early 2009 Jeon1799 ( December 30, 2009)

Conditions under which interest income from a money lending constitutes business income;

Whether a person is a profit-making profit for a non-business loan or a business income shall not be determined depending on whether the person has claimed to be a business operator or a consumer, but on the basis of all the circumstances, such as the profit-making nature, continuity, repetition, frequency of transactions, the length of the transaction period, the amount of the loan and the difference in the interest amount, the method of raising funds, the establishment of a security right, the situation of physical facilities and human organization for lending money, and the situation of advertisement and publicity.

1. Each disposition of the Defendant’s global income tax of KRW 31,55,080 for the year 2005, global income tax of KRW 28,747,950 for the year 2006, and global income tax of KRW 19,96,020 for the year 2007 shall be revoked.

2. The litigation costs shall be borne by the defendant.

The same shall apply to the order.

1. Circumstances of dispositions;

The following facts may be acknowledged, either in dispute between the parties, or in full view of the purpose of each entry and whole pleading set forth in Gap evidence 1 through Gap evidence 3, Eul evidence 1 through Eul evidence 6 (including each number):

A. In the name of ○○○○○○○-dong 805-3, ○○○○○○○-dong 805-3, the Defendant conducted a tax investigation on the least A, the husband of the Plaintiff, who had engaged in real estate brokerage business, loan brokerage business, and brokerage business, from April 24, 2008 to May 2, 2008. Based on the books found in the process, the Defendant did not return and pay the comprehensive income tax to the Defendant even though the Plaintiff lent the total amount of KRW 794,00,000 to 30 persons, such as ChoB, etc. from 2005 to 207,275,000, while receiving the interest amount of KRW 237,275,000, the interest amount received by the Plaintiff during the above period was as follows (hereinafter “interest income”).

B. Accordingly, the Defendant, on January 5, 2009, lent the instant interest income to the Plaintiff without filing a business registration as above, deemed the interest income from the non-business loan, and subsequently notified the amount of KRW 31,55,080, global income tax for the year 2005, global income tax for the year 2006, global income tax for the year 28,747,950, global income tax for the year 2006, and KRW 19,96,020 for the global income tax for the year 207 (hereinafter “instant disposition”).

C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on April 8, 2009 on February 17, 2009. However, the Tax Tribunal dismissed the Plaintiff’s claim on December 30, 2009.

2. Determination as to the legitimacy of the instant disposition

A. The parties' assertion

(i)The plaintiff's assertion

The Plaintiff, separate from the LA, operated an independent credit business by lending KRW 794,00,00 to 78 persons over three years from the her husband’s office, separately from the LA. In light of the size, frequency, mode, etc. of the financial transaction, the Plaintiff asserts that the instant interest income is illegal on the ground that the Plaintiff’s lending of the instant interest income to a non-business loan for the purpose of acquiring the interest income, not the profit of the non-business loan but the business income accrued from the loan business for the purpose of acquiring the interest income, on the ground that the Plaintiff’s lending of the non-business loan without the registration of business.

(2) The defendant's assertion

In regard to this, the Defendant asserted that the LA, the husband of the Plaintiff, arranged the loan to the lending company and received the brokerage commission from the lending company from 1.5% to 2.5% of the loan company, and that the Plaintiff did not independently engage in the money lending business under his own account as the former owner, but the Plaintiff received the interest income as the lender of the money loan service provider as required by the LA, and thus, the instant interest income constitutes the profit of the non-business loan, and thus, the instant disposition taken by the Defendant on the premise thereof is lawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Facts recognized

The following facts may be acknowledged by taking into account each evidence, Gap evidence No. 4 through No. 9, Eul evidence No. 4 through No. 6, Eul evidence No. 8 through No. 10 (including each number), the witness ChoiA's testimony and the whole purport of the pleadings, which are not disputed between the parties, or which are incurred by the parties.

