Whether the value of derivative financial products can be viewed as a debt;

The valuation profit or loss of derivatives at the time of the evaluation of unlisted stocks is related to the "evaluation of derivatives before the rights and obligations become final and conclusive due to the termination of the relevant derivatives contract." Thus, the valuation profit or loss of derivatives shall not be considered as the debt deducted from the value

Article 60 (General Principles, etc. of Appraisal)

Article 63 (Appraisal of Securities, etc.)

1. On June 11, 2004, the Defendant’s notification of change in the amount of income exceeding KRW 2,497,600,000 out of the bonus income amount in the business year 2001, wherein the income earner as ○○○○○○○ ( Address: ○○○○○○, Seoul 00 00 00 000 000 ) as to the Plaintiff is revoked.

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

The same shall apply to the order.

1. Details of the instant disposition

(1) On December 29, 2001, the Plaintiff, a corporation that runs a construction business, such as civil engineering and civil works, calculated 800,000 common shares of non-listed stocks held by ○○○○○ (hereinafter “○○○”) as follows, at KRW 16,50 per share, and acquired KRW 13,200,000 per share in total.

○○○ Accounting Corporation prepared a balance sheet as of June 30, 2001 [16,10,118,712 won of long-term sale derivatives stated in the balance sheet as of June 30, 2001; 1,100,010,010,702 won of sale derivatives stated in the balance sheet as of June 30, 2001; 30% of the total amount of shares issued [53-70 on April 7, 200] under Article 70 of the Corporate Accounting Standards (amended on August 25, 200); 40% of the total amount of shares issued on the balance sheet as of June 30, 200; 1.6% of the total amount of shares issued on the balance sheet as of 00, 30% of the total amount of shares issued on the balance sheet as of 30% of the Inheritance Tax and Gift Tax Act; 1.5% of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 1513057.

(2) According to the supplementary assessment method under the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”), the Defendant: (a) purchased the instant shares purchased from Jeongwon at a high price of 10,924 won per share; and (b) deemed that such shares constitute the subject of the wrongful calculation register under the Corporate Tax Act by treating the difference per share as 5,576 won (16,500 - 10,924). The Defendant calculated the difference per share as 4,460,000,000 (i.e., 80,000, X5,576 won) from the Plaintiff’s income at the time of calculating the Plaintiff’s income amount for each business year; (b) imposed corporate tax by adding the amount of bonus to the Plaintiff’s income (the Plaintiff’s tax amount notified as losses); and (c) disposing the said amount as a bonus to the Plaintiff on June 14, 204.

(3) Although the Defendant did not initially set the taxation on the instant case, which is related to the fiscal year 2001, the Defendant was pointed out by the Board of Audit and Inspection, it calculated the net asset value per share of ○○○ as of December 31, 2001 by 10,924 won as follows, and issued the instant disposition on June 14, 2004.

On December 31, 2001, the defendant evaluated 903,550,524,526 won in assets on the balance sheet as of December 31, 2001 as 842,432,460,397 won under the Inheritance Tax and Gift Tax Act, and assessed 626,982,41,642 won in the balance sheet as 613,551,29,487 won under the Inheritance Tax and Gift Tax Act (the defendant assessed 24,540,813,958 won in the value of derivatives stated in the debt on the balance sheet as of December 31, 2001 (the value of derivatives in this case was 21,653,809,49,09 + the value of derivatives sold as 2,887,04,467 won, hereinafter referred to as "derivatives derivatives in this case"); the defendant assessed the net assets as 208,681,660

In addition, from 228,610,810,956 won of the above net asset value, 119,375,519,610 won assessed as the amount to be repaid for 3,00,000 shares out of the shares of ○○'s ○○'s ○○'s 10,924 won of the net asset value per ○○'s 10,924 won of the common share after deducting the assessed amount of redemption priority.

(4) On July 12, 2004, the Plaintiff paid the amount of withholding taxes additionally to the Defendant according to the instant disposition, namely, the amount of withholding taxes for the increased bonus income of KRW 4,460,80,80,000 (=tax on earned income of KRW 1,696,65,280 + resident tax + KRW 169,665,280).

