Seoul Guarantee Insurance Co., Ltd. (Law Firm Square, Attorneys Kim Tae-tae et al., Counsel for the defendant-appellant

Sejong director of the tax office (Attorney Lee Jae-soo, Counsel for defendant-appellant)

April 29, 2009

Seoul Administrative Court Decision 2007Guhap38950 decided August 12, 2008

1. The plaintiff's appeal is dismissed.

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

The decision of the first instance shall be revoked. The defendant's rejection disposition against the plaintiff on December 8, 2006 against corporate tax of 68,97,154,019 won shall be revoked.

1. Quotation of judgment of the first instance;

The court's reasoning concerning this case is as stated in the reasoning of the judgment of the court of first instance except for the following changes among the judgment of the court of first instance. Thus, the court's reasoning is cited in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

○ Change of “Legal Benefits Tax Law” into “Corporate Tax Law” in the 8th sentence below the 3th sentence

○ Change of “profit and loss or loss” under 2 under 4 pages into “profit or loss”

Pursuant to Article 40(1)(A) of the Corporate Tax Act, the title "Article 40(1)(A)" is changed to "Article 40(1)(A) of the Corporate Tax Act."

○ 11 The following is added to the phrase “the fact that the corporation has reported and paid corporate tax” under 4:

In determining whether individual bonds should be included in gross income under the Corporate Tax Act, once the rights are established and should be included in gross income for the pertinent business year if there is no legal limitation on the exercise of the rights (see, e.g., Supreme Court Decision 2004Du3328, May 13, 2005). However, unlike such individual bonds, the amount of indemnity claims should be calculated by estimating the recovery rate of the total amount of claims, such as the right to indemnity acquired in the process of resolving insurance accidents, and the indemnity benefit is calculated by calculating the amount of indemnity claims. Therefore, it is difficult to apply the legal principles on individual bonds as above to the indemnity interest of this case that can change according to the predicted recovery rate. Since corporate accounting standards do not necessarily coincide with each other, it is difficult to determine the rights and obligations under the Corporate Tax Act, and thus, whether the rights and losses that may arise with specific facts should be included in gross income and deductible expenses even if there are corporate accounting standards, it should be sufficiently considered that the amount of indemnity or loss should be included in deductible expenses for 10 years or more than the aforementioned losses.

2. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance shall be just and it shall be dismissed as the plaintiff's appeal. It is so decided as per Disposition.

Judges Cho Jae-hoon (Presiding Judge)