Cho High Court Decision 2007Da2232 ( December 26, 2007)

Profit from forward exchange transactions in swap transactions shall not constitute interest income.

The United Nations swap deposit consists of the United Nations Fixed Deposit Transactions and Exchange Transaction Contracts, and the gains from forward exchange transactions do not constitute taxable income under the Income Tax Act.

The contents of the decision shall be the same as attached.

1. The Defendant’s rejection of correction as stated in the separate disposition is revoked in both the disposition of global income tax imposed on the Plaintiff as shown in the separate disposition and the separate disposition of refusal of correction as indicated in the separate disposition.

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

The same shall apply to the order.

1. Details of the disposition;

A. From around 2003 to 204, the Plaintiff entered into a contract with the new bank (hereinafter referred to as the “new bank”) to be paid in Korean currency in the name of the swap deposit contract (hereinafter referred to as the “instant contract”). ① The Plaintiff purchased the UN in Korean currency and deposited the UN at a fixed interest rate of 0.25% before and after the maturity and deposited the UN at the rate of 0.25% before and after the maturity and at the same time (hereinafter referred to as the “ UNCITRAL”) and entered into a contract to pay in Korean currency at the maturity or termination of the said UN deposit contract (hereinafter referred to as the “securities exchange transaction”).

B. In connection with the instant contract, the new bank withheld income tax only on the part of the Plaintiff’s profits which falls under the UN Regular Deposit Holder, and did not withhold on the remaining portion of the profits from the redemption of gift.

C. Under the premise that the total profit received by the Plaintiff in light of the substance over form principle constitutes interest income under Article 16(1) of the Income Tax Act in relation to the instant contract, the Defendant imposed global income tax (including additional tax) on the Plaintiff as originally imposed disposition among the following table. Accordingly, in the national tax adjudication filed by the said Plaintiff, some of the tax amount to be reduced as the following corrected portion in the national tax adjudication filed by the said Plaintiff was reduced, and eventually, only the tax amount indicated in the “ residual tax amount” column in the table below remains.

D. Meanwhile, in the case of global income tax for which the Plaintiff received in 2004 among the instant contract, the Plaintiff filed a request for correction for the refund of the amount of tax related to global income tax, not interest income, among global income tax that was paid in advance. However, the Defendant rejected the Plaintiff’s request for correction as stated in the details of the disposition rejecting correction (the disposition imposing the above sub-paragraph (c) together with the disposition rejecting correction), and the Plaintiff appealed against it. However, the above claim was dismissed on December 28, 2007.

[Basis] Facts without dispute, Gap's statements, Gap's 1 through 5, 7 through 19, Eul's statements, 1 through 3, 5, 6, 8 through 12, 22 through 24, 26 through 28, 30, 33 through 38 (including provisional numbers), and the purport of the whole theory of changes

2. Whether the disposition is lawful;

A. The plaintiff's assertion

Each disposition of this case is unlawful on the following grounds.

(1) The instant contract consists of the Universal Regular Deposit Transactions Contract and a separate gift exchange transaction contract. The gains from forward exchange transactions do not constitute taxable income under the Income Tax Act.

(2) In addition, commercial banks were treated as non-taxation on the part of a gift exchange contract for financial products similar to those of commercial banks since 2002. Although the National Tax Service decided that the portion of the gift exchange contract was not subject to taxation, it goes against the principle of trust protection.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

(1) From 2002, the new bank developed a financial product that entered into a currency exchange transaction and a forward exchange transaction with a customer, and made public relations and sales with a customer as more favorable than ordinary regular deposits at an effective return rate compared to ordinary deposits. The customer who entered into the instant transaction after paying Korean currency to the new bank and exchanging it into the United Nations into a foreign currency deposit contract with the bank. At the same time, the customer entered into a gift exchange contract with the maturity of the maturity and the unification of the UN currency deposit contract with the maturity of the maturity of the foreign currency deposit contract, setting the rate of exchange on the basis of the UN / the original futures exchange rate at the maturity of the maturity and at the same time setting the rate of exchange at the rate of exchange at the rate of exchange (the agreed goods exchange rate) of the gift (the agreed goods exchange rate).

