Payment of the re-deductible profit fee is subject to non-deductible loss as a disposition of profits.

The payment of the re-deductible profit fee has taken the form of commission to distribute profits reserved to the corporation, and is subject to non-deductible loss as a substantial disposition of profits.

Article 20 of the Corporate Tax Act

2017Guhap5809 Revocation of Disposition of Corporate Tax Imposition

○○○○○○○○○○

○ Head of tax office

November 29, 2018

January 17, 2019

1. All of the plaintiff's claims are dismissed.

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

Cheong-gu Office

Each disposition of imposing corporate tax of KRW 00,000,000 (including additional tax), corporate tax of KRW 000,000 (including additional tax), corporate tax of March 2, 2016 (including additional tax), and KRW 000,000,000 (including additional tax) of corporate tax of the business year 2010, March 2, 2016, against the Plaintiff on March 2, 2015, shall be revoked.

1. Details of the disposition;

A. The Plaintiff is a non-profit corporation established pursuant to the Fisheries Cooperatives Act (amended by Act No. 11690, Mar. 23, 2013; hereinafter referred to as the " Fisheries Cooperatives Act"), which is promoting the common interest and promoting sound development of fisheries, enhancing the social and economic status of fishermen, and member cooperatives (hereinafter referred to as the "member cooperatives of this case"), and is conducting education, support projects, economic projects, credit projects, mutual aid projects, etc. to achieve its objectives.

B. In relation to mutual aid projects, the Plaintiff received a mutual aid agreement solicited by the member cooperatives of this case (hereinafter referred to as “re-deduction”) and operated investment, etc., and paid part of its profits to the member cooperatives of this case under the name of re-deduction profit commission, and included them as losses.

C. The director of a regional tax office of AA has notified the Defendant of the taxation data that the Plaintiff paid to the member cooperatives of the instant case regarding the re-deduction profit fee as dividend based on the disposition of profits, and the Defendant excluded the re-deduction profit fee as indicated below from deductible expenses pursuant to Article 20 subparagraph 1 of the Corporate Tax Act (amended by Act No. 1522, Dec. 19, 2017; hereinafter “Corporate Tax Act”) and notified the Defendant of the corporate tax from 2009 to 2011 as listed below (hereinafter “each disposition of this case”).

No.

Business year

Date of appeal

Date of adjudication decision

1

209

May 20, 2015

December 20, 2016

2

2010

May 19, 2016

June 30, 2017

3

2011

April 7, 2017

June 30, 2017

D. The Plaintiff was dissatisfied with each of the dispositions of this case and filed a request for a trial with the Tax Tribunal as listed below, but was dismissed.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 6, Eul evidence 1 and 3 (including each number; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

For the following reasons, each of the dispositions in this case that did not include the re-deduction profit fee in the deductible expenses in the calculation of the surplus is illegal.

1) A mutual aid project is not different from that of private insurance and its substance from that of private insurance to pay mutual aid money when an accident occurs after receiving mutual aid money from a mutual aid contract holder, and the Plaintiff’s re-deduction also is the same as that of private insurance. Thus, in private insurance, a mutual aid project is allowed to include a re-insurance profit fee, which is the nature of ex post facto discounting re-insurance premium as consideration for taking over good contracts, in terms of sales over re-insurance premium, sales unit, sales unit, or other similar nature, in deductible expenses under the Corporate Tax Act. Therefore, re-deduction profit fee should also be included in deductible expenses.

2) Of the “disposition of surplus funds” that do not fall under deductible expenses under the Corporate Tax Act, surplus funds are accumulated in the balance remaining after the corporation bears corporate tax, etc. from profits generated from its business activities or other profit transactions, and among them, the accumulation of voluntary reserve funds and cash or stocks are distributed to the earned surplus remaining after accumulating the statutory reserve. The purpose of not including the disposal of surplus in deductible expenses is to prevent the payment of bonus, etc. through the disposal of surplus funds. In addition, the disposal of surplus funds is limited to the payment of bonus, etc. with the approval of the general meeting of shareholders and the board of directors, etc. stated in the item of the disposal of earned surplus funds as the item of the disposal of earned surplus funds. The calculation of the re-deduction profit is not subject to the resolution of the general meeting of shareholders, but

3) Unlike the dividends paid in return for investment in return for the use of the business, the dividends for use are merely made by the ex post facto adjustment of the transaction price based on the transaction performance unrelated to the investment, and thus is different from the ordinary dividends. In the case of re-deduction fees, it is not paid to the member cooperatives of this case by the resolution of the general meeting, unlike the dividends for use and the dividends, so it cannot be deemed that the re-deduction fees should not be included in the deductible expenses the same as the dividends for use.

