Article 18-3 (4) of the Corporate Tax Act shall not apply mutatis mutandis to Article 18-2 (1) 14 (c) of the Corporate Tax Act.

The meaning of "Article 18-3 of the Corporate Tax Act" and "Article 18-2 (1) 4 of the Corporate Tax Act shall apply mutatis mutandis to the amount calculated under the conditions as prescribed by the Presidential Decree" and it is difficult to view that the provisions of this case shall apply mutatis mutandis to the exception provided for in the proviso of Article 18-2 (1) 4 of the Corporate Tax Act."

2013Guhap59842 Revocation of Disposition of Corporate Tax Imposition

AA Life Insurance Corporation

The director of the tax office

May 2, 2014

May 30, 2014

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

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

Cheong-gu Office

The Defendant’s imposition of the corporate tax for the business year 2007, June 5, 2012 against the Plaintiff, and the imposition of the corporate tax for the business year 2008, October 5, 2012, and the imposition of the corporate tax for the business year 2008, and the corporate tax for the business year 2009, shall be revoked.

1. Details of the disposition;

"A. The plaintiff was holding not more than 50/100 of each of the shares issued by AA Securities Co., Ltd., AA fire insurance company, AAA card Co., Ltd, AAA card Co., Ltd. and AA Asset Management Co., Ltd. (hereinafter collectively referred to as "stock company, etc.") until December 31, 2008 as a domestic corporation that engages in life insurance business, asset management business, etc. under the Insurance Business Act, but does not fall under a holding company under the Monopoly Regulation and Fair Trade Act or a financial holding company under the Financial Holding Company Act, a financial holding company under the Industrial Education Enhancement and Industry Promotion Act, or an industry-academic cooperation technology holding company under the Industrial Education Enhancement Act. (b) AA Securities is a securities finance company licensed under the Securities and Exchange Act, AA Marine Insurance Fire is an insurer under the Insurance Business Act, AA Card is a specialized credit finance company under the Specialized Credit Financial Business Act, and AA Asset Management Company under the Indirect Asset Management Business Act was an asset management company under the Act on the Monopoly Regulation and Fair Trade Act.

C. During the business year from 2007 to 2009 (from April 1, 2006 to December 31, 2008), the Plaintiff received a total dividend for import of OO members (hereinafter referred to as "import dividend of this case") from dividends corporations as follows, and reported corporate tax for each business year including the amount deducted from re-investment of an affiliated company by applying the proviso of Article 18-2 (1) 4 (c) of the former Corporate Tax Act (amended by Act No. 9267 of Dec. 26, 2008; hereinafter referred to as the "Enforcement Decree") pursuant to Article 18-3 (1) 4 of the former Corporate Tax Act (amended by the Act No. 9267 of Dec. 26, 2008; hereinafter referred to as "the Enforcement Decree") in accordance with the proviso of Article 18-2 (1) 4 (c) of the Corporate Tax Act and Article 17-3 (6) of the Enforcement Decree of the Corporate Tax Act.

207 Business year

208 Business year

209 Business year

Consolidateds

AA Securities

OOO

OOO

OOO

OOO

AA Fire Marine Insurance

OOO

OOO

OOO

OOO

AA card

-

OOO

OOO

OOO

AA Asset Management

OOO

OOO

OOO

OOO

Total of import dividends

OOO

OOO

OOO

OOO

Gross Income Amount

OOO

OOO

OOO

OOO

"However, the defendant, however, deemed that Article 18-2 (1) 4 (c) of the Corporate Tax Act does not apply to the dividends for the import of this case, excluded OOOO won from the total amount of the re-investment reduction from the total amount of the dividend income, and included them in the gross income as follows; on June 5, 2012, 2007, OOO won of corporate tax for the business year of 2007; on October 5 of the same year, 2008, OOOO won of corporate tax for the business year of 2008 and OOOOE of corporate tax for the business year of 209 (hereinafter collectively referred to as "disposition of this case"); and (hereinafter referred to as the "

207 Business year

208 Business year

209 Business year

Consolidateds

Amount of earnings included in gross income;

(Reduction of Re-investment Amounts)

OOO

OOO

OOO

OOO

Imposition of Corporate Tax

(Disposition of this case)

OOO

OOO

OOO

OOO

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 3, Eul evidence Nos. 1, 2, and 3 (including each number), the purport of the whole pleadings

2. The plaintiff's assertion

Article 18-3 (1) 4 of the Corporate Tax Act, which is a provision for exclusion of dividend income in a general domestic corporation, applies mutatis mutandis not only to the main sentence of Article 18-2 (1) 4 of the Corporate Tax Act, but also to the proviso of Article 18-2 (1) 4 of the same Act, which is a provision for exclusion of dividend income in a general domestic corporation from taxable income. The applicable provisions in this context refer to the modification of matters similar but also to avoid spreading in accordance with overlapping regulations in legislative technology, if necessary. Even if the Plaintiff does not fall under a holding company or financial holding company, re-investment reduction in the import dividends in this case should be included in the amount of exclusion from taxable income, as long as the Plaintiff falls under an institutional investor under subparagraph 4 (c) of Article 18-2 (1) of the Corporate Tax Act. Such interpretation conforms to the purport of each of the above provisions that prevent double taxation on dividends paid from reducing the characteristics of the institutional investor's business, and thus, the dispositions in this case must be revoked."

