The date of accrual of earnings from shares of the Non-Performing Loan Resolution Fund shall be the business year in which the actual shares are paid.

The date of accrual of earnings from the shares of the Non-Performing Loan Resolution Fund shall not be the business year in which the profits of the Non-Performing Loan Resolution Fund accrue, but the actual

Article 104-11 of the Restriction of Special Taxation Act

2015Guhap5158 Revocation of Disposition of Rejecting Corporate Tax

AAAAA

BB Director of the Tax Office

October 29, 2015

1. The plaintiff's claim is dismissed.

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

The defendant's refusal of correction of the 2010 corporate tax against the plaintiff on May 1, 2014 and the rejection of correction of the oo,oo, andowon in the year 2011 is revoked.

1. Details of the disposition;

A. The Plaintiff was a financial institution that contributed to the DCC (hereinafter “CC”) established in the DCC (Law No. 6073, Dec. 31, 1999; hereinafter “CC”) (hereinafter “CC”) as a financial institution. On December 15, 2007, the Plaintiff contributed KRW 19.39 million to the instant fund.

B. The Plaintiff received the profits accrued from the business of the Fund in the business year 2010 as the dividend amount, oo,oo,oo, and oo,o,o, ando in the business year 2011 (hereinafter “distribution of this case”), and the total amount of the profits received during each business year received, as the dividend for revenues, reported and paid corporate tax in the calculation of earnings.

C. On March 4, 2014, the Plaintiff filed a claim for correction to the Defendant for the reduction of corporate tax of o, o, o, oo, and o, o, o, o, o, o, 201 for the business year 2010, on the ground that the time when the portion of the instant distribution was reverted to gross income was prior to the date of 2007 (hereinafter referred to as “instant claim for correction”), but the Defendant rejected the claim for correction on May 1, 201 (hereinafter referred to as “instant disposition”).

D. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on July 24, 2014. However, upon dismissal on November 27, 2014, the Plaintiff appealed and filed the instant lawsuit on February 25, 2015.

[Ground for Recognition: Facts without dispute, entries in Gap evidence 1 through 3, purport of whole pleadings]

2. Judgment on the Defendant’s main defense

A) The portion without any change in the tax base

If the funds of this case were to be included in the plaintiff's earnings immediately in the business year in which profits accrue as a joint business or trust property as shown by the plaintiff's argument, the shares of this case received from the funds of this case shall be excluded from the income in the business year 2010 and 2011, but the funds of this case also in the year 2010 and 2011. Considering the contribution ratio of the plaintiff, the funds of this case shall be newly included in the income in the year 2010, since the new part corresponding to the difference is that of 2010, oo,oo,oo,o-o,o-O (Oo,o-o,o-o,o-o,o-o,o-O), no change in the part corresponding to the difference, excluding the plaintiff's profits,o-o,o-O-O,O-O-O, and the part corresponding to the plaintiff's tax base is in violation of the law.

However, the above circumstances alleged by the defendant, namely, that if according to the plaintiff's argument, "Oo,Oo, andOo shall be newly included in the calculation of earnings in 2010." Since the plaintiff's argument is a separate claim that is compatible with the premise that the plaintiff's claim is accepted in the merits, it is nothing more than the argument that the part of the plaintiff's claim is rejected, that is, where the plaintiff's claim is accepted.

B) Abuse of power

In accordance with the Plaintiff’s assertion, the Defendant reported and paid corporate tax by including income that could have been attributed to the maximum amount of 203 years in gross income in 2010 and 2011, and filed the instant claim for correction immediately before the arrival of March 31, 2014, which is the deadline for filing a request for correction under the Corporate Tax Act, and filed the instant lawsuit again. The Plaintiff himself/herself acted to include the amount distributed in the gross income in 2010 and 2011. The Plaintiff’s filing of the instant claim for correction was asserted to the effect that it violates the principle of trust and good faith in the lawsuit and constitutes the abuse of rights in accordance with the principle of the FSA. In particular, upon acceptance of the Plaintiff’s claim, the Defendant did not impose tax on the amount distributed prior to 2007, due to the exclusion period, which constitutes abuse of the right of correction claim.

However, as seen earlier, the Plaintiff filed a claim for correction within the lawful period of filing a claim for correction with respect to the distribution of this case, and filed a lawsuit of this case within the lawful period of filing a lawsuit, and there is no illegality in this regard. The Defendant’s assertion that the taxpayer who paid taxes once filed a claim for correction against the principle of trust and good faith, claiming its illegality, and filing a claim for correction, does not constitute abuse of right, and even if the Plaintiff’s assertion was accepted, the Plaintiff’s failure to impose a tax on the Defendant due to the exclusion period, depending on the period of the true reversion of the distribution of this case, may not be deemed as an abuse of the Plaintiff’s right to request correction in accordance with the exclusion

C) Sub-determination

In the end, the defendant's defense of the principal safety cannot be accepted in all, and the plaintiff's assertion is judged.