4) Although the fee for re-deduction is paid to the instant member cooperatives as investors, the instant member cooperatives received it in the position of a re-insurer who is not an investor, and the fee for re-deduction is calculated at a certain ratio of profit arising from re-deduction. However, the number of vehicles that serve as the basis is based on the re-deduction fee revenue, which is the result of attracting the high-quality mutual-aid agreement by the instant member cooperatives, and therefore, the business relevance, which is the requirement for deductible expenses, and business relation and business relation relation is recognized.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) Articles of incorporation, etc. of the Plaintiff

A) The main contents of the Plaintiff’s articles of incorporation are as follows.

Article 5 (Organization) (1) The organization of the plaintiff (hereafter referred to as "the main body" in this Table) shall be classified into the following business sections, and the organization concerning the economic business sector and the credit business sector shall be operated as an independent business sector:

1. Guidance service sector: Services referred to in Article 6 (1) 1, 11, and 12 (excluding other services related thereto);

The businesses or their incidental businesses include the businesses or the business division as referred to in subparagraphs 2 through 5 above, also the same shall apply to them)

2. Economic business sector: Projects referred to in Article 6 (1) 2;

3. Credit business sector: Business under Article 6 (1) 3;

4. Mutual financial business sector: Business provided for in Article 95 (2) of the Credit Unions Act among those provided for in Article 6 (1) 4 and 14;

5. Mutual aid business: Insurance business entrusted to the principal association under Article 6 (1) 5, 6 and 14, and the Fishing Vessel Accident Compensation Insurance Act.

6. Management sector: A sector that supports and manages businesses under subparagraphs 1 through 5 commonly;

Article 6 (Business) (1) In order to achieve its objectives, all or part of the following business shall be carried out:

5. Mutual aid business;

Article 11 (Members) Members of plenary session shall be district fisheries cooperatives, fisheries cooperatives by type of business and fisheries cooperatives processing fishery products.

Article 12 (Liability of Members) (1) The liability of members shall be limited to the amount of their investment, other than where such expenses are borne.

(2) Members shall faithfully participate in the operation process of the plenary session and shall faithfully use the program of the plenary session.

Article 18 (Associate Members) The Association may appoint any of the following persons as associate members:

1. Organizations or corporations related to the fisheries and marine industry;

2. Organizations or corporations related to fishing villages;

3. Other persons deemed appropriate to use the business of the plenary session.

Article 21 (Investment) (1) Members shall have at least 1,00 units of investment: Provided, That the maximum limit of number of units of investment held by one member shall not exceed ten times the average number of units of investment.

Article 30 (Legal Reserves, etc.) (1) Until the amount reaches three times the equity capital, 10/100 or more of the surplus funds in each business sector referred to in Article 5 (1) 2 through 5 shall be accumulated as legal reserve for each legal year.

(2) In order to appropriate funds for the expenses of guidance projects, such as education and support projects, etc., the central association shall carry over at least 20/100 of the surplus funds of each business division referred to in Article 5 (1) 2 through 5 to the next fiscal year and transfer them to the guidance project division by carrying them over to the next fiscal year: Provided, That where the State, etc. makes an investment in the credit business sector pursuant to Article 153 of the Suhyup Act, the provisions of the main sentence shall not apply to surplus funds of the credit business sector until the credit business sector purchases or retires the total amount

(3) In cases of paragraphs (1) and (2), the amount to be accumulated or transferred when a loss carried forward occurs by each business division under Article 5 (1) 2 through 5 shall be calculated on the balance obtained by deducting the amount to be appropriated for compensating such loss from the surplus of the relevant business year.

Article 31 (Capital Reserves) The times shall accumulate profits accruing from assets falling under each of the following subparagraphs for each business division under each subparagraph of Article 5 (1) as capital reserve funds:

1. Marginal profits from capital reduction;

2. Assets revaluation marginal profit;

3. Merger marginal profits;

4. Other capital surplus.

Article 32 (Voluntary Reserve) (1) In case there is a balance after deducting the legal reserve and the balance of the guidance business as prescribed in Article 30 from the surplus funds of the corresponding business division in each business division referred to in Article 5 (1) 2 through 5, from the surplus funds of the corresponding business division in each accounting year, the Council shall set aside not less than 30/100 of the balance as the business reserve (hereinafter referred to as the "voluntary reserve").

