(a) Where an administrative litigation can be instituted to seek the revocation of subsequent taxation by means of a transfer of trial procedures for prior taxation among several subsequent taxation dispositions, which are formally selective and individual;

(b) The case holding that there exists a justifiable reason to file a lawsuit seeking revocation with respect to subsequent taxation as a result of a transfer of the procedure for prior taxation among two additional taxation dispositions on the ground of a failure to perform the duty to withhold the interest accrued over two years from the same contractual relationship;

C. Whether the interest income amount under Article 17 (1) of the Income Tax Act, which is paid by the party liable to withhold only on the ground that the interest paid by the corporation constitutes financial expenses (negative)

D. Whether the amount, etc. equivalent to the interest paid as a consideration for deferred payment when selling the goods under the conditions of deferred payment falls under the profits of a non-business loan under Article 17(1)10 of the former Income Tax Act (amended by Act No. 281 of Dec. 31, 190) (negative)

A. In a case where several subsequent taxation dispositions have been conducted in the course of a series of development and are related to each other, if the content of the prior taxation dispositions is in fact related to each other, the taxation authority is merely given the opportunity to correct the stock by itself, and if there are justifiable grounds, such as where it appears that the taxpayer would be harsh to make the taxpayer undergo the prior taxation procedures again, the taxpayer may file an administrative litigation seeking the revocation of the subsequent taxation dispositions even without undergoing the prior taxation procedures.

B. The case holding that where two additional tax imposition dispositions are identical to the items of taxation, taxpayer, and Plaintiff’s assertion on the grounds that two years of non-performance of the duty to withhold the interest arising from the same contractual relationship, there are justifiable grounds for filing a revocation lawsuit without going through the previous trial procedure for the subsequent taxation, if the previous taxation procedures were followed only for the previous taxation.

C. The interest that a corporation purchases and acquires stocks of another corporation on a yearly basis and shall pay at a certain rate not later than the date of annual payment, in addition to the fixed sales amount under a contract, shall be financial expenses, which constitute a business expense in the pertinent business year. However, in order for the corporation to pay the withholding tax on corporate tax, the interest income shall constitute the interest income amount listed in Article 17(1) of the Income Tax Act, and the said interest shall not be deemed as falling under the interest income amount under Article 17(1) of the Income Tax Act solely on the ground that the said interest falls under financial expenses from the corporation’s side that pays it.

D. The term “profit from a non-business loan” under Article 17(1)10 of the former Income Tax Act (amended by Act No. 281 of Dec. 31, 1990) refers to the interest, commission, etc. that a person who does not engage in the business of lending money temporarily or contingently lends money. In selling the goods under a condition that annual payment is made, the amount paid in return for annual payment, which is a cash transaction or a transaction by ordinary payment method, or the amount equivalent to the interest in addition to the amount corresponding to the initial contract, which is determined by the initial contract, and the sales price is paid in addition to the amount corresponding to the interest, and the amount including the interest is determined by the annual payment method, shall not be deemed to constitute

A.B. Article 18(b) of the Administrative Litigation Act. Article 39(1) of the Corporate Tax Act, Article 17(1) and Article 142(1)1 of the Income Tax Act, Article 9(3) of the Corporate Tax Act, Article 12(2)4 of the Enforcement Decree of the Corporate Tax Act, Article 17(1)10 of the former Income Tax Act (amended by Act No. 281 of Dec. 31, 190)

A. Supreme Court Decision 85Nu393 delivered on July 7, 1987 (Gong1987,133) 88Nu7996 delivered on November 10, 1989 (Gong1990,38) 90Nu2383 delivered on October 12, 1990 (Gong1990,2316). Supreme Court Decision 85Nu937 delivered on April 28, 1987 (Gong1987,903) 86Nu292 delivered on July 7, 1987 (Gong1987,1336) d. Supreme Court Decision 90Nu9230 delivered on March 27, 191 (Gong191,1306) 195Nu23961969 delivered on June 19, 199 (Gong196).