3. The plaintiff's assertion and judgment

A. The plaintiff's assertion

Since the Fund is not a juristic person or an organization treated as a juristic person, the instant shares ought to be handled in accordance with the legal doctrine as to joint business or trust property. According to such legal doctrine, the time when the instant shares accrue is not the business year 2010, 2011 that the Plaintiff actually received but the actual profits accrued during the business year 2007. Therefore, the instant disposition based on the premise that the instant shares accrue in the business year 2010 and 2011 is unlawful.

(b) Related statutes;

Attached Form is as shown in the attached Form.

(c) Fact of recognition;

1) The Fund was established on November 24, 1997 based on the former Act on the Establishment of the Non-Performing Assets Management Corporation of the Non-Performing Assets, etc. of the Republic of Korea (amended by Act No. 5371 of Aug. 22, 1997, amended by Act No. 5505 of Jan. 13, 1998, as Act No. 6073 of Dec. 31, 1999, as Act No. 10682 of May 19, 201, as Act No. 10682 of the Act on the Efficient Disposal of Non-Performing Assets, etc. of the Financial Institutions and the Establishment of the Korea Asset Management Corporation; hereinafter referred to as the "former Asset Management Corporation Act"). The Fund was established on November 24, 1997 based on the contribution of the financial institution of this case from the Corporation of this case to the funds raised from the issuance of Non-Performing Loan Resolution Fund bonds, etc. of Non-Performing Loan Resolution Fund (hereinafter referred to the same).

Year

Contributions from a financial institution (won)

Government contributions (won)

Total contributions (won)

Jinay

1997

568,000,000,000

568,000,000,000

1998

573,380,000,000

573,380,000,000

199

573,380,000,000

573,380,000,000

200

573,380,000,000

573,380,000,000

201

573,380,000,000

573,380,000,000

202

573,380,000,000

573,380,000,000

2003

573,380,000,000

3,505,66,000,000

4,079,046,000,00

Contribution of Public Funds

204

573,380,000,000

3,505,66,000,000

4,079,046,000,00

205

573,380,000,000

3,505,66,000,000

4,079,046,000,00

206

573,380,000,000

3,505,66,000,000

4,079,046,000,00

2007

573,380,000,000

505,666,00,000

1,079,046,000,000

Return of 3 trillion won of Public Funds

208

573,380,000,000

573,380,000,000

Return of 0.5 trillion won of Public Funds

2) The instant fund paid corporate tax for the taxable year 1999, oo,oo, and oo,o,o, and oo in the taxable year 2008, and the corporate tax for the taxable year 2009 (from 2000 to 2002, there was no income or the tax base was zero won, and the corporate tax was not paid from 2003 to 2007).

3) Following the amendment of Article 2(3) of the Addenda to the former Asset Management Corporation Act on December 21, 2007, the Fund decided to distribute residual property to a funding institution. The instant shares were paid to the Plaintiff in 2010 and 2011, and at the time, the Asset Management Committee decided not to pay a separate interest at the time of repayment of the Fund.

[Ground for Recognition: Facts without dispute, Gap evidence 4, 6 through 9, Eul evidence 4, the purport of whole pleadings]

D. Determination

1) Order of determination

The Plaintiff is disputing the timing of attribution of the instant shares. The issue of when the time of attribution of the instant shares is deemed to be included in the calculation of the fiscal year is connected to the legal nature of the instant funds. If a legal personality is recognized under the tax law of the instant funds, the instant shares will be reverted to the Plaintiff when the Fund pays the instant shares to the Plaintiff. On the contrary, if no legal personality is recognized under the tax law of the instant funds, the revenues accrued from the instant funds will be attributed to the beneficiaries of the said funds, and

2) Legal nature of the instant fund

A) Provisions of the Framework Act on National Taxes

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

In the case of the Fund of this case, it is established in the Asset Management Corporation under Article 38 of the former Asset Management Corporation Act, which has been raised with the financial resources provided for in Article 39 (1), and it constitutes a foundation with an endowment contributed for public interest in the following light of the following circumstances.

B) The Fund has basic property contributed for the purpose of public interest.

(1) The fund of this case is efficient liquidation of non-performing loans, etc. owned by financial institutions.

Article 38 of the former Asset Management Corporation Act (Article 38 of the former Asset Management Corporation Act). Financial resources for the establishment of the Fund shall be raised from not only the contributions of financial institutions, such as the Plaintiff, but also the funds raised from the issuance of insolvent reorganization fund bonds, and the funds borrowed from the Bank of Korea (Article 39(1) of

In the case of insolvent reorganization fund bonds issued at the expense of the Fund, the Government guarantees the repayment of principal and interest (Article 40(4) of the former Asset Management Corporation Act), the Fund shall designate funds borrowed from the Bank of Korea as a government agency under the Bank of Korea Act (Articles 39(3) and 40(1) of the former Asset Management Corporation Act), and the Fund shall be liable for such financial resources, not by the Asset Management Corporation.