(2) The representative director of a credit business may accumulate a separate reserve as prescribed by the Financial Services Commission, if any balance remains after deducting the legal reserve, the balance of the guidance business and the voluntary reserve referred to in paragraph (1) from surplus funds in each fiscal year.

Article 33 (Prohibition of Use of Legal Reserves and Capital Reserves) The legal reserves and capital reserves shall be used only for covering deficits of the business sector under each subparagraph of Article 5 (1).

Article 34 (Calculation of Shares) Members' shares in the property of the plenary session shall be calculated in accordance with the following standards:

1. For paid-in contributions, each fiscal year of payment shall be calculated according to the amount of contributions: Provided, That when the assets are reduced compared to the total amount of paid-in contributions, the amount of contributions by each member shall be calculated by reduction;

Article 96 (Distribution or Carry-over of Surplus) (1) If any balance remains after compensating for losses by business division under Article 5 (1) and deducting the legal reserve, guidance project transfer funds under Article 30, and voluntary reserve funds under Article 32, the balance shall be distributed or carried over to the following fiscal year: Provided, That dividends shall be divided into credit business and credit business division other than credit business, and if any deficit exists in any business division (Article 5 subparagraphs 2, 4 and 5) other than credit business division, they shall be carried over within the scope of remaining surplus after deducting such deficit.

(2) The dividends under paragraph (1) shall be distributed to a preferential investor pursuant to Article 25 (5) and (6) and, if any remainder remains after the member makes a distribution in proportion to the investment paid by him/her (including revolving contributions), it shall be made in proportion to the actual results of business use by the member and the associate member.

(3) Surplus funds in the credit business sector shall be distributed independently of other business sections.

Article 97 (Distribution of Surplus Funds) (1) Distribution of dividends for member contributions shall be made according to the contribution of the member at the end of each fiscal year, which shall be made by adding up dividends for each business section to the average deposit interest rate for each year of the member cooperatives.

(2) Where it is intended to distribute dividends to member investments pursuant to the provisions of paragraph (1), the calculation of dividends by business division shall be distributed and determined according to the ratio of earned surplus before disposal by business division from the total amount of earned surplus before disposal.

(3) The distribution of the actual results of the use of projects shall be the quantity, price and other of materials handled in the relevant fiscal year.

The business shall be conducted according to the results of the use of business by the members and associate members in consideration of the amount of business.

(4) Article 34 (5) shall apply mutatis mutandis to the calculation of dividends.

Article 98 (Compensation of Losses) In the event that any loss occurs as a result of the settlement of accounts for each business division under Article 5 (1) 2 through 5, the principal time shall be compensated in the order of the unpaid amount, voluntary reserve, legal reserve and capital reserve, and where there is a shortage even after compensation, it shall be carried over to each business division for the following fiscal year.

B) The main contents of the Plaintiff’s mutual aid agreement are as follows.

Article 1 (Purpose) The purpose of this Code is to prescribe matters necessary for the mutual aid projects conducted by the plaintiff (hereinafter referred to as "the plaintiff") pursuant to Article 132 (1) 6 of the Fisheries Cooperatives Act.

Article 3 (Scope of Business Activities) The scope of the business carried out by the central association shall be as follows:

1. Re-deduction and re-insurance program;

2. Mutual-aid projects for raw water;

Article 10 (Regulations) Matters necessary for the enforcement of this Code shall be prescribed separately by the Chairperson.

Article 11 (Accounting) (1) Accounting of the mutual aid project shall be special accounts, keep separate accounting between the non-life mutual aid project sector and the life mutual aid project sector, and clarify the status of profits and losses as of the end of each business year.

(2) In the calculation of profits and losses under paragraph (1), the calculation of profits and losses shall be made separately for each type of business with respect to the difference of profit and loss, the difference of profit and loss, and the difference of profit and loss.

Article 12 (Mutual Aid Fund) (1) A Mutual Aid Fund shall be established in the present session for the purpose of fulfilling the objectives of mutual Aid projects and the maintenance and expansion of collateral for the liability under mutual aid agreements.

