Cho-2018-west-1626 (2018.04)

Whether retirement pension contributions constitute personnel expenses eligible for tax credit for research and human resources development expenses

The retirement pension premium of this case can be deemed as falling under personnel expenses subject to tax credit for research and human resources development expenses under Article 10(1) of the Restriction of Special Taxation Act, so the disposition of this case is unlawful.

Article 10 of the Restriction of Special Taxation Act (Tax Credit for Research and Manpower Development Expenses)

Article 8 of the Enforcement Decree of the Restriction of Special Taxation Act and the scope of reserves for research and human resources.

2018Guhap75467 Revocation of Disposition of Rejecting Corporate Tax

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○ Head of tax office

May 2, 2019

September 10, 2019

1. On February 7, 2018, the Defendant’s rejection disposition against the Plaintiff regarding the application for rectification of corporate tax listed in attached Table 1 against the Plaintiff is revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff was a legal entity established for the purpose of developing and supplying software on November 27, 1996, and was recognized on May 28, 2001 as the establishment of a company-affiliated research institute by the head of the Korea Industrial Technology Association (hereinafter “instant research institute”).

(b) As for the employees working at the research institute of this case from 2012 to 2016 each month, the Plaintiff spent *,*,**,**,**,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*, 2016 business year***,*,*,*,**,** (hereinafter collectively referred to as “each of the instant retirement pension”).

C. On December 8, 2017, the Plaintiff: (a) each of the instant retirement pension contributions constitutes personnel expenses subject to the tax credit under Article 10(1) of the former Restriction of Special Taxation Act (Amended by Act No. 11614, Jan. 1, 2013; (b) was amended by Act No. 12173, Jan. 1, 2014; (c) was amended by Act No. 12853, Dec. 23, 2014; (d) was amended by Act No. 13560, Dec. 15, 2015; (e) was amended by Act No. 14390, Dec. 20, 2016; hereinafter referred to as the “former Restriction of Special Taxation Act”); (c) was entitled to the tax credit for research and human resources development expenses, and (d) was entitled to the tax credit for each of the instant retirement pension contributions to exclude the amount of corporate tax from corporate tax credit under attached Table 2161 through 2016.

D. On February 7, 2018, the Defendant rejected the Plaintiff’s claim for correction on the ground that each of the retirement pension contributions in this case was not subject to a tax credit for research and human resources development expenses (hereinafter “instant disposition”).

E. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on March 14, 2018, but was dismissed on June 4, 2018.

[Reasons for Recognition] Unsatisfy, Gap evidence 1 through 9, Eul evidence 2 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the parties' assertion

1) Plaintiff

Each of the retirement pension contributions in this case constitutes personnel expenses subject to tax credit for research and human resources development expenses under Article 10(1) of the former Restriction of Special Taxation Act, which are actually disbursed and fully recognized as deductible expenses in each business year, and thus is unlawful.

2) Defendant

Each of the instant retirement pension contributions constitutes an amount calculated as a cost for the payment of retirement allowances for future workers, and constitutes retirement income or allowances for severance benefits excluded from research and human resources development expenses pursuant to Article 8(1) [Attachment Table 6] [Attachment Table 6] subparagraph 1(a) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 23718, Apr. 10, 2012; Presidential Decree No. 26959, Feb. 5, 2016; Presidential Decree No. 29527, Feb. 12, 2019; hereinafter “former Enforcement Decree of the Restriction of Special Taxation Act”). It cannot be eligible for tax credit.

B. Relevant statutes

Attached Form 2 is as shown in the relevant statutes.

C. Determination

1) Article 8(1) [Attachment 6] subparag. 1(a) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 23590, Feb. 2, 2012) adjusted the scope of research and development expenses by excluding retirement income and allowances for severance and retirement from personnel expenses among research and development expenses. The aforementioned provisions are maintained until the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 29527, Feb. 12, 2019).

2) However, in full view of the facts acknowledged earlier and the purport of the entire pleadings, comprehensively taking account of the following circumstances, each of the instant retirement pension premiums is different from retirement income and allowances for severance and retirement benefits under Article 8(1) [Attachment Table 6] subparagraph 1(a)1 of the former Enforcement Decree of the Restriction of Special Taxation Act, and thus, it can be deemed that the instant retirement pension premium constitutes personnel expenses subject to the tax credit for research and human resources development expenses under Article 10(1) of the former Restriction of Special Taxation Act (see Supreme Court Decision 2016Du63200, May 30, 2017). Thus, the instant disposition was unlawful on the ground that each of the instant retirement pension premiums was not subject to

① Employees of the instant research institute are recognized as employees working in the department exclusively in charge of the tax credits under the former Restriction of Special Taxation Act. Based on the defined contribution plan, each retirement pension in this case actually paid by the Plaintiff according to whether the Plaintiff served as the research institute for each taxable year and each target employee, may be recognized as the expense for the pertinent business year, and the amount equivalent to the above insurance premium shall be deemed as a final attribution for each

(2) The retirement pension contributions in this case are different from the allowances for severance benefits that reasonably estimated the amount of the expenses for the calculation of profit and loss for a reasonable period of time, as the expenses actually disbursed by each researcher in direct response to research and human resources development for the pertinent taxable year.

③ In full view of the fact that each of the instant retirement pension contributions is not money paid to an employee due to actual retirement or retirement, but money already paid to each of the researchers at the time of expenditure, and that each of the instant retirement pension contributions was not paid in lump sum, and that the pertinent researchers selected to receive pension or lump sum payment only after the actual retirement, each of the instant retirement pension contributions does not constitute retirement income under Article 22 of the Income Tax Act (amended by Act No. 11611, Jan. 1, 2013) and Article 22 of the Income Tax Act.

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is so decided as per Disposition.