Daejeon District Court-2016-Gu Partnership-102749 (2017.05)

Whether the contractor dividend reserve and the contractor's profit dividend reserve are included in the deductible expenses for the year;

The part of the disposition of this case denying the Plaintiff’s inclusion of the first reserve in deductible expenses from 2009 to 2011 is legitimate. The part of the disposition of this case denying the Plaintiff’s return of the second reserve that was excluded from deductible expenses to the contractor’s dividend reserve and the disposition of this case is unlawful.

2017Nu1259 Revocation, etc. of Disposition of Corporate Tax Imposition

0000000000

00. Head of tax office

2017.07.05

208.29

October 24, 2018

1. All appeals filed by the plaintiff and the defendant are dismissed.

2. The costs of appeal shall be borne by each party.

1. Purport of claim

A. The primary claim: The Defendant’s primary claim is revoked each disposition (including additional tax) imposing KRW 340,438,120, corporate tax for the business year 2009, corporate tax for the business year 2010, corporate tax for the business year 2,486,024,590, and corporate tax for the business year 2010, totaling KRW 417,417,044, corporate tax for the business year 2011, and KRW 3,243,879,754.

B. Preliminary claim: A disposition rejecting correction of KRW 3,857,563,893 against the Plaintiff on December 8, 2014 by the Defendant is revoked.

2. Purport of appeal

A. In the judgment of the court of first instance, the part against the Plaintiff in the judgment shall be revoked. In the meantime, each disposition of imposition of KRW 2,486,024,590, a sum of KRW 2,417,417,04, and KRW 2,903,41,634 (including each additional tax) of the corporate tax belonging to the business year of 2010 and corporate tax belonging to the Plaintiff on September 1, 2011 shall be revoked. Preliminaryly, the Defendant’s refusal to rectify the amount of KRW 3,857,563,893, which was made against the Plaintiff on December 8, 2014, shall be revoked.

B. Defendant: The part against the Defendant in the judgment of the first instance shall be revoked, and the Plaintiff’s claim corresponding to the above revocation shall be dismissed.

1. Quotation of judgment of the first instance;

This court's explanation concerning this case is consistent with the reasoning of the judgment of the court of first instance, except for the following modifications or addition of judgment as provided in paragraph (2). Thus, this court cites it as it is in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

A. The last sentence of the seventh decision of the court of first instance was "the instant disposition" and "the instant disposition was taken" as "the instant disposition."

B. From the last 9th to the second 10th 2th am of the judgment of the court of the first instance, "the plaintiff is ...." means that "the plaintiff returned the contractor's profit dividend reserve with the first reserve fund from 2009 to 2011, and then accumulation of the contractor's profit dividend reserve fund as the contractor's profit dividend reserve fund into the calculation of losses without inclusion in the calculation of earnings in the calculation of earnings."

C. From the 10th day of the first instance judgment, five to two categories of taxable income shall be calculated on a yearly basis by adopting the principle of fixed-term taxation. Article 6 of the Corporate Tax Act provides for the tax base of corporate tax under Article 13 (1) and Article 14 (1) provides that "the income of each business year shall be calculated by deducting the total amount of deductible expenses belonging to the business year from the total amount of gross income belonging to the business year in question" and Article 40 (1) provides that "the business year of accrual of gross income and deductible expenses of each business year shall be the business year which includes the date on which the amount of deductible expenses is determined." In light of the foregoing, it is reasonable to view that inclusion of deductible expenses in deductible expenses for another business year from the business year of a specific business year by changing the account of money, etc. However, it is reasonable to deem that the 10th year reserves were not included in deductible expenses for the reason that the Plaintiff was not subject to the change of the legal reserve to deductible expenses under Article 31 of the former Corporate Tax Act and Article 58 of the Corporate Tax Act.

D. The following is added to the 14th 12th 12th 12th 12 of the judgment of the first instance court. (3) Even if the grounds for the subsequent request for correction exist, the business year of the first-class reserve shall be the same as seen earlier from the 2000 to the 2006th 206 business year. As such, the Plaintiff shall file a request for correction of the corporate tax for the pertinent business year. However, as seen earlier, the Plaintiff filed a request for correction for the refund of KRW 3,857,563,893, which was paid in excess, to the Defendant on September 4, 2014 and filed a request for correction for refund of KRW 3,857,563,893, which was paid in excess

2. Additional determination

A. The defendant asserts that the defendant's second reserve is subject to the inclusion of the contractor's profit dividend reserve in deductible expenses even under the former Corporate Tax Act and the Enforcement Decree of Corporate Tax Act, so the plaintiff should have included the second reserve that was excluded from deductible expenses in deductible expenses in deductible expenses for the business year 2007, and cannot be included in deductible expenses after the business year 2009.

B. In full view of the amendment process and contents of the corporate tax law as seen above, it is insufficient to recognize that the two reserve funds excluded from deductible expenses were included in deductible expenses in the business year 2007 only with the descriptions of the evidence Nos. 9 and 11.

1) According to Article 63(1)3 of the former Enforcement Decree of the Insurance Business Act (amended by Presidential Decree No. 21911, Dec. 29, 2009); Article 6-11 of the former Regulation on Supervision of Insurance Business (amended by the Financial Services Commission Notice No. 2010-7, Apr. 1, 2010), an insurance business statute, etc. provides that all of the contractor dividend reserve and contractor profit dividend reserve are classified as liability reserve as part of liability reserve. However, Articles 30 and 31 of the former Corporate Tax Act and Articles 57 and 58 of the former Enforcement Decree of the Corporate Tax Act provide for inclusion of contractor profit dividend reserve in deductible expenses separately from inclusion of liability reserve in deductible expenses and do not stipulate any explicit provision regarding inclusion of contractor profit dividend reserve in deductible expenses. As such, it is difficult to view that the former corporate tax law has separate provisions concerning inclusion of contractor profit reserve in deductible expenses (Article 31 of the former Corporate Tax Act and Article 58 of the former Enforcement Decree of the Corporate Tax Act).

2) Considering that the contractor dividend reserve is a type of liability reserve, Article 31 of the former Corporate Tax Act, Article 58 of the former Enforcement Decree of the Corporate Tax Act, and Article 30 of the former Enforcement Decree of the Corporate Tax Act, and Article 57 of the former Enforcement Decree of the Corporate Tax Act were included. However, in the process of the amendment, the term “contractor dividend reserve” under Article 31(1) of the former Corporate Tax Act was deleted. In addition, according to the theory of the Ministry of Strategy and Finance under the amended Corporate Tax Act, the contractor dividend reserve under Article 57(1)1 of the former Enforcement Decree of the Corporate Tax Act (where the insurance contract is terminated as of the end of the business year, the amount to be refunded to the contractor or beneficiary) is regulated as the contractor dividend reserve under Article 57(1)3 of the former Enforcement Decree of the Corporate Tax Act (the amount accumulated by the Financial Chairperson after consultation with the Minister of Strategy and Finance in order to pay dividends to the policyholder). In light of this, it is obviously difficult to interpret the contractor dividend reserve under Article 130(1).

3. Conclusion

Therefore, the plaintiff's claim shall be accepted within the scope of the above recognition, and the remaining claims shall be dismissed as it is without merit. The judgment of the court of first instance is just in conclusion, and both the plaintiff and the defendant's appeal are dismissed as they are without merit.