Whether the calculation of provisional payment and recognized interest related to business is unconstitutional on the grounds of no taxation without law.

The delegation of the specific scope of provisional payments to the Presidential Decree shall not be deemed null and void because it deviates from the delegation scope and limit of the parent law, and the denial of wrongful calculation shall not be deemed null and void because it deviates from the delegation scope and limit of the corporate tax law as the parent law.

Article 18-3 of the former Corporate Tax Act, Article 28 of the Corporate Tax Act

Article 89 of the former Enforcement Decree of the Corporate Tax Act, Article 52 of the Corporate Tax Act

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked.

The Defendant’s imposition of corporate tax of 36,158,930 won for the Plaintiff in 1998, corporate tax of 150,099,440 won for the year 1999, corporate tax of 1899, corporate tax of 189,709,290 won for the year 200, and corporate tax of 87,517,80 for the year 2001 shall be revoked.

1. Quotation of judgments of the first instance;

The reasoning for the court’s explanation on the instant case is as stated in the reasoning of the judgment of the first instance, except for the addition of the following judgments, and thus, this is acceptable in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act

2. Additional determination

A. The plaintiff's assertion

(1) Article 18-3(1)3 of the former Corporate Tax Act (wholly amended by Act No. 5581, Dec. 28, 1998); Article 28(1)4(b) of the former Corporate Tax Act (wholly amended by Act No. 5581, Dec. 28, 1998); and Article 28(1)4(b) of the former Corporate Tax Act (wholly amended by Act No. 5581, Dec. 28, 1998); hereinafter referred to as the "legal provision of this case") which provides the basis for the taxation of this case, provides that "the provisional payment, etc., made without any relation to business shall be prescribed by Presidential Decree" and comprehensively delegated the taxation requirements to the Presidential Decree, thereby violating the principle of no taxation without law under the Constitution, the prohibition of comprehensive delegation legislation, the protection of property rights

(2) In addition, Article 43-2 (2) 2 of the Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970, Dec. 31, 1998); Article 53 (1) of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970, Dec. 31, 1998) provides that "provisional payment, etc. which is not related to the business of the corporation" refers to the amount of loans which are not related to the business of the corporation regardless of their titles," and that "the provisional payment, etc. which is different from the concept of provisional payment in the meaning of the Korean language or corporate accounting standards shall be defined as the provisional payment, thereby unfairly expanding the concept of provisional payment, so the above provision of the Enforcement Decree itself shall be null and void as it deviates from the scope and limit of delegation by the law.

(3) With respect to inclusion of the interest on the recognition of wrongful calculation in gross income, Article 47 (2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970, Dec. 31, 1998) which served as the basis of the instant taxation (amended by Presidential Decree No. 15970, Dec. 31, 1998) provides that where money is loaned to investors, etc., the difference between the amount equivalent to the interest on the basis of the relevant interest rate and the amount equivalent to the relevant interest rate shall be included in gross income within the scope of the loan, notwithstanding the provisions of paragraph (1). In a case where an improper act is denied and the interest on the basis thereof is to be included in gross income, the recognized interest rate shall be calculated based on the reasonable monthly interest rate of the head of the Gu tax office in the notice of the amount equivalent to the market price of the bonds at all times. Thus, the calculation of the interest rate on the basis of the interest on the loan account is null and void by deviation from the scope and limit

B. Determination

(1) As to the first argument

(A) Article 38 of the Constitution provides that "All citizens shall have the duty to pay taxes under the conditions as prescribed by Act." Article 59 provides that "types and rates of taxes shall be determined by Act" and declares the principle of no taxation without the law. The ideology of the principle of no taxation without the law, which is based on these constitutional provisions, is to ensure the property rights of the people by stipulating the requirements for taxation in the law enacted by the National Assembly, which is the representative organ of the people, and to ensure the legal stability and predictability of people's lives (see Constitutional Court Order 93Hun-Ba32 delivered on November 30, 195).

(B) However, since it is practically impossible to impose taxes on the grounds of complex and diversification of social phenomenon, the limit of professional and technical ability of the National Assembly, and the limit of time application ability, but all laws and regulations are related to imposition of taxes without exception, and it is not appropriate to do so. Thus, in extenuating circumstances, such as the need to immediately respond to changes in economic reality or the development of professional technology, it is allowed to delegate matters to be prescribed by laws to administrative legislation more shot than the formal law of the National Assembly (see Constitutional Court Order 93Hun-Ba2, Jun. 26, 1996).

