[1] The purport of Article 20 of the former Corporate Tax Act concerning the denial of wrongful calculation, and the meaning of "the case where it is deemed that the corporation distributed profits to other investors, etc." under Article 46 (2) 9 of the Enforcement Decree of the same Act

[2] The case holding that a merged corporation's act of taking over sales claims of a merged corporation with no real value in the course of a merger with a person with a special relationship and then inclusion of bad debts in deductible expenses is not subject to rejection of unfair

[1] "Calculation of wrongful acts" means the calculation of an act to reduce or exclude the tax burden incurred when a taxpayer takes the ordinary rational transaction form without using the normal economic person's rational transaction form, such as the bypassing act, the multi-stage act and other abnormal transaction form. The purport of Article 20 of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998), which provides for the exclusion of wrongful act and calculation under Article 46 (2) of the former Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998), is that a taxpayer's transaction with a juristic person and a related party has neglected economic rationality by abusing all the forms of transactions under the subparagraphs of Article 46 (2) of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998), and thus, the person who has the authority to impose taxes is deemed to have committed an unfair act in terms of tax law.

[2] The case holding that the merger is not subject to the rejection of wrongful calculation in light of the fact that the merged corporation's act of taking over the sales bonds of the merged corporation with no real value as the account book while merged with a person with a special relationship and then inclusion in deductible expenses as bad debts is difficult to view it as disadvantageous

[1] Article 20 (see current Article 52) of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998); Article 46 (2) 9 (see current Article 88 (1) 9) of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998) / [2] Article 20 (see current Article 52) of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998) Article 46 (2) 9 (see current Article 88 (1) 9) of the former Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998)

[1] Supreme Court Decisions 87Nu357 delivered on October 13, 198 (Gong1987, 1728) 87Nu925 delivered on February 9, 198 (Gong198, 534) 88Nu8630 delivered on April 11, 198 (Gong1989, 772) 89Nu8095 delivered on May 11, 1990 (Gong190, 1292 delivered on July 24, 190), 89Nu472 delivered on July 24, 1997 (Gong190, 197Du2979 delivered on May 24, 197) 200Du9799 delivered on May 10, 297 (Gong190, 1810)

Maritime Investment Development Co., Ltd. (Attorney Kim Yong-sik, Counsel for the plaintiff-appellant)

Gu-ro Tax Office (Attorney Choi Jong-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2002Nu19383 delivered on November 25, 2003

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

Wrongful calculation means the calculation of a taxpayer's act of reducing or excluding the tax burden that arises when a taxpayer takes a normal and rational transaction form without using the normal economic form. The purport of Article 20 of the former Corporate Tax Act (wholly amended by Act No. 5581, Dec. 28, 1998; hereinafter referred to as the "Act") provides for the exclusion of wrongful calculation in Article 20 of the former Corporate Tax Act (wholly amended by Presidential Decree No. 15970, Dec. 31, 1998; hereinafter referred to as the "Enforcement Decree") is that the transaction with a juristic person and a related party is deemed to have neglected the economic rationality by abusing all the forms of transactions as stipulated in each subparagraph of Article 46 (2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970, Dec. 31, 1998; hereinafter referred to as the "Act") provides for the exclusion of a tax evasion act by imposing income which the taxpayer seems to have existed objectively in terms of tax law. 20.

According to the records, the plaintiff's act of calculating 20 won or more was 198.7. 7. 1. 7. 1. 7. 7. 1. 7. 7. - 20 7 - 3 60 - 4 - 20 7 - 9 7 - 4 - 7 - 7 5 - 7 - 4 - 7 - 7 - 4 - 7 - 7 - 9 6 - 7 5 - 7 - 4 - 7 - 7 - 7 - 4 - 7 - 9 5 - 7 - 7 - 4 - 7 - 9 6 - 4 5 - 20 - 9 - 20 7 - 9 - 4 5 - 9 - 206 - 9 204 - 7 - 104 ,00

Although the reasoning of the judgment of the court below is somewhat insufficient, the decision of the court below is just in holding that the disposition of this case is unlawful on the ground that the plaintiff's act of acquiring the sales claim of this case by the merger of this case as the account book and adding it to bad debts after the merger of this case is not subject to the rejection of unfair calculation under Article 20 of the Act, and it is not erroneous in the misapprehension of legal principles as to the rejection of unfair calculation under the Corporate Tax Act, mistake of facts, or incomplete hearing

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 on the bench.

Justices Lee Han-gu (Presiding Justice)