(2) The mutual aid fund under paragraph (1) shall not be classified by business division and shall not be used except in cases under subparagraph 2 of Article 13: Provided, That this shall not apply where the Minister for Food, Agriculture, Forestry and Fisheries approves such plan

Article 13 (Disposition of Balance of Profit and Loss) The main session shall, as a result of the calculation of profit and loss pursuant to the provisions of Article 11, treat the balance for each type of business as follows:

1. As for a business in which profits accrue, all or some of them shall be accumulated as a contractor's dividend reserve (excluding deduction without a reserve for mutual aid fees), and at least 50/100 of the remainder shall be accumulated in the mutual aid fund, and the remainder shall be appropriated as profits for the business year;

2. With respect to a business in which loss is incurred, the profit of other business, reserve funds for paying dividends to policyholders related to the business, special risk reserve funds and funds shall be appropriated for the amount of the loss in the order of the Fund: Provided, That if reserve funds for special risk are appropriated, it shall be limited to the loss caused by the occurrence of the accident exceeding the

Article 13-2 (Fees for Re-deduction Profits) (1) Part of the profits earned by taking over a re-deduction from a cooperative which is a member of the end of each business year may be paid by settling accounts as a re-deduction profit commission.

(2) The re-deduction profit fee under paragraph (1) shall be paid in the order of contribution ratio by each cooperative after measuring contribution ratio, and specific calculation basis shall be determined separately by the chairperson.

Article 14 (Contractor Dividend Reserve) (1) Part of profits may be distributed from a mutual aid contract in which the mutual aid premium reserve is made to the contractor's (the beneficiary if a part of profits is paid together with the mutual aid fund) according to the rate and method determined by the Chairperson from the contractor's dividend reserve.

(2) The contractor dividend reserve fund shall not be used except in the case of paragraph (1) and subparagraph 2 of Article 13: Provided, That where it is impossible to distribute dividends to policyholders under paragraph (1) in reality, it may be transferred to the mutual aid fund under Article 12.

§ 20 (Definitions) The term "re-deduction" means the business in which the principal installment bears all or part of the liability to be borne by a member under a mutual aid agreement after receiving a re-deduction fee from a member.

Article 22 (Acceptance of Re-Deduction) (1) The Association shall take over the re-deduction only for the liability of mutual aid which a member has entered into a mutual aid contract pursuant to the mutual aid agreement authorized by the president.

(2) The main session shall bear the responsibility for the re-deduction within the scope of the liability for the deduction to be borne by a member, and the period of the re-deduction is the same as

(3) The liability for re-deduction shall commence at the time of the head of the mutual-aid liability and terminate at the closing date.

(4) When intending to conclude a mutual-aid contract, the Council shall do so in accordance with the basic contract for the acceptance of mutual-aid agreed in advance with its members.

Article 23 (Reinsurance for Mutual Aid and Re-Mutual Aid Liability) The principal installment may re-insurance for part of the liability to be borne by a mutual aid contract or a re-mutual aid contract.

Article 1 (Purpose) The purpose of these Rules is to prescribe matters necessary for the enforcement of the Mutual Aid Regulations pursuant to Article 10 (Regulations) of the Mutual Aid Regulations.

Article 14 (Procedures for Conclusion of Re-Mutual Aid Contract) (1) Where a member intends to receive an offer of a mutual aid contract and accept it, he/she shall make an offer of a re-mutual aid contract by attaching an amount equivalent to the first re-mutual aid fee to the subscription form

(2) When a member has sent a written subscription for re-deduction pursuant to paragraph (1), he/she shall be deemed to have consented to the re-deduction contract simultaneously with the consent of the raw mutual-aid contract

Article 15 (Collection of Re-Deduction Fees) (1) Re-deduction fees shall be collected immediately after a member receives raw-use deduction fees, and the payment period shall be the same as the payment period of the non-use mutual-aid fees under the raw-use mutual-aid contract for

Article 16 (Payment of Re-Mutual Aid) (1) The re-mutual aid shall be paid to the member when the member is liable to pay the mutual aid.

Article 23 (Calculation of Re-deduction Benefit Fees) (1) The meeting may refund to the Association the re-deduction Benefit Fees set forth in the budget of the year concerned.

(2) The re-deduction profit fee prescribed in paragraph (1) shall be calculated by multiplying the estimated profit prior to incorporation into the fund of the current year by the equity ratio and ratio.

(3) The ratio of re-deduction prescribed in paragraph (2) shall be calculated by averaging the ratio of re-deduction from risk deduction charges, estimated project costs and liability reserve, and the ratio of such re-deduction may be determined by the head of the mutual aid insurance department within 20 percent.

(4) The re-deduction profit fee under paragraph (1) shall not be paid if the payable ratio for November of the relevant year is less than 150%.

(5) The head of the mutual aid insurance department may adjust the amount to be refunded within the re-deduction profit commission set forth in the budget in consideration of the actual profits and losses after November of the year concerned.