(5) On September 2, 2004, the Plaintiff appealed to the National Tax Tribunal as 2004No3581 on September 2, 2004, but the National Tax Tribunal dismissed the Plaintiff’s request on October 29, 2007.

[Ground of recognition] Unsatisfy, Gap1-6, 9, Eul 1, and 2

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The plaintiff's assertion

Pursuant to the interpretation of corporate accounting standards, corporate accounting standards, etc. (53-70), ○○ shall calculate the amount of KRW 24,540,813,958 as the debt on the balance sheet as of December 31, 2001, as the debt amount of KRW 24,540,813,958, which is appropriated as the debt, as of December 31, 2001, as the debt amount of KRW 13,378 (=10,924 won per share + 2,454 won + 2,454 won per share (=24,540,813,958 won + 10,000 won per common share). Accordingly, the portion of KRW 2,460,80,000,00, which exceeds the net asset value of KRW 2,497,600,000,000 shall be revoked (=the portion of KRW 1963,2000,4000).

(2) The defendant's assertion

As ○○’s assessed value of the instant derivatives shall be deemed as the obligation deducted from the net asset value at the time of evaluating the net asset value of ○○○○’s net asset value under the Inheritance Tax and Gift Tax Act, the net asset value per share of ○○○ shall be calculated as KRW 10,924.

B. Relevant provisions

Article 60 (General Principles, etc. of Appraisal)

Article 63 (Appraisal of Securities, etc.)

Article 54 (Appraisal of Unlisted Stocks)

Article 42 (Evaluation of Assets and Liabilities of the former Corporate Tax Act)

Article 73 (Scope of Assets and Liabilities Subject to Evaluation)

Article 76 (Evaluation of Asset or Debt in Foreign Currency)

Article 88 (Calculation Type, etc. of Wrongful Acts)

(c) Fact of recognition;

(1) As the autonomousization of the global financial market and the foreign exchange market increases the fluctuation in the exchange rate, interest rate, etc., companies engaged in international trade use various derivatives, such as futures (a contract under which companies have agreed to deliver and take over specific objects on which futures, quantity, size, quality, etc. are standardized at the present time and which is traded in a organized market at a certain point in the future at a certain point in the future) and swap (aWAP, and a continuous forward transaction in which certain cash flows generated during a specific period are exchanged for other cash flows, or a transaction in which parties having different currencies or interest rates exchange rates exchange each other to avoid risks arising from future interest rates or exchange rate fluctuations), options, as determined by the parties to the contract, are used for various derivatives, such as options (a contract for the right to purchase or sell foreign currencies or securities at a predetermined price within a certain period of time).

○○ is an enterprise which receives the export price of the goods in US dollars and may incur a large amount of loss on the accounts. Accordingly, on June 19, 200, the term “standard derivatives contract” was entered into with ○○ Bank (hereinafter “○○ Bank”) for the purpose of avoiding risks arising from the exchange rate fluctuations in US dollars. Accordingly, on June 19, 200, each of the non-negotiable currency options transaction (NN-LL 200, Sept. 20, 200, each of the 3rd parties to the transaction agreed to enter into an agreement on the exchange rate of 10,000, 30,000, 30,000, 200, 200, 30,000, 30,000,000,000,000,000,000,000,000,000,000,000,000).

(2) In preparing the balance sheet as of December 31, 2001, ○○ reflected the valuation value of the instant derivatives computed by ○○ Bank in accordance with Article 70 of the Corporate Accounting Standards and the Corporate Accounting Standards [53-70] as follows with respect to the transaction other than four cases settled after the end of the transaction, among the above monetary option transactions, and monetary forward transactions.

(1) Evaluation and accounting of monetary options transactions.

As of December 31, 2001, the appraised value of USD 130,00,00 in the currency option transaction balance as of December 31, 2001 is KRW 22,262,172,235, and the ○○○ is an effective part of the said appraised value of KRW 22,262,172,235 (the interpretation of corporate accounting standards, etc.) [53-70]] to avoid risk, and it is not included in the calculation of profits and losses for the fiscal year, but in the calculation of capital adjustment and represented liability on the side.

