(b) Method of calculating a tax amount reduced or exempted in accordance with foreign currency loans provided by a domestic branch of a domestic bank of its country under Articles 15(10) and 15(11) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 2932, Dec. 22, 1976); Article 27-2(2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 8353, Dec. 31

(c) Method of including allowances for bad debts of corporations concurrently operating taxable businesses and tax-free businesses;

B. In calculating income to be exempted from foreign currency loan projects of a domestic branch of a foreign bank which has been exempted from corporate tax and defense tax pursuant to Articles 15(10) and 15(11) of the former Regulation of Tax Reduction and Exemption Act (Act No. 2932, Dec. 22, 1976) and Article 27-2(2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 8353, Dec. 31, 1976), necessary expenses such as interest paid on foreign currency loans used for the loan shall be calculated by deducting the interest paid on foreign currency loans from income with a maturity of three years or more, or the interest paid on foreign currency loans used for the loan except for foreign currency funds used for Korean currency loans (Swww capital), and it is practically impossible to calculate interest paid on foreign currency loans corresponding to the total amount of interest paid on loan and paid on foreign currency loans depending on the purpose of Article 11(1)3 of the former Corporate Tax Act (amended by Act No. 3200, Dec. 28, 1979).

C. According to Article 14 of the former Corporate Tax Act (amended by Act No. 3577, Dec. 21, 1982) and Article 19(3) of the Enforcement Decree of the same Act, a corporation concurrently operating a taxable business and a tax-free business may appropriate the allowance for bad debts only for one of the taxable business and the tax-free business, and may appropriate the allowance for bad debts in common for both business.

The costs of appeal are assessed against the defendant.

With respect to No. 1:

As determined by the court below, if the Seoul branch of the plaintiff bank concluded a labor-management agreement to pay bonus equivalent to 400% of the annual basic monthly salary to its employees, and the above bonus was paid in monthly installments at the request of the labor union, the above bonus has the nature of allowances paid in supplementary sense regardless of corporate achievements, and it is deemed that the above bonus is a bonus income subject to the special bonus deduction under Article 21 (3) of the former Income Tax Act (amended by Act No. 3098 of Dec. 5, 1978) and is a bonus income subject to the special bonus deduction under Article 21 (3) of the former Income Tax Act. Thus, the bonus deduction should be made in calculating the labor income tax (referring to the bonus income subject to the special bonus deduction under Article 81Nu241 of December 14, 1982; 81Nu215 of May 29, 1984). Accordingly, the court below's decision that the defendant's Class A earned income tax and defense tax of this case, which reported the above bonus as illegal.

2. On the second ground for appeal:

According to Article 15(10)(11) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 2932, Dec. 22, 1976); Article 27-2(2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 8353, Dec. 31, 1976) provides that a foreign bank's domestic branch shall be exempted from corporate tax and defense tax with respect to the interest and fees paid in foreign currency for three or more years to a national. However, in calculating income to be exempted from foreign currency loan due to such foreign currency loan, necessary expenses such as interest and general management expenses on foreign currency loan used for such loan shall be deducted from the foreign currency loan interest with a maturity of three or more years and the said domestic branch operating a bank take foreign currency from its head office, and excludes foreign currency loan interest from the foreign currency loan with a maturity of three or more times, and thus, it is reasonable to determine the total amount of interest paid in foreign currency loan to be used separately from other funds (see Article 387(1) of the former Corporate Tax Act).

Therefore, the court below is just in holding that the corporate tax of this case and the defense detailed disposition of this case are unlawful since the funds that can be used by the Seoul Branch of the Plaintiff Bank for foreign currency loans shall include all foreign currency funds except for the above foreign currency funds for the above Korean currency loans, and therefore it is limited to the loan of the long-term repayment condition, and there is no error of law in the determination of the object of corporate tax reduction or exemption income due to the failure to exhaust all necessary deliberations as alleged in the arguments. Thus, the argument is without merit.

3. On the third ground for appeal

The former Corporate Tax Act (amended by Act No. 3577, Dec. 21, 1982) provides that the corporation may arbitrarily determine whether to include the allowance for bad debts in calculating the income amount for each business year, and in cases where the allowance for bad debts is to be appropriated, the corporation may include the allowance for bad debts in its bonds. However, Article 19(3) of the Enforcement Decree of the same Act limits only the amount of the allowance for bad debts. Thus, a corporation concurrently operating a taxable business and a tax-free business may include the allowance for bad debts only in one business among taxable business and tax-free business and appropriate it as the allowance for bad debts (see, e.g., Supreme Court Decision 85Nu349, Mar. 10, 1987; 85Nu615, Jul. 7, 1987).

Therefore, in case where the Seoul branch of the plaintiff bank, which operates a tax-free business and a taxable business, did not account for the bad debts fund appropriated for the Korean won loan business as a common bad debts fund, and accounts for the bad debts fund limited to the Korean won loan business, it should be treated as losses separate from the taxable business portion, and it does not be considered as losses. Thus, it is just to determine that each corporate tax and defense detailed and disposition of the defendant, which treated it as a common bad debts fund, was illegal, and there is no error in the misapprehension of legal principles as to the bad debts fund claimed by the arguments

In addition, the paper is groundless.

4. Therefore, the appeal shall be dismissed, and all costs of appeal shall be assessed against the losing party. It is so decided as per Disposition by the assent of all participating judges.

Justices Park Jong-dong (Presiding Justice)