Nayang Fran Stock Company

The Director of the National Tax Service

Seoul High Court Decision 90Gu871 delivered on November 22, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

As to the ground of appeal by Defendant Litigation Performers

1. In an administrative litigation seeking the revocation of a tax disposition on the grounds of illegality of the taxation disposition, where several subsequent taxation dispositions are different in form, but have been conducted in a series of developmental processes and are related to each other, it is reasonable to view that the taxpayer may institute an administrative litigation seeking the revocation of the subsequent taxation disposition even without going through the procedure of the previous trial if there are justifiable grounds, such as where the prior taxation disposition was conducted in a series of developmental processes and the prior taxation procedures were merely given an opportunity for the tax authorities to voluntarily rectify the issues, and where it appears that the taxpayer would be harsh to undergo the procedure of the previous trial, and thus making the taxpayer undergo the procedure of the previous trial, etc. (see, e.g., Supreme Court Decisions 85Nu393, Jul. 7, 1987; 8Nu799

According to the facts established by the court below, the plaintiff corporation purchased shares issued by the non-party General Chemical Industry Co., Ltd. and paid only the remainder on three occasions on a yearly basis, and agreed to pay interest equivalent to the general loan interest rate in commercial banks. On January 1, 1988 and January 31, 198, etc., three times the agreed interest was paid. The defendant deemed that the above interest was the benefit of non-business loan under Article 17 (1) 10 of the Income Tax Act (amended by Act No. 4281 of Dec. 31, 1990; hereinafter the same), and the plaintiff corporation as the payer did not perform the duty of withholding corporate tax under Article 39 (1) of the Corporate Tax Act. Thus, the plaintiff did not perform the duty of withholding taxes under Article 39 (1) of the same Act for the same reason as that of the above non-performance of the duty of withholding taxes, and the plaintiff did not perform the duty of withholding taxes under Article 9 (1) of the same Act.

In the same purport, the decision of the court below that rejected the Defendant’s defense is just, and there is no error in the misapprehension of legal principles, such as the theory of lawsuit.

2. The interest that a corporation purchases and acquires stocks of another corporation on a yearly basis and should pay in return for the deferred payment terms by a certain rate not later than the date of annual payment, among the indirect expenses incurred in acquiring the relevant stocks, shall be the financial expenses (see Supreme Court Decisions 85Nu937, Apr. 28, 1987; 86Nu292, Jul. 7, 1987; 86Nu292, Apr. 28, 1987). However, in order for the corporation to pay the corporate tax equivalent to the amount calculated by applying the tax rate prescribed under Article 39(1) of the Corporate Tax Act and Article 142(1)1 of the Income Tax Act to pay the interest income of the corporation, the above interest shall constitute the interest income amount listed in Article 17(1) of the Income Tax Act, and the said corporation’s payment constitutes the financial expenses only on the ground that it constitutes the financial expenses of the corporation.

However, as seen earlier, the defendant imposed the tax in this case on the premise that the interest paid by the plaintiff corporation to the above non-party company constitutes a non-party company's interest under Article 17 (1) 10 of the Income Tax Act, and therefore, the profits from non-business loans under the above Article refers to the interest or commission paid by the non-party who does not engage in the business of lending money temporarily contingent, and in selling the goods under the conditions of annual payment, the amount paid in addition to the transaction by cash transaction or ordinary payment method as consideration for annual payment, or the amount of interest paid in addition to the amount of interest paid in accordance with the terms of the initial contract and the amount of interest paid in addition to the sales price and the amount of the sales price, including interest, is determined by the method of annual payment, shall not be deemed to constitute a profit from the non-business loan (see Supreme Court Decision 90Nu9230 delivered on March 27, 191), and it shall not be deemed to constitute a profit from the non-business loan, and it does not constitute any other interest income under Article 17 (17 (1).

In the same purport, the judgment of the court below that the taxation disposition of this case was unlawful is just and there is no error in the misapprehension of legal principles, such as theory of lawsuit.

For these reasons, 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 Kim Sang-won (Presiding Justice)