Attached Form is as shown in the attached Form.

4. Determination

(a) The history of amendment to the provisions on exclusion of import dividends from taxable income;

1) Although the Monopoly Regulation and Fair Trade Act has been previously prohibited from establishing a holding company, when there was a need to introduce a holding company for corporate restructuring, the Monopoly Regulation and Fair Trade Act was amended on February 5, 1999 (Act No. 5813) and limited the establishment of a holding company, the main business of which is to control the domestic company’s business through stock ownership. In addition, the Corporate Tax Act amended on December 28, 1999 (Act No. 6047) provides that the holding company shall exclude the amount equivalent to a certain ratio of the dividend income that the holding company received from the subsidiary from the corporate tax from the taxable income (Article 18-2). Article 18-2 of the Corporate Tax Act provides that the holding company shall exclude part of the dividend income that the holding company received from the subsidiary from the taxable income, taking into account the amount re-investment in the subsidiary, in cases where the holding company’s subsidiary re-investments in order to restrain the indecent business group from the chain investment since its introduction.

2) The Corporate Tax Act amended on December 29, 200 (Act No. 6293), in order to globalize and advance companies and taxes, and to promote taxation equity other than holding companies, newly established a provision for exclusion from taxable income that can resolve double taxation for revenue dividends received by a general domestic corporation that is not a holding company (Article 18-3). However, unlike Article 18-2, Article 18-3 of the Corporate Tax Act does not provide for the deduction of some of the dividend for revenue from taxable income when a dividend payment corporation re-investeds to an affiliate at the time of its introduction.

3) On October 23, 200, the Financial Holding Companies Act (Act No. 6274) rendered financing to establish a financial holding company that controls a company carrying on financial business in order to enhance the competitiveness of financial institutions through largeization and concurrent operation of financial institutions. Accordingly, Article 18-2 of the Corporate Tax Act (Act No. 6293) stipulates that, in addition to holding companies under the Monopoly Regulation Act, holding companies should add financial holding companies under the Financial Holding Companies Act to the scope of holding companies to which the provisions for exclusion of holding company’s dividend income apply through the amendment (Act No. 6293) on December 29, 200, in consideration of the fact that the transfer of a second-tier company controlled by a subsidiary under the Financial Holding Companies Act is permitted, such companies should be excluded from the amount to be deducted

4) The Corporate Tax Act (amended on December 31, 2001 (No. 6558) provides that a subsidiary company of a financial holding company shall be excluded from the amount of exclusion from gross income even if the subsidiary company of the financial holding company is an institutional investor, in order to support restructuring through the establishment of the financial holding company.

5) In addition, the Corporate Tax Act, through the amendment on December 30, 2003 (Act No. 7005), stipulated that the Monopoly Regulation and Fair Trade Commission Act, at the time, should be excluded from the amount to be deducted from the amount to be deducted from the gross income, even in cases where a subsidiary of a general holding company has invested in a business-related sub-subsidiary as determined by the Fair Trade Commission, in view of the fact that the Monopoly Regulation and

6) The Corporate Tax Act newly established the instant statutory provisions that may exclude some of the dividends from the amount of non-inclusion in the calculation of gross income in cases where a domestic corporation, other than a holding company’s subsidiary, has invested in the expansion of affiliated companies in order to restrain indisrush expansion due to reckless affiliated investments in the restructuring of affiliated companies with respect to a general domestic corporation that is not a holding company.

7) Afterwards, the Corporate Tax Act deleted both Article 18-2(1)4 of the Corporate Tax Act and the applicable provisions of this case to deduct the reduction of re-investment from the total amount of income dividends, through the amendment (Act No. 9267) on December 26, 2008, the amount of reduction of re-investment from the total amount of income dividends, in order to repeal a regulation that is not related to the original purpose of the system for exclusion from

B. Determination on the import dividends of this case

1) Whether the proviso of Article 18-2(1)4 of the Corporate Tax Act applies mutatis mutandis

