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

Cheong-gu Office

The part of the notice of change in the amount of income stated in attached Form 1, which the Defendant issued to the Plaintiff on August 1, 2015, in excess of the amount stated in the column shall be revoked.

A. The Plaintiff, a company engaged in the construction business, etc., has secured loans claims against AA (O% of the Plaintiff’s shares) (O% of the equity ratio), BB, CCC (O% of the Plaintiff’s shares; hereinafter “AAA, BB, and CCC, etc.”), which is its representative director, during the period from 2004 to 2014, as shown in attached Table 2.A. (a) with respect to shareholders, executives, employees’ short-term claims, and loans claims to the account for provisional payment (hereinafter “instant provisional payment”), and added the amount to the principal for the following business year as against the attempted interest (hereinafter “scheduled interest”) equivalent to the interest rate on loans for each business year from 2009 to 2013.b. as stated in attached Table 2.

B. On March 17, 2014, the Plaintiff’s board of directors decided to lend to AA, etc. an amount equivalent to the accrued interest at the interest rate for overdrafted loan as of March 24, 2014. On December 16, 2014, the Plaintiff decided to lend money to AA, etc. with the same content as of December 23, 2014. On the date of the resolution of each board of directors, the Plaintiff drafted a written agreement for loans identical to the said resolution with AA, etc. on the date of the said resolution of each board of directors.

C. On March 24, 2014, May 25, 2014, and December 24, 2014, the Plaintiff deposited corporate funds to AA, etc. through the Plaintiff’s national bank account as shown in attached Table 3, and immediately traded the transaction in which the Plaintiff received the amount corresponding to the attempted dispute interest by business year from AA, etc., and based on this, the Plaintiff returned the accounts for the attempted dispute and account extinguished according to the accounting method of the above paragraph (a) on the account books, and then the Plaintiff kept accounts in the way of revealing that the Plaintiff loaned the amount corresponding to the attempted dispute interest to AA, etc. in cash through the provisional payment account and received the said cash again from AA, etc.

D. As a result of the consolidated investigation conducted with respect to the Plaintiff during the period from May 12, 2015 to July 17, 2015, the Defendant determined that: (a) an attempted dispute over the accounting process of the Plaintiff was recovered; (b) but in fact, it was not recovered in cash until one year has passed from the end of the business year in which interest was generated; and (c) that interest on the attempted dispute over the one-year period was included in the gross income during the period from 2010 to 2014; and (d) the corporate tax base was corrected by correcting the corporate tax base (in addition, the tax adjustment was made in order to prevent double imposition of corporate tax on the provisional payment corresponding to the attempted dispute already appropriated in the previous business year; hereinafter referred to as “instant correction”); and (d) the Plaintiff did not dispute the amount of the income amount, excluding the interest on the change in attached Form 1, 2015.

E. The Plaintiff sought revocation of the instant disposition and sought an inquiry from the Tax Tribunal, but the Tax Tribunal rendered a decision to dismiss the Plaintiff’s claim on January 7, 2016.

[Reasons for Recognition] Unsatisfy, Gap evidence Nos. 1, 2, 3, 5, 9, 10 (including branch numbers, if any; hereinafter the same shall apply), Eul evidence Nos. 2, 3, 4, 6, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Claim for invalidation under Article 11 subparagraph 9-2 (b) of the former Enforcement Decree of the Corporate Tax Act

Article 11 subparagraph 9-2 (b) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 26600, Jun. 23, 2015; hereinafter referred to as the "former Enforcement Decree of the Corporate Tax Act"). Article 15 (3) of the Corporate Tax Act as the mother of the above provision delegates that "the scope and classification, etc. of profits arising from the transactions that increase the net assets of the corporation can be prescribed by Presidential Decree" as to "the scope and classification, etc. of profits arising from the transactions that are generated from the transactions that increase the net assets of the corporation" under Article 11 (1) of the former Enforcement Decree of the Corporate Tax Act (hereinafter referred to as the "former Enforcement Decree of the Corporate Tax Act"). However, although the net assets increase, the provision of this case constitutes a matter that can only be defined in the manner of amending Article 15 (2) of the Corporate Tax Act, which is a law, and thus, the provision of this case is null and void because it clearly exceeds the scope delegated by the mother law.

Therefore, the disposition of this case based on the invalid provision of this case is unlawful.

