[1] In a case where a corporation intentionally makes a separate settlement of accounts and made an excessive report on corporate tax for a specific business year, but after the next business year, in order to offset the effect of the separate settlement of accounts, the tax authorities underreporting corporate tax by making a separate settlement of accounts after the following business year; however, in a case where the tax authorities made a correction of corporate tax after the next business year so that the effects of the separate settlement of accounts can not be offset, whether a subsequent request for correction can be made pursuant to Article 45-2(2)4 of the former Framework Act on National Taxes (negative)

[2] Whether the amount equivalent to the claim constitutes “provisional payment, etc. paid without connection with the corporation’s business” under Article 28(1)4(b) of the former Corporate Tax Act where a corporation has a justifiable reason to delay the time of collecting the claim that should be paid by a specially related person, and the time of the fulfillment of the claim is determined at a certain time in the future (negative in principle)

[1] Where a corporation intentionally appropriates profits or understates losses in a specific business year and filed an excessive tax return by making an excessive statement of corporate tax different from the facts. In order to offset the effects of the above window dressing settlement, in order to offset the effects of the above window dressing settlement, the tax authority made an excessive statement of profits or underreporting corporate tax after making an excessive statement of losses from the next business year, even though it could not offset the effects of the window dressing settlement made in a specific business year by adding the earnings excessively appropriated or adding the excessive losses to the gross income or by adding the excessive losses to deductible expenses after the next business year, and revising corporate tax, such circumstance alone does not constitute the case where a subsequent change occurs in the basis of the calculation of the tax base and tax amount reported in the specific business year due to the disposition of the tax authority, and the tax base and tax amount are in excess of the tax base and tax amount to be reported under tax-related Acts. Accordingly, a request for correction cannot be made pursuant to Article 45-2(1) of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 201, 201). 420).

[2] The delay of the collection of claims that a corporation should receive from a person with a special relationship without justifiable grounds is practically the same effect as the amount of claims already recovered within the deadline for the performance of the obligations and the amount equivalent to the unrepaid claims has the same effect as the amount provisionally paid again. Thus, the amount equivalent to the unclaimed claims does not constitute the "provisional payment, etc. paid without connection with the business of the corporation in question" under Article 28 (1) 4 (b) of the former Corporate Tax Act (amended by Act No. 7317 of Dec. 31, 2004). However, where the due date for the collection of claims is determined at the time of occurrence of a certain reason in the future, barring special circumstances, the amount equivalent to the claims shall not be deemed as "provisional payment, etc. paid without connection with the business of the corporation in question

[1] Article 45-2(1) and (2)4 of the former Framework Act on National Taxes (Amended by Act No. 9911, Jan. 1, 2010) / [2] Article 28(1)4(b) of the former Corporate Tax Act (Amended by Act No. 7317, Dec. 31, 2004)

The target corporation (Attorneys Son Ji-yol et al., Counsel for the plaintiff-appellant)

Head of Eastern Tax Office

Seoul High Court Decision 2010Nu21305 decided June 17, 2011

Of the part of the judgment below against the plaintiff, the part concerning the claim for revocation of the disposition imposing corporate tax for the 2000 business year and the part concerning the 118,106,966 won among the claims for revocation of the disposition imposing corporate tax for the 2002 business year shall be reversed, and the judgment of the first instance corresponding thereto shall be revoked, and this part of the lawsuit shall be dismissed. The remaining appeals by the plaintiff and the defendant shall be dismissed. The total costs of the lawsuit shall be ten minutes

1. Determination and ex officio determination on the Plaintiff’s grounds of appeal

A. Grounds of appeal concerning the scope of the amount of tax to seek revocation against the disposition of increase or decrease

(1) Article 22-2(1) of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 2010; hereinafter the same) provides that “The rectification that increases the amount of tax initially determined under tax-related Acts shall not affect the rights and obligations under this Act or other tax-related Acts with respect to the amount of tax initially determined.”