(C) Article 75 of the Korean Constitution also provides that "The President may issue Presidential Decrees in the case of matters delegated with specific scope by law," which provides the basis for delegated legislation, and at the same time provides that "the delegation shall be determined by specific scope."

(D) However, the legal provision of this case does not simply provide that "the scope of interest on loans paid by a domestic corporation during each business year, which is not subject to non-deductible expenses, as prescribed by Presidential Decree", and it does not provide that "the provisional payment, etc., made without connection with the business, etc., shall be prescribed by Presidential Decree" of the relevant corporation. This provision provides that "The scope of interest on loans excluded from deductible expenses shall be considerably limited to the scope of interest, so that Presidential Decree, which is a subordinate law, can be prescribed flexibly by Presidential Decree according to the socioeconomic situation at that time." Thus, even any person can predict the major principles of the contents to be prescribed by Presidential Decree from the legal provision of this case. Thus, the legal provision of this case complies with the limits of delegated legislation under the

(E) Therefore, the legal provision of this case cannot be deemed to be contrary to the principle of prohibition of comprehensive delegation under the Constitution or to be contrary to the duty of tax law, and in light of the form, content, etc. of the legal provision of this case as well as the form, contents, etc. of the legal provision of this case, which is beyond the ordinary social constraints on property rights, and thus violates the basic contents of property rights beyond the ordinary social constraints on property rights, and thus, it cannot be deemed to have violated the principle of guarantee of property rights under the Constitution. Therefore, the Plaintiff’s assertion on

(2) As to the second argument

The legislative intent of the instant legal provision to prevent the inclusion of interest on loans for the purpose of raising provisional payments, etc. paid by a corporation without connection with the business of a special person in the deductible expenses is to prevent corporate private company's own personal needs from falling into insolvency. In addition, in order to prevent a company from becoming bankrupt, regardless of its business, by inter-affiliated companies in a special relationship with one another, such as loans, etc., regardless of their own business, the other companies are to strengthen the competitiveness of the company by improving the corporate financial structure and inducing sound economic activities.

In light of this, the term "provisional payments paid without relation to the business of 'the object subject to non-Inclusion of interest paid in deductible expenses' is interpreted to include not only pure meaning loans but also loans corresponding to the nature of claims (see, e.g., Supreme Court Decisions 2003Du7651, May 12, 2006; 2002Du4068, Mar. 11, 2003). Therefore, the specific scope of provisional payments under the legal provision of this case delegates the Presidential Decree with the scope of provisional payments, and accordingly, the concept of provisional payments cannot be deemed null and void because the above provision of the Enforcement Decree, which provides "a loan of funds not related to the business of the corporation concerned, regardless of the name, exceeds the delegation scope and limit of the parent law." Thus, the plaintiff's above assertion is without merit.

(3) As to the third argument

(A) Review of legislation

1) Article 20 of the former Corporate Tax Act (amended by Act No. 5881 of Dec. 28, 1998) provides that "Where it is deemed that the act of a domestic corporation or the calculation of income amount has unjustly reduced the tax burden on the corporation's income in the transaction with a related party as prescribed by the Presidential Decree, the Government may calculate the income amount for each business year of the corporation notwithstanding the calculation of the income amount of the corporation." Article 46 of the Enforcement Decree of the Corporate Tax Act (amended by the Presidential Decree No. 15970 of Dec. 31, 1998) provides that "one case where it is deemed that the tax burden has been reduced unreasonably to the investor, etc.", and Article 47 of the Enforcement Decree provides that the difference between the loan amount and the interest rate under the provisions of the former Corporate Tax Act (amended by the Presidential Decree No. 15970 of Dec. 31, 199) shall be applied to the method of calculating the income amount."

2) After the revision of the Corporate Tax Act on December 28, 1998, the concept of "market price" under Article 52 (2) of the Act and Article 89 (3) of the Enforcement Decree thereof, as the provisions on the denial of wrongful calculation were amended as follows.