Article 23-2 (Payment by Cooperative, etc.) (1) The main association shall pay the re-deduction profit fee for the year fixed in Article 23 for each cooperative.

(2) The amount paid by a cooperative as referred to in paragraph (1) shall be calculated by multiplying the profits accruing from a re-deduction by the combination contribution rate as follows:

Amount paid by each association = Re-deduction profit commission 】 Cooperative contribution rate by each association.

Ratio of contribution by partnership = Revenue rates by partnership ± Total amount of revenue rates by partnership.

* Acceptance = MX (Re-Deduction Fee - Re-Deduction Refund - Re-Deduction Distribution, 0)

(3) The amount paid by a cooperative as referred to in paragraph (2) shall be reduced at less than the full cost, and the difference between the total amount paid by each cooperative and the fees for re-deduction shall be adjusted by reflecting the highest rate of contribution by a cooperative and the fees for re-deduction at a cooperative.

(4) The calculation of the number of land by cooperative under paragraph (2) shall be appraised as the performance from December of the preceding year to the end of November of the relevant year.

C) The main contents of the Plaintiff’s mutual aid agreement enforcement rules are as follows.

Article 1 (Subscription for Re-Mutual Aid Agreement) The subscription for the Re-Mutual Aid Agreement shall be made from the date on which the member cooperatives of this case (hereinafter referred to as the "A" in this Schedule) agree with the head of the Mutual Aid Agreement.

Article 2 (Procedures for Executing Re-Mutual Aid Contracts) (1) Conclusion of a raw-use mutual-aid contract shall be made by Gap upon receiving an application for a contract from a raw-use mutual-aid contractor and receiving the premium.

(2) The conclusion of a re-deduction agreement shall be effected when the plaintiff (hereinafter referred to as "B" in this table) consented to the raw mutual-aid agreement concluded under paragraph (1), and in such cases, the re-deduction fee shall be collected from Gap.

(3) A re-deduction agreement consenting to B shall be deemed to have been concluded on the date when the head of such mutual-aid contract is concluded, and shall take effect at the time of the liability for the head

(4) A shall make a re-deduction to B, and the conclusion of a re-deduction agreement shall be governed by this basic contract.

Article 6 (Payment Method of Re-Deduction Fee) Payment of Re-deduction Fee for Gap shall be made at the same time by a raw-use mutual-aid contractor A and at the same time by the raw-use mutual-aid contractor A.

Article 7 (Payment of Mutual-Aid Money, etc.) (1) If A is to pay mutual-aid money to the beneficiary of mutual-aid, etc., B shall be paid to A.

(2) The amount payable to mutual aid funds shall be the same amount as the mutual aid funds to be paid by A.

(3) Re-mutual aid money, refund money, dividends to policyholders, and other payments to Party A shall be governed by the provisions of Section B.

Article 12 (Amendment of Terms and Conditions of Mutual Aid Agreement) (1) Where the contents of a special purpose mutual aid agreement are amended, it shall be deemed that the contents of the special purpose mutual aid agreement are also amended.

Article 13 (Invalidation of Re-Mutual Aid Agreement) In cases where the whole or part of a raw water mutual-aid agreement is null and void, a re-mutual-aid agreement relating to the invalid part shall also be

Article 14 (Withdrawal of Subscription for Re-Mutual Aid) When the subscription for a re-mutual aid contract is withdrawn, the subscription for the re-mutual aid contract shall also be withdrawn.

2) The main contents of the basic contract on the takeover of re-deduction between the Plaintiff and the instant member cooperatives on October 13, 2010 are as follows.

3) Payment of the Plaintiff’s re-deduction profit fee (draft)

1. Grounds for payment;

◎ 공제규약 제13조의2(재공제이익수수료) 조항에 따라 재공제를 인수하여 얻게 되는 이익금의 일부를 재공제이익수수료로 정산하여 지급

2. The amount paid;

(1) Calculation basis

◎ 공제규약 시행세칙 제23조(재공제이익수수료산출)에 근거하여 산출

Income prior to incorporation into the Fund

】 Rededuction ratio ¡¿

Ratio

⇒ 10억 원

13.6 billion won

51.2% by mass

14.5% by mass

3. The amount paid by partnership.

Re-deduction profit fee (1 billion won) ¡¿ Revenue and expenditure difference by cooperative ± Total amount of earnings and expenditure difference by cooperative;

* Acceptance = Deduction. - Mutual aid - Refund

(1) Methods of computing individual payments by partnership.

(2) Target cooperatives

◎ 총 91개 조합 중 지급 대상조합 89개

The current status of the amount paid by 20 cooperatives.

