Busan District Court-2014-Guhap-20729 (2.03, 2017)

No outstanding claim shall be included in gross income for which profit has not been determined.

It is difficult to see that there was income generated due to the lack of significant maturity and finalizedness in the possibility of realizing the rights of the savings bank in each business year.

Article 14 (Income for Each Business Year)

2017Nu20781 ( November 13, 2017)

The Bankruptcy Trustee of ○ Savings Bank, Inc.

○ Head of tax office

on October 30, 2017

October 25, 2017

1.The judgment of the first instance is modified as follows:

A. The Defendant’s imposition disposition of each corporate tax listed in the [Attachment 1 to 3] of February 8, 2012 against the Plaintiff shall be revoked.

B. On December 30, 2011, the part of the Defendant’s rejection disposition against the Plaintiff regarding the second-term education tax of KRW 618,645,09 for KRW 386,96,916 for KRW 618,645,09 for the second-term education tax of KRW 409 is revoked.

C. The plaintiff's remaining claims are dismissed.

2. The total costs of a lawsuit shall be borne individually by each party.

1. The Defendant’s disposition of imposition of each corporate tax listed in the separate sheet as of February 8, 2012 against the Plaintiff and each disposition of refusal to correct each education tax stated in the same list as of December 30, 2011 shall be revoked.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Details of the disposition;

This part of this Court's reasoning is the same as the corresponding part of the reasoning of the judgment of the court of first instance. Thus, this part of this Court's reasoning is accepted in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of

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

In this part, the reasons for this court's entry are as follows: ① Decision on the argument related to financial advisory fees of the court of first instance (10th 12 to 14th 8th th th th 8th th th th th 10th th th 10th th th 10th th th 14th th th 8th th th th 8th th th th 8th th th th th th th th th th th th th 2

○ Parts of the garment

4) Determination on the assertion on the financial advisory fee

A) Facts of recognition

In full view of Gap evidence Nos. 4, 6, 11, 12, 15, Eul evidence Nos. 7 and 8, the following facts are recognized:

(1) Mutual savings banks are prohibited from running their business directly, such as real estate development business.

Nevertheless, ○ Savings Bank Group Group’s major shareholders ○ Savings Bank Group’s ○○ Savings Bank Group’s ○○ Savings Bank Group’s large shareholders ○○ Savings Bank Group, Kimyang, etc. started to participate in the real estate development implementation business with an intention to promptly fill out the insolvency that occurred by lowering to the so-called IMF, and later, the size of ○○ Savings Bank Group opened and managed SPC solely for real estate development implementation business, etc., and had ○ Savings Bank Group grant PE loans

② The ○○ Savings Bank Group Group concluded a financial advisory service contract with each SPC on the basis that the bank will receive financial advisory fees from SPC in order to revert to the ○○ Savings Bank Group the operating profit of the SPC, such as sales profit from the operation of the SPC for the real estate development and implementation project.

③ On the other hand, a mutual savings bank may not grant a loan to the same borrower for at least eight billion won, if the ratio of BISD does not reach eight percent, and if the ratio is less than five percent, a supervisory officer of the Financial Supervisory Service may stay at the same place under the order of the Financial Supervisory Service to improve the management and restrict a new loan, and as the ratio of BISD is lower, the deposit receipt is disadvantageous to the

④ The profit accrued from the real estate development implementation project becomes final and conclusive according to the share ratio of SPC stocks or the share ratio of pre-contract profit after the completion of the project, and the ○ Savings Bank Group may receive the profit at the time of the completion of the implementation project. In order to meet the BISD ratio, the ○ Savings Bank Group re-undertakes the PMF loans to SPCs, the borrower, in order to receive financial advisory fees from the PF business place where no business profit has yet to be accrued, and receives the loan from ○○ Savings Bank under the name of “financial advisory fees”. The ○ Savings Bank shall include false profits from the name of financial advisory fees in accordance with the profits from the real estate development implementation project of SPC, even if the funds under the name of financial advisory fees are not deposited into ○ Savings Bank even if they are not deposited into ○○ Savings Bank, making up a false appropriation of the outstanding financial advisory fees as the outstanding

⑤ In the same way as above, the Busan Savings Bank recognized the amount of 37,710,00,000,000 won for the financial advisory fee for SPC as profit (i.e., KRW 26,70,000,000 recovered after loan implementation + the outstanding bonds of KRW 11,010,000,000 + 62,176,429,809 for the business year 2008 + the outstanding bonds of KRW 6,176,176,429,000 recovered after loan implementation + the outstanding bonds of KRW 56,176,429,800 + the outstanding bonds of KRW 77,823,636,048 for the business year 2009 (i.e., the collected loans of KRW 31,494,000,000 + the outstanding bonds of KRW 11,000,000 + the outstanding bonds of KRW 363636,6364,63648

6. The ○○ Savings Bank Group Group does not have any human structure to provide faithful financial advice to the executor of a business place where a long-term period of time is in progress. The Financial Advisory Services Contract, which forms the basis for receiving the Financial Advisory Fee, was prepared retroactively from the date on which it is intended to receive most financial consulting fees, and actually did not provide financial consulting services.