In light of the language and text of the above provision and the purport of the above provision are to restrict any objection against the amount of tax in the initial return or decision that cannot be raised any longer due to the lapse of the objection period or the period of filing a request for correction, etc., in cases of a disposition of increase or correction, the initial return or decision should lose the value of existence as a result of absorption of the disposition of increase or correction, and in principle, the disposition of increase or correction shall be subject to an appeal litigation, and a taxpayer may assert both illegal grounds for the initial return or decision in the appeal litigation. However, even if the period of objection or the period of filing a request for correction cannot be claimed as to the amount of tax that cannot be raised any longer due to the lapse of the period of objection or the period of filing a request for correction, the revocation may be claimed only within the scope of the increased amount of tax (see Supreme Court Decision 2011Du485

(3) According to the reasoning of the first instance judgment as well as evidence duly admitted by the lower court, the Plaintiff revoked the corporate tax base for the 200 business year from March 31, 201; KRW 24,146,44; KRW 8,270,322,914; and KRW 28,714,50,228 of the business year from March 31, 2003; KRW 5,705,42,736 of the revised tax base for the 200-7 business year from March 31, 200; KRW 208; KRW 207.6.6.6 of the revised tax base for the 20-7 business year from March 31, 2001 to KRW 30; and the Defendant issued a revised tax base for the 204 business year from March 6, 2006; and

In light of the above legal principles, 8,270,322,914 won of the corporate tax amount for the business year 2000, which the Plaintiff originally reported, was no longer disputed due to the lapse of the two-year correction period from the statutory due date of return at the time of the determination of the increase as of March 10, 2006, after the lapse of the two-year correction period from the statutory due date of return at the time of the determination of the increase as of March 10, 2006, and there is no part of the amount of the increased tax amount that can be revoked by the Defendant’s revocation of the disposition of corporate tax for the

In addition, since the Plaintiff’s initial return amount of corporate tax for the business year 2002 KRW 5,705,442,736 cannot be asserted any longer due to the lapse of the two-year period for filing a claim for correction from the statutory due date for filing a return at the time of the decision of revocation of the increase in the amount of corporate tax for the business year 2002, the Plaintiff may not seek revocation of the tax amount for KRW 10,536,394,743, which was corrected for the business year 202, and may also claim for the illegal cause for the initial return. However, even if the Plaintiff may claim revocation of the disposition for imposition of KRW 10,536,39,743, which was corrected for the business year 202,

Unlike this, the argument in the grounds of appeal to the effect that the court below erred by misapprehending the interpretation and legal principles of Article 22-2(1) of the former Framework Act on National Taxes cannot be accepted on the premise that if a correction order is issued, not only the increased tax amount by the disposition, but also the initial returned tax amount determined by the expiration of the period for filing a

(3) However, as seen earlier, the part concerning the claim for revocation of the disposition of corporate tax for the business year of 200 in the instant lawsuit and the part concerning the claim for revocation of the disposition of corporate tax for the business year of 2002 in excess of KRW 5,587,335,770 in the disposition of corporate tax for the business year of 2002, and the part concerning the tax amount already finalized, which is part of the determined tax amount, 118,106,966 won ( KRW 5,705,442,736 - 5,587,335,70), which is a part of the determined tax amount, shall not be claimed any longer for revocation (see Supreme Court Decision 2011Du485

Nevertheless, the lower court determined otherwise on the premise that the part concerning the claim for revocation of the disposition imposing corporate tax for the business year 200 and the above 118,106,966 won among the claims for revocation of the disposition imposing corporate tax for the business year 2002 were legitimate, and dismissed the claim for revocation of this part of the lawsuit. In so doing, the lower court erred by misapprehending the legal doctrine on the benefit of the lawsuit

B. Grounds of appeal on the grounds of post-ex post-ex post-explosion correction under Article 45-2(2)4 of the former Framework Act on National

(1) Article 45-2(2) of the former Framework Act on National Taxes provides that “Any person who has filed a tax base return within the statutory due date of return, or who has received the determination of the tax base and amount of national taxes, may file a request for the determination or correction within two months from the date on which he/she becomes aware of the occurrence of such cause, notwithstanding the period stipulated in paragraph (1).” Of them, subparagraphs 1 through 5 provide that “where the tax base and amount of the national tax initially filed for the taxable period other than the taxable period subject to the determination or correction, due to the determination or correction, exceeds the tax base and amount to be reported under the tax-related Acts.” The purport of the former Framework Act on National Taxes provides that “The purpose of the ex post facto request for correction is to expand the protection of taxpayers’ rights by allowing the taxpayer to file a request for the reduction after proving the fact (see Supreme Court Decision 2009Du2379, Jul. 28, 2011, etc.).

