised the corporate tax amount of 00 won for the business year 2006 and 2007 (the disposition of imposing corporate tax that was corrected in the disposition of imposing corporate tax at the beginning of the year 2006, hereinafter referred to as the “disposition of imposing corporate tax at the time of the disposition of imposing corporate tax at the time of the correction,” and that “each disposition at the time of the notice of the change in the income amount at the time of the instant case” (which is grounds for recognition).

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

(1) Although the processing labor cost was included in the deductible expenses at the time of filing the corporate tax return for the business year 2003, it is merely a mere false declaration, the imposition of corporate tax for the business year 2003 and the notification of the change in the amount of income was imposed with the exclusion period of five years. Even if it constitutes a fraud or other unlawful act, it cannot be deemed as a "Fraud or other unlawful act to evade the comprehensive income tax to be imposed according to the recognition and contribution disposition." Thus, the exclusion period of five years was imposed.

(2) The plaintiff is required to include 00 won (=00 won - 00 won) in the deductible expenses for the business year of 2004, as it included 200 won in the amount to be paid to the O landscaping in the amount to be paid for the business year of 2004 as stated in the table 3. In addition, the plaintiff is required to include 200 won in the deductible expenses for the business year of 2004, since 1) the amount to be paid for the construction work completed in the business year of 2004 as described in the table 3, 3) the construction work to be paid in the amount to be paid in the amount of expenses for the business year of 204, as stated in the table 3, the amount to be paid in the table 3, the amount to be paid in the amount to be paid in the actual expenses for the business year of 200, 3) the construction work to be paid in the amount to be paid in the amount to be paid in the corresponding business year.

(3) Table 3 omitted:

(3) In the year 2005, 2006, KimD sold trees to the Plaintiff and paid income tax on the sales amount. As such, while viewing that the sales amount of trees of KimD is effective, without any grounds, the Plaintiff’s inclusion of the sales amount of trees in deductible expenses is contrary to the underlying taxation principle.

(4) To secure the construction manpower, the wage that was paid without withholding the income tax from the daily employed workers was not included in the book. To reduce the income tax burden, the amount of income reduced compared to the amount of income actually paid to the full-time employees of the Plaintiff is included in the book, etc., which was not reflected in the book, but should be additionally included in the deductible expenses for the business year 2006 and the labor cost of 000 won for the business year 2007.

(5) (At all times) Inasmuch as the Tax Tribunal did not neglect its duty to report and pay corporate tax on personnel expenses additionally included in deductible expenses according to the review decision, there was an error in the failure to reduce the corporate tax in the first disposition of corporate tax, even though it did not have to reduce the corporate tax for the said personnel expenses. In addition, the imposition of corporate tax for each business year from 2003 to 2007, stating only the sum of the tax payment notice without disclosing the type of penalty tax and the calculation basis thereof.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) As to the exclusion period of imposition

“Fraud or other unlawful act” under Article 26-2(1)1 of the Framework Act on National Taxes refers to the same meaning as “Fraud or other unlawful act under Article 9 of the Punishment of Tax Evaders Act.” The term “Fraud or other unlawful act” means a deceptive scheme or other active act that makes it impossible or considerably difficult to impose and collect taxes as a means of tax evasion. Without accompanying such act, the mere failure to file a tax return under the tax law or underreporting the tax base does not constitute an unlawful act (see, e.g., Supreme Court Decision 2005Do370, Mar. 25, 2005). If a corporation received a notice of change in its income tax on the date of receipt of the notice of change in income amount, it is deemed that the relevant corporation paid the income amount on the date of receipt of the notice of change in income amount, but it merely means the payment of corporate tax on the date of receipt of the notice of change in income amount to the representative, and thus, it is unlawful to establish the exclusion period for imposition of income tax for 20 years after the above notice of change in income amount.

In full view of the purport of each statement in Gap evidence Nos. 5 and Eul evidence Nos. 7 (including the paper number), the fact that the plaintiff paid KRW 000 to the computerized account book kept in the plaintiff's office computer, and the plaintiff can recognize the fact that the plaintiff appropriated labor cost in the statement of accounts as KRW 000 and reported corporate tax for the business year 2003. According to such fact-finding, it is reasonable to deem that the plaintiff made double account books and made it impossible or considerably difficult to impose and collect corporate tax impossible. Thus, the exclusion period of 10 years pursuant to Article 26-2 (1) 1 of the Framework Act on National Taxes (amended by Act No. 8139 of Dec. 30, 2006) is applied. Therefore, the plaintiff's above assertion is without merit.

