Where interest income is paid in full under an individual contract and is fully realized in a fixed manner, such interest income from a non-business loan shall be applicable;

The instant contract is an individual contract that is a separate and independent monetary loan contract, and as the interest income is fully realized by receiving all principal and interest pursuant to an individual contract during each taxable period, the disposition imposing interest income from non-business loan is lawful.

2013Guhap401 Global Income and Revocation of Disposition

KimA

Head of Dong District Office

October 10, 2013

October 31, 2013

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The imposition of global income tax for the year 2009 against the Plaintiff on May 21, 2012 and the imposition of global income tax for the year 2010 shall be revoked.

1. Details of the disposition;

A. The Plaintiff, upon the recommendation of the KimB (a group of ACC as a form of punishment between the Plaintiff and the Plaintiff) and the Ansan (a MaB; hereinafter referred to as the “GGB, etc.”), paid the principal and interest equivalent to 10% of the principal of the investment within three months and paid the 10% interest on the principal to KimB, etc. within three months after he/she paid the principal of the investment within three months, and repeated the process of receiving 10% interest on the principal and its interest within three months after re-payment of the principal.

B. The details of the amount and collected amount that the Plaintiff paid to KimB, etc. from 2008 to 2011 are as follows.

[Attachment 1] Whether a decision is made two pages

C. On November 201, 201, KimB, etc. paid only the early settlement amount of OB, which is the sum of the amounts paid by the Plaintiff from September 201 to September 201, to the Plaintiff, and offset the remainder of each amount received as interest from 2008 by the Plaintiff. As a result, the Plaintiff did not receive OB from the Plaintiff.

[Attachment 2] Whether a judgment is three pages

D. The director of the Seoul Regional Tax Office, in the course of conducting a tax investigation with respect to Ansan from September 29, 201 to February 17, 2012, notified the Plaintiff of the following purport: (a) that 10% of the principal collected from January 1, 2008 to December 31, 201 is interest income; and (b) that the Plaintiff should levy the global income tax as interest income; and (c) on May 21, 2012, the Defendant determined and notified the Plaintiff of the global income tax amount for 2009 and the global income tax amount for 2010 as global income tax amount for 209 (hereinafter “instant disposition”).

Facts that there is no dispute over the basis of recognition, Gap evidence 1, Eul evidence 2, Eul evidence 1, Eul evidence 2, Eul evidence 2 (including each number), and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The Plaintiff paid the money by continuing to pay the money in accordance with the art investment contract with KimB, etc. The interest that the Plaintiff received from KimB, etc. is not the profit gained by actually investing in art works, etc. but the principal invested by the Plaintiff or other investors. The act of monetary transaction, such as the Plaintiff and KimB, etc., such as the Plaintiff, KimB, etc., is not a separate contract for each transaction, but a comprehensive contract has been concluded. The act of treating the principal and interest as being paid once every three months is a formal settlement of interest, which is merely a single contract for the purpose of paying the principal and interest on the investment principal and interest, and the interest received each time by the Plaintiff is merely a single contract for the purpose of inducing the re-investment of some interest on the leased principal paid by the Plaintiff, and it cannot be deemed a substantial interest of the meaning subject to the Income Tax

2) Article 51(7) of the Enforcement Decree of the Income Tax Act provides that if all or part of the principal and interest cannot be recovered from a debtor or a third party because the pertinent non-business amount falls under the bonds stipulated in Article 19-2(1)8 of the Enforcement Decree of the Corporate Tax Act before the final return on the tax base or the determination or correction of the tax base and the amount of tax, the amount recovered shall be calculated by preferentially subtracting the principal from the recovered amount, and if the recovered amount falls short of the principal amount, the total amount collected shall be deemed as nonexistent.

3) The Plaintiff, KimB, etc. rescinded the agreement on investment in art around November 201, and appropriated an amount equivalent to 10% of the total amount received by the time of restitution to its original state as at the end of November 201 to the investment principal of November 9, 2011.

Therefore, since the above contract has become retroactively effective, the amount equivalent to 10% of the investment principal acquired by the plaintiff cannot be regarded as interest income.

4) On June 18, 2013, the Plaintiff, as a art investment contract against KimB, etc. was made by deception to the effect that the said contract would be revoked, and thus, the said contract was lawfully revoked.

Therefore, the amount equivalent to 10% of the investment principal acquired by the Plaintiff cannot be viewed as interest income.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) The legal nature of the receipt of money between the Plaintiff, KimB, etc.