Priority

name of partnership

Tearsens

Allocation Rate

Amount paid

1

20,101,130

10.6% by mass

105,720

2

1,062,332

5.8%

58.180

3

7,824,828

4.1% by mass

41,160

4

7,257,521

3.8% by mass

38,170

5

6,891,679

3.6% by mass

36,260

6

6,665,612

3.5% by mass

35,060

7

6,547,096

3.4% by mass

34,440

8

6,250,301

3.3% by mass

32,870

9

5,782,298

3.0% by mass

30,410

10

5,364,337

2.8% by mass

28,210

11

4,738,790

2.5% by mass

24,920

12

4,694,502

2.5% by mass

24,710

13

3,836,755

2.0% by mass

20,200

14

3,832,810

2.0% by mass

20,140

15

3,606,869

1.9% by mass

18,980

16

3,596,092

1.9% by mass

18,920

17

3,250,956

1.7% by mass

17,100

18

2,99,632

1.6% by mass

15,780

19

2,581,920

1.4% by mass

13,590

20

2,475,206

1.3% by mass

13,010

(unit: ,000 won)

A) The main contents of the Plaintiff’s payment of the re-deduction profit fee in 2009 are as follows.

2. The amount paid;

(1) Calculation basis

◎ 공제규약 시행세칙 제23조(재공제이익수수료산출)에 근거하여 산출

Income prior to incorporation into the Fund

】 Rededuction ratio ¡¿

Ratio

⇒ 15억 원

15.3 billion won

68.8%

14.25%

B) The main contents of the Plaintiff’s payment of the re-deduction profit fee in 2010 are as follows.

1. Grounds for payment;

Y 201 Business Plan and Dozary Budget of 201

○ Re-deduction profit fee of KRW 1.5 billion [the cost of operating (or (or (or (or)) re-deduction profit fee]

2. The amount paid;

(a) The solvency ratio (as of the end of November 2011);

Amount of solvency (A)

Standard amount of solvency (B)

Amount payable ratio (A/B)

130,426

84,325

154.67

(unit: 00,000 won, per cent)

(b) Ordinary profits;

(unit: million won)

Profit (A)

Expenses (B)

(A-B) ordinary profits (A-B)

932,764

924,689

8,075

(c) Amount paid;

Minority Benefits

】 Rededuction ratio ¡¿

Ratio

⇒ 8억 원

8.1 billion won

68.3% by mass

14.55%

C) The main contents of the Plaintiff’s payment of the re-deduction benefit fee in 2011 are as follows.

4) Meanwhile, the Plaintiff’s dividends to the member cooperatives of this case are as follows.

Business year

209

2010

2011

Jinay

Dividend of Investment

1,432

1,279

1,422

Amount of paid-in investment

Dividend for Use

-

-

-

Business Performance

(unit: million won)

[Ground of recognition] Facts without dispute, Gap evidence 2, 4 through 9, 12, Eul evidence 2, the purport of the whole pleadings

D. Determination

1) Article 19(1) of the Corporate Tax Act provides that "deductible expenses shall be the amount of losses incurred by transactions which reduce the net assets of the corporation, except as otherwise provided for in this Act and other Acts," and Article 19(2) provides that "deductible expenses under paragraph (1) shall be losses or expenses incurred in connection with the business of the corporation which are generally accepted as normal or directly related to profits, except as otherwise provided for in this Act and other Acts." Article 20(1) provides that "The amount appropriated as losses for the disposal of surplus earnings (referring to the inclusion as losses when settlement of accounts is finalized) shall not be included in deductible expenses for the purpose of calculating the amount of income of the domestic corporation for each business year."

On the other hand, if the re-deduction profit fee is not a normal price for the re-mutual aid business but a form of commission externally takes the form of commission to distribute profits reserved to a corporation, it shall be deemed that the disposal and substance of the profit subject to non-deductible loss are identical, and thus, it shall not be included in the loss pursuant to Article 20 subparagraph 1 of the Corporate Tax

2) In light of the above legal principles and the following circumstances acknowledged by comprehensively considering the purport of the entire argument in the above facts, the payment of the Plaintiff’s re-deduction profit fee appears to have taken the form of commission to mainly distribute the reserved profit to the corporation, and it is deemed that the payment of the Plaintiff’s re-deduction profit is subject to non-deductible loss as a substantial profit disposition. Accordingly, each of the dispositions in this case is legitimate, and the Plaintiff’s assertion on