If a corporation intentionally appropriates profits or understates losses in a specific business year and filed an excessive corporate tax by filing a false statement of accounts, which is different from the fact, in order to offset the effects of the above window dressing settlement, the tax authority undergoes a window dressing settlement of accounts through understating profits or overappropriating losses from the next business year in order to offset the effects of the window dressing settlement, even though the tax authority could not offset the effects of the window dressing settlement of accounts made in a specific business year by adding the overly appropriated profits from the next business year to gross income or by adding the excessively appropriated losses to deductible expenses and by adding the increased corporate tax, such circumstance alone does not constitute a case where a subsequent change occurs in the basis of calculating the tax base and tax amount reported in the specific business year due to the disposition of the tax authority, and the tax base and tax amount in excess of the tax amount to be reported under tax-related Acts. Accordingly, in such a case, a request for the reduction of tax amount may not be filed within the lawful filing period of correction pursuant to Article 45-2(1) of the former Framework Act on National Taxes.

(2) In order to offset the effect of the window dressing settlement by appropriating the processed sales revenue in the 2000 business year and 2001 business year, after filing an excessive report on corporate tax, the court below determined that the Defendant cannot be deemed to have caused the grounds for filing a subsequent claim for correction under Article 45-2 (2) 4 of the former Framework Act on National Taxes, even if the Defendant failed to offset the effect of the window dressing settlement by appropriating the processed expenses in the 2002 business year or 2004 business year or 2004 business year, and by revising the tax base and tax amount, it could not be deemed that the tax base and tax amount of the 200 business year or 201 business year were excessively excessive due to the above measures taken by the Defendant.

Examining the aforementioned legal principles and evidence duly admitted, the lower court did not err in its judgment by misapprehending the legal doctrine on the grounds for ex post facto request for correction as stipulated in Article 45-2(2)4 of the former Framework Act on National Taxes.

C. Grounds of appeal as to the business relevance of the loan and the existence of interest agreement

Among the lawsuits in this case, the part concerning the claim for revocation of the disposition imposing corporate tax for the 2000 business year is illegal as seen earlier, and since the plaintiff filed a claim for revocation of the disposition imposing corporate tax for the 2001 business year, the remaining part of the claim for revocation of the disposition imposing corporate tax for the 2002 business year and the part concerning the claim for revocation of the disposition imposing corporate tax for the 2003 business year and 2004

(1) Parts pertaining to construction works on the south Fla and construction works on the committee building in the gyeast-dong.

(A) Article 28(1)4(b) of the former Corporate Tax Act (amended by Act No. 7317, Dec. 31, 2004; hereinafter the same) includes not only purely meaningful loans, but also loans corresponding to the nature of claims. Whether the provisional payments are related to the business of the pertinent corporation must be objectively determined based on the purpose of business, business contents, etc. of the pertinent corporation (see, e.g., Supreme Court Decisions 91Nu8302, Nov. 10, 1992; 2006Du1224, May 14, 2009).

(B) citing the reasoning of the first instance judgment, the lower court determined to the effect that it is difficult to view that the Plaintiff actually concluded a contract for construction work with the jus Development Co., Ltd. (hereinafter referred to as “jus Development”) in terms of construction work and construction work in the jus Development Co., Ltd. in the position of a person with a special relationship under the Corporate Tax Act, and that there is no other evidence to deem that the amount of the Plaintiff lent to jus Development in relation to the Plaintiff’s business was paid in relation to the Plaintiff’s business or that it

Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the evidence duly admitted, the lower court did not err in its judgment by misapprehending the legal doctrine regarding the relevance of business in the provisional payment without office, or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules.

(2) The parts related to the construction of a new main complex building in east-dong.

According to the evidence duly admitted, the Plaintiff entered into an agreement on the modification of the contract for construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction work of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of the construction project of

Although the reasoning of the lower court is somewhat insufficient, it did not err in its judgment by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, contrary to what is alleged in the grounds of appeal.

2. Judgment on the Defendant’s grounds of appeal

A. Article 52 of the former Corporate Tax Act (amended by Presidential Decree No. 18706, Feb. 19, 2005) provides that a corporation’s wrongful calculation division under Article 52 of the former Corporate Tax Act is deemed to have avoided or reduced tax burden by abusing the various forms of transactions listed in each subparagraph of Article 88(1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 18706, Feb. 19, 2005) without using a reasonable method with a person with a special relationship. This provision applies only to cases where, from the economic standpoint of an economic person, it is deemed that the person with a right to taxation denies or reduced tax burden by using the various forms of transactions under the circumstances stipulated in each subparagraph of Article 8(1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 18706, Feb. 19, 2005). The determination of whether an economic rationality exists shall be made based on whether the transaction was unfair in light of sound social norms or commercial practice.