(2) According to the instant contract, customers deposit won currency at a new bank by changing them into the United Nations. While there is almost no interest on advance payment at maturity, they came to know of the gift redemption profits based on the futures exchange rate already agreed at the time of the conclusion of the contract (in Korean won and 3% per annum at the time of the contract). As a result, they are similar to the fixed interest rate, and gift redemption profits under the Income Tax Act are also tax-exempt, so they could secure high profits compared to the fixed amount of won currency deposit, so they could be subject to the comprehensive taxation on financial income.

(3) 엔/원 선물환시장은 2006. 5. 29.경까지 우리나라에 존재하지 아니하였으므로, 신한은행은 @@@@ 주식회사로부터 이 사건 계약 당시 공시되는 만기의 달러/원 스왑포인트('스왑포인트'란 선물환율에서 현물환율을 뺀 금액을 말한다)와 달러/ 엔 스왑포인트를 제공받아, 달러/원 스왑포인트와 달러/원 현불환율을 합산하여 산정한 달러/원 선물환율을 달러/엔 스왑포인트와 달러/엔 현불환율을 합산하여 산정한 달러/ 엔 선물환율로 나눈 엔/원 선물환율{재정(載定)환율, cross rate}을 기준으로 '약정선물 환율'을 정하였고, 위와 같이 산정된 엔/원 선불환율(재정환율)과 엔/원 현물환율의 차 이인 엔/원 스왑포인트는 2002년겸부터 2005년경까지 계속 양(+ )의 상태에 있었다. 다만, @@@ 주식회사로부터 제공받은 달러/원 스왑포인트와 달러/엔 스왑포인트는 매시간 변동하묘로 이를 이용하여 엔/원 선물환율을 계산하면 고객이 선물환계약을 체결한 시간에 따라 서로 상이한 약정선물환율을 적용하여야 할 것이지만, 신한은행은 매일 사내 인트라넷을 통하여 'DEPO 거래수익률'을 게시하고 동일한 날짜에 계약된 모든 엔화스왑예금의 선물환계약에 대하여는 통일한 선물환율을 적용하도록 하였다.

(4) In the event that, while running the instant transaction, there is no separate declaration of intention from the customer on the repurchase agreement before maturity, the new bank automatically terminated the Universal Regular Deposit Agreement and the Futures Exchange Agreement and deposited it into the customer account designated in advance. In the event of termination of the Universal Regular Deposit Agreement, the gift exchange agreement was also terminated at the same time.

[Reasons for Recognition] The above evidence

D. Determination

(1) Whether a forward exchange contract is included in the UN Fixed Deposit Agreement

When a taxpayer engages in economic activities, one of the several legal relations may be selected to achieve the same economic purpose, and the tax authority shall respect the legal relations chosen by the parties, barring any special circumstance (Supreme Court Decision 2000Du963 Decided August 21, 2001).

Although the new bank, at the time of early termination of the international currency deposit contract, handled that the maturity of the international currency deposit contract and the maturity of the forward exchange contract are terminated together, and that the forward exchange contract was operated together with the international currency deposit transaction, the issue of whether the bank should enter into a certain method of financial instruments transaction contract by raising funds from its customers is one of its own choice by taking into account the efficiency in achieving its purpose, the degree of bearing relevant expenses, such as tax, etc. If the bank formed a separate legal relationship with the customer, the contents and scope of the tax arising therefrom should be determined individually in accordance with the legal relationship, and the same cannot be treated uniformly under the tax law.

