Cho Jae-2015-west-4529 ( November 23, 2015)

Since Non-Performing Loan Resolution Fund constitutes a non-profit domestic corporation under the Corporate Tax Act, the Plaintiff’s Note, which is written on different premise, is not accepted.

The Non-Performing Loan Resolution Fund shall be a foundation with basic property for the public interest under Article 13 (1) 2 of the Framework Act on National Taxes, which falls under a nonprofit domestic corporation under the Corporate Tax Act.

Article 13 of the Framework Act on National Taxes, Article 18-3 of the Corporate Tax Act

2016Guhap54725 Disposition of revocation of refusal to correct corporate tax

○ Stock Company

○ Head of tax office

June 23, 2017

December 15, 2017

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The defendant's refusal to correct the x members of the corporate taxx in the 201x business year against the plaintiff shall be revoked.

1. Details of the disposition;

A. The Plaintiff is a financial holding company that was established by dividing the financial investment business portion of the National Federation of X. X. X. X. AA, and has AA bank corporation (hereinafter “A bank”) as its subsidiary.

B. On December 15, 2007, the Korean Asset Management Corporation (Korea Asset Management Corporation, Law No. 6073, Dec. 31, 1999; hereinafter “Korea Asset Management Corporation”) contributed funds to the Non-Performing Loan Resolution Fund (hereinafter “Korea Asset Management Corporation”) established in Korea Asset Management Corporation (hereinafter “Korea Asset Management Corporation”).

C. AA Bank received KRW 000 from the instant funds as the share distribution, around 2012 (hereinafter “instant share distribution”), and the Plaintiff reported and paid corporate tax including the income for 2012 consolidated business year.

D. The Plaintiff claimed that the period during which the amount of dividend falls is prior to the business year 2007 or that it is subject to exclusion from taxable income under Article 18-3 of the Corporate Tax Act, and that the amount of tax base for the 2012 consolidated business year was excluded from the income and claimed for the refund of 00 won of corporate tax. However, the Defendant rejected X. 205 (hereinafter “instant disposition”).

E. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on X. X. 2015, and the Tax Tribunal dismissed X. 2015.

(Reasons for recognition) Facts without dispute, entry of Gap 1 through 3, and five evidence, the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The primary argument

Since the Fund does not constitute a juristic person or an organization deemed a juristic person, the shares of this case shall be attributed to the business year 2007, which actually occurred in accordance with the legal principles as to joint business or trust property. Therefore, the instant disposition based on the premise that the shares of this case were reverted to the business year 2012 is

2) Preliminary assertion

If the Fund constitutes an organization deemed as a corporation under tax law, the provision on exclusion of income dividends under Article 18-3 of the Corporate Tax Act shall apply to the instant amount distributed, and thus, the instant disposition that did not apply is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Facts of recognition

1) The Fund was established on Nov. 24, 1997 based on the former Act on the Establishment of the Non-Performing Assets Management Corporation of the Republic of Korea (amended by Act No. 5371 of Aug. 22, 1997; Act No. 5505 of Jan. 13, 1998; Act No. 6073 of Dec. 31, 1999; Act No. 10682 of May 19, 201; Act No. 10682 of the Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Companies and the Establishment of the Korea Asset Management Corporation; hereinafter referred to as the "former Asset Management Corporation Act"); the Fund was amended as the Act on the Establishment of the Non-Performing Assets Management Corporation of the Republic of Korea; the Fund was amended as the Act on the Establishment of the Non-Performing Assets Management Corporation of the Financial Institutions; the Fund was established on Nov. 24, 1997.

2) Article 2 of the Addenda to the former Asset Management Corporation Act (No. 5371, Aug. 22, 1997) provides that the remaining property of the Fund shall be returned to a contributed financial institution after the end of the operating period of the Fund. However, the proviso to Article 2(5) of the Addenda to the former Asset Management Corporation Act (amended by Act No. 8698, Dec. 21, 2007; hereinafter referred to as the “Annex to the former Asset Management Corporation Act”) was provided for the grounds for returning the residual property of the Fund even before the end of the operating period.

