Cho High Court Decision 2007Du3934 ( August 31, 2009)

Current value assessment of long-term tax liabilities and long-term loans is not allowed under the Corporate Tax Act.

Even if long-term tax liabilities and long-term loans are assessed at the current value in accordance with the corporate accounting standards, and the discounted debt estimated by present value, which is the difference between the nominal value and the accounts are calculated by considering the depreciation amount as interest expenses, they shall be assessed as a voluntary evaluation of liabilities not permitted under the

The contents of the decision shall be the same as attached.

Construction △ corporation

Gangwon-gu Director of the District Office

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s imposition of KRW 54,415,020 of corporate tax for the business year 2002 against the Plaintiff on June 19, 2007; the imposition of KRW 54,846,872 of corporate tax for the business year 2003; the imposition of KRW 960,079,810 in excess of KRW 54,846,872 of the imposition of KRW 930,750,010 of corporate tax for the business year 2004; the imposition of KRW 77,720,667 of the imposition of KRW 930,750,010 of the imposition of KRW 763,83,880 of corporate tax for the business year 205; and the imposition of KRW 29,049,306 of the imposition of KRW 29,049,306 of the Plaintiff’s grounds for filing the claim.

1. Circumstances of dispositions;

The following facts are not disputed between the parties, or can be acknowledged in full view of the purport of the entire pleadings in Gap evidence 1, 2 (including each number), and Eul evidence 1-4 (including each number):

가. △△건설 주식회사(이하 '△△건설'이라 한다)는 주식회사 ■■가 2002. 11. 27 서울지방법원의 회사정리계획 변경인가를 받아 건설사업 부문을 물적 분할하면서 신설 된 법인이다. 위 회사정리계획 변경인가의 내용은, 주식회사 ■■의 영업이익만으로는 원리금을 정상적으로 변제하는 것이 불가능하므로 건설사업 부문을 분할하고, 주식회사 ■■의 장기조세채무 및 장기차입금의 변제기를 2014년으로 유예하여 확정채무액 전액을 일시 변제한다는 것이다

B. △△ Construction evaluated assets and liabilities subject to installment acquisition as fair value, and included the discounted debt estimated by discounting the above long-term tax liabilities and long-term loans, which are finalized by the modification plan of the company reorganization plan, at the average interest rate of 9.68% on corporate bonds of the same type of business, and the current value assessment details are as follows:

C. △△ Construction: (a) paid the discounted debt estimated by present value each year, and included the discounted debt estimated by present value in deductible expenses, considering it as one of the following specifications.

D. From February 26, 2007 to April 9, 2007, the director of the Seoul Regional Tax Office conducted the corporate tax integration investigation for the business year 2002 to 2005 of △△ Construction. As a result, △△ Construction deemed as the voluntary evaluation of long-term debt, deeming that the amount of depreciation by including the discounted debt estimated by present present value as above is the voluntary evaluation of long-term debt, and thereby denying it and not including the loss and notifying the Defendant

E) Accordingly, on June 19, 2007, the Defendant corrected and notified 54,415,020 won of corporate tax for the business year 2002, 960,079,810 won of corporate tax for the business year 2003, and 930,750,010 won of corporate tax for the business year 2004, and 763,83,880 of corporate tax for the business year 2005, respectively (hereinafter “each equity interest”). Of these, the amount of corporate tax related to the depreciation of discounted debt estimated by present value is 54,415,020 won for the business year 202, 905,232,938 won for the business year 905,232,938 won for the business year 2003, 853,029,343,74,7574,7474, for the business year 2005.

F. △△ Construction, who is dissatisfied with each of the dispositions of this case, filed a request for tax adjudication on September 14, 2007, and the said request was dismissed on August 31, 2009.

사. △△건설이 2009. 6. 22. ■■■■건설 주식회사로 상호를 변경하였고, 이 사건 소송 계속 중인 2010. 4. 1. 원고가 ■■■■건설 주식회사를 흡수합병 하였다.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

Since △△ Construction evaluated assets and liabilities as fair value and succeeded to new acquisition value in accordance with the Act on the Purchase of Corporate Accounting Standards, the amount of depreciation discounted debt estimated by present value constitutes deductible expenses under the Corporate Tax Act in the nature of interest expenses on acquisition value. Nevertheless, each of the dispositions of this case is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

Article 42(1) of the Corporate Tax Act provides that in cases where the book value of assets and liabilities possessed by a domestic corporation increases or decreases with respect to the appraisal of assets and liabilities, the book value of the relevant assets and liabilities shall be the value before the evaluation in calculating the income amount for the business year to which the date of the evaluation belongs and each subsequent business year. This does not reflect the unrealized profits and losses following the evaluation of assets and liabilities in the calculation of the income amount for the relevant business year, but shall reflect them in the calculation of the income amount for the relevant business year as transactions such as disposal of assets and liabilities, redemption of liabilities, etc., and reflect them in the calculation of the

The purpose of legislation is to exclude a third party (see Supreme Court Decision 2007Du19683, Dec. 10, 2009).

In other words, with respect to the assets and liabilities held by the Plaintiff, the Corporate Tax Act shall evaluate the real value of the assets before disposing of them, and it shall not be understood that the disposal profit or loss should be realized at the time of the disposal of the assets, or that the appraisal of the value of the assets prior to the settlement of the accounts without compensation should be advanced and recognized at the time of the settlement of the accounts. In light of the general rules of the Corporate Tax Act, within the meaning of confirming such purport, the bonds and liabilities arising from long-term monetary loan transactions shall be evaluated as the current value, and the difference between the current value and the current value shall not be included in the calculation of the income amount for each business year if the current value is appropriated as the current value of the bonds and liabilities as the present value of the bonds and liabilities, and it shall not be included in the calculation of the income amount for each business year if the present value is appropriated as the interest expense or interest profit or loss in the calculation of the income amount for each business year.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.