7. The officers of the Busan Savings Bank, Park Jong-ho, Kimyang, etc. were indicted for the same kind of accounting as the above (4) and convicted.

B) Determination

(1) Article 40(1) of the Corporate Tax Act provides that "the business year to which the profits and losses of a domestic corporation accrue shall be the business year which includes the date on which the profits and losses are determined," and declares the principle of confirmation of profits and losses, and stipulates that "the period to which the profits and losses accrue individually according to the type of transactions or the method of payment of the purchase price," but the provisions on the reversion of profits and losses under the tax law according to the type of transactions are individually listed according to the type of transactions or the method of payment. However, in cases where it is difficult to determine the attribution of profits and losses due to the provisions listed above, unless it is against the principle of confirmation of profits and losses under the Corporate Tax Act, it may determine the attribution of profits and losses by adopting the standards on the accrual of profits and losses under the corporate accounting standards which are generally accepted as fair and reasonable accounting practices, and this conforms with the principle of corporate accounting existence under Article 20 of the Framework Act on National Taxes (see Supreme Court Decision 192).

10. 23. See, see, e.g., Supreme Court Decision 92Nu2936.

(2) First, according to the above facts, it is reasonable to view that the ○○ Savings Bank received the benefit of the PF project executed directly or jointly by the ○○ Savings Bank, not by providing financial consulting services and receiving the cost of services.

However, inasmuch as the Corporate Tax Act and its Enforcement Decree do not expressly stipulate the period of attribution of profits, such as financial advisory fees, and so long as it does not go against the principle of confirmation of rights under tax law, the period of attribution of profits and losses can be determined in accordance with the corporate accounting standards, unless it is contrary to the principle of confirmation of rights under tax law. In light of the aforementioned facts and

Financial advisory fees shall be 'other revenues' under corporate accounting standards, 'profit-making revenue type 34.1) of subparagraph 4.

It is reasonable to recognize the PF project as profit at the time of the final completion.

In other words, the amount of the financial advisory fee received from the ○○ Savings Bank is not determined on the basis of objective data, but determined voluntarily by the representative director of the ○○ Savings Bank, and the ○○ Savings Bank received the financial advisory fee at will at the time determined in the operation. ② The ○○ Savings Bank received the financial advisory fee from the ○○ Savings Bank, most of the PF places of business in the initial business or business, and most of the PF places of business are in progress, and there are many cases where the business is being delayed, and it is difficult to predict when the business is completed. ③ In addition, even if the business is in progress, it is difficult to measure the amount of revenue in a reliable manner because there are many lots of business places prior to the commencement of sale or unsold, and it is difficult to measure the amount of revenue in a reliable manner after the settlement of the input amount.

However, the issue of which income is taxable income is not that it is sufficient to say that there is a tax-bearing force because it is judged that there is a tax-bearing force, considering that it is economic aspect, and it is possible to control and manage the profit in reality, and that there is a tax-bearing force, and the legal evaluation of the causal relationship which is derived from the income must be lawful and effective (see, e.g., Supreme Court Decision 91Nu5303, Dec. 10, 191). In addition, it is recognized that the nature of the financial advisory fee falls under the case where the sales of goods, the provision of services, the interest, the dividend, and the royalty are received first in the interest of the PF business (see, e.g., Supreme Court Decision 91Nu5303, Dec.

(A) The profit-making process has been completed or almost completed.

(b)The amount of revenue may be measured in a reliable manner.

(C) The possibility of inflow of economic benefits is very high.

1) The Accounting Standards Committee of ○○ Accounting Institute was amended on November 19, 2004.

The revenue recognition type No. 4 of the corporate accounting standards provides that revenue is generated in the ordinary business activities of an enterprise, and the most important issue in the accounting of revenue is to be determined at the time of recognizing the revenue.The revenue is highly likely to bring into economic benefits and to be recognized when it can be measured in a reliable manner after presenting the general standard of revenue recognition, which defines the type of revenue as ‘profit from the sale of goods', ‘profit from the provision of services', ‘profit from the provision of services', ‘profit from the provision of dividends.', and ‘other revenues', which are classified as ‘profit from the provision of services', and it is individually defined at the base point of time when each revenue can be recognized.

Furthermore, in the 34th of the literature, the following provisions are provided for the time of revenue recognition of the ‘other revenues'.

○○ Savings Bank already acquired the loan as a financial advisory fee by executing a valid loan agreement with each SPC, this part of the financial advisory fee is capable of controlling and managing ○ Savings Bank's profit in reality, and there is a tax-bearing force.

The decision should be made.

Ultimately, among the ○○ Savings Bank’s financial advisory fees for SPCs recognized as profits, ① the outstanding amount’s claim is considerably mature and finalized in each business year because it is difficult to view that the right has been realized in each business year, and thus, there is no income at that stage. However, in principle, there is no income at that stage. ② After ○○ Savings Bank executes a valid loan contract with SPC, the part which ○○ Savings Bank took out as a financial advisory fee again shall be deemed taxable income.