3) Pursuant to the foregoing revised supplementary provision, the Fund paid shares to a financial institution, including AA bank, in 2012, before the end of the operating period, and at the time, the Asset Management Committee of the Corporation (hereinafter “Management Committee”) decided not to pay any separate interest when the Fund is repaid.

4) The Fund reported and paid corporate tax on the income in each taxable period except from 2003 to 2007, a non-taxation period.

(Reasons for recognition) Facts without dispute, entries in Gap evidence 4, 5 and 9 (including each number), the purport of the whole pleadings

D. Judgment on the main argument

1) Legal nature of the instant fund

Article 13(1) of the former Framework Act on National Taxes (amended by Act No. 8830 of Dec. 31, 2007) provides that, among non-corporate organizations, an unregistered association, foundation, or other organization established with the permission or authorization of the competent authority or which is registered with the competent authority pursuant to the law and has not been registered as an unregistered foundation (Article 1(1)) or a foundation which has basic property contributed for the public interest (Article 1(2)) shall be deemed a corporation under tax law (amended by Act No. 8830 of Dec. 31, 2007, which does not distribute profits to its members). Such an organization constitutes a non-profit domestic corporation under the Corporate Tax Act (Article 1 subparag. 2(c) of the Corporate Tax Act).

In full view of the following circumstances, the Fund is a foundation with basic property contributed for public interest under Article 13(1)2 of the former Framework Act on National Taxes, which is not registered, and is a non-profit domestic corporation under the Corporate Tax Act.

A) The fundamental property contributed for the public interest exists.

이 사건 기금은 금융기관이 보유하고 있는 부실채권 등의 효율적인 정리를 위해 설치되었고(구 자산관리공사법 제38조), 이 사건 기금의 설치를 위한 재원은 금융기관의 출연금뿐만 아니라 부실채권정리기금채권으로 조성한 자금과 한국은행으로부터 차입금 등의 재원으로 조성되며(위 법 제39조 제1항), 금융기관의 부실채권 및 부실징후기업의 자구계획대상자산의 인수 등에 사용된다(위 법 제41조 제2항 제1호). 또한 부실채권기금과 같이 국가재정법의 적용을 받는 기금은 기금의 설치목적과 공익에 맞게 기금을 관리・운용하여야 하고(국가재정법 제62조), 공익을 위하여 특히 인수할 필요가 있다고 인정되는 부실자산이나 이해관계인이 많아 정리의 효과가 큰 부실자산을 우선적으로 인수할 수 있다(구 자산공사법 제41조 제2항, 같은 법 시행령 제6조 제1항 제1, 2호). 한편 기금의 부담으로 발행한 부실채권정리기금채권의 경우 정부가 원리금 상환을 보증하고(구 자산공사법 제40조 제4항), 한국은행으로부터 차입한 자금에 대해서는 기금이 한국은행법의 규정에 따른 정부대행기관으로 지정되는 등(위 법 제39조 제3항), 자산공사가 아니라 기금이 그 재원에 대해 책임을 부담하고, 부실채권기금과 자산공사의 회계는 구분되며(위 법 제43조 제2항), 자산공사는 기금에 관한 결산서, 대차대조표, 손익계산서를 작성하고, 기금운용계획안을 회계연도 개시 90일 전까지 국회에 제출하여 기금운용에 관해 국회의 통제를 받도록 되어 있다(위 법 제66 내지 68조).

In full view of the purpose of the establishment of the Fund, methods of raising funds, restrictions on the use of the Fund, preferential acquisition of non-performing assets in accordance with the need for public interest, methods of management and operation of the Fund, etc., the purpose of the Fund seems to be more public interest purpose than simply improving the liquidity and soundness of financial institutions, not merely improving the liquidity and soundness of financial institutions, but to prevent damage that may occur to the majority of the public, including users of financial institutions, if it fails to secure such liquidity and soundness. Accordingly, the Fund constitutes an underlying property contributed for public interest purpose.