In light of the following circumstances acknowledged in the above facts, i.e., ① the Plaintiff did not have entered into a basic contract that regulates the entire monetary transaction with KimB, etc., and there was no evidence to regard it as a single contract as a whole as the Plaintiff’s assertion, ② during the taxable period of taxation, the Plaintiff recovered not only the principal of each investment, but also the interest in accordance with the agreed interest rate; ③ The Plaintiff appears to have enjoyed economic benefits on the interest received by the Plaintiff by regularly lending money regardless of the period of collection of principal and interest; and ③ The Plaintiff’s monetary transaction between the Plaintiff and KimB, etc. is reasonable to regard it as an independent monetary loan contract for each transaction (the Plaintiff asserted that the contract with KimB, etc. is an investment contract). However, in light of the fact that the Plaintiff has asserted that the contract with KimB, etc. is an investment contract, but its legal nature is to pay the principal and 10% interest within three months by guaranteeing the principal and 10% interest.

2) Whether an interest income falls under interest income

A) Article 45 of the Enforcement Decree of the Income Tax Act provides that interest income under the Income Tax Act refers to profit from a non-business loan or income similar thereto in the nature of a price as a result of the use of money, and Article 45 of the Enforcement Decree of the Income Tax Act provides that the date of payment of interest shall be deemed the date of receipt of interest income from a non-business loan, but where no agreement on the payment of interest exists, or where the interest is paid prior to the date of payment under an agreement or the interest that was excluded from

B) In addition, income tax is a so-called taxation that imposes tax on the income amount for one year from January 1 to December 31 of each year, and the interest income amount generated from profits from non-business loans is calculated as the total income amount for the year concerned. If part of the claim is recovered, if it becomes objectively obvious that it is impossible to recover the remaining claim at the time of recovery.

As long as the recovered amount falls short of the principal amount, it shall be deemed that there is no realization of interest income meeting the taxation requirements, but it may not affect any tax liability for interest income already realized prior to the occurrence of a cause not to recoverable (see Supreme Court Decision 2005Du5437, Oct. 28, 2005).

C) With respect to the instant case, a health loan contract is respectively separate and independent, and as long as the Plaintiff received all principal and interest pursuant to an individual contract during the respective taxable period, thereby realizing interest income in a final and conclusive manner, any obligation to pay the interest income already determined solely on the ground that the principal cannot be recovered under a separate monetary loan contract concluded in 2011.

Therefore, the Plaintiff’s assertion based on the premise that monetary transactions between the Plaintiff and KimB, etc. are a single contract is without merit without any further review.

D) Whether Article 51(7) of the Enforcement Decree of the Income Tax Act is applied

(1) Article 51(7) of the Enforcement Decree of the Income Tax Act provides that "in calculating the total amount of profits accruing from a non-business loan pursuant to Article 16(1)11 of the Act, where the whole or part of the principal and interest cannot be recovered from the debtor's bankruptcy, compulsory execution, execution of punishment, discontinuance of business, death, disappearance, or missing before the final return on tax base pursuant to Article 70 of the Act or the final return on tax base pursuant to Article 80 of the Act is determined and2 of the Act, the amount of non-business loan shall be calculated by preferentially subtracting the principal from the recovered amount if the amount recovered falls short of the principal."

(2) However, the above provision is a method of calculating interest income where all or part of the principal and interest cannot be recovered from an obligor or a third party, and it cannot be applied to this case where the Plaintiff received full repayment of principal and interest under an individual contract. Therefore, the Plaintiff’s assertion that the interest income should be calculated by preferentially deducting the principal from the recovered amount is without merit.

E) Whether the agreement has been rescinded and the deception has been cancelled

(1) Although the Plaintiff asserted that he/she had rescinded an investment contract on or around the end of November 201, the agreement was asserted only in the instant lawsuit. However, in light of the fact that even at the time of the decision of the Tax Tribunal rendered on December 6, 2012, the Plaintiff asserted that he/she unilaterally offseted the Plaintiff by KimB, etc. and incurred losses to OOB members, even before the time of the decision of the Tax Tribunal rendered on December 6, 2012, it is difficult to believe that the Plaintiff’s assertion corresponds to the Plaintiff, and there is no other evidence to acknowledge the Plaintiff’s assertion. Furthermore, even if the Plaintiff decided to cancel an individual contract separately between KimB, etc. after the decision of the Tax Tribunal rendered on the above tax Tribunal, the individual contract was concluded after collecting the principal and interest of the leased principal and interest, and since interest income was already realized each year according to the principle of taxation, it would be unreasonable to permit the Plaintiff to have agreed on the retroactive cancellation of the tax collection right of the State.

(2) Meanwhile, the Plaintiff asserted that the deception by KimB, etc. was led to a monetary transaction act. However, it is not sufficient to recognize only the entries in Gap evidence 6 and Gap evidence 7, and there is no other evidence to acknowledge it.

(3) Therefore, the Plaintiff’s assertion based on the premise that the rescission of agreement or the cancellation of declaration of intent by deception is valid is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.