Plaintiff Co., Ltd. (Law Firm Haok, Attorneys Jeong-hyeong et al., Counsel for the plaintiff-appellant)

The director of the tax office

September 27, 2006

Seoul Administrative Court Decision 2005Guhap7747 decided August 25, 2005

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 imposition of 11,024,30 won of corporate tax for the business year 1999, 11,024,330 won of December 15, 2003, and 83,952,030 won of corporate tax for the business year 200, and 113,702,320 won of corporate tax for the business year 2002, and each imposition of 96,041,570 won of corporate tax for the business year 2001, January 10, 2004, and 67,447,280 won of corporate tax for the business year 201.

1. Quotation of judgment of the first instance;

A. The reasoning for the court's explanation in this case is as follows: ① 4 pages 1, 4 April 15, 2004 among the grounds for the judgment of the court of first instance; ② 1) the part of the judgment of the court of second instance is changed to the entry of the "part 1, 2, 2004" below; ③ the part of the judgment of the court of first instance 2-A, 3) the "claim of the plaintiff" and 2-C, 3) the "judgment" are as follows: (a) the reasons for the judgment of the court of first instance other than adding the "additional assertion and determination of the plaintiff" as stated in Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act. Thus, it is cited as it is in accordance with Article 420 of the Civil Procedure Act.

B. Parts used for repair;

(1) First, the plaintiff's assertion is examined as to (i).

㈎ 국외거래에서의 금융리스에 관한 회계 처리

A lease refers to a contract under which another person's goods are used and the price for the goods is paid. Therefore, it is reasonable to appropriate to include the goods subject to a lease contract as its assets as the ownership of the leased company. However, in the case of a financial lease, a lessee takes the form of a lease contract in order to borrow the price from a lessee to a lessee company while paying the price in installments and to secure the obligation to pay in installments, and the economic substance of the lease is deemed to be the purchase of the goods and the lease of the purchase price. Therefore, the substantial owner of the leased goods is the lessee.

Considering such economic substance, Article 24(5) of the Enforcement Decree of the Corporate Tax Act provides that, in the case of financial leases, the object of the lease shall be deemed as the assets of the lessee, and in other cases, the object shall be deemed as the assets of the lessee company (However, the time of acquisition shall be the time of acquisition, regardless of whether the price is liquidated or transfer of ownership in accordance with Article 24(3) of the Enforcement Decree of the Corporate Tax Act, the value of the fixed assets shall

However, according to the above Enforcement Decree and Article 13 of the Enforcement Rule of the Corporate Tax Act, financial leases that can be depreciated by appropriating assets as assets of lessee under the Corporate Tax Act are limited to transactions with domestic lessors, and the above provision cannot be applied in cases of leasing assets from overseas lessors. However, lease transactions with foreign lessors are different from lease transactions with domestic lessors. However, there is no problem that the other party to transactions is a foreign company, and there is no reason to treat them differently.

For this reason, Article 68(3) of the Enforcement Decree of the Corporate Tax Act provides that, in cases where an object is leased from a foreign lessor, if the object is similar to a financial lease, it shall be treated equally as a long-term installment transaction to acquire the object. In other words, in a foreign transaction, it shall be recognized that the lease of the asset under a conditional agreement for transfer of ownership is a long-term installment transaction, and Article 24(3) of the Enforcement Decree of the same Act provides that in such a case, the value of the fixed asset may be appropriated for depreciation by appropriating it in full as an asset. Therefore, in applying the Corporate Tax Act, the financial lease in an overseas

㈏ 금융리스의 경우 리스물건의 취득가액

Article 24(3) of the Enforcement Decree of the Corporate Tax Act provides that "the total value of fixed assets shall be appropriated as assets," and Article 72(1)1 of the Enforcement Decree of the same Act provides that "the acquisition value of assets shall be added to the purchase value," and Article 72(3)1 of the same Decree provides that "where a debt incurred from a sale on long-term installment basis is assessed as the current value and appropriated as the discounted value discount amount according to corporate accounting standards, the present value discount margin shall be excluded from the acquisition value

Furthermore, the corporate accounting standards provide that "the acquisition cost of tangible assets shall be the value calculated by adding the incidental expenses to the acquisition cost or the purchase value of the relevant assets" (Article 62(1)), and that "the value of liabilities recorded on the balance sheet shall be the amount of liabilities borne by the enterprise" (Article 64). In cases of bonds and obligations arising from transactions on long-term deferred payment terms, long-term monetary lending transactions, or other similar transactions, and where the difference between the nominal value and the current value is important, the current value shall be assessed, and such current value shall be the value at the discount rate of the relevant transactions, which shall be the total value received or to be paid in the future due to the relevant claims and obligations, and the difference between the nominal value of the above bonds and obligations and the current value shall be written in the form of deducting from the nominal value of the relevant bonds and obligations, and the interest rate, period and method of accounting shall be written in the form of calculating or returning them by applying the effective interest rate, and shall be appropriated as the subject of interest expenses or interest profits (Article

In full view of the above provisions, in the case of sale on long-term installment terms (the same shall also apply to financial leases), the sales price shall be included not only in the sales price, but also in the acquisition price of interest on installment. However, it shall be interpreted that the difference between the nominal price and the present value is excluded from the acquisition price of the present discount margin only in cases where the current value is calculated by subtracting the total amount to be paid in the future from the effective interest rate of the transaction in question as the effective interest rate of the transaction in question, and the difference between the nominal price and the present value shall be calculated as the interest expense item as the interest expense item. Therefore, in this case, as long as the plaintiff did not include the interest expense item in the interest expense item

C. Additional assertion and determination

In the case of KRW 420,892,635 in excess of the legitimate revaluation reserve of the instant vessel, the Defendant, without any legal basis, did not transfer all or part of the surplus in the capital. However, the Plaintiff asserted that the Defendant’s disposal of increased surplus on January 10, 2004 (the Plaintiff’s assertion on January 15, 2004 appears to be erroneous) was unlawful.

However, as seen earlier, even though the capital surplus which can be transferred to the capital was not in excess of 1,079,107,365 won for revaluation reserve, the Plaintiff paid 1.5 billion won to the non-party who was the representative director of the Plaintiff company at the time of capital transfer, and thus, 420,892,635 won, which is the difference, cannot be deemed as having been transferred to the capital. Thus, the Defendant’s disposition on January 10, 2004 on this basis is lawful, and the Plaintiff’s assertion against this is without merit.

2. Conclusion

Therefore, the judgment of the first instance court is legitimate, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.

Judges Cho Yong-ho (Presiding Judge)