(B) has the substance of an unincorporated foundation.

The term “unregistered property” means a group of property incorporated for a certain nonprofit purpose, which is a group of property independently of contributors and other specific individuals, but is not granted legal personality because it has not been registered. As seen earlier, the Fund is a group of property invested or created by a specified method, and its accounting has been carried out separately from the Asset Corporation, and it is operated as an organization separate from the Asset Corporation, such as the Non-Performing Loan Resolution Fund Bonds issued by the Fund and the Bank of Korea bears obligations independently from the Asset Corporation. In addition, the Fund was established pursuant to the former Asset Corporation Act, and Articles 38 through 43 of the same Act provide for the purpose of establishing the Fund, methods of raising the Fund, methods of managing and operating the Fund, methods of managing and operating the Fund, accounting and executive organ, etc. Therefore, it cannot be deemed necessary to establish a separate articles of incorporation, which provides for the purpose, organization, performance of duties, etc. of the Fund as a foundation.

(C) satisfies the condition that profits will not be distributed to its members.

As long as the Fund has the substance of the Foundation, the Foundation cannot be deemed as a member of the Foundation because it constitutes an asset contributed and cannot be deemed as a member of the Foundation. As such, there is no problem of distributing profits to its members due to its nature. Article 2(5) of the Addenda to the former Asset Management Corporation Act provides that the Fund shall return its residual assets to the contributor after the expiration of the operating period of the Fund, but this cannot be deemed as a provision on the distribution of profits, as it provides for the reversion of residual assets after its dissolution.

D) There are a number of regulations premised on the premise that the instant fund under the former Asset Corporation Act and the Corporate Tax Act is a corporation under tax law.

(1) The funds of this case are deemed to have been designated as government agencies under the Bank of Korea Act for the funds borrowed from the Bank of Korea (Article 39(3) of the former Asset Management Corporation Act). The term "government agencies" in this context means corporations that carry out public projects or functions for the Government in production, purchase, sale or distribution (Article 85 of the former Bank of Korea Act (amended by Act No. 5491 of Dec. 31, 1997).

(2) Article 29(1) of the Corporate Tax Act and Article 56(1)3 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 26981, Feb. 12, 2016) provide the premise that a fund established under the Act and subordinate statutes as of the instant fund is one of the organizations deemed corporations under the Corporate Tax Act and allow the fund to be included in deductible expenses for the reserve fund for essential business

(3) Article 2(1)8(d) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 17826, Dec. 30, 2002; Presidential Decree No. 20619, Feb. 22, 2008) excludes “business related to the acquisition and disposal of insolvent bonds” under the premise that the Fund is a non-profit domestic corporation within the scope of profit-making business.

(4) Article 34(1) of the Corporate Tax Act and Article 61(2)30 of the former Enforcement Decree of the Corporate Tax Act provide that "where the Korea Asset Management Corporation (including Non-Performing Loan Resolution Fund) under the Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation appropriates allowance for bad debts as deductible expenses, it shall be included in deductible expenses within a certain percentage." As seen earlier, since the accounts of the Asset Management Corporation and Non-Performing Loan Fund are separated, the said provisions are meaningful in the accounting of the Non-Performing Loan Fund, and the inclusion in deductible expenses is premised on the calculation

2) The nature of the shares of this case

In light of the following circumstances revealed by the provisions and interpretation of the former Asset Management Corporation Act, it is reasonable to view that Article 2 (5) of the Addenda to the former Asset Management Corporation Act provides that the residual property of the Fund shall be returned to the relevant institution after the expiration of the period of operation of the Fund in accordance with the criteria for disposal taking into account the contribution ratio, etc. is rather than the return of profits to investors.

