Daejeon District Court 2012Guhap609 ( November 07, 2012)

early 201 Jeon 2773 ( December 07, 2011)

The plaintiff and the subsidiary are specially related persons, and new stocks are purchased at a price higher than the market price.

The plaintiff and the subsidiary constitute a person with a special relationship that constitutes an enterprise group, and the subsidiary receives new stocks from the plaintiff and enables the plaintiff to repay the loan claims to the plaintiff, and the plaintiff is deemed to have included the loan claims that could not be included in deductible expenses in deductible expenses in the form of investment securities disposal loss, the transaction type is unreasonable in terms of tax law because it disregards the economic rationality.

2012Nu2847 Revocation of Disposition of Corporate Tax Imposition

AAAE Co., Ltd.

The Director of the National Tax Service

Daejeon District Court Decision 2012Guhap609 Decided November 7, 2012

May 23, 2013

July 4, 2013

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant's disposition of imposing corporate tax of KRW 000 on the plaintiff on July 1, 201 shall be revoked.

1. Details of the disposition;

A. The Plaintiff’s disposal loss of investment securities

On June 4, 2008, the Plaintiff participated in the capital increase with 100% of its equity interest (hereinafter “B”) and acquired 150 new shares (hereinafter “new shares”) at KRW 000,000, but transferred 175 shares, which are all the shares of BB, including the new shares, to the UCC on December 29, 2008. Upon filing a corporate tax return for the business year 2008, the Plaintiff included 000 won of the amount of loss arising from the aforementioned stock transaction [300 won of acquisition price + 0000 won of the newly owned shares + 25 million won of the acquisition price of the new shares) - 000 won of the transfer price of the new shares] as investment securities disposal loss.

(b) Adjustment of increase in corporate tax resulting from non-deductible expenses;

On July 1, 2011, the Defendant rendered a decision of correction to increase corporate tax amount of 000 won in the business year of 2008 and notified the Plaintiff of the amount of 000 won which the Plaintiff had invested and gathered in the instant new shares on the ground that the amount of 00 won was constituted a wrongful calculation under Article 52(1) of the former Corporate Tax Act (amended by Act No. 9267, Dec. 26, 2008; hereinafter referred to as the “Corporate Tax Act”). Meanwhile, on August 25, 2011, the Defendant notified the Plaintiff that the amount of 00 won of the fixed value-added tax (general refund) was appropriated for the said corporate tax.

C. Determination by the Tax Tribunal and the defendant's reduction and correction

On July 26, 2011, the Plaintiff filed a request with the Tax Tribunal for a ruling on the above ruling of increase, and the Tax Tribunal rendered a decision to reduce the amount of losses incurred by the Plaintiff on December 7, 2011 to include the amount of losses incurred by the Plaintiff’s investment in the instant stock in the calculation of losses incurred by the investment securities disposal in the calculation of losses in the calculation of losses, but the part related to the instant new stocks in the calculation of losses is not 000 won but 000 won, and thus, the Defendant’s non-deductible of losses should be included in the calculation of losses. Accordingly, on December 14, 2011, the Defendant rendered a decision to reduce the amount of KRW 00 of the corporate tax (hereinafter referred to as “the disposition of imposing corporate tax of KRW 00 on the Defendant remaining after the reduction according to the decision of the Tax Tribunal”) as the disposition of imposing corporate tax of KRW 000 on the Plaintiff in the calculation of losses.

[Ground of Recognition] The non-strifed facts, Gap and 5, Eul evidence 1, 2, and 3, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. Summary of the plaintiff's assertion

Article 87 (1) 2 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 21302, Feb. 4, 2009; hereinafter referred to as the "Enforcement Decree of the Corporate Tax Act") stipulates that B shall be a shareholder in a special relationship with the Plaintiff, but in this case, B is not a shareholder in a special relationship with the Plaintiff under Article 52 (1) of the Corporate Tax Act (see Supreme Court en banc Decision 2008Du150, Jul. 21, 201). The Defendant changed the reason for disposition to the effect that B is "other affiliates belonging to the business group to which the Plaintiff belongs" under Article 87 (1) 7 of the Enforcement Decree of the Corporate Tax Act, and that the act of the Plaintiff did not fall under the scope of the above Article 87 (1) 7 of the Enforcement Decree of the Corporate Tax Act, and the above provision of the Enforcement Decree of the Corporate Tax Act constitutes a non-taxable one under Article 52 (1) of the former Enforcement Decree of the Corporate Tax Act.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

