[1] Criteria for determining whether a monetary loan income constitutes interest income or business income

[2] The case holding that a buyer's act of attracting deposits constitutes "financial and insurance business" under Article 19 (1) 10 of the former Income Tax Act, and the next fee, other than the interest accrued upon attracting deposits, also constitutes business income subject to global income tax

[1] Articles 16 (1) 12 and 19 (1) of the former Income Tax Act (amended by Act No. 6051 of Dec. 28, 1998) / [2] Articles 16 (1) 12 and 19 (1) 10 of the former Income Tax Act (amended by Act No. 6051 of Dec. 28, 1998)

[1] Supreme Court Decision 86Nu96 delivered on May 26, 1987 (Gong1987, 1081) Supreme Court Decision 87Nu784 delivered on December 22, 1987 (Gong1988, 364) Supreme Court Decision 97Nu3668 delivered on September 8, 198

Freeboard

Head of Seogsan Tax Office

Busan High Court Decision 2002Nu3249 delivered on November 7, 2003

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

1. As to the legal nature of the rent that the Plaintiff received

Whether the act of lending money constitutes a business under the Income Tax Act or not, which is a kind of interest income, shall be determined in light of social norms, considering all the circumstances such as the profit-making nature, continuity, repetition, existence of repetition, length of the transaction period, and the difference between the amount of the loan and the amount of interest (see Supreme Court Decision 97Nu3668 delivered on September 8, 198).

According to the reasoning of the judgment below, the court below found that the plaintiff, who runs a price business under the trade name of "effective company", as a whole upon the request of the labor union interference broker, opened a deposit of 6,91,500,000 won in total to the Yangyang Mutual Savings and Finance Company from March 18, 1998 to June 1, 198, and received the rent of 298,526,125 won in addition to the interest specified in the terms and conditions of the above credit cooperative for the above period from the interference of employment. The court below held that the above rent was paid separately from the interest specified in the terms and conditions of the deposit inducement, continuity, continuity, sustainable period, the above rent was not contingent or temporary act of attracting the deposit of the plaintiff, but it constitutes a violation of the legal principles as to interest income under the former Income Tax Act (amended by Act No. 10651, Dec. 28, 198; hereinafter referred to as "the interest income of the plaintiff's savings account of this case").

2. As to the plaintiff's income amount

Examining the Plaintiff’s business contents and the process and circumstances up to the payment of the instant rent, etc., admitted by the court below in light of social norms, insofar as the Plaintiff, who runs a business, received a large amount of deposits and the instant rent in return, it is reasonable to deem the instant rent as the amount of business income. Although some of the instant rent fees were later delivered to the Plaintiff by mutual agreement with the Plaintiff in the course of raising funds, the burden of proving that the Plaintiff constitutes necessary expenses incurred in relation to the omission of the report on the amount of income, which constitutes the necessary expenses paid by the Plaintiff to obtain the amount of income, is insufficient to recognize that the necessary expenses were paid even if all the evidence submitted by the Plaintiff was insufficient, and there is no other evidence to acknowledge that the necessary expenses were paid, and thus, the amount claimed by the Plaintiff cannot be deducted as necessary expenses. Accordingly, the court below’s rejection of the Plaintiff’s assertion is justifiable in light of relevant statutes and the records, and there is no violation of law such as misunderstanding of facts due to the violation of the rules of evidence, and misunderstanding of legal principles

3. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Yang Sung-tae (Presiding Justice)