Early High Court Decision 201J 2066 (No. 17, 2012)

In cases of delayed collection of the construction price from a person with a special relationship without justifiable grounds, it shall be subject to unfair calculation.

Where the construction cost is delayed and collected from a person with a special relationship without any justifiable reason, it is legitimate to recognize it as a wrongful calculation and to include the interest on the recognition of the proceeds of the attempted construction work in the calculation of earnings, and to exclude the interest on borrowings from the calculation of losses.

Article 28 (Non-Inclusion of Interest Paid in Loss)

Article 52 of the Corporate Tax Act: Denial of Wrongful Calculation

2012Guhap2472 Revocation of Disposition of Corporate Tax Imposition

AA Construction Corporation

Chuncheon Director of the Tax Office

December 20, 2013

January 17, 2014

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

Each disposition taken by the Defendant against the Plaintiff on March 2, 201, on the corporate tax of 2005 against the Plaintiff was revoked among the OOO members of the corporate tax of 2005, on the OO members of the corporate tax of 2006, on the OO members of the corporate tax of 2007, on the OO members of the corporate tax of 2007, on the OO members of the corporate tax of 2008, on the OO members of the 2008 corporate tax of 208, on the OO members of the OO members of the corporate tax of 209, on the one hand (the corporate tax of 2006, written application for correction of the purport of the claim, appears to be a clerical error).

1. Details of the disposition;

(1) Since its opening on February 18, 1957, the Plaintiff: (a) was a corporation operating the construction business; (b) was awarded a contract for the construction business of BB rental apartment; (c) DB rental apartment; and (d) EE2 rental apartment (hereinafter collectively referred to as the “instant construction”); (b) was the head of Daejeon District Tax Office’s integrated tax investigation for the Plaintiff from December 19, 2010 to February 24, 201; (c) was 2000,000,000,000 won for 20,000,000 won for each of the instant 20,000,000 won for 20,000,000 won for 20,000,000 won for 20,000,000 won for 20,000,000 won for each of the instant construction business years; and (d) was 20,000,000 won for each business year.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff’s failure to recover the outstanding amount of the F apartment can recover the construction cost from the seller in accordance with the initial height in the case of F apartment. However, in the case of the rental apartment, it is due to the unique characteristics of the leased apartment that can recover the construction cost after the rental deposit of the apartment was completed. Thus, even if 92 days, which is the collection date of the general claim, are not applied to the collection of the construction cost of the rental apartment, the Defendant recognized it as the object of avoidance of wrongful calculation and included the interest to recognize the outstanding amount in the calculation of the income. Although the outstanding amount of the instant case was directly related to the Plaintiff’s business, the Defendant issued the disposition of this case, deeming it as the temporary payment of the outstanding amount of the loan, and imposed corporate tax by non-Inclusion of the interest paid on the loan in the calculation of earnings and non-Inclusion of losses. Therefore,

B. Relevant statutes

Attached Form is as shown in the attached Form.

(c) Fact of recognition;

(i)the principal contract details of the instant construction;

The Plaintiff entered into an agreement with AA Industry Co., Ltd. to preferentially pay the progress payment at the time of receipt of the progress payment for national housing, and the main contents of the contract are as follows.

(ii)the details of the amount of construction accounts related to BBB secondary rental apartments;

3) Details of construction accounts receivable related to the second rental apartment

4) Details of construction accounts receivable related to DD Rental Apartments

(v) details of construction accounts related to EE2 rental apartments;

6) Details of the Plaintiff’s loan and interest payment

7) Annual loans and investment assets of AA Industry Corporation

? See the Decision of the Court.

8) The maximum period of collection of the Plaintiff’s general claims is 92 days.

[Reasons for Recognition] Each of the evidence mentioned above, Gap evidence No. 8

D. Determination

6. The Plaintiff’s assertion that the Plaintiff’s construction work price was due for the first time after the Plaintiff’s construction contract was completely recovered within the time limit, and that the amount equivalent to the unpaid construction price was not payable without connection with the business under Article 28(1)4(b) of the Corporate Tax Act and the interest paid on the loan corresponding thereto is not included in deductible expenses. Furthermore, the Plaintiff’s assertion that the redemption of the outstanding construction price was unreasonably reduced due to the lack of economic rationality in light of the sound common sense and common practice of the Plaintiff’s 20-year rental business, and that it was unreasonable to view the Plaintiff’s assertion that the payment of the outstanding construction price was due to the Plaintiff’s wrongful calculation under Article 8(1)6 of the Enforcement Decree of the Corporate Tax Act, and that it would be unreasonable to view the Plaintiff’s assertion that the amount of the outstanding construction price was reduced for 20-year rental business without any reasonable consideration between the Plaintiff and its related parties to the 20-year rental business.

3. Conclusion

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