There is no circumstance to deem that the assignment of an obligation was made in place of satisfaction of the existing obligation.

It is difficult to view that the Plaintiff’s assertion that the transfer of claim was made as a substitute for the repayment of existing obligation is the Defendant’s confession, and there is no special circumstance to deem that the transfer of claim was made as substitute for the repayment of existing obligation.

2011Guhap6043 global income and revocation of disposition

Park AA

Head of Ansan Tax Office

December 1, 2011

February 2, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of global income tax of KRW 82,242,710 for the year 2004 against the Plaintiff on March 1, 201 and the imposition of global income tax of KRW 667,932,227 for the year 2007 is revoked.

1. Basic facts

A. Key Claim of this case

1) The LB agreed to transfer all shares and operating rights of D shopping to 3,500,000,000,000,000,000,000,000 won (hereinafter referred to as "the land of this case") and if the transfer proceeds were not paid by September 23, 1997, the LB agreed to pay damages for delay calculated at a rate of 3% for the construction of D shopping buildings (hereinafter referred to as "D shopping").

2) However, as the Countermeasure Committee did not pay the above transfer proceeds, the largestB filed an application for payment order against the Countermeasure Committee for the payment of KRW 3,500,000,000 and damages for delay at the rate of 36% per annum from September 24, 1997 to the date of full payment, and the payment order was issued on May 19, 200, which became final and conclusive at that time (hereinafter referred to as the “instant claim”).

B. Assignment of key claim of this case

1) On June 23, 1997, the largestB agreed to pay to the Plaintiff KRW 1,00,000,000 in return for the share to the Plaintiff on September 23, 1997 (hereinafter referred to as the “first agreement”) while settling the partnership between the Plaintiff and the Plaintiff who jointly operated D shopping (hereinafter referred to as “D shopping”).

2) In addition, on September 12, 1997, the LB paid to the Plaintiff KRW 740,000,000 with compensation for damages related to the pertinent business, and KRW 500,000 with the amount of divorce agreement, etc., the LB agreed that each of the above gold sources shall be paid until October 30, 1997, and if a violation is made, the amount calculated at the rate of 21% per annum from October 30, 1997 to September 12, 1999 shall be paid in addition to the amount calculated at the rate of 21% per annum. In the event that the agreement is not complied with even September 12, 199, the LB agreed that the entire issue claim of this case to be received from the Countermeasure Committee shall be transferred to the Plaintiff and the EE (hereinafter referred to as the "second agreement"), and the existing claim and obligation pursuant to the second agreement shall be referred to as the "existing claim and obligation").

3) The Plaintiff and EE agreed on July 24, 200 to distribute the principal and interest of the instant claim to the Plaintiff in accordance with the ratio of the original amount of the existing claim (Plaintiff 1,740,000,000 won: EE 500,000, i.e., Plaintiff 174/224: EE 50/224): EE 50/224, while the Plaintiff was transferred the instant claim from the largestB on July 24, 200.

C. Collection of key claims of this case

1) The Plaintiff: (a) on February 1, 2002, set up a collateral on the instant building at the maximum debt amount of KRW 3,400,000 with respect to the instant claim that was acquired as above; (b) on March 30, 2004, received KRW 3,000,000 as a collateral obligation of the said collateral from a FF Industrial Co., Ltd. that purchased the instant building on March 30, 2004; and (c) out of them, 669,642,857 won (= KRW 3,00,000,000 KRW 50,224) was divided into shares of the EE in accordance with the aforementioned distribution agreement; and (c) the remainder of KRW 2,330,357,143, the Plaintiff shared the said share of the Plaintiff (hereinafter “the Plaintiff’s share of KRW 2,30,357,143”).

2) Meanwhile, on July 31, 200, the Plaintiff and EE were granted an execution clause on the instant disputed claim and applied for a compulsory auction on the instant land on July 31, 200. At the auction procedure thereafter, the distribution schedule was prepared jointly with the Plaintiff and EE on September 5, 2002, to distribute KRW 1,541,506,127. The Plaintiff filed a lawsuit of demurrer to the distribution. After the judgment in favor of the Plaintiff and EE on June 14, 2007 became final and conclusive on June 14, 2007, the Plaintiff received both the Plaintiff’s share of KRW 1,306,519,192 (i.e., the Plaintiff’s share of KRW 1,687,341,838,x174/24/24,207) and the Plaintiff’s share of KRW 1,687,341,838).

