The scope of "provisional payment which is not related to the business" under Article 18-3 (1) 3 of the former Corporate Tax Act and the criteria for determining whether it falls under such scope.

Article 18-3 (1) 3 of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998); Article 43-2 (2) 2 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998); and Article 43-2 (2) 2 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998); “Provisional payment” includes not only pure meaning but also a loan equivalent to a loan, such as a claim for indemnity, and also a case where a provisional payment is provided with interest at a reasonable interest rate. Whether the provisional payment is related to the business shall be objectively determined based on the business purpose

Article 18-3 (1) 3 of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998) (Article 28 (1) 4 (b) of the current Corporate Tax Act) and Article 43-2 (2) 2 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998) (see the current Article 53 (1))

Hanjin Co., Ltd. (Law Firm Sejong, Attorneys Osung-hwan et al., Counsel for the plaintiff-appellant)

Head of Mapo Tax Office

Seoul High Court Decision 2001Nu16233 delivered on April 19, 2002

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

Article 18-3 (1) 3 of the former Corporate Tax Act (wholly amended by Act No. 5581 of Dec. 28, 1998); Article 43-2 (2) 2 of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970 of Dec. 31, 1998); and Article 43-2 (2) 2 of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970 of Dec. 31, 1998); “Provisional payment” includes not only pure meaning, but also a loan equivalent to a loan due to the nature of a bond such as a claim for indemnity, and also a case where a provisional payment is provided with interest at a reasonable interest rate. Whether the provisional payment is related to the business shall be objectively determined on the basis of the purpose of business or business contents of the relevant corporation (see, e.g., Supreme Court Decision 91Nu

According to the reasoning of the judgment below, the court below found that the plaintiff, a corporation for the purpose of manufacturing, selling, etc. non-ferrous metals, deposited the funds in the non-party Jinjin Co., Ltd. (hereinafter referred to as "non-party Co., Ltd.") which is a related party, with the purpose of the manufacturing, selling, etc. the funds of this case, and determined that the deposit of the funds of this case constitutes the provisional payment made without relation to the plaintiff's business regardless of the plaintiff's business's name in light of the plaintiff's purpose and business contents, and that the above deposit of funds does not constitute the provisional payment made without relation to the plaintiff's business, and that the plaintiff deposited the funds in the course of managing the surplus funds, or accounted the interest paid by the non-party Co., Ltd. to the plaintiff as business expenses.

In light of the above legal principles and records, the above recognition and decision of the court below is just, and there is no error in the misapprehension of legal principles as to provisional payment due to the violation of the rules of evidence and there is no error in the misapprehension of legal principles as to the

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition.

Justices Lee Yong-woo (Presiding Justice)