The third instance decision

Supreme Court Decision 2015Du50153 ( October 18, 2016)

The portion of the corporate tax related to each retirement pay of Section A, BB and C, which exceeds KRW 1,538,203,521 from KRW 1,916,145,541 to KRW 1,538,203,521 from KRW 1,49,558,383, 203, 1,310,656,600, and cC B as income earner with KRW 1,327,138,286 from KRW 1,9,99,538,521 from KRW 1,53,541, and the part of the disposition of notice of change in the amount of income is revoked, and the plaintiff's claim corresponding to that portion is dismissed.

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

Of the disposition imposing corporate tax on the Plaintiff on January 2, 2013, the Defendant stated that: (a), (b), and (c) corporate tax of KRW 1,916,145,541 related to each retirement allowance of the Plaintiff for the year 2009; and (b) the income earner as Aa; (c) KRW 1,82,928,384, the income earner as BB; and (d) KRW 1,650,195,100, the income Earner as B; and (c) the disposition of notifying the change in the income amount of KRW 1,66,676,786, which is cc with the income earner as C (see, e.g., the amended disposition of KRW 1,916,145,541 among the disposition of imposing corporate tax for the year 209, and each disposition is sought for revocation of each of the above dispositions; (e.g., the written request for revocation of the respective dispositions.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

“In the first instance court’s decision, the part against the Defendant in excess of the order to revoke the following:

The plaintiff's claim corresponding to the cancellation portion is dismissed. The part of the judgment in favor of the plaintiff and the defendant against the plaintiff on January 2, 2013 in excess of KRW 1,99,58,538,65,60,60, ccc as income earner among the part of the disposition imposing corporate tax belonging to the plaintiff in 2009, which exceeds KRW 1,538,521, from KRW 1,538,541 to KRW 1,538,538,5830, 1,310,656,60, bbb as income earner, and cc as income earner, is revoked. The part of the judgment in favor of the plaintiff and the defendant against the plaintiff in favor of the judgment in favor of the judgment in favor of the court below that "the remaining part of the judgment in favor of the plaintiff is dismissed." The part of the judgment in favor of the plaintiff in favor of the judgment in favor of the court below is reversed and remanded to the court below which ruled against the plaintiff.

Therefore, the defendant in the judgment of the court after remanded the above reversed part, that is, the defendant in the judgment of the court of first instance.

Of the disposition imposing corporate tax on the Plaintiff on January 2, 2013, the portion exceeding KRW 1,538,203,521, and the portion exceeding KRW 1,49,558,3838,58,383, and bb as the income earner, among the disposition imposing corporate tax on the Plaintiff for the year 2009, which was rendered against the Plaintiff on January 2, 2013, in excess of KRW 1,310,656,60, and KRW 1,327,138,286, and cc as the income earner (the part against the Defendant of the judgment of the court of the first instance that was reversed by the reversal judgment) of the Defendant against which the order to revoke the portion exceeding KRW 1,327,138,286 is limited.

2. Details of the disposition;

The reasons why this Court shall explain are set forth in section 6(s) and 6(s) of the first instance judgment.

Article 8(1) of the Administrative Litigation Act, inasmuch as the reasoning of the judgment of the court of first instance is the same as that of the judgment of the court of first instance.

(2) It shall be quoted in accordance with paragraph (2) of this Article, the main sentence of Article 420 of the Civil Procedure

“I. The Defendant, prior to the merger on January 2, 2013, excluded retirement allowances from deductible expenses as above, to Ddd, etc. prior to the merger.

The corporate tax for the business year 2009 is revised and notified, and each of the above excess amounts is an officer.

a. The disposal of the income by recognizing the recognition of aa, etc., and the notification of the change in the amount of income was given, whichever is

In the case, the part of the plaintiff's dispute is as indicated below in the list of "the details of notification of changes in corporate tax and income amount" (hereinafter the above disposition of imposing corporate tax and notification of changes in income amount, which the plaintiff

Part of the issue of this case is 'the disposition of this case'.

(j) Before the merger, ddd, etc. filed an appeal with the Director of the Tax Tribunal against the disposition of imposition of corporate tax and notification of change in income amount. However, on December 12, 2013 and February 13, 2014, the Director of the Tax Tribunal dismissed all of the part concerning the disposition of this case among the above appeal.

3. The parties' assertion

A. The plaintiff's assertion

Each of the instant retirement allowances paid to officers Aaa, etc. under each of the instant provisions prepared by dddddddddddds, etc. prior to the merger through a provisional general meeting of members, etc.

