Amount of revenue of financial or insurance business under Article 4 of the Enforcement Decree of Education Tax Act

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

The reasoning of this court's judgment is as follows: (a) the part of the judgment of the court of first instance is dismissed as provided in paragraph (2); and (b) it is identical to the reasoning of the judgment of the court of first instance, and thus, (c) it is cited in accordance with Article 8(2) of the Administrative Litigation Act and Article

2. Parts to be dried;

○ 9 17 pages. The following shall be added to each other:

Meanwhile, Article 5(1) of the former Financial Investment Services and Capital Markets Act (amended by Presidential Decree No. 21296, Feb. 4, 2009) defines derivatives. The Enforcement Decree of the Education Tax Act (amended by Presidential Decree No. 21296, Feb. 4, 2009) provides that “net profit after aggregating profit and loss of derivatives trading by financial or insurance business entities and profit and loss of such derivatives trading in order to avoid risks related to the trading of the relevant derivatives,” and Article 4(1)5-2 of the former Enforcement Decree of the Education Tax Act (amended by Presidential Decree No. 2014, Feb. 4, 2009; Presidential Decree No. 25135, Feb. 14, 2011; Presidential Decree No. 2014, Feb. 14, 2011; Presidential Decree No. 2010, Feb. 24, 2014>

○ 12 9 pages 12. “Non-existent.........” add the following:

④ The Plaintiff asserts that the portion of the appraisal profit of this case among the appraisal profit of this case does not constitute gross income under the Corporate Tax Act, but there exists internal profit of the processing with the same nature as that of Article 4(2)2(c) of the former Enforcement Decree of the Education Tax Act, and thus, it is clear that (c) merely provides for the specific item of the revenue amount, “an amount equivalent to bad debt and bad debt allowances of the pertinent bonds, out of the profit from sale or redemption of bonds,” so it cannot be applied to the appraisal profit of this case, namely, exchange derivatives. The appraisal profit of this case cannot be deemed as internal profit based on the above provision. (5) Under the above legal principle, the revenue amount generated from the increase of net asset, which does not fall under Article 5(3) of the Education Tax Act, Article 4(1)2(c) of the former Enforcement Decree of the Education Tax Act, and the revenue amount of the financial or insurance business entity falling under each subparagraph of Article 4(2)2(c) of the former Enforcement Decree of the Education Tax Act shall be included in the education Tax base.

○ 12 No. 9 No. 9 is called “No. 500”.

○ 12, up to 15, from 13, an internal profit, up to 13,000, shall be as follows:

Internal profit is generated from the evaluation of assets and liabilities or from differences in the timing of attribution of profits and expenses, and it is unreasonable to impose taxes due to the characteristics of external taxation of education tax, and it is changed from the tax base to the profits excluded from the tax base.

○ 12 pages 19, the following shall be added to “a determination made”:

8 The Plaintiff may cause inequality between a corporation that selected the method of recognizing the instant valuation profit and loss at the time of filing a corporate tax return and a corporation that selected the method of not recognizing the instant valuation profit and loss. However, in the event of a derivatives valuation loss, if the Plaintiff selected the method of recognizing the valuation profit and loss in the pertinent year’s corporate tax for the purpose of reflecting the pertinent valuation loss, it cannot be deemed unfair even if the Plaintiff incurred an evaluation profit and loss different from the Plaintiff’s expectation in some taxable periods, and even if the Plaintiff bears an education tax, it cannot be deemed unfair.

From 16 to 22 pages of "relevant Acts and subordinate statutes", the statutes in the corresponding part of "relevant Acts and subordinate statutes" shall be added.

3. Additional determination

A. Whether a violation of the principle of property right guarantee under the Constitution is null and void

1) Summary of the Plaintiff’s assertion

The interpretation that Article 4 (2) 2 (a) of the former Enforcement Decree of the Education Tax Act includes all the evaluation profits of assets and liabilities deemed as earnings under Article 42 of the Corporate Tax Act as the tax base of education tax is contrary to the principle of property rights guarantee under the Constitution, and the scope of delegation or legislative intent under Article 5 (3) of the Education Tax Act, as well as the taxation deliberation or substance over

2) Determination

In full view of the following facts, the provisions of Article 4 (2) 2 (a) of the former Enforcement Decree of the Education Tax Act are contrary to the principle of property rights security under the Constitution, the scope of delegation and the purpose of legislation under Article 5 (3) of the Education Tax Act, or the violation of the principle of substance over form and substance over form, which are recognized by the respective entries and arguments as well as the overall purport of arguments as to Gap's evidence Nos. 4 through 6, 9, 10, 12 through 14, 18, 19, 5, 9, 10, 14 through 20, 7 and 8, and the whole purport of arguments as to Gap's evidence Nos. 7 and 8. The plaintiff's above assertion is without merit.

(1) Article 4 (2) 2 (a) of the former Enforcement Decree of the Education Tax Act provides that "gains from evaluation of assets and liabilities which are not considered as earnings under Article 42 of the Corporate Tax Act" shall not be included in the revenue amount serving as the education tax base. This provision itself does not clearly specify the revenue amount serving as the education tax base.