(1) A surplus means the capital surplus or the earned surplus generated in the course of business activities, which is the amount obtained by deducting the capital from the net asset value of a corporation, which is accrued from capital transactions, and only the earned surplus shall be disposed of by dividends, etc. with the approval of the general meeting of stockholders after settlement of accounts, and the ordinary

Meanwhile, Article 2 subparag. 11 of the "re-deduction profit fee" provides that "re-deduction profit" means that the plaintiff can be refunded part of the profit that the plaintiff would obtain by taking over the re-deduction from a member cooperative in the settlement term for each mutual-aid project," Article 63(1) provides that "the part of the profit that the plaintiff would obtain by taking over the re-deduction from a member cooperative in the settlement term for each mutual-aid project, which is the end of each business year, may be adjusted and paid as the re-deduction profit fee for each cooperative, and Article 63(2) provides that "the re-deduction profit fee for each cooperative under paragraph (1) shall be determined by the mutual-aid provision." Article 13-2(1) and (2) of the "re-deduction profit for the relevant year" provides that the amount of non-deductible profit for the pertinent year shall not be determined by the re-deduction profit for the first time after the revision of the standards for calculation of the plaintiff's operating profit for the relevant year. However, Article 13-2(2) of the "re-deduction profit for the relevant year.

② Re-insurance refers to a liability insurance policy, the main function of which is to increase the acquisition capacity of the original insurer and the rational management of the risks of insurance pursuant to Rule 2 of the Act of the Number of the Re-insurers, with the aim of transferring all or part of the insurance he/she has assumed over to the re-insurers. In other words, in cases of concluding re-insurance contracts, the original insurer is not directly responsible for the risks of insurance, and thus, the original insurer can extend the business area by resolving the shortage of the risks of insurance, and improve the financial structure by reducing the amount to be accumulated, and the re-insurer is able to operate specialized assets at a low risk in accordance with the law and economic interests of the large number of insurers.

Under the above re-insurance policy, the re-insurance profit fee paid by the re-insurer to the insurer refers to the refund of part of the profit accrued from the operation, etc. of the re-insurance premium to the insurer at the end of the year, and the profit fee is calculated on the basis of the net profit actually earned by the re-insurer. In ordinary circumstances, the amount calculated by subtracting the amount of the profit accruing from the revenue (the premium concerned + the insurance premium carried forward before the previous year + the unpaid premium carried forward before the previous year + the unpaid premium + the relevant unpaid premium + the relevant unpaid premium + the expense of the re-insurer + the expense of the previous insurer + the loss carried forward in the past) from the amount of the profit accrued from the re-insurance contract.

In such reinsurance, the purpose of paying the re-insurance benefit fee of the re-insurance is to promote a careful acquisition of the contract by the original insurer of the re-insurance organization, and to increase the interest of the re-insurance company by providing incentives to the original insurer of the re-insurance organization. From the perspective of the original insurer, in calculating net profit that is the basis of calculation of the re-insurance benefit fee, the insurance premium paid to the contractor is also the basis, and thus, in order to increase the re-insurance benefit fee, the contract acceptance should be careful, and from the standpoint of the re-insurance company, the insurer can expect the expansion of the re-insurance business if the re-insurance benefit fee is paid by increasing the profit through the operation of the re-insurance premium. In particular, it is more true

However, in the case of the re-insurance benefit fee of this case, there is a difference between the above re-insurance benefit fee and the above re-insurance benefit fee. In other words, the re-insurance benefit fee depends on the business feasibility of the re-insurance, and the amount is calculated on the basis of the Plaintiff’s profit accrued from the business operation. In addition, the Plaintiff must serve the State for the members or the member cooperatives of this case (see Article 5(1) of the Fisheries Cooperatives Act) in the purport that the State should foster self-help organizations of farmers, fishermen, and small and medium enterprises and guarantee their autonomous activities and development (see Article 6(2) of the Fisheries Cooperatives Act). As part of the business for common interests, the Plaintiff is running a re-insurance business as part of the business for such common interests, while the Plaintiff is ordinarily working for the mutual-aid business by combining many groups of common interests, the amount of the re-insurance benefit fee is similar to the insurance, but the Plaintiff is also an organization that has the nature of the non-insurance benefit of the Plaintiff’s members of the general insurance association for the benefit of the insurance company.