A) Article 39(1) of the former Asset Management Corporation Act provides for an “contribution of a financial institution” as one of the financial resources created by the instant fund. However, Article 9 of the same Act provides that the capital of the Asset Management Corporation is comprised of a financial institution and an investment by the Government, and the meaning of the contribution refers to an increase in property losses by paying money or bearing obligations according to its own intent.” In light of the fact that the said financial institution’s contribution is not construed as an investment in which profit is anticipated.

B) Article 39(1) of the former Asset Management Corporation Act provides for “1. Financial resources from the creation of the Fund of this case, funds transferred from the Corporation, 2.3. Funds created by the issuance of Non-Performing Loan Resolution Fund Bonds, 4. Loans from the Bank of Korea, 5. Loans from persons other than the Bank of Korea, 6. Operational earnings and other revenues.” This is distinguishable from contributions, funds transferred, bonds issued, funds borrowed, loans, earnings, and other revenues. It cannot be deemed that the members of the Fund, which are the premise for return of revenues from the investment, are presented.

C) As long as financial institutions, including the Plaintiff, do not have invested in the instant fund, it is deemed that Article 2(5) of the former Asset Management Corporation Act provides that the relevant institution shall return residual property after the expiration of the period of operation of the Fund in accordance with the guidelines for disposal, taking into account the contribution ratio, etc., is a policy provision that determines the method of disposal of residual property after the expiration of the period of operation. As a matter of course, it cannot be deemed that financial institutions, including the Plaintiff, including the Plaintiff, have the right to

D) Furthermore, the Fund is established for the efficient liquidation of non-performing loans, etc. owned by financial institutions, and is used for the liquidation business of non-performing loans, etc., so it does not directly aim at generating profits (Articles 38 and 41 of the former Asset Management Corporation Act).

3) The time when the amount distributed was reverted to gross income

(A) Article 40(1) of the Corporate Tax Act provides that “The fiscal year to which profits and losses of a domestic corporation accrue shall be the fiscal year which includes the date on which the profits and losses are determined.” It shall be deemed that the income has been realized when the rights that constitute the cause of the taxation have not been actually accrued, and shall adopt the so-called principle of confirmation of rights that calculates taxable income. Such principle of confirmation of rights shall be deemed as the time of accrual of rights other than the time when the income is realized, and shall be deemed as the time of acquisition of residual assets and the principle that permits the imposition of residual assets in advance on the premise that they will be realized in the future. However, the concept of “determined” in the above principle of determination of rights shall not be defined as a general principle that does not include any exception to the time when the assets are disposed of after the end of the fiscal year. It shall be determined as follows: (i) whether the amount of residual assets and the amount of profits generated from the management of the Fund should be returned to the extent that it can be realized by the expiration date of 197 years.

C) Therefore, the time when the Plaintiff can be deemed to have secured the taxpayer’s money by enabling management and control of the shares of this case. Therefore, it is reasonable to deem that the business year to which the shares of this case accrue is 2012.

4) Sub-determination

The Fund is a foundation with basic property contributed for public interest under Article 13(1)2 of the former Framework Act on National Taxes and not registered as a non-profit domestic corporation under the Corporate Tax Act. The amount distributed in this case is the distribution of residual assets to contributors, not the return of profits to investors, and the business year to which such portion belongs is deemed to be 2012. Thus, the first Plaintiff’s assertion on a different premise is unacceptable.

E. Determination as to the conjunctive assertion

1) 독점규제 및 공정거래에 관한 법률은 종래 지주회사의 설립을 금지하여 왔으나, 기업구조조정을 위하여 지주회사의 도입 필요성이 제기되자, 1999. 2. 5. 법률 제5813호로 개정되면서 주식의 소유를 통하여 국내회사의 사업내용을 지배하는 것을 주된 사업으로 하는 지주회사의 설립을 제한적으로 허용하였다(제8조, 제8조의2, 제8조의3 참조). 이와 함께 자회사로부터의 배당을 주된 수입으로 하는 지주회사의 특성을 감안하여 이중과세를 조정��해소할 수 있도록, 1999. 12. 28. 법률 제6047호로 개정된 법인세법은 지주회사가 자회사로부터 받은 배당소득금액의 일정률에 상당하는 금액을 법인세 과세대상에서 제외하도록 하는 익금불산입규정(제18조의2)을 신설하였다.