② If a financial or insurance business entity selects a method of recognizing the instant valuation profit and loss for the purpose of reflecting the corporate tax in the pertinent year’s corporate tax for the purpose of reflecting the valuation loss, even if the difference between corporate tax and the education tax taxable period leads to the result of calculating the tax base higher and bearing the education tax, it is based on the result of one of the valuation methods stipulated in corporate tax-related Acts and subordinate statutes. Unlike corporate tax, it is included in the limitation of the education tax taxation system that does not recognize the carried-over deduction for a short period of three months.

③ Since the transaction of monetary derivatives by a financial or insurance business entity is one of its major businesses and is aware of the valuation profit and loss in mind of the possibility of realization, the valuation profit and loss in this case should be deemed different from the valuation profit and loss of other business entities in terms of the timing of recognition and handling of such profit and loss.

④ Since the increase in the appraisal profit of monetary derivatives can not be seen as only a simple processing profit connected to the increase of the tax-bearing capacity, it cannot be deemed that the revenue of the “interest, dividend, commission, guarantee fee and securities sales profit and redemption profit, etc. received by the financial and insurance business entities” under Article 5(3) of the Education Tax Act, which set the education tax base, and the revenue of the completely different nature from the tax-bearing capacity.

⑤ Considering the legislative purpose and special nature of the education tax, the education tax law provides that the amount of income tax, unlike the ordinary revenue tax, shall be determined as the revenue per se by recognizing the tax-bearing capacity and using it as the tax base for education tax, so it is difficult to view that the amount of income as a certain assessment profit, which can be classified as the revenue, goes against the legislative purpose of education tax and the characteristics of external taxation.

B. Whether the portion not recognized as gross income under the Corporate Tax Act is illegal

1) Summary of the Plaintiff’s assertion

Article 7 of the Education Tax Act shall apply mutatis mutandis to the period of attribution of the revenue amount of financial and insurance business entities. Thus, the revenue amount prescribed in each subparagraph of Article 4(1) of the former Enforcement Decree of the Education Tax Act shall be deemed to mean the revenue amount recognized in accordance with the Corporate Tax Act during the period of the education tax period. Even if the assessment profit of this case is interpreted as not an internal profit due to the opposite interpretation of Article 4(2)2(a) of the former Enforcement Decree of the Education Tax Act, the imposition of education tax for the portion which the Plaintiff

2) Determination

Article 7 of the Education Tax Act provides that "Article 40 and Article 43 of the Corporate Tax Act shall apply mutatis mutandis to the period of accrual of the revenue amount of a financial or insurance business entity." In other words, Articles 40 and 43 of the Corporate Tax Act provide for the application of corporate accounting standards and practices in the calculation of the business year of accrual of profits and losses and the income amount of each business year. In other words, the business year of accrual of earnings and losses for each business year shall be the business year which includes the date on which the concerned earnings and losses are determined, and in the calculation of the income amount of each business year, where the corporation applies certain corporate accounting standards or continues to apply the practices concerning the business year of accrual of earnings

As such, Article 7 of the Education Tax Act applies mutatis mutandis mutatis mutandis to the period of attribution of the revenue amount under Articles 40 and 43 of the Corporate Tax Act. Article 40 of the Corporate Tax Act determines the business year of accrual of profit and loss on the basis of "the date on which the profit and loss is determined", and Article 43 of the Corporate Tax Act determines the calculation of income amount on the basis of "specified corporate accounting standards and practices" under Article 43 of the Corporate Tax Act. Therefore, the specific contents of the Education Tax Act applied mutatis mutandis are related to the criteria for calculating the revenue amount, which is the education tax base, and it is not the existence or amount of profit calculated according to the Corporate Tax Act, and therefore, it cannot be deemed that the gross income recognized under the provisions of the Corporate Tax Act, which is the tax base of the Education Tax Act, must be the same with the revenue amount, which is the tax base under the Education Tax Act. As long as the period of taxation of the education tax differs from the Education Tax Act and the Corporate Tax Act includes a number of taxable periods of the corporate

4. Conclusion

Since the judgment of the first instance is justifiable, the plaintiff's appeal is dismissed as it is groundless.

Additional Parts of relevant statutes

/ Education Tax Act

Articles 7 (Period of Reversion of Revenue Amount of Financial and Insurance Business Entities) Articles 40 and 43 of the Corporate Tax Act shall apply mutatis mutandis to the period of accrual of Revenue Amount of Financial and Insurance Business Entities.

m. Corporate Tax Act

Article 40 (Business Year of Profit and Loss)

(1) The fiscal year of accrual of earnings and losses of a domestic corporation shall be the fiscal year which includes the date on which the concerned earnings and losses are settled.

(2) Necessary matters concerning the scope of the business year of accrual of earnings and losses under paragraph (1) shall be prescribed by Presidential Decree.

Article 43 (Application of Corporate Accounting Standards and Practices)

In calculating the amount of income of a domestic corporation for each business year, where the corporation applies corporate accounting standards which are generally deemed fair and reasonable with respect to the business year in which earnings and losses accrue and the acquisition and evaluation of assets and liabilities, or continuously applies the practices, such corporate accounting standards or practices shall be followed, except as otherwise provided in this Act and the Restriction of Special Taxation Act.