However, considering the following circumstances, i.e., ① the Plaintiff prepared a separate disposal agreement between the new bank and the "application for foreign currency deposit transaction", i.e., a separate disposal agreement between the new bank and the "agreement on Futures Exchange Transaction", and ② the new bank entered into a gift exchange contract with its customers separately, ② the new bank entered into a gift exchange agreement with its customers at the rate of exchange calculated on the basis of USD / won and US/N exchange rates and the present rate of exchange; ③ the new bank entered into a gift exchange agreement with its maturity at the rate of exchange; ③ the new bank entered into a gift exchange agreement with its customers in Korean currency at the rate of exchange agreed upon at the maturity; ③ the new bank and its customers enter into a gift exchange agreement only in formality, and the fact that there is no express or implied agreement between the parties to the gift exchange contract as void, and ④ the fact that the new bank did not have any profit from the new currency exchange agreement, as a result, is more specific and more specific, separate from the new currency exchange agreement.

(2) Whether profits from futures exchange transactions constitute interest income from the use of money

In general, interest is a substitute for money received in proportion to the principal amount and the lending period. It is a matter of interpretation of how to determine whether a transaction, such as deposits, installment payments, fees, etc. between a bank and a customer constitutes interest received by a customer or non-taxable income as a profit from foreign exchange transactions. This is a matter of interpretation of how to consider a legal act related to the transaction in question. However, in light of the substance or form of the transaction in question, not simply depends on the content or form of the transaction in question, but rather on the basis of the parties’ intent and the process of conclusion of the contract in question, the degree of return on profit and its profit are conclusive, and the whole transaction process should be substantially determined.

In addition, even if the transaction form, which the parties take place, is an act to avoid the excessive burden of tax, it should be deemed valid unless there are special circumstances, such as that the above act constitutes the disguised act. Therefore, in order to deny this, it is necessary to take legal and specific measures in light of the demand for legal stability and predictability of the above no taxation without the law, which protects taxpayers from the person with the power (see, e.g., Supreme Court Decision 90Nu3027, May 14, 191).

In light of the facts acknowledged above, (1) The gift exchange contract of this case is a separate contract that is distinct from the UNFCCC regular deposit contract in order to achieve the purpose of the UNFCCC regular deposit contract, and (2) as if the gift exchange contract is not the most unfair act, the new bank obtained an opportunity to manage the UNFCCC fund because it does not seem to be the most unfair act, and (3) the profits gained by the plaintiff are not generated in proportion to the duration of principal and interest rate. (4) Considering the fact that the gift exchange contract of this case only closely combines with the UNFCCC regular deposit contract in order to achieve the purpose of the UNFCCC regular deposit contract, and (5) considering the fact that the new bank cannot be said to have obtained an opportunity to manage the UNFCCC fund, it is difficult to conclude that the gift exchange contract of this case does not fall under the securities exchange transaction of this case even if there is no difference between the securities exchange contract and the general deposit transaction of this case.

In addition, taxation on marginal profits from repurchase agreements on bonds or securities is imposed by offering an opportunity to use money from a contractor to the time when the conditions for repurchase are fulfilled by selling bonds or securities conditionally, and considering certain profits paid in return for repurchase as income. Since the Plaintiff’s payment in return for the offering of an opportunity to use them to the new bank after the offering of an opportunity to use them is limited to the amount equivalent to the UN interest and it cannot be included in the gift redemption marginal profits, it is difficult to view that the gift redemption marginal profits from repurchase agreements on bonds or securities or similar profits are difficult.

Even if the profits from repurchase agreement are similar to the profits from repurchase agreement of bonds or securities, it is subject to the profit margin of 'bonds' or ‘securities' under Article 16 (1) 9 of the Income Tax Act, and Article 24 of the Enforcement Decree of the same Act. Although Article 16 (1) 13 of the Income Tax Act is defined in the form of a tangible comprehensive principle, the expanded interpretation of 'bonds' or ‘securities' as interest income can not be allowed in light of the principle of no taxation without law.

(3) Sub-decisions

Therefore, inasmuch as the gift redemption marginal profit of this case is deemed to constitute interest income, the pertinent income tax is imposed, and each of the instant dispositions rejecting the request for rectification of global income tax is unlawful.

3. Conclusion

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