Whether the remuneration paid to non-standing directors without the resolution of the general meeting of shareholders constitutes a corporation's loss;

A. It is not paid to non-standing directors with the approval of the general meeting of shareholders as remuneration necessary for the performance of the business, but the amount of part of the corporate profit accrued during the business year in question is recognized as an executive bonus and added to gross income.

B. In the event that the Plaintiff did not collect the rent from the trade association, which is the investor, at the time of each month, the interest accrued from the overdue rent as the wage should be included in the income of the Plaintiff corporation.

Articles 9, 20, and 42 of the Corporate Tax Act; Articles 12, 31, and 35 of the Enforcement Decree of the Corporate Tax Act;

Supreme Court Decision 67Nu150 Decided February 9, 1968

Plaintiff, Ltd.

The director of the Seoul Small Public Tax Office

The plaintiff's claim is dismissed.

Litigation costs shall be borne by the plaintiff.

On November 11, 1966, the Plaintiff’s attorney sought a revocation of the part exceeding KRW 269,887 of the disposition of imposition of corporate tax of KRW 1,172,126 against the Plaintiff.

1. From April 1, 1965 to March 31, 1966, the Plaintiff reported 21,931,811 won to the Defendant as corporate income amount for the business year, and paid 7,108,819 won as corporate tax. The Defendant recognized that the above amount reported by the Plaintiff was inappropriate, and determined as 23,948,420 won for the business year portion, and the amount of income already paid by the Plaintiff out of 8,429,001 won for the corresponding amount of corporate tax 7,108,819 won was imposed to the Plaintiff, and then adjusted this amount as 1,172,126 won. Since the amount of income determined by the Defendant was 23,948,420 won as income amount determined by the Plaintiff’s investigation, the Defendant did not recognize the amount of interest calculated as 1,345,000 won for the officers of the Plaintiff’s company and the amount of non-party company’s non-party company’s non-party company’s profit as remuneration amount.

2. The plaintiff paid 5,00 won each month for the purpose of compensating for the actual expenses incurred by the officers of non-standing services to attend the board of directors as shown in the plaintiff's investigation. Thus, the defendant's disposition denying the plaintiff's calculation of deductible expenses is illegal even though it falls under the so-called personnel expenses, and the interest for recognizing the outstanding amount is not a legal entity with the plaintiff's identity, and the non-party trade association's non-profit legal entity can not be deemed to have unfairly reduced the tax burden by collecting the rent from the above trade association because the non-party trade association's non-profit legal entity. Thus, the defendant's disposition, which calculated the plaintiff's income, is also unlawful. Thus, we examine whether it is legitimate in the following order.

(1) As to the remuneration of officers:

If the payment to an officer of a company is made as a price for the performance of the business within the scope of remuneration approved by the articles of incorporation or the general meeting of shareholders, it is difficult to say that the officer is paid as a price for the performance of the business. However, if it is deemed that the compensation is made for the profit generated from the business activities without such consideration, it cannot be said that it is in the nature to be appropriated as the profit as an officer by the disposal of the company's profit. Thus, it cannot be said that there is no dispute over the establishment of this case's evidence Nos. 1 and 3-1 and 2-1 of evidence Nos. 4 and 7-2 of the above witness's testimony and the above witness's testimony, it is difficult to view that the officer was paid as a price for the non-party 2's non-party 3's non-party 1's non-party 1's non-party 2's non-party 3's non-party 1's non-party 2's non-party 3's non-party 2's non-party 3's non-party 1's.

(2) As to interest to which the outstanding amount is recognized:

If the statement No. 2 and the witness testimony of Non-party 4 (except for the portion not trusted in the future) without dispute over the establishment of the rent, the plaintiff, as the above, is consistent with the purport of the pleading, 240,000 won per month from April 1965 to September 19 of the year in the exhibition business year, and 266,90 won per month from the date of the payment of the rent to the non-party trade association during the period from October 10 to March 1967. In the settlement period of the exhibition business year, the plaintiff cannot be found to have collected only the above overdue interest after deducting the above overdue interest from the dividend income, and there is no other evidence to prove that the plaintiff did not pay the above overdue interest to the non-party trade association at the time of the above increase in the rent of the non-party trade association, but there is no other evidence to prove that the plaintiff did not pay the overdue interest to the non-party trade association, which is the investor, at the time of the above trading business year.

Therefore, the Defendant’s interest on the overdue rent that has not been collected pursuant to Article 18 of the Corporate Tax Act, Article 19(2)9 of the Enforcement Decree of the same Act, and Article 9 subparag. 2 of the Enforcement Rule of the same Act shall be deemed to have accrued, and the interest on the overdue rent shall be deemed to have accrued to the extent of the interest rate per month (the Plaintiff shall not dispute that the interest accrued from the overdue rent would be the interest rate to this extent). The measure calculated by the Plaintiff’s income is not erroneous

4. Ultimately, the plaintiff's claim seeking revocation of the disposition of this case by the defendant is groundless and dismissed. The costs of lawsuit are assessed against the losing party. It is so decided as per Disposition.

Judges Kim Young-ju (Presiding Justice) Lee Chang-joon