Seoul Administrative Court 2014Guhap50972 ( October 13, 2014)

Interest income that a non-profit domestic corporation has not reported as a tax base by the filing deadline for corporate tax shall be subject to separate taxation.

The purpose of Article 62 (1) of the Corporate Tax Act is to grant the authority to choose whether to be subject to preferential taxation measures to non-profit domestic corporations, and to restrict the selection period until the time of filing a tax base return is to determine the tax law relationship between the taxpayer and the tax authority at an early stage and to grant legal stability.

Article 29 of the Corporate Tax Act / Article 62 of the Corporate Tax Act

2014Nu5290 Revocation of revocation of revocation of corporate tax rectification

AAA Mutual Aid Association

o Head of the tax office

Seoul Administrative Court Decision 2014Guhap50972 decided June 13, 2014

November 25, 2014

December 16, 2014

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, and the defendant shall revoke the disposition rejecting each request for correction of corporate tax for the business year 2009 against the plaintiff on June 5, 2013 and the corporate tax for the business year 2010.

1. Details of the disposition;

A. The plaintiff's status

The plaintiff is a non-profit domestic corporation established on December 9, 1997 pursuant to Article 9 of the former Act on the Employment Improvement, etc. of Construction Workers (amended by Act No. 6848, Dec. 30, 2002) for the purpose of conducting mutual-aid projects, such as paying mutual-aid money for retirement to the beneficiaries of construction workers in order to stabilize the employment and promote their welfare.

B. Disposition of imposing corporate tax on the Plaintiff for the business year 2010 and corporate tax on the Defendant for the business year 2007 to 2010

On May 25, 2012, the Plaintiff filed a request for correction to the effect that the amount of interest income that a corporation failed to file a tax base return may not be included in the tax base by filing a revised tax return, after filing a revised tax return, correction, etc., and that the amount of interest income cannot be included in the tax base and deductible expenses because it was not included in the deductible expenses as a reserve for the proper purpose business of a non-profit domestic corporation under Article 29 of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter the same shall apply). However, the Defendant rejected the Plaintiff’s request for correction to the effect that the amount of interest income that the corporation failed to file a tax base return pursuant to Article 62(1) of the former Corporate Tax Act and Article 99(2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22577, Dec. 30, 2010); the Plaintiff did not report the amount of interest income at the tax base and deductible expenses.

Tax Base

Reporting

Business year

Interest income accrued in other business years

Amount of withholding tax corresponding to it

Actual Year Year

Amount

Actual Collection Year

Amount

209

For the 2007 Reversion

OOOE

For the 2007 Reversion

OOOE

208 Reversion of year 2008

OOOE

208 Reversion of year 2008

OOOE

Total

OOOE

Total

OOOE

2010

For the 2007 Reversion

OOOE

For the 2007 Reversion

OOOE

208 Reversion of year 2008

OOOE

208 Reversion of year 2008

OOOE

209 Reversion of year 2009

OOOE

209 Reversion of year 2009

OOOE

Total

OOOE

Total

OOOE

Accordingly, the defendant included interest income not accrued to the plaintiff in the business year 209 and 2010 as above in the tax base of the above business year and the reserve fund for the proper purpose business of a non-profit domestic corporation under Article 29 of the former Corporate Tax Act, and judged that the corresponding withholding tax was excessively refunded as the already paid tax amount. On March 29, 2013, the defendant issued each disposition (hereinafter referred to as "the first disposition") on the corporate tax amount for the business year 2009 and the corporate tax amount for the corporate tax for the business year 2010 and the corporate tax for the non-profit domestic corporation (the already refunded amount + the additional tax for the unfaithful refund + the additional tax for the non-profit domestic corporation) (hereinafter referred to as "the first disposition").

C. Plaintiff’s request for rectification of corporate tax for the business year 2007 to 2010

(4) As a result of a report on the inclusion of interest income in the calculation of deductible expenses in the calculation of deductible expenses by a financial institution or an omission of a return on the tax base for special purpose business for non-profit domestic corporations under Article 29 of the former Corporate Tax Act on March 29, 2013, the Plaintiff filed a request for correction seeking the refund of withheld tax for the business year 2007 through 2010. ① As regards the business year 2007, the amount of interest income reported by including in the calculation of tax base and deductible expenses for the business year 2009 and the tax base and deductible expenses for the business year 2010 shall be included in the calculation of deductible expenses for the business year 207, and the amount of OO and that the amount reported shall be additionally included in the calculation of deductible expenses for the business year 2009, 2009, 2000 and 209, 200O and 208, respectively.

D. Defendant’s rejection disposition

In accordance with Article 62(1) of the former Corporate Tax Act and Article 99(2) of the former Enforcement Decree of the Corporate Tax Act on June 5, 2013, interest income for which a corporation has not filed a tax base return can not be included in the tax base by filing a revised return, return after the deadline, correction, etc. However, the interest income corresponding to the amount of withholding tax for which the Plaintiff seeks refund was filed was not reported by the deadline for filing a tax return for each corporate tax, and thus, the taxation procedure was completed as a separate taxation procedure and it cannot be included in the tax base and deductible expenses thereafter (the disposition rejecting correction for the business year 2009, 2010 sought by the Plaintiff).