2) Claim on the non-performance of the applicable requirements of the instant provision

A) Claim for recovery of an attempted interest during the dispute

Since the provisions of this case do not separately stipulate the method of recovery, there is no ground to conclude that AA et al. borrowed an amount equivalent to the interest accrued from the Plaintiff as an attempted dispute, and then the repayment of the interest accrued from the loan is prohibited, and it cannot be deemed unlawful to omit the movement of real capital in the manner falling under the novation under the Civil Act and make the above transactions. Thus, the Plaintiff recovered the interest accrued from the failed dispute prior to the end of the business year in which the interest accrued.

B) The assertion that the provisional payment does not constitute a processed asset

The instant provision is that the provisional payment, etc. (in the case of the plaintiff, it appears to refer to the provisional payment equivalent to the attempted dispute, which was replaced with the provisional payment in the next business year, as seen earlier) is an processed asset and is included in the gross income only when the outflow from the company is recognized. However, in the case of the provisional payment in dispute, 10.4 billion won was recovered as substitute for dividends from 2004 to 2007, and 6.5 billion won was recovered by account transfer since 2012, it cannot be deemed as a public asset, and it cannot be deemed as a outflow from the company.

3) Claim on satisfaction with the disposition requirement of income

A) Claim that was not included in the calculation of earnings, which is a prerequisite for disposal of income

According to Article 106(1)1 of the former Enforcement Decree of the Corporate Tax Act, only in cases where it is evident that the amount included in the calculation of earnings pursuant to Article 67 of the Corporate Tax Act was leaked out of the company, the income may be disposed of to the person to whom the income accrued. However, as long as the Plaintiff voluntarily recognized the person who attempted the dispute as a gross income and counted in the account book, so long as the Plaintiff voluntarily counted the amount to be additionally included in the

B) The assertion that the company was not released from the company

From 2004 to 2007, the Plaintiff has consistently recovered the provisional payment from AA, etc. by offsetting dividends with dividends to AA, etc., and even after 2012, prior to the Defendant’s tax investigation, the Plaintiff collected KRW 650 million from AA, etc. before the time of the Defendant’s tax investigation. As such, the Plaintiff’s addition of the interest to the principal of the provisional payment was based on the actual collection, it cannot be deemed that the attempted dispute was out of the company.

4) Claims that constitute grounds for disposal of income under the General Rule 4-0, - 6 of the Corporate Tax Act

In the event that the provision of this case is applied on the basis of the general rules of the Corporate Tax Act 4-0, 4-4, and 6 [the criteria for the disposal of the gold, etc.] (hereinafter referred to as the "basic rules of this case"), the defendant's disposition of this case was unlawful, provided that part of the basic rules of this case was legislated by Presidential Decree, and that part of the basic rules of this case concerning the disposal of income in the basic rules of this case was not legislated, insofar as the part concerning the disposal of income in the basic rules of this case was not legislated.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination as to the deviation from the legislative limitation of the instant provision and the assertion of violation of no taxation without law

A) Legal principles

Under the principle of no taxation without law, the interpretation of tax laws shall be interpreted in accordance with the text of the law unless there are special circumstances, and it shall not be permitted to expand or analogical interpretation without any reasonable grounds. However, where it is necessary to clarify the meaning through mutual interpretation between the laws and regulations, it shall be permitted to make a combined interpretation in view of the legislative purport and purpose, etc. within the scope that does not undermine the legal stability and predictability oriented by the principle of no taxation without law (see, e.g., Supreme Court Decision 2007Du4438, Feb. 15, 2008). Meanwhile, the Enforcement Decree or the Enforcement Rule of the Act does not change or supplement the contents of rights and obligations of individuals, or provide new contents that are not prescribed by the law, unless they are delegated by the law, but it shall not be deemed that the legislative purport of the law or the contents of the Enforcement Rule of the Act can be seen as going beyond the scope of the mother law if they are for embodying it based on the purport of the provisions of the mother law (see, e.g., Supreme Court Decision 2007Du181818.