Meanwhile, delaying the recovery of claims that should be paid by a corporation without any justifiable reason is practically having the same effect as the amount of claims recovered in full within the deadline for performing the obligations and the amount equivalent to the unrepaid claims is deemed to fall under the “provisional payment, etc. paid without connection with the business of the corporation concerned” under Article 28(1)4(b) of the former Corporate Tax Act. However, in a case where there is a justifiable reason to delay the time of recovery of claims and the due date is determined at the time of the occurrence of a certain cause in the future, the amount equivalent to the claims shall not be deemed to fall under the “provisional payment, etc. paid without connection with the business of the corporation concerned,” barring any special circumstance.

B. According to the reasoning of the lower judgment and the evidence duly admitted, ① the Plaintiff established a limited liability company specializing in the first securitization (hereinafter “subject special purpose company”) on July 19, 2001 and transferred its sales claims to the Plaintiff’s transaction partners as securitized assets from 2002 to 2004, and the special purpose company subject to the securitization has issued and sold asset-backed securities based on its underlying assets. ② The subject special purpose company provides for a dividend of KRW 1,395,493,300 for the portion in excess of profits to the Plaintiff holding Class 2 equity shares, KRW 945,493,300, and KRW 945,493,300 for dividends in 203, and KRW 95,493,300 for each of its employees’ dividends after the date of completion of the distribution resolution, and then received them after redemption of the dividends for each of the above dividends with the intention of redemption of dividends in accordance with the articles of incorporation’s dividends (3).

① In addition, Article 51-2(1)1 of the former Corporate Tax Act requires that a special purpose company under the Asset-Backed Securitization Act distributes dividends in excess of 90/100 of profits available for dividends as prescribed by the Presidential Decree at the time of calculating the amount of income in the business year so that a special purpose company should be deemed as a kind of conduit and impose corporate tax at the time of distributing dividends to its employees upon meeting certain requirements. ② A special purpose company needs to resolve dividends in excess of 90/100 of profits available for dividends in each business year in order to receive income deduction pursuant to the above provisions. On the other hand, even if the profits available for dividends were resolved during each business year, it is likely that other losses will occur even if the dividends were resolved. Thus, it is necessary to take measures so that profits accrued in a specific business year until the principal and interest of the asset-backed securities are repaid in full for the protection of investors who purchased the asset-backed securities. ③ In order to smoothly issue and sell the asset-backed securities and raise funds through this, it is necessary to ensure the market and trust of investors by clarifying provisions in its articles.

Examining the above facts in light of such circumstances, it is reasonable to view that the Plaintiff’s articles of incorporation of a special purpose company that provides for the period for payment of dividends to members holding Class II equity shares at the time of completion of the redemption of the asset-backed securities issued by the special purpose company subject to the resolution on dividends pursuant to its articles of incorporation to have economic rationality in light of sound social norms and commercial practice. Furthermore, it is reasonable to view that the Plaintiff’s receipt of dividends paid when the redemption of the asset-backed securities became due to the completion of the redemption of the asset-backed securities without immediately receiving the dividends on which the resolution on dividends was adopted in accordance with

Therefore, the Plaintiff cannot be deemed as having paid provisional payment to a special purpose company without relation to its business during the period when the redemption of the asset-backed securities is completed in accordance with the articles of incorporation of the special purpose company subject to the resolution of the distribution.

Although the reasoning of the court below is somewhat insufficient, it did not err in the judgment of the same purport by misapprehending the legal principles regarding the nature of the dividend resolution of a special purpose company, the legal relations between the special purpose company and its employees, and provisional payment irrelevant to the business, or by exceeding the bounds of the principle of free evaluation of evidence, as otherwise alleged in the ground of appeal.

3. Conclusion

Therefore, among the part against the plaintiff in the judgment of the court below, the part concerning the claim for revocation of the disposition imposing corporate tax for the business year 2000 and the part concerning the 118,106,966 won among the claims for revocation of the disposition imposing corporate tax for the business year 2002 are reversed, and this part is sufficient for this court to directly render a judgment. Thus, the judgment of the court of first instance corresponding thereto shall be revoked, and this part of the lawsuit shall be dismissed, and all of the remaining appeals of the plaintiff and the defendant shall be dismissed, and the total costs of the lawsuit shall be ten minutes and the remainder shall be borne by the plaintiff,

Justices Shin Young-chul (Presiding Justice)