3) On the other hand, as seen above, the calculation of wrongful calculation means an act of reducing or excluding the tax burden incurred when a taxpayer takes a reasonable transaction form due to a taxpayer’s failure to take a normal and reasonable transaction form. The purpose of Article 20 of the former Corporate Tax Act Article 20 is to determine whether a transaction with a corporation and a special-related person under the provision of the denial of wrongful calculation under the former Corporate Tax Act is to disregard the economic rationality by abusing the various forms of transaction as stipulated in each subparagraph of Article 46(2) of the Enforcement Decree of the Corporate Tax Act, and it is deemed unfair in terms of tax law by imposing a tax on the person with the authority to impose tax, deeming that there was an income objectively deemed reasonable, and thereby preventing the act of tax evasion. Determination of whether the economic rationality exists shall be made based on whether the transaction is unfair in light of the price applied or determined to be applied to a sound social norms or practice, and a normal transaction between the persons who are not the special-related person (see, e.g., Supreme Court Decision 200Du76829, Sep. 4, 200202).

In the case of lending money to special-related persons, etc. at an interest rate lower than that of the lending corporation, it is reasonable in light of sound social norms and commercial practice to include the difference between the interest rate calculated on the basis of the monthly interest rate of the lending corporation in ordinary cases. However, if the lending corporation itself has lent money to special-related persons, etc. at an interest rate lower than that of the lending corporation despite the poor financial standing in which it bears its liabilities at an interest rate higher than that of the lending corporation, there is a reasonable ground to see the case of lending money at an interest rate lower than that of the lending corporation in light of the purport of the aforementioned wrongful calculation system. In addition, in ordinary cases, it is difficult for the lending corporation to have more credit or financial standing than that of the lending corporation, and therefore, in order for the lending corporation to borrow money from a person other than the lending corporation, it is deemed that the lending corporation should bear more interest rate than that of the lending corporation at least than that of the lending corporation. Therefore, in light of the above, the lending corporation cannot be deemed as invalid than that of the loan amount equivalent to the loan interest rate.

4) In addition, Article 47 (2) of the former Enforcement Decree of the Corporate Tax Act (amended by Act No. 15970 of Dec. 31, 1998) and Article 89 (3) of the Enforcement Decree of the same Act (amended by Act No. 15970 of Dec. 31, 1998) provide that where the money is leased to a person with a special relationship, the recognition interest rate for the relevant loan shall be deemed to be the interest rate on the loan in calculating the interest rate on the relevant loan when the party agreed to receive the interest at the overdraft interest rate by setting the due date. Thus, in calculating the interest rate on the relevant loan, it shall be deemed to be the interest rate on the overdraft loan in calculating the interest rate on the relevant loan, where the non-party company is a corporation and used the outstanding loan as business fund and used the borrowed loan, the repayment period shall be deemed to be determined. Thus, each of the dispositions of this case

However, Articles 47(2) and 89(3) of the Enforcement Decree of the above Act apply only to cases where the plaintiff agreed to receive interest at the overdraft interest rate while lending money to a related party, as clearly stated in the relevant law. In this case, since the plaintiff did not agree to receive interest from the non-party company as the overdraft interest rate, the above Articles 47(2) and 89(3) of the Enforcement Decree of the above Act cannot be applied.

Therefore, the plaintiff's above assertion is without merit.

3. Conclusion

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

[Insuwon District Court 2003Guhap5656, 18 August 2008]

1. The plaintiff's claim is dismissed.

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

The defendant revoked each disposition of imposition of KRW 36,158,930, corporate tax for the year 1998 against the plaintiff, KRW 150,09,440, corporate tax for the year 1999, KRW 189,709, KRW 290, corporate tax for the year 2000, KRW 87,517,880, corporate tax for the year 2001.

1. Circumstances of dispositions;

The following facts can be acknowledged by taking into account the following facts: (a) there is no dispute between the parties; (b) evidence Nos. 1 through 20; (c) evidence Nos. 1 through 3-8; and (d) witness testimony of the public-private partnership country.

A. The Plaintiff is a company established for the purpose of construction and civil engineering works on February 18, 1982. ① On December 23, 1997, the Plaintiff: (a) on December 30, 1997, the Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970, Dec. 30, 1998; hereinafter referred to as the “Decree”); (b) on December 30, 1997, the Plaintiff owned 358,382 shares issued on the ○○○ Day Co., Ltd. (hereinafter referred to as the “○○ Day”) with an investor with a special relationship under each subparagraph of Article 46(1) of the former Enforcement Decree of the Corporate Tax Act (wholly amended by Presidential Decree No. 15970, Dec. 30, 1998; hereinafter referred to as the “Decree”); (c) the sales interest of ○○○○ Co., Ltd. was sold in advance to ○○○○ Co., Ltd. (hereinafter referred to the instant shares”).