B) Determination

(1) Article 15(1) of the Corporate Tax Act defines profits as "amount of profits generated from transactions which increase the net assets of the pertinent corporation, except as stated in this Act or capital contributions." "profit" generally refers to the amount of income acquired through the provision of goods or services and all other economic benefits attributed to the pertinent corporation, and Article 15(3) of the same Act delegates "necessary matters concerning the scope and classification of profit under Article 15(1) to Presidential Decree." It is reasonable to see that matters concerning the scope and classification of profit under Article 15(1) of the former Enforcement Decree of the Corporate Tax Act, which was enacted upon such delegation, are able to be determined flexibly by delegation to subordinate Acts and subordinate statutes. Article 11 of the former Enforcement Decree of the Corporate Tax Act, which was enacted upon the delegation, provides that "the amount of profit accrued to the relevant corporation or to be attributed to the relevant corporation," and Article 15(1) of the former Enforcement Decree of the Corporate Tax Act, which provides for the scope of profit-related matters, such as "the scope and classification of profit-related matters only" under Article 15(3).

(2) The provision of this case was newly established by the Enforcement Decree of the Corporate Tax Act by Presidential Decree No. 22035 on February 18, 2010, which was amended by the Presidential Decree. This was partially legislated the content of the previous basic rules of this case, stating, “The person who received provisional payments and attempted interest not recovered until the termination of the special relationship shall be deemed to have disposed of pursuant to Article 106 of the former Enforcement Decree of the Corporate Tax Act in the business year including the day on which the special relationship was extinguished, and in the case of the continuation of the special relationship, the person who failed to recover not later than one year from the end of the business year to which the date on which the interest was generated

However, the provisions of the General Rules of this case, in certain cases, are deemed to have waived the provisional payment, attempted payment, and the claim against the specially related person, and thus, in order to dispose of income to the specially related person. Thus, it is reasonable to view that the provisions of this case also stipulate that the amount equivalent to the attempted interest and the claim, which are considered to have been renounced, shall be included in the gross income as a condition that the income, such as bonus or dividend, is deemed to have been attributed to the specially related person.

In the past, even if a corporation renounced its claim for provisional payment, etc. and reverted the profit from the exemption of obligation to a related party equivalent to the equivalent value to the corporation’s gross income, the disposal of income was not allowed for the related party, unless there are legal grounds that can be included in the corporation’s gross income (see, e.g., Supreme Court Decision 2008Du2156, Sept. 9, 2010). In this case, the instant provision should be deemed as having provided the basis that the related

(3) However, it is reasonable to add interest on loans, substitute payments, etc. in the merchant's transaction to the gross income because the interest on the provisional payments falls under the profit per se which increases the net assets of the corporation. Thus, the provision of this case is a provision that a related party may be included in the gross income on the condition that the interest on the provisional payments, which are naturally recognized as the gross income and have to be included in the account book, was not recovered for one year, under the condition that the income was not recovered for the one-year period. It is difficult to see that the scope of the gross income is extended as a condition for disposal of income. However, it is difficult to view that the person to whom the profit accrued belongs should be attributed through the corporation. Further, in light of the purport of the introduction of the provision of this case, and the diversity of the provisions of the provisions of each subparagraph of Article 11 of the former Enforcement Decree of the Corporate Tax Act, it is difficult to view that the provision of this case is a separate provision of Article 15(3) of the Corporate Tax Act, and it can not be viewed as the provision of this case.

(4) Therefore, the Plaintiff’s assertion on this part is without merit.

2) Determination as to the assertion of non-performance of the requirements of the instant provision

A) The part concerning the assertion of recovery of the parties who attempted the dispute

In this case, although the provision of this case does not clearly stipulate the method of "the recovery", the proviso of this case provides that "the cases where there are justifiable reasons prescribed by Ordinance of the Ministry of Strategy and Finance, such as the cases where recovery is impossible due to a dispute over claims and debts," and Article 6-2 of the Enforcement Rule of the Corporate Tax Act enacted upon delegation of the above proviso provides that "the cases where a related party has provided the property equivalent to the claims to be recovered as a security or has secured the claims by compulsory execution against the property owned by the related party", "the cases where a related party holds the debts that can offset the claims," or "the cases where it is deemed legitimate to not recover the claims due to other reasons similar to those of subparagraphs 1 through 3."

The grounds for exclusion from the application of the above provision of this case are cases where a corporation has secured the satisfaction of claims, such as provisional payments, through the property belonging to a specially related person, or where the relation of claims and obligations has not been confirmed in dispute between them, and it is reasonable to view that the "collection" in the provision of this case means that at least a corporation at least obtains the actual satisfaction of claims for interest of provisional payments in a manner such as receiving property contributions from a specially related person or decreasing obligations against a specially related person.