(e) Procedures of the previous trial;

The Plaintiff appealed and filed an appeal with the Tax Tribunal on July 10, 2013, but was dismissed on October 25, 2013.

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1 through 16 (including all of the numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Judgment on the defendant's main defense

The court's explanation on this part is the same as the corresponding part of the reasoning of the judgment of the court of first instance. Thus, this part of the reasoning is accepted by Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

Article 99(2) of the former Enforcement Decree of the Corporate Tax Act provides that interest income not reported for the tax base shall not be included in the tax base upon a request for correction, etc. Thus, it shall be deemed possible to revise the specific details within the scope of the reported amount as interest income for the pertinent business year. The Plaintiff filed a report on OOO as interest income for the business year 2009, OOOOO as interest income for the business year 2010, 2009, and OOOOOO within the scope of the total reported amount changed the specific details of 209 business year OOO and 2010, OOOOOOO as deductible expenses for the proper purpose business, and rejected the request for correction of the amount of withholding tax.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Relevant legal principles

A domestic corporation liable for tax payment shall report the tax base and amount of corporate tax on income for the concerned business year within 3 months from the end of each business year (Article 60(1) of the former Corporate Tax Act); a non-profit domestic corporation may choose not to report the tax base on withheld interest income; and in such cases, the interest income which is not reported on the tax base shall not be included in the calculation of the income amount for each business year (Article 62(1) of the former Corporate Tax Act); and a non-profit domestic corporation may complete the performance of corporate tax liability by including the withheld interest income in the concerned business year’s income, on which the tax base return on corporate tax is filed, and receive the refund of the already paid withheld tax amount or receive the withholding tax (Cumulative taxation method); and without filing the tax base return within the statutory due date of return, the

Meanwhile, a non-profit domestic corporation may choose not to file a tax base return even on part of interest income withheld within the same business year (Article 99(1) of the former Enforcement Decree of the Corporate Tax Act). Whether a non-profit domestic corporation may be deemed to have filed a tax base return based on individual interest income. In a case where a non-profit domestic corporation fails to file such a tax base return within the statutory due date of return under Article 60(1) of the former Corporate Tax Act without filing a tax base return on specific interest income, it shall be deemed that the method of separate taxation under Article 62(1) of the former Corporate Tax Act has been chosen on the withheld interest income, and the taxation procedure on the withheld interest income becomes final and conclusive separately (see Supreme Court Decision 2004Da4218, Oct. 15,

Therefore, as well as the case where a tax base return was filed with respect to a specific interest income, and the case where a tax base return was filed by the deadline for filing corporate tax return for the business year thereafter, which was not the deadline for filing corporate tax for the business year in which the said interest income accrued, is the same as that where the tax base return is not filed within the statutory deadline for filing a return after the deadline for filing a return, it shall not be included in the tax base by filing a return after the deadline for filing a return, and such interpretation shall be reasonable even in light of the legislative intent of Article 62 (1) of the former Corporate Tax Act, which limits the filing of the tax base return to a non-profit corporation to grant legal stability by establishing the tax

2) Determination on the instant case

Examining the evidence adopted earlier and evidence No. 17-1 and No. 17-2 comprehensively considering the overall purport of the pleadings in light of the legal principles as seen earlier, each interest income claimed by the Plaintiff to be included in the corporate tax base for the business year 2009 and 2010 is confirmed as separate taxation by withholding, and the taxation procedure is completed, and thus, it cannot be included in the tax base for the next business year by filing a request for correction.

① Of the interest income directors asserted by the Plaintiff that they should be included in the corporate tax base for the business year 2009, the Plaintiff did not have any tax base return, and the remainder of the OOO was filed on March 31, 2010 after one year from the filing deadline of the corporate tax for the business year 2009.

② There is no tax base return on the OO of interest income claimed by the Plaintiff to be included in the corporate tax base for the business year 2010.

③ In general cases, the determination of corporate tax liability is made through the tax base within the statutory due date of return, the tax return within the statutory due date of return, the determination of imposition by the tax authority prior to the determination by the tax authority after the statutory due date of return, [the reporting system after the due date under Article 45-3 of the former Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 201; hereinafter the same shall apply], the determination by the tax authority based on the tax authority’s request for correction of the return within the statutory due date of return (Article 45-2 of the former Framework Act on National Taxes). If there is no corporate tax to be paid as in the instant case, and if the tax base is filed by adding the amount of interest income to the tax base for the refund of the existing corporate tax withheld at source, it is not expected that it will occur, and as seen earlier, it is possible for the Plaintiff to file a return within

④ In the event that the Plaintiff did not receive a withholding tax receipt from a discretionary investment business entity or a financial institution, including BB Investment Advisory, it should, as a matter of course, notify a discretionary investment business entity of such fact and have received a withholding tax receipt within the statutory due to the Plaintiff’s failure to receive the withholding tax receipt, and there is a harsh exemption from the Plaintiff’s corporate tax to be refunded. However, this is always an issue arising from the act of setting the statutory deadline, and it cannot be recognized that the Plaintiff may request a return or correction after the statutory deadline

4. 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 as it is without merit. It is so decided as per Disposition.