(d) Imposition of the initial global income tax;

1) The head of Ansan Tax Office deemed that the Plaintiff and Ansan Tax Office received KRW 7,065,972,60,603 in total from the principal of the claim and the damages for delay incurred until the time of the assignment of the claim in question, and determined that the Plaintiff’s share was KRW 4,216,790,102 in total, and determined that the Plaintiff’s share was 740,000,000 in principal of the Plaintiff’s existing claim in accordance with the second agreement from October 30, 1997 to September 12, 1999, deducted the Plaintiff’s share of KRW 289,938,082 from the interest income accrued in 1999 to the Plaintiff’s interest income accrued in 4,216,790,790,102 from the Plaintiff’s interest income accrued in 199, the Plaintiff deducted the Plaintiff’s share of KRW 740,000,000 and KRW 2839,289,280

2) Accordingly, on April 26, 2007, the director of the Ansan Tax Office imposed 252,335,140 won as global income tax for the Plaintiff in 199, and 2,870,895,980 won as global income tax for the year 2000.

(e) Determination by the Tax Tribunal and imposition of global income tax accordingly;

1) The Plaintiff filed a request for a trial with the Tax Tribunal on March 26, 2008, which was only dissatisfied with the imposition of global income tax for the year 2000 among the initial dispositions above (hereinafter “former dispositions”). The Plaintiff asserted that the amount collected from the key claim of this case in excess of the principal and interest of the existing claims held by the largestB at the time of the transfer of the key claim of this case does not constitute income subject to taxation as gains from the sale of claims, and that the income amount of the first collection and the second collection shall be deemed to be the year 2004 and 2007, respectively, which actually received the first collection and the second collection.

2) On December 27, 2010, the Tax Tribunal rendered a decision that “The previous disposition of this case, on the grounds delineated below, by re-auditing the amount received by the Plaintiff in excess of the principal and interest to be repaid as other income, and the necessary expenses corresponding to the year 2004 and 2007, including the date on which the receipt of the said payment was received, to rectify the tax base and amount to be corrected.”

3) 위 조세심판결정의 취지에 따라 재조사를 마친 피고는 ① 우선 제1차 약정에 따 른 1,000,000,000원의 기존채권도 제2차 약정에 따른 기존채권처럼 이 사건 쟁점채권 의 추심금에 의하여 변제되어야 할 채권으로 인정하고, ② 제1차 추심금 2,330,357,143 원에서 위와 같이 인정한 변제대상 채권액 2,029,938,082원3)과 추심비용 142,000,000 원을 공제한 158,419,061원을 2004년 귀속 기타소득으로, 제2차 추심금 1,306,519,192 원을 2007년 귀속 기타소득으로 보아, ® 2011. 3. 1. 원고에게 2004년 귀속 종합소득 세 82,242,710원과 2007년 귀속 종합소득세 667,932,227원을 부과하였다(이하 위 각 부과처분을 '이 사건 처분'이라 한다).

[Ground of Recognition] A without dispute, Gap evidence 1, 2, 3, Gap evidence 4-1, 2, 3, Gap evidence 5-8, Gap evidence 9-1, 2, 3, Eul evidence 1-1, 2, 3, 3-2, Eul evidence 3-1, 2, 3-2, and Eul evidence 4, and the purport of the whole pleadings

2. The assertion and judgment

A. The plaintiff's assertion

1) The transfer of the instant key claim constitutes a substitute for the repayment of the existing obligation, and thereby constitutes a repayment of the Plaintiff’s existing claim against the largestB. As such, the Plaintiff’s profits acquired by the collection of the instant key claim in excess of the principal and interest at the time of the extinguishment of the existing claim does not constitute a penalty, which is other income, but is merely a redemption interest of the claim that is not subject to income tax or a transfer marginal profit of the claim. Therefore, the instant disposition is unlawful as it does not exist

2) Even if the Plaintiff’s income from the transfer of the key claim of this case is taxed as other income, the Plaintiff’s income from other income is not money, but a claim (i.e., the part of the claim exceeding the amount of the existing claim at the time of the transfer of the key claim of this case) and the time when the income is attributed should be 200 years from July 24, 200, which is the time of the transfer of the key claim of this case. In addition, since the amount objectively anticipated to be recoverable from the claim at the time of the transfer of the key claim of this case falls far short of the amount of the existing claim at that time, there is no value of other income acquired by the Plaintiff from the transfer of the key claim of this case. Ultimately, the time when the other income is attributed and the amount of this case’s disposition is unlawful

(b) Related statutes;

It is as shown in the attached Form.