(C) Notice of change in the amount of income in the business year 2003

Since it is difficult to view that the representative director of the plaintiff's representative has counted the processing labor cost as the person to whom the income accrued from the company was not revealed, it is difficult to expect that the representative director of the plaintiff has counted the processing labor cost. Thus, it is reasonable to view that the exclusion period for global income tax on the global income tax under the recognition and contribution disposition is five years. The global income tax for which the representative director of the plaintiff in 2003 belongs was imposed on May 31, 2009, which is the day following the due date for filing the report, and the disposition for notifying the change of the income amount in the business year 2003 was taken only after September 1, 2009. Thus, the disposition for notifying the change of the income amount in the business year 203 is unlawful. Therefore, the plaintiff's above assertion has merit.

(2) As to the period of reversion of losses

(A) The fiscal year of accrual of losses for each fiscal year of a large-scale corporation shall be the fiscal year which includes the date on which the deductible expenses are determined (Article 40(1) of the Corporate Tax Act). The fiscal year of accrual of losses for construction shall be the fiscal year which includes the date on which the construction is completed, but in cases of construction for which the contract period (referring to the period from the commencement to the date of the construction completion; hereinafter the same shall apply) is not less than one year, the deductible expenses for each fiscal year from the fiscal year which includes the date on which the construction is completed to the fiscal year which includes the date on which the construction is completed shall be included in the deductible expenses, and in cases of construction for which the contract period is less than one year, the amount of losses for the pertinent fiscal year may be calculated by the same method. Furthermore, where the total construction amount actually spent cannot be verified or the book kept and recorded cannot be calculated by the end of the pertinent fiscal year, it shall be included in the deductible expenses for the business year which includes the date of completion of construction [Article 30(1) and (30(4) of the Enforcement Rule before the Act; 20.37.

"(B) It is insufficient to recognize that the testimony of Gap's health team return to this case, Gap's evidence 6 through 27, evidence 35 through 47, each of Gap's evidence 28 through 34 (including paper numbers), each of the images of Gap's evidence 28 through 34, witness KimE, and Kim F's testimony of Gap's evidence 28 through 34, and the testimony of Gap's evidence 3 is terminated in 2004, and "the classification under Table 3" means the ① the installation of facilities by OO Lighting as to the stated construction, and "the division under Table 3" means that the work progress rate for the installation of facilities by O O Crossing cannot be calculated with regard to the stated construction. Thus, the plaintiff's above assertion is without merit, and the inclusion of

(A) The burden of proof of the tax base, which serves as the basis of taxation in a lawsuit seeking revocation of corporate tax, is against the tax authority, and the tax base is deducted from necessary expenses, so the burden of proof of revenue and necessary expenses shall be imposed on the tax authority. However, considering that most of the facts causing necessary expenses are favorable to the taxpayer and are within the territory controlled by the taxpayer, and it is easy to prove them, it is consistent with the concept of fairness to recognize the necessity of proof for the taxpayer by permitting the presumption of non-existence with respect to necessary expenses for which the taxpayer does not perform the duty of proof (see Supreme Court Decision 2002Du1588, Sept. 23, 2004). If it is necessary to prove to the taxpayer, the tax authority refers to the use of any expense reported by the taxpayer and the case where the other party to the payment has been proved to the extent that it is significantly false (see Supreme Court Decision 2002Du1588, Sep. 23, 2004).

(B) In full view of the purport of the argument in the instant case’s health account return, Gap’s evidence Nos. 24, 25, Eul’s evidence Nos. 10 (including additional numbers), and Eul’s testimony of KimF, KimF, KimD sold trees only to the Plaintiff in 2005, 2006, while Kim FF was subject to double-entry bookkeeping, KimD was subject to double-entry bookkeeping, but was subject to double-entry bookkeeping’s global income tax return return for the year 2005, 2008, and 2009; and

The plaintiff may recognize the fact that he/she fails to submit evidence of wood trading except for the tax invoice and the president of the Trade Punishment Account.

However, it is difficult to view the above facts alone to have proved that the purchase amount of trees in the business year 2005 and 2006 reported by the Plaintiff was false. Rather, comprehensively taking account of each of the above evidence and the overall purport of the arguments in the evidence Nos. 48, 156, and 157 (including the paper number) as to the capacity to carry out landscaping planting in the year 2005 and 2006, the Plaintiff had a large quantity of construction to the extent that it falls under the upper 1% among the landscaping companies nationwide. KimD filed a comprehensive income tax return in the year 2005, 2007, 2007, and 2008, and the Seoul Regional Tax Office filed a comprehensive income tax return in the corresponding year with respect to the income from selling trees to other companies than the Plaintiff, and the Seoul Regional Tax Office did not make an integrated investigation with respect to the Plaintiff’s processed Dok for the reason that the Plaintiff did not claim it as the global income tax return only for the pertinent year.

