Early High Court Decision 2014J 1774 (Law No. 146.30)

The acquisition of convertible bonds issued by another special juristic person from the special juristic person is judged to have made a loan to the special juristic person.

The settlement of the issue convertible bonds as a reduction loss seems to be difficult for the applicant corporation to conduct transactions between related parties, which is judged to be substantial financing by holding convertible bonds that are not related to business without economic rationality.

Article 52 of the Corporate Tax Act

2014Guhap32480 Revocation of Disposition of Imposing corporate tax

O000

The director of the Southern Incheon District Office

2015.06.04

2015.06.25

1. Of the imposition disposition of corporate tax for a business year 2009 against the Plaintiff on November 18, 2013, the part of the principal tax of 29,140,285 won and penalty of 22,942,724 won and penalty of 22,724 won among the imposition disposition of corporate tax for a business year 2010, the part of the principal tax of 31,664,258 won and penalty of 21,508,763 won among the imposition disposition of corporate tax for a business year 2011, the part of the principal tax of 30,988,79,754 won and penalty of 17,589,754 won and penalty of 28,956,620 won and penalty of 13,30,481 won shall be revoked, respectively.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On December 31, 2008, the Plaintiff had a special relationship under the Corporate Tax Act with the Plaintiff, 0000,000,000 (hereinafter referred to as "the 0000,000,000,000 were changed to a stock company).

2008. 11. 4. 에이•• 주식회사(이하 '에이••'이라 한다)로부터 2,000,000,000원에 인수한 에이•• 발행의 전환사채(이하 '이 사건 전환사채'라 한다)를 오0000000로부터 경과이자 포함 2,028,109,589원에 양수하였다.

나. 원고는 에이••의 재무구조가 악화되었다는 이유로 각 1,014,054,794원을 2009

After counting as a loss from the accounting in the business year and 2012, the above amount was all included in deductible expenses and disposed of as a reservation.

C. The Defendant: (a) acquired the instant convertible bonds according to the results of the tax investigation by the director of the Central District Tax Office; (b) on the ground that the acquisition of the instant convertible bonds constitutes a variable loan against 0000,000, a person with a special relationship, and thus, (c) issued each of the instant dispositions to increase or correct corporate tax by

D. On February 28, 2014, the Plaintiff filed an appeal with the Tax Tribunal on the grounds that it was dissatisfied with each of the instant dispositions, but the Tax Tribunal dismissed the Plaintiff’s appeal on June 30, 2014.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, 3-1 to 4, Eul evidence 1-4, Eul evidence 1-1 to 4, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The parties' assertion

1) The plaintiff's assertion

Since it is impossible to deny the rejection of wrongful calculation by reconcing transactions that do not fall under the individual type of wrongful calculation, the Plaintiff’s act of taking over the instant convertible bonds from O&C cannot be deemed to be a case where the Plaintiff reconcilizings them as a monetary loan contract, and thus the act is not “a case where the Plaintiff lends or provides money or other assets or services free of charge or at an interest rate, rate, or rent which is lower than the market price.” Therefore, each disposition of this case is unlawful.

2) The defendant's assertion

The purchase transaction lacking economic rationality shall be deemed as a de facto loan of funds, and the recognized interest rate shall be included in the gross income, and Supreme Court Decision 98Du12055 Decided November 10, 200 held that it is legitimate to impose corporate tax by including the recognized interest rate in the gross income in the case of purchase of non-profit assets from a specially related person. However, since the bonds of this case are bonds with no investment value and the nature of non-profit assets are identical to that of non-profit assets, each disposition of this case imposing corporate tax by deeming the Plaintiff’s act of acquiring convertible bonds of this case as a loan of funds and adding the recognized interest rate to the gross income

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Determination as to whether the form of transaction should be reconvened at the time of wrongful calculation

The term "statement of wrongful calculation" under Article 52 of the Corporate Tax Act means the calculation of the act of reducing or excluding the burden of taxes incurred when a taxpayer takes a reasonable transaction form, such as a bypassing act, multi-stage act and other abnormal transaction form, rather than in accordance with the normal transaction form of an economic person, and the purport of the provision on the register of wrongful calculation is with special relationship with a corporation.

If it is recognized that a transaction with a person has neglected the economic rationality by abusing the various forms of transaction under the subparagraphs of Article 88(1) of the Enforcement Decree of the Corporate Tax Act, and it appears that the person who has the authority to impose taxes seems to have been objectively reasonable in terms of tax law, thereby ensuring the fairness of taxation and preventing tax avoidance. The determination of whether the economic rationality exists shall be made on the basis of whether the transaction is abnormal in view of sound social norms or commercial practices (see, e.g., Supreme Court Decision 2001Du7268, Sept. 4, 2002).

As such, in a case where a tax avoidance or mitigation is made by means of disregarding economic rationality without tanging the substance over form principle, it is deemed that the taxation authority denies it and reconforms transactions in cases where economic rationality exists by reflecting the substance of the transaction, and thus, it is deemed that there is an objective and reasonable income. Therefore, even if it is a transaction with no economic rationality, it cannot be reconvened as a trade with a difference in substance even if it is a transaction without any economic rationality.