After all, when the Financial Holding Companies Act was enacted on October 23, 200 by Act No. 6274 in order to establish a financial holding company that controls a company that runs a financial business by enhancing the competitiveness of financial institutions through the largeization and concurrent operation of financial institutions, Article 18-2 of the Corporate Tax Act amended by Act No. 6293 on December 29, 200 included a financial holding company under the Financial Holding Companies Act in the holding company, and Article 18-2 of the Corporate Tax Act newly established a provision for the exclusion of double taxation (Article 18-3) in relation to income dividends paid to a general domestic corporation that is not a holding company in order to promote the equity of taxation with the holding company.

Accordingly, Article 18-3 (1) of the Corporate Tax Act provides that "if a domestic corporation (excluding a non-profit domestic corporation as defined in subparagraph 2 of Article 1; hereafter the same shall apply in this Article) receives a certain amount of dividend from another domestic corporation invested by it, such excess amount shall not be included in the gross income for the purpose of calculating the amount of income for each business year."

2) In full view of the following circumstances that can be seen in light of the overall purport of the argument as seen earlier, Article 18-3 of the Corporate Tax Act is not applicable when calculating the Plaintiff’s income, and the Plaintiff’s preliminary assertion is also rejected.

A) Article 18-3 of the Corporate Tax Act may apply to cases where a domestic corporation that is not a non-profit domestic corporation has invested in a domestic corporation that is not a non-profit domestic corporation. As seen earlier, the Plaintiff contributed money to the instant fund, which is a non-profit domestic corporation. The Plaintiff refers to the contribution of money, property, etc. to a corporation, etc. as capital to run a business. The contribution includes an act of increasing property losses by either paying money or bearing an obligation on the basis of its intent, and thus, there is no room to apply the above provision premised on the act of contribution, insofar as the Plaintiff made a contribution having the nature of a contribution to the instant fund.

B) In addition, Article 18-3 of the Corporate Tax Act may apply to cases where a domestic corporation that is not a non-profit domestic corporation has "amount of dividend received from a domestic corporation that is not a non-profit domestic corporation." "amount of dividend" means the amount of dividend or surplus distribution and the amount of dividend or distribution under each subparagraph of Article 16(1) of the Corporate Tax Act (see Article 18-2

However, the instant amount distributed by the Fund, which is a nonprofit corporation, to the Plaintiff does not constitute the amount of dividend or surplus distribution, and since the Plaintiff cannot be deemed the members of the Fund, which is a foundation, the instant amount distributed does not constitute “money acquired by the stockholders, etc. (including the members of an organization deemed a corporation) of the dissolved corporation under Article 16(1)4 of the Corporate Tax Act due to the dissolution of the said corporation.” Therefore, the instant amount distributed does not constitute “amount of dividend” under Article 18-3 of the Corporate Tax Act, and thus, the said provision cannot be applied in this respect.

C) The purpose of Article 18-3 of the Corporate Tax Act is to prevent double taxation on a single income by imposing a tax again at the stage of a domestic corporation with respect to the income already imposed on the first-time corporate tax in cases where a domestic corporation received dividend income from another domestic corporation invested. However, the corporate tax paid by the Fund is a tax paid by a separate entity for a separate reason, and it cannot be deemed the advance payment of the tax to be paid by the Plaintiff. Thus, the taxation on the instant dividend cannot be deemed as a double taxation on the same income as the tax already paid by the Fund.

3. Conclusion

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