(C) Therefore, the disposition of imposing corporate tax for the business year 2005, 2006 and the notice of change in the amount of income is unlawful, so the Plaintiff’s above assertion is with merit

(4) As to the excessive labor cost

In light of the following circumstances, the Plaintiff paid KRW 00 as labor cost for the business year 2006, KRW 00 as labor cost for the business year 2007, KRW 000 as labor cost for the business year 2006, KRW 000 as labor cost for the business year 2007, and KRW 000 as labor cost for the business year ; Defendant director of Seoul Regional Tax Office recognized labor cost when personal information is confirmed according to the review decision of the Tax Tribunal and account transfer of labor cost for the Internet banking; however, there are cases where the disbursement of labor cost is not recognized even in cases where personal information is confirmed and labor cost is transferred from the Plaintiff’s account to the Net Bank; or when it is remitted from the Plaintiff’s account to the daily worker who does not confirm personal information such as resident registration number, etc., the Plaintiff’s assertion that labor cost was paid to the Plaintiff’s non-indicted 4, 2006, and the Plaintiff’s assertion that labor cost was paid to the non-indicted 4, 2006.

(4) The following table 4 omitted:

(5) The following table 5 omitted:

(5) As to additional tax

(A) According to the health class, Eul evidence No. 5 on the assessment of additional tax (main assertion), the head of Seodaemun-gu Tax Office may recognize the fact that the head of the tax office of defendant Seodaemun-gu added additional personnel expenses to deductible expenses according to the review decision by the Tax Tribunal and did not reduce the corporate tax return, failure to report, and failure to pay taxes for the said personnel expenses.

(B) With respect to the defect in the imposition and collection of additional taxes (preliminary assertion), when a single tax notice imposes both a principal tax and an additional tax, the principal tax and the basis for calculation should be stated in the tax notice separately. In addition, where multiple kinds of additional taxes are imposed, it is clear that the taxpayer can per se know the details of each taxation disposition by classifying the amount and the basis for calculation of the additional tax by different types. As such, the imposition of additional tax is deemed a disposition imposing penalty tax, and only the sum of additional taxes is stated without disclosing the type and the basis for calculation of the amount of tax (see, e.g., Supreme Court en banc Decision 2010Du12347, Oct. 18, 2012). On the other hand, even if there is any defect in the entries required in the tax notice, etc., prior notice, etc. sent by the tax authority prior to the taxation disposition, if it is evident that the taxpayer is dissatisfied with the determination of whether to appeal such disposition and appeal at all, it may be corrected or corrected (see, e.g., Supreme Court Decision 2097Du397).

In full view of the purport of the argument as a whole, the following facts can be acknowledged by the head of Seodaemun Tax Office: (a) the notice of tax payment imposing additional tax on the Plaintiff by the head of Seodaemun Tax Office, without distinguishing each of the additional tax as specified in the attached Table 6 from the principal tax amount; and (b) the fact that the sum of the additional tax is only separate from the principal tax amount; and (c) the basis for calculation of each additional tax is not specified. According to such facts of recognition, each of the above imposition of additional tax is illegal and cannot be deemed as having been corrected or cured.

The categories of additional tax:

(6) The following table may be omitted:

(C) Therefore, the Plaintiff’s above assertion is with merit.

(6) Scope of revocation

(A) The imposition disposition of the corporate tax in this case; the purchase price of trees in the business year 2005; the purchase price of trees in the business year 2006; the foreign labor cost in the business year 2006; the foreign labor cost in the business year 2007; and the foreign labor cost in the business year 2007 should be included in the deductible expenses; however, the defendant Seodaemun-gu Tax Office did not include in the deductible expenses but did not impose the corporate tax in this case. The calculation of the legitimate tax amount by reflecting all of the above is identical to the calculation of the legitimate tax amount in the attached Form.

Therefore, from among the imposition disposition of corporate tax for the business year of 2005 to 2007, the portion exceeding the principal tax should be revoked.

(B) The imposition of additional corporate tax for the business year of 2003 shall be revoked in full, and the additional corporate tax for each business year of 2004 through 2007 shall be revoked in the part exceeding each additional tax stated in the separate sheet of corporate tax imposition in the separate sheet of the plaintiff's argument. (C) The notice of the income amount in the case of this case; the notice of the change in the income amount in the business year of 2003 shall be revoked in its entirety at the expiration of the exclusion period of imposition. In addition, the notice of the change in the income amount in the business year of 2005 and 2006 added the purchase price in the business year of 205 and the disposal of the bonus by adding the purchase price in the business year of 206 to the gross income is unlawful, so the notice of the change in income amount in the separate sheet of income amount shall be revoked."

Therefore, the plaintiff's claim against the defendant Seoul regional tax office is justified within the scope of the above recognition, and the remaining claim against the defendant Seodaemun Tax Office is dismissed as it is without merit. It is so decided as per Disposition.