(2) Evaluation and accounting of monetary forward transactions.

As of December 31, 2001, the appraised value of USD 25,00,000 in the currency forward transaction balance as of December 31, 2001 is KRW 2,278,641,723, and ○○○ is the derivatives [the construction of corporate accounting standards, etc. / [53-70] / [6-6]] which are held for the purpose of sale and purchase of KRW 2,278,641,723 in the above appraised value as of KRW 2,278,641,723 in the currency forward transaction balance as of December 31,

③ ○○ at the time of filing the tax base and amount of corporate tax for the business year 2001, KRW 2,278,641,723 of the derivatives valuation loss (profit or loss) was included in the calculation of deductible expenses, and KRW 22,262,172,235 of the derivatives (capital adjustment) as a reservation.

(3) Results of the termination and settlement of transactions of the instant derivatives

① As a matter of principle, the derivatives of this case terminate transactions on the date of each end of the transaction stipulated in the contract (the monetary option transaction contract includes the Ext and the monetary forward transaction contract) and settle accounts on the settlement date (the contract includes the Seet Management). In addition, the derivatives transaction of this case was concluded on June 19, 200 based on the standard derivatives contract, which was concluded on June 19, 200, under the International Standard Clause Clause 5, and the cause for default and termination of obligations under International Standard Clause 6(6) of the International Standard Clause 5(Evs) occurs, and upon exercise of the right to terminate the transaction under the International Standard Clause 5(Etact’s termination, the transaction is terminated and settled on the date of 00 U.S. dollars 205(the above monetary option transaction was settled on the date of 00 U.S. dollars 200 to March 18, 2005).

③ From September 23, 2002 to March 22, 2004, the said monetary forward transaction terminated at each end of the last day, and the settlement amount calculated at the spot exchange rate compared to the agreed exchange rate of US dollars as to US dollars as of each end date, ○○ received the settlement amount on each settlement date. Accordingly, as to the sum of the said monetary forward transaction, 25,00,000 US dollars as to the sum of the said currency forward transaction, ○○ received 1,837,109,64 won from each settlement date.

④ Therefore, on the balance sheet as of December 31, 2001, ○○○ included the assessed value of the instant derivatives in the amount of KRW 24,540,813,958, but rather, upon the final settlement of each end of the transaction of the instant taxable product, ○○○ in the amount of KRW 1,778,680,158 (i.e., monetary option transaction - 58,429,506 + (i.e., monetary option transaction settlement - 58,429,506 + monetary forward transaction settlement 1,837,109,64) increased assets.

[Grounds for recognition] Gap 2-13's statements (including paper numbers) and the court's fact inquiry about ○○ corporation of this case, the whole purport of the arguments

D. Determination

(1) Article 63(1)1(c) of the Inheritance Tax and Gift Tax Act and Article 54(2) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act stipulate that the net asset value per share of unlisted stocks shall be calculated by dividing the net asset value of the relevant corporation by the total number of issued stocks as of the base date of appraisal, and “net asset value” refers to the value calculated by deducting the total amount of liabilities from the total amount of assets of the corporation. According to the above, the net asset value per share of unlisted stocks shall be the value calculated by subtracting the liabilities from the value assessed under Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the base date of appraisal (Article 5(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act), and the amount related to the assessment of assets and liabilities, such as intangible fixed assets, reserve funds, etc.

Meanwhile, Article 17-2 of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act provides for the method of deducting or adding the assets or liabilities of the relevant corporation in the assessment of other assets and liabilities, such as intangible fixed assets, reserve funds and allowances, and provides for items to be added to and deducted from the liabilities under subparagraphs 3 and 4 among them. Article 17-2 of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act provides that the amount to be added to the liabilities as of the base date of appraisal shall be calculated by deducting the amount from the liabilities, but it provides that the amount determined as of the base date

According to this, the liabilities not fixed as of the base date of appraisal should be excluded from liabilities.