(3) In contrast to this view, even if the nature of the financial advisory fee is the consideration for services under the financial advisory service agreement, it is difficult to view that the outstanding amount of the financial advisory fee for SPC recognized by the ○○ Savings Bank as profits is taxable income for the following reasons.

(A) Article 40(1) of the Corporate Tax Act provides that “The business year to which the profits and losses of a domestic corporation accrue shall be the business year to which the date on which the profits and losses are determined belongs” shall be the business year to which the date on which the profits and losses are determined. In the event that a right which is the cause of such income does not actually accrue, the income is deemed realized

The principle of confirmation of rights refers to the time income for the pertinent business year, considering that there is a time difference between the time when the right which is the cause of income and the time when the right which is not the time when the income is realized, is the time when the income is finally generated.

The method of calculating B, in substance, allow a prior taxation on an uncertain income on the premise that it will be realized in the future. Therefore, even if the tax liability was established on the grounds that the right, which is the cause of income, has been finally caused by a conclusive occurrence of the right to taxation, and the requirements for taxation have been met, it is determined that the income is not

In light of the legislative intent of Article 45-2(2) of the Framework Act on National Taxes, the tax liability originally established ought to be deemed as null and void, as a matter of principle, and thus, cannot be imposed corporate tax accordingly. Such interpretation is only a natural request following the adoption of the principle of confirmation of right, and also accords with the legislative intent of Article 45-2(2) of the Framework Act on National Taxes that provides the system of ex post facto request for correction. However, such as bad debts

Where special circumstances exist, such as the grounds for deduction of the amount of income for a business year, or where a taxpayer has reported corporate tax in a manner that deducts the amount of income for the business year in which such reasons occurred in accordance with corporate accounting standards or practices with respect to the subsequent reasons, such as short-term sales reduction or sales exchange incurred in ordinary and repetitive business year, the occurrence of such subsequent reasons cannot affect the original tax liability (see, e.g., Supreme Court Decision 2011Du1245, Dec. 26, 2013).

In addition, in light of the purport of the ex post facto request for correction, the significance, function, and limitation of the principle of confirmation of right, etc., even if the tax liability was established once a claim for income was established upon the occurrence of the right which is the cause of the income becomes final and conclusive and satisfies the requirements for taxation, barring special circumstances, such as where the tax liability, which was established initially due to the occurrence of a certain event after the occurrence of income becomes final and conclusive, is separately stipulated as the cause for deducting the income amount in the business year where the cause of the ex post facto transfer occurred, such as the bad debt amount from the business income, the taxpayer shall be deemed to be free from the burden of tax liability by filing the subsequent request for correction as stipulated in Article 45-2(2) of the Framework Act on National Taxes, unless there are special circumstances, such as that the income amount not realized due to the occurrence of a specific event, such as the income amount and bad debt amount, is separately stipulated as the cause for deducting the income amount in the business year where the subsequent transfer occurred (see, e.g., Supreme Court Decision 201208Du14.).

(B) In the instant case, according to the aforementioned evidence, each SPC, which entered into a financial advisory service contract with the Busan Savings Bank, was virtually insolvent, and the ○○ Savings Bank is also difficult to provide services under the financial advisory service contract. Therefore, it is objectively impossible to recover the outstanding amount of the financial advisory service fee recognized as profit by the ○ Savings Bank.

In light of these facts in light of the aforementioned legal principles, even if a financial advisory fee has been claimed at the time when the conclusion of the relevant agreement is completed in light of the nature of the financial advisory fee in return for a service under the financial advisory service agreement, the part of the outstanding amount of the financial advisory fee becomes objectively impossible to be recovered. This constitutes grounds for ex post facto request for correction corresponding to subparagraph 2 of Article 25-2 of the Enforcement Decree of the Framework Act on National Taxes, and such later request for correction can also be asserted as illegal in the disposition of tax imposition, barring any special circumstance. Thus, the part of the outstanding amount of the financial advisory fee recognized as profit by the ○ Savings Bank

shall not be subject to this subsection.

6) Sub-decisions

Examining the scope of revocation of each disposition of this case on the premise of the above determination, first, according to the purport of the entry of the evidence Nos. 18 through 20 and the whole pleadings, it is reasonable to revoke the entire imposition of each corporate tax listed in the separate sheet.

Next, according to the overall purport of the statements and arguments in Eul's Evidence Nos. 16, 17, and 21, the amount of education tax for the second term of 2009 was 618,645,097, and the amount of education tax for the second term of 2009 was 386,996,916, if the outstanding amount of education tax for the second term of 2009 is excluded from the profits of ○○ Savings Bank, the amount of education tax for the second term of 2009 is 386,996,916, and the outstanding amount of education tax for the second term of 209, among the education tax for the third term of 208 and the second term of 2009, the amount of education tax for the second term of education tax for the second term of 209, among the claims for correction listed in the attached list, may not have any influence on the calculation of the remaining amount of education tax for the second term of education tax.

It is reasonable to revoke the application only to the extent that it exceeds 386,96,916 won.

3. Conclusion

Therefore, each of the dispositions of the defendant in this case shall be revoked within the above scope, and the judgment of the court of first instance is unfair with a different conclusion, so it is so decided as per Disposition by changing the judgment of the court of first instance.