Article 18-2 (1) 4 of the Enforcement Decree of the Corporate Tax Act provides that "the amount calculated under the conditions as prescribed by the Presidential Decree shall be excluded from the inclusion of dividends in gross income by applying mutatis mutandis the provisions of Article 18-2 (1) 4, and Article 17-3 (4) of the Enforcement Decree of the Corporate Tax Act shall apply mutatis mutandis to the calculation of the above amount by a domestic corporation's investment in dividends (30/10, 50 or 100 as it may apply mutatis mutandis) and "ratio of the book value of stocks, etc. acquired by the domestic corporation's investment in an affiliate of the domestic corporation to the amount invested by the domestic corporation" shall be multiplied by the fixed ratio (30/10 or 100) of the amount prescribed by the Presidential Decree to be excluded from the inclusion of dividends under the provisions of Article 18-2 (1) 4 of the Corporate Tax Act, if a subsidiary, which is a corporation that pays dividends, has invested in an affiliate of the domestic corporation." The main sentence of Article 18-2 (2) provides that the aforementioned ratio shall be excluded from the inclusion of dividends.

Article 18-2 (1) 4 of the Corporate Tax Act as well as Article 18-2 (1) 4 of the same Act shall not apply to the interpretation of "subsidiary company under Article 2 (1) 2 of the Financial Branch Holdings Act" as a domestic corporation, as alleged by the plaintiff. "A) The principle of strict interpretation derived from the principle of no taxation without law is applicable not only to the cases that meet the taxation requirements, but also to the cases that meet the requirements for non-taxation and tax reduction and exemption. As such, the expanded interpretation or analogical interpretation of the requirements for non-taxation or tax exemption and exemption as favorable to the taxpayer without any justifiable reason would result in a violation of the principle of no taxation without law, which is the basic ideology of the tax law (see, e.g., Supreme Court Decision 2005Da19163, May 25, 2006). Thus, the same shall apply mutatis mutandis to cases where legislative technology is used in a similar case, even if the tax law is not completely identical to those subject to the application, and even if other provisions apply mutatis mutandis to the strict interpretation of the provisions within the necessary scope of the provision.

B) In light of the legislative history of the customs provision and the purport of the amendment, as seen earlier, the establishment of a holding company under the Monopoly Regulation and Fair Trade Act was prohibited, and the need for corporate restructuring was raised after the crisis of foreign exchange, each general holding company and financial holding companies were allowed through the amendment of the Monopoly Regulation Act and the enactment of the Financial Holding Companies Act, and the Corporate Tax Act also has introduced the provision on import dividends to holding companies in the form of more advanced and strengthened manner compared with general domestic corporations, not holding companies. It is reasonable to view the legislative policy issue of whether giving more favorable treatment to general domestic corporations with respect to non-fulfillment of income dividends in light of the original purpose of coordination of double-frequency 1, as well as the establishment of a new financial holding company under the proviso of Article 14 of the Corporate Tax Act to exclude the conditions, ratio, and scope of exclusion from income in the calculation of income for income dividends to the holding company. In particular, it is reasonable to view the establishment of a new financial holding company as an alternative to promote corporate restructuring by an institutional investor under the proviso of Article 14 of the Corporate Tax Act as the Act.

C) The Plaintiff asserts that the aforementioned interpretation is not applicable mutatis mutandis to the application of the proviso of Article 18-2 subparag. 1 subparag. 4 of the Corporate Tax Act as it is. However, the use of the aforementioned legislative technology is not because the subject to the allocation of dividend income is intended to apply the provisions in cases where the holding company is a holding company and is not a holding company, but the nature of the dividend payment corporation. Rather, if an institutional investor falls under the Plaintiff’s assertion, the provision in exclusion from the income is applied to all dividends paid by all domestic corporations that are not subsidiaries of a financial holding company, thereby creating a substitution of legislation by exceeding the scope of the language and text and the limit of the application of the provision in the exclusion from the income from the income of the dividends. In light of the legislative effort to expand double taxation and the legislative history of the Corporate Tax Act, the application of the provision in the exclusion from the income of the income of the dividends may not be adjusted by exceeding the text of the provision in the exclusion from the income of the dividends. Accordingly, even if the scope of the income dividends arising or the exclusion from the income of each source differs has changed, it cannot be corrected in violation of the principle of no taxation without law.

3) Sub-determination

Ultimately, Article 18-2(1)14 (c) proviso of the Corporate Tax Act shall apply mutatis mutandis only to cases where a dividend payment corporation is a subsidiary under the Financial Holding Companies Act even if it is difficult to regard the instant provision as applicable mutatis mutandis, or even if it is applied mutatis mutandis. However, all dividend corporations that paid the income dividends to the Plaintiff are not subsidiaries under the Financial Holding Companies Act, and thus, the amount of reduction in re-investment in the instant dividends should be excluded from the scope of exclusion from the income. Such disposition is just and there is no error

5. Conclusion

The plaintiff's claim is dismissed without merit, and all costs of lawsuit are assessed against the plaintiff who has lost. It is so decided as per Disposition.