However, according to the above facts, AA, etc. did not actually pay the Plaintiff the interest accrued from the dispute, which is interest on the provisional payment, and only an increase in the provisional payment through the Plaintiff’s account settlement. Since the Plaintiff formed the appearance as the cash withdrawal between AA, etc. for the first time in 2014, and prepared a loan agreement, it is reasonable to deem that the formation of the above external appearance is the most unfair act, and the Plaintiff did not obtain a realistic satisfaction with respect to the interest claim equivalent to the accrued interest claim from AA, etc.

Therefore, this part of the plaintiff's assertion is without merit.

B) The portion claiming that the provisional payment does not constitute a processed asset

The instant provision provides that, even in cases where a provisional payment and an interest agreement on the provisional payment with respect to a person with a special interest exists and an attempted interest is appropriated in the account book, such attempted interest shall be included in the gross income when such failed interest was not recovered within one year, so it is irrelevant to whether the provisional payment or attempted interest was processed assets.

Therefore, the plaintiff's assertion that the provision of this case can be applied only when the provisional payment for AA, etc. is a processed asset is without merit.

3) Determination on the assertion regarding the non-performance of income disposition requirement

A) The part concerning the assertion that the income was not included in the calculation of earnings, which is a prerequisite for disposal of income

According to the above facts, the defendant can find the fact that prior to the disposition of this case, the defendant filed a correction of this case corresponding to the tax adjustment included in the gross income of the next business year from the date of each occurrence of the interest accrued. Thus, this part of the plaintiff's assertion is without merit.

B) The part of the assertion that the outflow was not disclosed

In full view of the following circumstances, it is reasonable to deem that the attempted dispute interest was out of the company, taking into account the facts as seen earlier, the entries in Gap evidence Nos. 12, 13, and 14, and the entire purport of the pleadings:

① The purpose of the instant provision is to dispose of income to a related party by deeming that a corporation renounced its interest claim against a related party, or exempted its debt, if the interest on the provisional payment was not recovered for a period of one year.

② AA, etc. holds approximately 94% of the Plaintiff’s shares, and in fact, the Plaintiff is in accord with economic interest. Among them, BB and CCC’s representative director is an son of AA, and thus, AA, a representative director, is deemed to be in the position of the Plaintiff’s management and shareholder, and can be deemed as having the intent of AA to be identical to the Plaintiff’s intent. Therefore, it is difficult to deem that there is a reasonable possibility for the Plaintiff to recover the attempted dispute with the Plaintiff.

③ The Plaintiff’s provisional payment to AA, etc. was added to the principal and continuously increased from 2010 to 2014 (in the case of AA, the continuous increase has been made from 2008). The Plaintiff asserted that an attempted dispute was recovered by lending money equivalent to the interest accrued from the failed dispute to AA, etc. in addition to the principal of the provisional payment. However, the Plaintiff did not submit materials on the fact that the failed dispute was actually repaid due to the contribution by AA, etc.

④ Examining the details of the Plaintiff’s deposit into the Plaintiff’s bank account before 2015, the Plaintiff’s deposit of KRW 30 million in total, KRW 10 million in total, around 2013, and KRW 80 million in total, and KRW 20 million in around 2012, and KRW 280,000 in total, and KRW 130,00 in total, and KRW 130,000 in total, and KRW 130,00 in total, and KRW 130,00 in total, and KRW 130,00 in total, and KRW 130,00 in total, the Plaintiff appears not to constitute an attempted repayment, and the Plaintiff’s deposit of KRW 10,00 in total, including the above failed repayment of interest.

⑤ Although it is reasonable to deem that AA, etc. does not actually pay the interest that the Plaintiff shall pay each year, thereby acquiring the benefit equivalent to the amount of the interest, it can be deemed that the Plaintiff avoided the payment of global income tax due to the Plaintiff’s accounting.

Therefore, this part of the plaintiff's assertion is without merit.

4) Determination on the assertion that the disposition of income in general provisions of the instant case is not based on the disposition of income

As seen above 2. C. (3) The instant disposition satisfies all the requirements of “gross income” and “exploitation of outflow,” which are the requirements of disposition of income as stipulated in Article 67 of the Corporate Tax Act and Article 106 of the Enforcement Decree of the Corporate Tax Act, and disposes of based on such requirements. Thus, the basic rules of the instant case cannot be deemed the basis of the disposition.

Therefore, the plaintiff's assertion on this part is without merit.

3. Conclusion

Therefore, each of the claims of the plaintiff in this case is dismissed as it is without merit, and it is so decided as per Disposition.