In addition, in re-insurance contracts, the re-insurance company makes efforts to reasonably diversify risks and gain profits in accordance with large number rules, and each insurance company decides on whether to enter into re-insurance contracts with any re-insurance company in accordance with the re-insurance profit ratio, etc. agreed in advance. However, according to the basic contract on re-insurance between the Plaintiff and the member cooperatives of this case, the Plaintiff does not take over other mutual aid contracts than the mutual aid contract acquired by the member cooperatives of this case, as well as the closed structure in which the Plaintiff takes over all the mutual aid contracts acquired by the member cooperatives of this case through re-insurance contracts (see Article 2(1)). In addition, the other party to the payment of re-insurance profit payment is all the investors of the Plaintiff as the member cooperatives of this case.

Ultimately, in light of the purport of the Plaintiff’s establishment and the characteristics of the mutual aid project, the re-deduction profit fee is distinct from the re-insurance profit fee, and the purpose of paying the Plaintiff’s re-deduction profit fee is not to increase the profit through prudent contract acceptance or the diversification of risks through the large number of re-insurance companies through the law, which is the purpose of paying the re-insurance profit fee, and it appears that the purpose is to distribute the profit of the re-mutual aid project that occurs after the Plaintiff re-

③ In particular, the member cooperatives of this case enter into a mutual aid agreement with the Plaintiff on the whole mutual aid agreement entered into with the Plaintiff on the basis of the basic contract on the acceptance of the re-deduction. The above basic contract does not contain any content on the calculation of the re-deduction profit fee between the member cooperatives of this case and the Plaintiff, and the re-deduction profit fee is calculated by multiplying the expected profit prior to incorporation into the fund of the corresponding year by the ratio of re-deduction share and ratio. Re-deduction profit ratio is calculated by averaging the risk deduction fee, estimated project cost and liability reserve, and a certain ratio is determined by the Plaintiff’s head of the mutual aid insurance division within the limit of 20%, and the above ratio is also calculated by the Plaintiff. Furthermore, even if the member cooperatives of this case took over all the profits and risks arising from the mutual aid agreement through the re-deduction contract, it is difficult to view that the re-deduction profit has the nature of sales commission because it does not pay in proportion to the mutual aid agreement. Ultimately, it is difficult to view that the Plaintiff’s sales installment or other similar nature of sales contribution from the mutual aid association of this case.

④ The Plaintiff asserts that the dividends for use are to be refunded surplus according to the actual use of the business, and that the re-deduction fee should not be included in the same deductible expenses as the dividends for use, as it is not paid by the resolution of the general meeting, unlike the dividends for use. However, the Plaintiff’s federation, such as the Plaintiff, distributes profits through investment dividends and dividends for use (distribution for the actual use of the business), and the dividends for use are based on the association’s contributions. The dividends for use refer to the distribution of profits generated from the use of the business (Article 97(3) of the Articles of Incorporation), and the dividends for use are not recognized as deductible expenses pursuant to Article 19(1) of the Corporate Tax Act. This is because there is substance in allocating profits of the federation of cooperatives. However, the Plaintiff’s methods of paying the re-deduction profits are calculated and paid in excess of the amount calculated from the deduction fees, i.e., the amount calculated by subtracting the deduction amount from the deduction fees, and the Plaintiff’s assertion that the contributions made to the member cooperative in this case can not be seen as the above.

⑤ On the other hand, according to the requirement for deductible expenses under the Corporate Tax Act, the term “ordinary expenses generally accepted” means expenses that are deemed to have been disbursed under the same situation among other corporations operating the same kind of business as taxpayers. Whether such expenses constitute such expenses ought to be objectively determined by comprehensively taking into account the details, purpose, form, amount, effects, etc. of expenditure (see, e.g., Supreme Court Decision 2017Du51310, Oct. 26, 2017). As seen earlier, the Plaintiff re-deductions all mutual aid agreements based on the re-deduction agreement with the instant member cooperatives. Furthermore, unlike re-insurance, it is difficult to recognize that the Plaintiff, as an organization operating a non-mutual aid agreement, could not be deemed to have enjoyed all the risks that the Plaintiff, unlike the re-insurance, could not directly paid the re-mutual aid fees to the non-mutual aid association, and thus, it is difficult to recognize that the re-mutual agreement between the Plaintiff and the Plaintiff, as an organization operating the non-mutual aid agreement.

3. Conclusion

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

(1) the insurer, in respect of its liability to be borne by an insured event, again concludes an insurance contract with another insurer with respect to all or part of its liability under its insurance contract;

(ii) the phenomenon in which the number of test or observation targets increases, the unique factors of each individual unit are concentrated and the essential tendency inherent in that group appears.

(c) The net ratio of the relevant insurance premium: 5 percent normally.