[1] The case holding that the payment of personnel expenses for the officers and employees dispatched to the company which is a specially related person constitutes "the case where the profits of the corporation are distributed to other specially related persons" under Article 46 (2) 9 of the former Enforcement Decree of the Corporate Tax Act

[2] The case holding that a company's lending of the deposit to employees who work in a notice without interest for the purpose of welfare is not an abnormal transaction with substantial economic rationality in light of sound social norms and commercial practices, and thus, it is not subject to the denial of unfair act and calculation

[3] The case holding that any abnormal transactions lacking economic rationality, where a company received delayed payments from related companies in charge of receiving the payment of the payment with a bill with two-month maturity, are not subject to the avoidance of wrongful calculation

[1] Article 46 (2) 9 (see current Article 88 (1) 9) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of December 31, 1998) / [2] Article 52 of the Corporate Tax Act, Article 46 (2) 7-2 (see current Article 88 (1) 6) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of December 31, 1998) / [3] Article 52 of the Corporate Tax Act

Korea Broadcasting System (Law Firm Samung Law Office, Attorneys Kim Young-ok, Counsel for the plaintiff-appellant)

Head of Yeongdeungpo Tax Office

Seoul High Court Decision 2005Nu22694 delivered on October 26, 2006

Each appeal is dismissed. The costs of appeal are assessed against each party.

The grounds of appeal are examined.

1. Plaintiff’s ground of appeal

The court below acknowledged the facts as stated in its reasoning after comprehensively taking account of the adopted evidence. The Korea Broadcasting System Saemaul Savings Depository (hereinafter referred to as the "KBS Saemaul Savings Depository") is not limited to the plaintiff's officers and employees, but limited to profit-making executives and employees, and its capital gains only go to the members. Therefore, it should be different from the intra-company labor welfare fund and the Korea Broadcasting System Joint Medical Insurance Association, which result in the same result even if the operating expenses were paid directly to the officers and employees who were dispatched by the plaintiff since they were established in order to promote the welfare of the plaintiff's officers and employees from the beginning, and their operating expenses were spent from the plaintiff's contribution funds, and there is no evidence to deem that the officers and employees dispatched to the KBS Saemaul Savings Depository were subject to the plaintiff's unique duties or under the direction and supervision by the plaintiff. Considering the fact that the dispatched officers and employees were in charge of the duties of direction and supervision of the KBS Saemaul Savings Depository, the court below's decision that paid the labor expenses of the officers and employees dispatched to the KBS Saemaul Cooperative without special relation as above can be justified in light of the records.

The judgment of the court below is not erroneous in the misapprehension of legal principles as to the wrongful calculation and omission, as otherwise alleged in the ground of appeal.

2. As to the Defendant’s ground of appeal

A. The portion on the lease of security deposit to employees in a duty-free notice.

The court below acknowledged the facts as stated in its decision after comprehensively taking account of the evidence of its employment. The plaintiff applied for security deposit to employees transferred to the head office and the local office without any relation in implementing the circular service system in 25 regional countries in accordance with the collective agreement. The plaintiff only applied for security deposit for lease on a deposit basis, and the amount is not excessive. The plaintiff also prepared specific and subdivided requirements (the guidelines for security deposit for lease on a deposit basis for a deposit basis for a deposit basis) and controlled the payment and return thereof. Such security deposit support can be presented identical to the provision of company house for employees who are interpreted as excluded from the application of the avoidance of wrongful calculation in accordance with Article 46 (2) 7-2 of the former Enforcement Decree in substance, and this is not different from that of the relevant employees, the court below affirmed the judgment below that the plaintiff lent security deposit to employees without notice for the purpose of welfare benefits, etc., in light of the law and sound social norms and economic rationality in light of the records.

The court below did not err in the misapprehension of legal principles as to the provisional payment in office and the wrongful calculation, as otherwise alleged in the ground of appeal by the defendant.

B. The portion of the delayed receipt of the sponsors from the KBS Cultural Business Association (hereinafter “KBS Cultural Business Association”)

The court below acknowledged the facts as stated in its reasoning after comprehensively taking account of the adopted evidence. The time and method of payment of the funds received by the plaintiff from the KBS Cultural Business Association is in accordance with the mutual agreement that the plaintiff decided in consideration of the commission and payment method to be paid by the plaintiff to the KBS Cultural Business Association, the duty to issue tax invoices in the name of the plaintiff to be borne by the KBS Cultural Business Association, the duty to issue tax invoices in the name of the plaintiff, and all liabilities with respect to the bad debts of the loans, and if the KBS Cultural Business Association agreed not to attract the funds in cash at any time and the KBS Cultural Business Association shall not pay the funds in cash to the plaintiff, the fee rate is different, and the above agreement cannot be deemed as favorable only to the KBS Cultural Business Association. Considering the fact that the payment of the funds by the plaintiff to the plaintiff at the maturity of two months is difficult to conclude that the funds is subject to unfair calculation and calculation, in light of sound social norms and commercial practice, and the records, the judgment below is justified.

The court below did not err in the misapprehension of legal principle as to the wrongful calculation omission as otherwise alleged in the ground of appeal by the defendant.

3. Conclusion

Therefore, each appeal is dismissed, and the costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cha Han-sung (Presiding Justice)