Article 26 Subparag. 1 of the former Corporate Tax Act (Amended by Act No. 10423, Dec. 30, 2010; hereinafter the same) and Article 44(4)1 and (5) of the former Enforcement Decree of the Corporate Tax Act (Amended by Presidential Decree No. 22812, Mar. 31, 201; hereinafter the same shall apply) shall be included in deductible expenses.

B. The defendant's argument

1) Although each of the instant retirement allowances was paid in accordance with the payment rules of each of the instant retirement allowances for executive officers, it is excessive under the generally accepted social norms. Accordingly, the amount exceeding the payment limit of legitimate retirement allowances, such as executive officers Aa, etc., calculated by the formula prescribed in the former retirement allowance standard under Article 52 of the Corporate Tax Act, among each of the instant retirement allowances, cannot be included in deductible expenses. Thus, the instant disposition on the ground thereof is lawful.

2) Even if a wrongful calculation of losses is not recognized, each of the instant retirement allowances payment provisions cannot be deemed as retirement benefits under Article 44(4)1 and (5) of the former Enforcement Decree of the Corporate Tax Act. Thus, the former Enforcement Decree of the Corporate Tax Act among each of the instant retirement allowances.

A person who exceeds the maximum amount of retirement allowance payment calculated by the formula prescribed in Article 44(4)2;

The above amount shall not be included in the loss, and the excess amount shall not be included in the loss.

The instant disposition is lawful (see, e.g., Supreme Court Decision 2009Da1548, Jun. 20, 2015).

4. Determination on the legitimacy of the instant disposition

A. As to the grounds for non-inclusion of the calculation of unlawful calculation, even if the e's act of paying each of the instant retirement benefits to the children of the e who were affiliated companies prior to the merger with ddd', etc. prior to the merger with d'd' and executives A'a', etc., could be subject to avoidance of wrongful calculation as an act of unreasonably reducing the tax burden on the corporation's income, the e's act of unreasonably reducing the tax burden on the corporation's income may be subject to avoidance of wrongful calculation. The burden of proof is against the tax authority claiming wrongful calculation (see, e.g., Supreme Court Decisions 2003Du15287, May 12, 2005; 86Nu378, Apr. 14, 1987). The defendant applied the provision of this case to the calculation of the retirement benefits in the preceding business year x 10th of the former Enforcement Decree of the Corporate Tax Act's calculation of the retirement benefits in the preceding business year x 20d'for 10 years before the merger.

As a result, the Defendant’s assertion that the provision of wrongful calculation shall apply to the case where the market price or adequate retirement allowance amount for officers aa, etc. is not proven.

There is no reason to do so without considering it.

(b) Article 26 Subparag. 1 of the former Corporate Tax Act and Article 44(4)2 of the Enforcement Decree of the former Corporate Tax Act

As to the non-deductible grounds

1) Relevant legal principles

Article 26 (1) of the former Corporate Tax Act is deemed excessive or unjust as prescribed by Presidential Decree among personnel expenses when calculating the amount of income of a domestic corporation for each business year.

(2) No. 44 of the Enforcement Decree of the former Corporate Tax Act shall be included in the calculation of losses.

subsection (4) of this section shall not apply to any of the following retirement benefits paid by a corporation to its executive officers:

The amount in excess of the amount shall not be included in the loss, and subparagraph 1 shall not apply to the articles of incorporation.

Where the amount to be paid as retirement benefits (including retirement benefits, etc.) is determined, the articles of incorporation

In addition to subparagraph 1 of subparagraph 2, "amount calculated by multiplying the amount equivalent to 1/10 of the total salary paid to the relevant executive for one year retroactively from the date of his/her retirement by the number of years of continuous service calculated by the method prescribed by Ordinance of the Ministry of Strategy and Finance." Article 44 (5) of the Act provides that "Article 44 (4) 1 of the Act includes cases where the articles of incorporation stipulate the standards for calculating the retirement salary of an executive, but where there is a separate provision for the payment of retirement benefits delegated by the articles of incorporation, it shall be based on

In light of the language and text of the above provisions or the legislative intent to prevent an unfair reduction of corporate income, the retirement benefits paid to an executive officer pursuant to the articles of incorporation or the rules on payment of retirement benefits delegated by the articles of incorporation or the rules on payment of retirement benefits delegated by the articles of incorporation (hereinafter collectively referred to as "the rules on retirement benefits") shall be included in the calculation of losses.

In principle, however, the provisions on retirement benefits of executives intend to pay retirement benefits in consideration of employment, etc.

In addition, the date and time to divide the corporation's funds to a specific officer by lending the form of retirement benefits.

If it is prepared by means of an adequate means, it shall be subject to Article 44(4)1 or 44(4)1 of the Enforcement Decree of the Corporate Tax

It does not constitute a retirement benefit provision for executive officers stipulated in Paragraph 5. Therefore, the officer does not so.

