National Tax Service Review Corporation 2010-0040 (2010.30)

the purchase and sale of shares with respect to the acquisition of shares shall not constitute a provisional payment in office;

It is reasonable to view that the Plaintiff acquired treasury stocks from the beginning for the purpose of retiring stocks, and since the agreement on stock trade itself cannot be deemed null and void on the ground that it did not go through the procedures for reducing the capital, it shall be deemed that the purchase and sale price of treasury stocks paid in connection with the acquisition of treasury stocks is a provisional payment unrelated to the business, and the disposition of taxation after

2010Guhap4638 Disposition of revocation of imposition of corporate tax

XXco Co., Ltd.

O Head of tax office

June 22, 2011

July 20, 2011

1. The Defendant’s disposition of imposition of KRW 16,797,661 against the Plaintiff on April 12, 2010 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. Upon the resolution of the board of directors on August 29, 2008, the Plaintiff purchased 6,000 shares issued by the Plaintiff on September 9, 2008, 6,000 shares issued by the Plaintiff, 6,000 shares issued by the KimB, 3,00 shares issued by the Plaintiff held by the KimB, 75,00 shares issued by the Plaintiff on October 14, 2008, and 2, after the resolution of the board of directors on October 14, 2008, the Plaintiff purchased 1,00 shares issued by the Plaintiff on October 14, 200 each share amounting to 75,000 shares issued by the Plaintiff, and paid all of the shares on each day of the above sales contract.

B. On April 12, 2010, the Defendant rendered a disposition to correct and notify the corporate tax of KRW 16,797,661 for the business year 2008 on the ground that the Plaintiff’s temporary payment related to the acquisition of the Plaintiff’s own stocks is included in the gross income in relation to the temporary payment unrelated to the business affairs that the Plaintiff paid to XX, KimA, KimB, LeeCC, and UD (hereinafter referred to as “xx, etc.”), and that the paid interest related to the provisional payment should be excluded from the deductible expenses.

C. Accordingly, the Plaintiff filed a request for examination with the National Tax Service on July 12, 2010, but the National Tax Service dismissed the request on August 30, 2010.

[Ground of recognition] The facts without dispute, Gap 2 through 4, Eul 6, Eul 1 (including each number), the whole purport of the pleading

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

① The Plaintiff’s act of acquiring treasury shares is valid as it falls under the grounds for exception to the acquisition of treasury shares (the time of retirement of shares) stipulated in Article 341 subparag. 1 of the Commercial Act. ② The time when a claim for purchase and sale of treasury shares occurs in a share sales contract in accordance with the principle of freedom of contract. Therefore, it is reasonable to include the Plaintiff’s sales price paid to XX et al. in the Plaintiff’s deductible expenses as the provisional payment related to the business and the lawful sales price, and the Defendant’

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Whether the acquisition of shares is for the retirement of shares

In light of the above facts, Gap's 2-1, 2-2 and 2-H 1's shares were stated as the grounds for acquiring 'the minutes of the board of directors' at the time of the resolution to acquire 'the stock' from 00, 209. The plaintiff's explanation that 'the defendant would acquire 'the stock for the purpose of re-sale or stock retirement' at the request of 00, 2009, 'the total amount of 00, 100, 200, 100, 200, 100, 200, 200, 200, 200, 200, 200, 200, 200, 200, 20, 200, 200, 200, 20,000, 20,000, 20,000,00,00,00.

2) The time when a debt for stock retirement proceeds accrues;

Even if the Plaintiff acquired shares issued by the Plaintiff at a cost from XX, etc., it cannot be deemed null and void as it is for the purpose of retiring shares as seen earlier. The procedures for capital reduction that should be taken after the Plaintiff’s acquisition of shares, and such procedures cannot be deemed null and void. Thus, even if the Plaintiff paid the purchase price of shares to XX, etc. on the date of the conclusion of the contract with XX, etc. pursuant to the contents of the share purchase contract concluded with the Plaintiff, it cannot be deemed that the Plaintiff paid the purchase price of shares in advance prior to the occurrence of the legal obligation to pay shares. Accordingly, the Plaintiff’s assertion on this part is with merit.

3) Sub-decisions

Therefore, the defendant's disposition of this case based on the premise that the payment of the purchase price of shares by the plaintiff constitutes a prior payment prior to the occurrence of the obligation for the redemption of shares, rather than the acquisition of treasury shares exceptionally permitted, should be revoked.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by the assent of all participating Justices.