Whether a claim corresponding to a bad debt is a claim subject to disposition of losses.

Each claim corresponding to a bad debt shall not be deemed a claim arising in 1993 or 1994, or a claim to be treated as a loss due to the impossibility of collection of claim or the completion of extinctive prescription, etc.

Article 13 of the Corporate Tax Act

Article 14 of the Corporate Tax Act for each business year

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. Each part of the disposition imposing KRW 146,767,303 on the Plaintiff on May 2, 2005 and KRW 152,174,688 among the disposition imposing KRW 168,231,010 on the Plaintiff on the business year 200 and corporate tax for the business year 201 shall be revoked.

1. Details of the disposition;

A. The Plaintiff is a company that manufactures and sells synthetic resin products and pipes. The Plaintiff reported the amount of income (loss) from the business year 1995 to 2002, including the deficit amount of 863,170,435 won in the business year 195, and reported only the deficit amount from the business year 1995 to the business year 2002 as shown in the following table, and the tax base was deducted from the income amount in each business year to 1998 to 2001 by deducting the deficit amount equivalent to the same amount of income respectively from the income amount in each business year as zero won, and paid KRW 9,890,590 in the corporate tax by voluntarily reporting the tax base for the business year 202 to 661,358,542.

B. The Defendant determined the income amount of KRW 361,196,942 among the Plaintiff’s losses for the business year 1995 (hereinafter “the instant bad debt”) as stated in the following chart for the reasons that the extinctive prescription of the claim has not yet expired, and determined the income amount of KRW 1,238,087,923 as stated in the following chart for the business year 1998 to 2002, and deducted KRW 1,238,087,923 as deductible losses that may be deducted for the business year 1998 to 200, in the order of 326,728,762,986, and KRW 403,702,202, and the tax base for the business year 2002 to the Plaintiff for the business year 2000 to 326,728,201, 2008, 2006, 20036, 2008.

C. Income reported by the Plaintiff for each business year from 1995 to 2002, losses carried forward, income decided by the Defendant, losses carried forward, and tax base recognized by the Defendant are as follows:

Classification

Reported income (loss)

Losses carried forward

Amount reported to be deducted

Determination income (loss)

Losses carried forward

Amount determined to be deducted

Tax Base

195

-863,170,435 won

-99,113,711

0 won

196

-527,297,470 won

-526,77,470 won

0 won

1997

-622,580,742

-612,196,742

0 won

1998

67,185,859 won

67,185,859 won

67,185,859 won

67,185,859 won

0 won

199

1,094,208,621 won

1,094,208,621 won

1,109,814,948 won

1,109,814,948 won

0 won

200

455,001,737 won

455,001,737 won

455,001,737 won

128,272,975 won

326,728,762 won

201

397,460,456 won

397,460,456 won

403,702,986 won

403,702,986 won

202

727,736,374 won

6,377,832 won

734,044,600 won

734,044,600 won

[Reasons for Recognition] Each entry of Gap evidence 1 through 5 (including each number), the purport of the whole pleadings

2. The plaintiff's assertion and judgment

A. The plaintiff's assertion

The issue of this case is that the bad debt of this case occurred in 193 and 1994 and was disposed of as loss in the business year 1995 because it was impossible to recover due to the defect of the product due to the defect of the product. On September 1997, the defendant made a disposition of non-taxation and reservation in the business year for the reason that the claim corresponding to the issue bad debt of this case has not been extinctive prescription.

Therefore, the defendant should regard the issue of this case's bad debt as deductible expenses for the business year in which the extinctive prescription of the above claim became due, and deduct it as deductible expenses within five years before the starting date of the business year 2001, and the disposition of this case which did not deduct it as losses is unlawful.

B. Determination

First, as alleged by the plaintiff, each claim corresponding to the issue bad debt of this case is a claim arising in 1993 and 194, or is a claim that should be disposed of as a loss due to the plaintiff's impossibility of recovery of claim or the completion of extinctive prescription, etc., and each statement of Nos. 7 and 8 corresponding thereto is difficult to believe in light of the respective statements of No. 2-1, 2, and 3, and there is no other evidence to prove otherwise.

Therefore, without any further review, the Plaintiff’s above assertion is without merit (the Plaintiff’s assertion that, at the time of a regular tax investigation against the Plaintiff on 197, the Defendant confirmed the existence of a claim corresponding to the instant bad debt, at the time of the instant regular tax investigation with respect to the Plaintiff, and then denied the existence of the claim when 10 years have passed since the Defendant’s disposition of non-deductible losses was in violation of the principle of trust and good faith. However, as to the fact that the Defendant confirmed the existence of each claim corresponding to the instant bad debt as deductible expenses at the time of the tax investigation on 1997, it is insufficient to accept the Plaintiff’s above assertion

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance with this conclusion is just, and the plaintiff's appeal is dismissed and it is so decided as per Disposition.