C. Determination on this safety defense

1) We examine the Defendant’s principal defense that the instant lawsuit was unlawful because it did not go through the pre-trial procedure.

2) In tax administration, two or more administrative dispositions for the same purpose were taken in the process of step-by-step and development, and are related to each other, and the tax authority has changed the taxation disposition subject to such disposition while in the course of tax litigation and there are common grounds for illegality. In the event that several persons are subject to the same obligation by the same administrative disposition, one of the persons who are not obligated to pay taxes has granted an opportunity to re-determine the basic facts and legal issues, such as when they go through legitimate pre-trial procedure, and the Commissioner of the National Tax Service and the National Tax Tribunal has provided a taxpayer an opportunity to further determine the basic facts and legal issues, and further, if there are justifiable grounds, such as where it seems that the taxpayer would be harsh to go through the pre-trial procedure, the taxpayer may file an administrative lawsuit claiming the revocation of the taxation disposition without going through the pre-trial procedure (see Supreme Court Decision 2007Du25817, May 28, 2009)

3) As to the instant case, the Plaintiff asserted that the amount received in excess of the principal and interest of the initial repayment object does not constitute income subject to taxation from mortgage sale marginal profit. The Tax Tribunal decided that the amount received as above constitutes other income under the Income Tax Act from delay damages received due to violation of the contract, and decided that the tax base and tax amount should be corrected at the time of attribution of 2004 and 2007. The fact that the Defendant made the instant disposition to the Plaintiff according to the purport of the decision is acknowledged as follows. In other words, when the Defendant rendered the instant disposition, it can be said that there was no specific issue other than whether the amount exceeding the principal and interest of the existing bonds should be included in the total income from other income in the first and second collection process, since it was actually necessary hearing as to the issues related to the instant disposition at the time of the said tax appeal, and thus, it cannot be viewed that the Plaintiff had a legitimate opportunity for the Tax Tribunal to determine the amount of the instant disposition separately from the tax appeal procedure in light of the legal principles as seen earlier.

D. Determination on the merits

1) As to whether the transfer of the instant key claim was made as a substitute payment for the existing obligation

A) An obligor’s transfer of another obligation in relation to the repayment of obligation to a creditor is presumed to have been transferred by means of a security for repayment of obligation or a repayment, barring special circumstances, and is not deemed to substitute for the repayment of obligation. Thus, the original claim cannot be deemed extinguished if the assignment of obligation is made. The obligor is exempted from liability within the scope of the obligor’s transfer by receiving the assignment of obligation from the obligee (see, e.g., Supreme Court Decision 95Da1660, Dec. 22, 1995).

B) First of all, the Plaintiff’s assertion that the transfer of key claim of this case was made as a payment in substitutes of existing obligation, as alleged by the Plaintiff, is deemed to have led to the confession of the Defendant as alleged by the Plaintiff. The Defendant asserted that, on August 9, 2011, “the most BB was made as a payment in substitutes of the claim of this case because it was difficult for the Plaintiff to perform the existing obligation to the Plaintiff.” However, according to the purport of the entire pleadings including the above preparatory documents, the Plaintiff alleged that the transfer of key claim of this case constitutes the transfer of assets at the cost, and thus, the transfer of assets at issue constitutes the transfer of assets at the cost, i.e., the transfer of assets at the most B, the object of taxation of the transfer income tax, but it appears to be the Plaintiff, as alleged by the Plaintiff, by mistake, and contrary to the above argument, it is difficult to view that the Defendant received the above claim as a payment in substitution of existing obligation of this case within the scope of the Plaintiff’s transfer in light of the substance of the existing claim collection in the claim of this case.