(1) Determination as to whether BB constitutes “a person in a special relationship with the Plaintiff as provided in Article 52 of the Corporate Tax Act and Article 87(1)7 of the Enforcement Decree of the Corporate Tax Act”

(A) As to the addition and change of the reasons for the disposition

The facts that the Defendant determined BB as “a person in a special relationship under Article 87(1)2 of the Enforcement Decree of the Corporate Tax Act at the time of the instant disposition” cannot be acknowledged as “a person in a special relationship under Article 87(1)2 of the Enforcement Decree of the Corporate Tax Act, and according to the changed Supreme Court precedents, as alleged by the Plaintiff, BB cannot be considered as “a person in a special relationship under the above Enforcement Decree.” However, since the subject matter of a tax disposition lawsuit is the objective existence of the tax amount determined by the tax authority, the tax authority may submit new data that can support the legitimacy of the tax base or tax amount recognized in the relevant disposition at the time of closing argument during the lawsuit and exchange the reasons to the extent that the unity of the disposition is maintained (see, e.g., Supreme Court Decision 2001Du1994, Oct. 11, 202). In so doing, the Defendant can change Article 87(1)2(7) of the Enforcement Decree of the Corporate Tax Act, which serves as the basis to the extent consistent with the determination.

(B) As to "a person who is in a special relationship under Article 87 (1) 7 of the Enforcement Decree of the Corporate Tax Act", BB is an affiliated company belonging to an enterprise group under Article 87 (1) 7 of the Enforcement Decree of the Corporate Tax Act (hereinafter "the Monopoly Regulation and Fair Trade Act"), "a person who is in a special relationship with the plaintiff." Article 2 subparagraph 2 (a) of the Monopoly Regulation and Fair Trade Act defines "enterprise group" as "a group of companies substantially controlling its business by the same person and one or more companies under the same person's control," and Article 87 (1) 3 of the Enforcement Decree of the Corporate Tax Act defines "a group of companies under the same business group" as "a group of companies under the same Article 87 (1) 2 (a) of the Corporate Tax Act, and Article 3 (1) 7 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act provides that "a person who actually controls its business pursuant to the criteria prescribed by Presidential Decree, actually owns more than 30 percent of the total number of outstanding shares of the plaintiff.

(C) As to whether there exists a tax law interpretation or a practice of national tax administration applying Article 87(1)7 of the Enforcement Decree of the Corporate Tax Act only to a large-scale enterprise group

In order to establish a non-taxable practice under Article 18(3) of the Framework Act on National Taxes, the tax authorities must have the intent not to impose tax due to any special circumstance even though the objective fact that the non-taxable practice had not been imposed over a considerable period of time, and the tax authorities knew that they could impose tax on the matter. Such public view or intent must be expressed explicitly or implicitly, but in order to include an implied indication, it must be determined that the tax authorities expressed their intent not to impose tax on the status of taxation for a considerable period of time, unlike a mere omission of taxation (see, e.g., Supreme Court Decision 2001Du7855, Sept. 5, 2003). However, each entry of Gap 15, 16, and 18 evidence (including serial numbers, and hereinafter the same shall apply) are difficult to find that such non-taxable practice was non-taxable practice, and there is no other evidence to acknowledge it, but rather, according to the evidence No. 8, if the tax authorities stated in the evidence No. 8, it cannot be applied Article 87(1) of the Enforcement Decree of the Act.

(2) Determination as to whether the Plaintiff’s act constitutes wrongful calculation under Article 52 of the Corporate Tax Act and Article 88(1)1 of the Enforcement Decree of the Corporate Tax Act

Article 52 (1) 1 of the Corporate Tax Act provides that if a domestic corporation's tax burden on its income is deemed to have been reduced unfairly by 00, 2000 won or more than 00 won, 200 won or more than 0 won for each of the above new shares were purchased at 0, 300 won or less than 00 won, and 200 won less than that of the new shares were purchased at 0,000 won less than that of the corporation's 1, 300,000 won less than that of the corporation's new shares were purchased at 0,000 won less than that of the corporation's 20,000 won less than that of the corporation's 1,000 won more than that of the corporation's new shares were purchased at 0,000 won less than that of the corporation's 20,000 won more than that of the corporation's new shares, the plaintiff's new shares was acquired at 0,000 won less than that of the market value.

(3) Sub-determination

Therefore, the disposition of this case on the ground that the plaintiff unfairly reduced tax burden due to transactions with BB, a person with a special relationship, is legitimate, and the above assertion by the plaintiff on the other premise is without merit.

3. Conclusion

Then, the plaintiff's claim of this case is dismissed due to its reason, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without reason, and it is so decided as per Disposition.