(2) The assessed amount of KRW 24,540,813,958 of the derivatives value of this case, which ○○○ appropriated as a debt on the balance sheet on December 31, 2001, is not the relevant payment obligation on the above date (the right to receive only the contract date may be established) but the amount to be paid on the due date of the contract to arrive is not determined (the right to receive only the contract date may be established) and it constitutes an unpaid obligation (the ○○ includes the obligation arising under the derivatives contract pursuant to Article 70 of the corporate accounting standards. It is merely an interpretation of corporate accounting standards, etc. [53-70].

(3) Therefore, in full view of the contents and purport of Article 17-2 subparag. 4 of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act, the process that ○○ accounts the assessed value of the instant derivatives as debt items in accordance with the corporate accounting standards, and the balance sheet as of December 31, 2001, the assessed value of the instant derivatives was appropriated as debt amounting to KRW 24,540,813,958, but rather, as a result of the final settlement at the end of each of the instant derivatives transaction, the amount of KRW 1,78,680,158 (i) (i.e., monetary option settlement - currency option settlement - KRW 58,429,506 + Monetary forward settlement - KRW 1,837,109,664) as at the base date of appraisal, the assessed value of the instant derivatives should be excluded from the net asset value at the time of calculating the net asset value as at the base date of appraisal.

(4) Article 17(3)5 of the former Enforcement Rule of the Inheritance Tax and Gift Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 79 of May 7, 199) provides that where the rights and obligations of foreign currency assets and liabilities are determined and determined, the disposal of the converted profit and loss arising from conversion into Korean currency is related to the disposal of the converted profit and loss. The appraised profit and loss of derivatives is related to the "evaluation of derivatives in the status prior to confirmation of the rights and obligations due to the termination of the relevant derivatives contract." Thus, the valuation profit and loss of derivatives

(5) In principle, the Corporate Tax Act does not recognize the evaluation of assets and liabilities (main sentence of Article 42(1) of the former Corporate Tax Act), but it stipulates items that are exceptionally recognized (proviso of paragraph (1) of the same Article). Article 73 of the former Enforcement Decree of the Corporate Tax Act, which applies to this case, only recognized the evaluation of foreign currency assets and liabilities under the corporate accounting standards (excluding foreign currency assets and liabilities held by the Bank of Korea under the Bank of Korea Act), and since the evaluation of derivatives was not recognized at the time of December 29, 2001, which is the base date of appraisal of the instant derivatives, the evaluation profits and losses appropriated in accordance with the corporate accounting standards for the relevant derivatives prior to the confirmation of gross income and deductible expenses in the course of trading derivatives, were not recognized as gains or deductible expenses under the Corporate Tax Act.

When the Enforcement Decree of the Corporate Tax Act is amended on December 31, 2001, Article 73 subparag. 5 provides that a special purpose company shall include a currency swap contract concluded to avoid exchange risk of foreign currency assets and liabilities in the assets subject to evaluation. The aforementioned new provision provides that it shall apply from the evaluation of the business year which includes December 31, 2001. However, there are no special provisions regarding futures trading and other derivative financial products. ② In the amendment of the Enforcement Decree of the Corporate Tax Act on February 9, 2006, the scope of the corporation subject to the monetary swap contract for the purpose of avoiding exchange risk was extended to all domestic corporations without limit to the special purpose company (Articles 73 subparag. 5 and 76(1)), ③ the amendment of the Enforcement Decree of the Corporate Tax Act on February 28, 2007, as well as the currency swap contract, and Article 73 subparag. 4 and subparag. 27 subparag. 7(2)1, 2007).

(6) Therefore, ○○○’s net asset value per share of KRW 24,540,813,958, which was calculated by ○○ as a debt on the balance sheet on December 31, 2001, cannot be deemed as a debt that is deducted from the asset value at the time of assessing the net asset value of ○○○○’s net asset value. Thus, the net asset value per share of KRW 13,378 (=24,540,813,958 ± Ordinary 10,000 per share) should be calculated as KRW 4,460,80,800,000 of the instant disposition amount in excess of KRW 2,497,60,600,000,000 per share). The portion of the instant disposition amount in excess of KRW 2,497,600,000 per share is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by the assent of all participating Justices.