C) Meanwhile, there is no evidence to acknowledge that there was an agreement between the parties to transfer the instant claim in lieu of repayment of the existing claim at the time of the transfer of the instant claim. Thus, barring special circumstances, the assignment of the claim is presumed to have been made by means of collateral or repayment of the existing claim, barring special circumstances. In this regard, the Plaintiff’s intent to conclude the legal relationship with the Plaintiff based on the existing claim as an early assignment of the claim is consistent with the empirical rule, i.e., to the maximum extent B at the time of the transfer of the instant claim, if there were no assets other than the above claim. The Plaintiff’s efforts to recognize the transfer of the instant claim as having been made for the collection of the transferred claim by means of collateral or reimbursement of the existing claim is difficult to view that the transfer of the claim was not the transfer of the instant claim, but rather the Plaintiff’s efforts to collect the transferred claim by means of collateral and reimbursement of the existing claim as the transfer of the claim to the Plaintiff’s maximum extent possible under the circumstance of the transfer of the transferred claim to the Plaintiff No. 1.

D) Furthermore, the Plaintiff asserts that the instant claim was transferred as a payment in kind, even if the Defendant had taken the instant disposition by deeming the collection amount of the instant claim as other income but did not impose additional tax on the person who actually paid the collection amount to the Plaintiff as to other income, and Article 151(1) of the Enforcement Decree of the Income Tax Act provides that the transfer of assets for debt repayment, which is subject to capital gains tax, is excluded from the transfer of assets subject to transfer income tax. In light of the fact that the transfer of the instant claim does not meet the requirements of the above provision, and thus cannot be seen as the transfer of assets to secure the repayment of existing obligations, the instant claim was transferred as a payment in kind. However, the above circumstances required by the Plaintiff are merely premised on the legal provisions that are not directly related to the issue of fact-finding, which is whether the Plaintiff and the largest BB made the transfer of the instant claim as the actual payment in kind as an existing payment in kind or by means

E) Thus, the issue claim of this case is deemed to have been transferred by means of the security of the existing claim or the repayment of the debt. Accordingly, the plaintiff's assertion on the premise that the assignment of the claim was made by accord and satisfaction cannot be accepted.

2) As to the subject of income tax following the collection of the key claim of this case

A) Article 21 (1) 10 of the Income Tax Act provides that "a penalty or compensation received due to a breach or termination of a contract" shall be one of the other income subject to income tax, and Article 41 (7) of the Enforcement Decree of the Income Tax Act provides that "the penalty or compensation" under Article 41 (1) 10 of the Enforcement Decree of the Income Tax Act means the compensation received due to a breach or termination of a contract on the property right, which refers to the value of the money or other goods to compensate the damages exceeding the damages to the payment itself which is the original contract terms, regardless

B) As seen earlier, if the transfer of the claim in this case was made by means of the security of the existing claim or the repayment thereof, the amount derived from the rate of 21% per annum from October 31, 1997 to October 31, 1997 of the existing claim to KRW 740,00,000 of the principal amount under the second agreement shall be deemed as damages for delay in agreement due to nonperformance, i.e., penalty. Thus, the amount equivalent to the damages for delay from the first and second collection collected from the disputed claim in this case shall be deemed as other income as a penalty under Article 21 (1) 10 of the Income Tax Act. On the contrary, the Plaintiff’s assertion that the transfer of the claim in this case was imported as other income is merely an independent opinion of the Plaintiff’s assertion that it exceeds the amount of the existing claim at the time of the transfer (the claim in this case’s issue claim in excess of the amount of the existing claim at the time of the transfer). Accordingly

C) Furthermore, among the first and second claims, whether the amount of the Plaintiff’s existing bonds and the remaining amount of the claim due to satisfaction of the Plaintiff’s existing bonds can be seen as other income. According to the facts acknowledged earlier, the amount of the claim acquired by the Plaintiff through the transfer of the key bonds of this case (i.e., the principal amount of KRW 2,718,750,00,000 and KRW 174/224) and the amount calculated at the rate of 36% per annum from September 23, 1997 to the date of full payment, compared to the amount calculated at the rate of KRW 1,740,00,000 and KRW 740,000 among them, and KRW 9,000,000 among them, the amount of the existing bonds held by the Plaintiff against the largestB at that time should be appropriated to the Plaintiff’s repayment of the principal amount of the claim of this case from October 30 to 21, 1997, as well as the remaining portion of the amount of the claim collected.

Therefore, among the first and second collection amounts, the above excess collection amounts are also other income as penalty under Article 21 (1) 10 of the Income Tax Act.

3) Conclusion

In full view of the above, the instant disposition imposing income tax on the amount within the scope of the above other incomes out of the first and second collection amounts is lawful, which is ultimately lawful.

3. Conclusion

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