(2) The above established funds can be used only for the purposes prescribed in the Asset Management Corporation Act, and the non-performing assets or other interested persons deemed necessary to take over in particular for the public interest can be acquired preferentially with a large effect of liquidation. The Asset Corporation shall prepare a statement of accounts, balance sheet, and profit and loss statement concerning the funds, and determine the fund operation plan before the fiscal year begins, and shall account separately from the funds of the Corporation (Articles 42 and 43 of the Asset Management Corporation Act). Such funds shall be operated as a foundation separate from the assets of the Corporation.

(3) Upon the termination of the operation of the Fund, a list of assets and balance sheets of the Fund shall be prepared in advance with the approval of the Committee, and the remaining assets shall be returned at the fund contribution ratio, and a report on the settlement of accounts shall be prepared without delay after the remaining assets are returned to the Committee (Article 5371 and Article 2(5) of the Addenda to the Act on the Establishment of Non-Performing Assets, etc. of Non-Performing Assets Management Corporation (Article 15511 and Article 3(2) and (3) of the Addenda to the Enforcement Decree of the Act on the Establishment of Non-Performing Assets Management of Non-Performing Assets,

(4) Sub-determination

Purpose of the establishment of such fund, method of financing, restriction on the use of the fund, public notice

Considering the preferential acquisition of non-performing assets according to the need, the purpose of the Fund is not simply to improve the liquidity and soundness of financial institutions’ disposal of non-performing loans, etc., but to prevent damages that can be seen by the majority of the public in advance. Accordingly, the Fund is a case where the basic property contributed for the purpose of public interest exists.

C) The instant fund has the substance of the Foundation.

not registered as a foundation shall be incorporated for a given non-profit purpose.

The term "a group of property" means a group of property, which has the substance of a foundation, but has not yet been registered, by having the fund contributor or other specific individual independent of the management body.

As seen above, the Fund is a group of property invested or created by a certain method, and its accounting has been carried out separately from the instant project, and the Fund bears the obligation independently from the instant project for the Non-Performing Loan Resolution Fund and the Bank of Korea with respect to loans from the Non-Performing Loan Resolution Fund and the Bank of Korea. In addition, as to the grounds, purposes, methods, methods of creation, methods of management and operation, accounting and executive organs, etc. of the Fund, separate articles of incorporation is not required under Articles 38 through 43 of the former

In full view of these circumstances, the Fund is deemed to have the substance of the Foundation.

D) The Fund satisfies the condition that the revenues should not be distributed to its members. The Foundation is composed of funded assets and cannot be deemed as members of the Foundation. As such, there is no problem of allocating profits to its members due to its nature. It is also the same as the Fund in this case, insofar as the Fund has the substance of the Foundation, so long as it has the substance thereof.

Article 2 (5) of the Addenda to the former Asset Management Corporation Act provides that a person shall return residual property to the contributor after the end of the operation period of the Fund, but this falls under the provision on the reversion of residual property after the dissolution of the Foundation, and thus, it cannot be deemed that the above provision is a provision on the distribution of profits.

E) Meanwhile, the following provisions are premised on the premise that the instant fund is a corporation under tax law.

○ The Fund is deemed to have been designated as a government agency under the Bank of Korea Act with respect to the money borrowed from the Bank of Korea (Article 39(3) of the former Asset Management Corporation Act). The term "government agency" means a corporation that performs 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).

The fund established by the law of ○ is one of the organizations deemed corporations under the Corporate Tax Act, and the fund is allowed to include the reserve fund for its proper purpose business in deductible expenses (Article 29(1) of the Corporate Tax Act and Article 56(1)3 of the Enforcement Decree of the same Act).

Article 2 (1) 8 (d) of the Enforcement Decree of the Corporate Tax Act amended by Presidential Decree No. 17826, Dec. 30, 2002; however, Article 2 (1) 8 (d) of the Enforcement Decree of the Corporate Tax Act, on the premise that the Fund is a non-profit corporation, considers the business related to the acquisition and liquidation of non-performing loans through the

Article 34(1) of the former Corporate Tax Act (amended by Act No. 5581, Dec. 28, 1998); Article 61(2)19 of the Enforcement Decree of the Act on the Establishment of Non-Performing Assets Management Corporation (limited to the Non-Performing Loan Resolution Fund) provides that where the Korea Assets Management Corporation (limited to the Non-Performing Loan Resolution Fund) under the Act on the Establishment of Non-Performing Assets Management Corporation of Non-Performing Assets, etc. of Non-Performing Assets Act appropriates allowances for bad debts as deductible expenses, it shall be included in deductible expenses within the scope of a certain percentage. The foregoing provision is meaningful in the accounting of the Fund, because the accounts of the Asset Management Corporation

3) Sub-determination

In full view of the above circumstances, this case’s fund constitutes a nonprofit domestic corporation under the Corporate Tax Act on the ground that it constitutes a foundation with basic property contributed for the purpose of public interest under Article 13(1)2 of the Framework Act on National Taxes, which is not registered. The Plaintiff’s assertion on a different premise is not acceptable.

3. Conclusion

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