The provision on retirement benefits is enacted with a rapid increase in retirement benefits than the previous provisions; or

institution is in the position of, or closely related to, an amendment and that may affect its establishment or amendment;

a person who is in a relationship has received as an officer a sudden increase in retirement benefits, and he/she has received such payment.

The amount of retirement benefits paid pursuant to this paragraph shall be the continuous service period or the content of service of the relevant retired officer or similar;

In light of the amount of retirement benefits paid by a corporation of one scale, etc., the service period is remarkably during the service period.

excessive amount which cannot be deemed as consideration for service or contribution, and the regulation itself or the relevant corporation;

payment of such retirement benefits thereafter in the light of financial situation or business prospects, etc.

under special circumstances, such as the recognition that the retirement benefit is not available, the provisions of the retirement benefit

The form of retirement benefits is not for the payment of retirement benefits as remuneration for work in quality.

It is reasonable to view that it is nothing more than a temporary measure to distribute the corporation's funds to its officers.

in this case, the amount calculated pursuant to Article 44(4)2 of the former Enforcement Decree of the Corporate Tax Act

The part exceeding the amount can not be included in deductible expenses as retirement benefits.

In addition, if a corporation that made the provision on retirement benefits of officers, which is a temporary reason, increases the monthly salary, which serves as the basis for calculating the retirement benefits immediately before the retirement of the officer without any reasonable reason, to distribute the corporation's funds to a specific officer in the form of retirement benefits, only the amount calculated based on the monthly salary before the increase shall be deemed as being included in the calculation of the retirement benefits

2) In the instant case:

In light of the above facts and evidence, Gap 5, Eul 8 through 10, Eul 8 through 10, and each of the above statements stated in Eul 8 through 10, the following circumstances, i.e., children of e who are affiliated with d'd's d'd' before the merger and shareholders of e who were affiliated with d'd's d'd's d'd' before the merger and were directors of the above company. ② The provision on the payment of retirement allowances for officers of ggggg above before the merger was created after Aaa retires, and also the provision on the payment of retirement allowances for officers of gggg above before the merger was made hhhh and c. 2 months before the merger or 6 months after the 30th anniversary of the retirement allowances for officers of this case, it is difficult to find a reasonable reason for each of the above 9th d's retirement allowances for officers of this case and 10th 5th d's retirement allowances for officers of this case.

Therefore, Article 44(5) of the former Enforcement Decree of the Corporate Tax Act provides for payment of retirement allowances for each officer of this case.

section 44 of the former Enforcement Decree of the Corporate Tax Act on the basis of the monthly salary before the increase.

Article 4 (4) 2 of the former Enforcement Decree of the Corporate Tax Act provides that only the amount calculated according to the formula (one year salary x 1/10 x number of years of service) shall be deemed as subject to inclusion in deductible expenses, and the excess amount of each retirement allowance in this case shall be as stated in the column of "1" as shown below. However, the defendant shall re-calculated the maximum amount of retirement allowance payment in accordance with the formula (one year salary x 1/10 x number of years of service x number of years of service payment x five times) set forth in the former retirement allowance payment standards prior to the increase on January 2, 2013, and then write in the column of "2" as mentioned below. This is apparent in the calculation of the scope of non-deductible expenses in accordance with the formula set forth in Article 44 (4) 2 of the former Enforcement Decree of the Corporate Tax Act, so this part of the disposition grounds is recognized.

Ultimately, the instant disposition that the Defendant notified the Plaintiff, a corporation surviving the merger, to revise corporate tax for the business year 2009 after the merger. The instant disposition that disposed of the excess amount as a bonus to the officer Aaa, etc. as a result of the disposal of the income amount, is legitimate. The Plaintiff’s assertion that the payment provision of retirement allowances for each officer of the instant case was made in accordance with Article 44(5) of the

5. Conclusion

Thus, the plaintiff's claim of this case shall be dismissed as it is without merit, and the judgment of the court of first instance shall be this.

As the conclusion is inappropriate differently, the defendant's appeal is accepted, and the main disposition of this case among the judgment of the first instance court is rendered.

at least 1,916,145,541 won of each retirement allowance-related corporate tax, such as officer Aa, in the disposition of imposition of corporate tax

The portion exceeding 1,538,203,521 won and aa income earner is included in the notice of change in income amount.

1,499,558,383 won, bb as income earners 1,310,656,600 won, c cB income earners.

The part against the defendant ordering the revocation of the part exceeding KRW 1,327,138,286 (the part against the defendant in the judgment before remanding the case by a refund) shall be revoked, and the plaintiff's claim corresponding to the revoked part shall be dismissed. It is so decided as per Disposition.