Seoul Administrative Court 2013Guhap3085 (2013.05)

2012west 4355 ( December 28, 2012)

The leased principal is illegal disposition because it is objectively apparent that it cannot be recovered on the date of the disposition of this case.

The Plaintiff’s recovered principal is less than the leased principal, and the leased principal is objectively clear on July 2, 2012, which is the date of the instant disposition, and thus, it cannot be taxed as interest income pursuant to Article 51(7) of the former Enforcement Decree of the Income Tax Act.

2013Nu45920 Revocation of Disposition of Imposing global income tax, etc.

king AA

Head of Seocho Tax Office

Seoul Administrative Court Decision 2013Guhap3085 decided July 5, 2013

November 20, 2013

December 18, 2013

1. The defendant's appeal is dismissed.

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

1. Purport of claim

On July 2, 2012, the Defendant revoked the imposition of the global income tax OO(including the additional tax) on the Plaintiff in 2009.

2. Purport of appeal

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

The reasoning of the judgment of this court is as follows, except for the addition of the judgment of the defendant to the new argument in the trial, and therefore, it is identical to the reasoning of the judgment of the court of first instance.

Article 51 (7) of the former Enforcement Decree of the Income Tax Act provides that, in calculating the gross income of non-business profits, if the relevant non-business income falls under the bonds under Article 55 (2) 1 or 2 and the whole or part of the principal and interest cannot be recovered from the debtor or a third party, the calculation shall be made by preferentially subtracting the principal from the recovered amount. Article 55 (2) 1 of the former Enforcement Decree of the Income Tax Act provides that in case where the debtor is a juristic person, and Article 55 (2) 2 provides that in case where the debtor is a natural person, the debtor shall continue to exist as an enterprise at the time of the instant disposition, and the plaintiff's claim against the third party's loan shall not be deemed an unrecollectionable claim under Article 55 (2) 1 of the former Enforcement Decree of the Income Tax Act.

Therefore, Article 55 (2) of the former Enforcement Decree of the Income Tax Act provides for claims which cannot be recovered due to the debtor's bankruptcy, compulsory execution, execution of sentence, or discontinuation of business, and subparagraph 2 of Article 2 of the former Enforcement Decree of the Income Tax Act provides for claims which cannot be recovered due to the debtor's death, disappearance, unknown whereabouts, etc., and does not provide for the grounds for recovery of claims differently depending on whether the debtor is a juristic person or natural person. Unlike the Corporate Tax Act, Article 51 (7) of the former Enforcement Decree of the Income Tax Act does not provide for institutional measures which can reflect losses in the case of non-business proceeds as deduction items of interest income, so it cannot be deemed that there is an interest income ultimately because there are no institutional measures which can reflect such losses as deduction items of interest income (see, e.g., Supreme Court Decision 2010Du9433, Jun. 28, 2012). In light of such legislative purport, it is difficult for the debtor to treat claims differently depending on whether the debtor is a juristic person or natural person.

Therefore, the plaintiff's claim of this case is justified, and the judgment of the court of first instance is just, and the defendant's appeal is dismissed. It is so decided as per Disposition.