2) Determination as to whether the acquisition of the instant convertible bonds constitutes a loan

Article 52 of the Corporate Tax Act and Article 88(1)6 of the Enforcement Decree of the same Act provide that the difference between the amount equivalent to the interest calculated at the monthly interest rate for the current account shall be included in the gross income in cases where the money was loaned at a rate lower than that for the current account, and the purport of the above provision is that the loss equivalent to the amount equivalent to the interest to be received when a corporation ordinarily provides a loan is forced to be included in the gross income in the calculation of the tax base regardless of whether the corporation has appropriated the income in accordance with the legal doctrine of wrongful calculation denial. However, in the calculation of the amount of interest recognized as above, it should be the premise that the relevant corporation holds the bonds corresponding to the loan or loan in the calculation of the gross income. In addition to the fact that the act of waiver does not exist at the beginning or where the bonds are renounced, it shall be deemed that the recognized person cannot be included in the gross income on the premise that the bonds continue to exist (Supreme Court Decision 2007Du16561 Decided 29, 2009).

As to the instant case, the Plaintiff was on December 31, 2008 2,028,109,589 won on December 31, 2008

지급하고 이 사건 전환사채를 양수한 사실, 원고가 에이••의 재무구조가 악화되었다는 이유로 각 1,014,054,794원을 2009 사업연도 및 2012 사업연도에 회계상 평가차손으로 계상한 후 세무상으로는 위 금액을 모두 손금불산입하고 유보로 처분한 사실은 앞서 본 바와 같은바, 원고가 이 사건 전환사채 매매대금을 오0000000에게 지급하고 이 사건 전환사채를 보유하게 됨으로써 이 사건 전환사채 양수행위는 완료되었다고 할 것이고, 달리 원고에게 이 사건 전환사채 매매계약을 해제하거나 취소할 수 있는 법적 권능이 있다는 자료가 없는 이상 원고가 오0000000에 대하여 이 사건 전환사채 매매대금 상당의 대여금 또는 대여금에 준하는 채권을 가지고 있다고 할 수 없다고 할 것이므로, 그 채권의 존속을 전제로 인정이자를 익금에 산입할 수는 없다.

3) Determination as to whether the instant convertible bonds are non-profitable assets

As the Defendant’s acquisition of the instant convertible bonds is identical to non-profitable assets because the instant convertible bonds are bonds with no value of investment, and thus, as seen in Supreme Court Decision 98Du12055, etc., Supreme Court Decision 98Du12055, etc., deeming that the act of acquiring the instant convertible bonds as a real loan of funds should also be deemed as a loan of funds, and thus, it should be viewed as

A non-profitable asset refers to an asset which does not contribute to the profit-sharing of a corporation or is not related to the corporation's profit-making, and which is hard to obtain profits from the management of the asset in the future. If the purchase price can be recovered by resale in the future from a person with a special relationship, it shall be offered as a security during the holding period and the amount equivalent to the purchase price may be lent to a person with a special relationship free of charge for the transaction, and the recognition interest may be included in the calculation of the profits, but if the purchase price cannot be recovered, the transaction cannot be reconstructed with the above contents even if it is based on the wrongful calculation division.

However, although the convertible bonds of this case are assets with considerably low possibility of recovery as seen below, they are attached to the agreement, so their inherent nature cannot be deemed as non-profitable assets.

더구나 앞서 든 각 증거, 을 제3호증의 1 내지 4, 제8호증의 1 내지 4의 각 기재 및 변론 전체의 취지에 의하면, 이 사건 전환사채를 발행한 에이••은 2007 사업연도 결손금이 39,032,328원, 2008 사업연도 결손금이 1,027,142,593원, 2009 사업연도 결손금이 260,834,025원, 2010 사업연도 결손금이 869,802,193원으로 계속 적자를 내고 있었고, 2007 사업연도부터 부분적으로 자본잠식이 시작되고 있었던 사실이 인정되고, 앞서 본 바와 같이 원고 스스로 이 사건 전환사채에 대하여 매입가액의 절반 정도를 평가차손으로 계상하였으므로 원고가 이 사건 전환사채를 매입할 당시 그 시가는 매입가액보다 현저히 낮았다고 할 수 있고, 그 이후에는 시가가 더 떨어졌다고 할 수 있으므로 원고가 향후 이 사건 전환사채를 전매하거나 그 만기까지 보유하더라도 그 매입가액 상당을 회수할 가능성은 없다고 보아야 한다. 따라서 원고의 이 사건 전환사채의매입에 대하여는 무수익자산의 매입에 관한 부당행위계산부인의 방법을 적용할 수 없다.

Supreme Court Decision 98Du12055 Decided January 1, 2005 cited by the Defendant, etc., was related to the case in which a golf club member who is unrelated to the purpose of the business of the pertinent corporation was purchased from a specially related person and did not generate profits during the pertinent period of possession. However, since the market price is stable and thus the amount of cash equivalent to the purchase price is likely to be recovered when transferred in the future, and the amount of the purchase price can be deemed as being offered as security and lent free of charge, which differs from

In the end, the defendant's argument disputing this part is without merit.

4) Sub-determination

Therefore, Article 52 of the Corporate Tax Act is Article 52 of the Act, since the acquisition of the convertible bonds of this case was purchased at a higher par value than that of the market price at the time of acquisition because

'The assets stipulated in Article 88 (1) 1 of the Enforcement Decree of the same Act at a price higher than the market price.

In the case of entry, the issuance of the instant convertible bonds shall be subject to wrongful calculation, aside from the fact that there may be a wrongful calculation.

In light of the substance of the acquisition of convertible bonds as a loan, it cannot be included in the calculation of earnings by the wrongful calculation panel under Article 52 of the Corporate Tax Act and Article 88 (1) 6 of the Enforcement Decree of the same Act. Thus, each of the dispositions in this case must be revoked as unlawful.

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is so decided as per Disposition.