(1) From October 28, 1999 to December 31, 2006, the Plaintiff’s husband, engaged in real estate brokerage business and loan brokerage business. After November 2003, the loan brokerage business was mainly conducted by linking the debtor with the debtor who mainly intends to provide real estate, such as apartment houses, and borrow money as security at the request of another lending business, and then receiving 1.5% to 2.5% to 3% interest of the loan from the lending business. The credit business was conducted by directly lending the money to the debtor and receiving 2.5% interest of 2.5% to 3% interest of the monthly loan. The LA acquired 87,285,00 won as the loan brokerage fee for three years from January 1, 2004 to December 31, 2006. The loan brokerage business was confirmed to have been included in the interest income equivalent to 34,620,000 won for the credit business, and it was confirmed that the creditor had been arranged for the above investigation period under the Plaintiff’s name.

(2)On the other hand, the LA has been prepared and kept by the real estate intermediary at the time of the tax investigation, and the loan-related books (No. 4-2) submitted to the defendant at the time of the tax investigation were recorded in the debtor's name, resident registration number, telephone number, amount of loan, lending period, interest rate and maturity date, repayment and extension amount, the creditor's name, apartment price as a security, apartment bond price as a security, and senior bond. In the event the debtor has repaid the loan, the above book was indicated in the "X" and the leastA and the plaintiff were also recorded in the above book." (3) The LA directly prepared the above loan-related books, and (3) the LA has taken measures such as making a provisional registration when it is difficult to secure the credit because there are many senior bonds on the collateral, and the registration of cancellation was made when the obligation is fully recorded and managed in the above book.

(4)The interest on the loan executed in the name of the Plaintiff from 2005 to 2007 was deposited into the agricultural bank passbook in the name of the Plaintiff, and the debtor who has failed to repay the principal and interest has filed an application for voluntary auction in the name of the Plaintiff.

D. Determination

(1) Whether a monetary lending profit is a kind of non-business loan, which is a type of interest income, and business income is determined depending on whether a monetary lending act constitutes a business under the Income Tax Act. Whether it constitutes a business under the Income Tax Act is determined not by whether it externally professed to be a payment business operator, but by whether it falls under a business under the business under the said Income Tax Act, shall be determined in light of ordinary social norms, taking into account all the circumstances, such as the profit-making nature, continuity, repetition, frequency of transaction, length and length of transaction, amount and interest amount, method of raising funds, existence of a security right, existence of a security right, circumstances of physical facilities and human organization for a monetary lending, advertisement and publicity (see, e.g., Supreme Court Decision 2003Du14505, Aug. 19,

(2) Examining the above facts in light of the above legal principles, the following facts were revealed, namely, ① loans made in the Plaintiff’s name continued repeatedly over a long period of up to three years, and the loan amount was about KRW 80 million, and the interest amount received was about KRW 240 million, and the other party to the transaction is also about KRW 80,000,000,000,000. The other party to the transaction is also deemed to have profit-making, continuity, and repetition in the frequency, scale, mode, etc. of financial transactions, including approximately KRW 80,00,00,000. ② It is deemed that the business registration for the purpose of the credit business was made at the district tax office under the Plaintiff’s name or the advertisement was not made for daily life, but the issue of whether the loan constitutes a business under the Income Tax Act does not require that the other party to the transaction is an external credit business operator, apart from the basic provisions of the Income Tax Act, and the Plaintiff’s assertion that the loan was actually binding within the above basic administrative period.

(3) Ghana: (a) examining whether the actual accrual of interest income of this case is the Plaintiff; (b) the following circumstances acknowledged by the overall purport of the entry and arguments in Section 11 to Section 13, namely, ① the Plaintiff was an ordinary occupational owner, and there was no experience in engaging in credit business except for the cafeteria operating a restaurant; (c) the Plaintiff’s assertion that the Plaintiff, the husband, while operating the real estate brokerage office, operated the loan brokerage business and the credit business separately at the same office, was not acceptable; (b) the account books on most debtors’ personal information on loans, the secured goods, the amount of loan and the interest, etc., included in the Plaintiff’s name, included in Section 11 to Section 13; (d) the Plaintiff did not appear to have operated the loan business for 00 million won; and (d) it was difficult for the Plaintiff to find out any wrong loan revenue of KRW 100,000,000,000,000,000 for each of the instant loan brokerage offices.

3.In conclusion

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