B. (1) The Plaintiff received down payment of KRW 525,191,00 for each contract from 00,000 for the intermediate payment and the remainder, unlike the contents of the contract, and KRW 100,000 for the intermediate payment on April 29, 1998, and KRW 808,337,00 for the intermediate payment and the remainder on December 23, 1999, respectively, and KRW 358,382,00 for the remainder on December 31, 200; ② the balance of the outstanding amount which was not received from the non-party company with the settlement of the sales revenue and the purchase cost is 903,279,215, 100, 102,431, 218, 200, 2013, 313, 2018, 2013, 2013, 2013, 2015, 2013, 2018.316.3

(3) The defendant shall calculate 203.12. 203.17 to 36, 196, 30, 47.47, 196, 47, 297, 197, 467, 1967, 47, 1967, 30,47, 1967, 1967, 47,47, 1967, 1967, 196, 30,467, 1967, 197, 47, 1967, 1967, 196, 306, 196, 306, 47, 296, 306, 47, 197, 496, and 196, of the interest paid for the sale of shares to 25,306,47,496, and 197,3975,37,397,4

2. Determination on the lawfulness of each of the dispositions of this case

A. The plaintiff's assertion

① In order to improve the financial structure, the Plaintiff sold ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 2,90 won a share price of 2,290 won per share. On December 23, 1998, criminal cases against ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ were not closed, and the payment period for intermediate payment and outstanding payment of the instant shares was changed to December 23, 199. In light of the sales circumstance of the instant shares and the real value of the instant shares, the delayed payment of the outstanding shares does not constitute an economic rationality disregarding the economic rationality, and thus, the Plaintiff’s failure to collect the outstanding shares from the Nonparty Company does not constitute wrongful calculation.

(b) Related statutes;

Article 18-3 of the former Corporate Tax Act

Article 20 of the former Corporate Tax Act

Article 28 of the Corporate Tax Act

Corporate Tax Act Article 52

C. Determination

(1) As to the calculation of wrongful acts

Whether a certain act constitutes a wrongful calculation under the Corporate Tax Act shall be determined on the basis of whether the transaction lacks economic rationality in light of sound social norms and commercial practice, taking into account the overall circumstances of the transaction.

[Defendant-Appellant] Plaintiff 1 and 2 others (see, e.g., Supreme Court Decision 2000Du5494, Nov. 14, 2000

According to the above evidence, the plaintiff transferred the shares of this case to ○○○○ who is in a position of a person with a special relationship. (1) Unlike the initial agreement, the plaintiff extended the time of payment of intermediate payment for one year and one year, and delayed payment of the outstanding payment without any agreement as to interest payment. 358,382,00 won out of the outstanding balance is still in a state of recovery up to the present. (2) The plaintiff did not pay the outstanding amount as 903,279,215 won as of January 1, 200 as a result of settlement between the non-party company and the outstanding amount, and there was no reason to acknowledge the amount of interest interest interest accrued from the date of sale to ○○○○○○○ upon the increase in the outstanding amount, and there was no reason to recognize the amount of interest interest accrued from 2,342,583,413 won to ○○○○○○’s actual transaction with the above outstanding amount to 16,700,200 won.

(2) As to the exclusion of the interest paid in advance from deductible expenses

Article 18-3 (1) 3 of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998) (amended by Act No. 5581 of Dec. 28, 199), and Article 43-2 (2) 2 of the Enforcement Decree of the Corporate Tax Act (amended by Act No. 28 (1) 4 (b) of the current Corporate Tax Act), “provisional payment paid without connection with the business,” include not only purely meaningful loans, but also bonds such as indemnity bonds (see Supreme Court Decision 2002Du4068 of Mar. 11, 2003). If the outstanding amount is not collected within a considerable period of time without just cause, such outstanding amount shall be deemed as provisional payment. According to the above legal principle, it constitutes non-deductible payment. Accordingly, each of the instant dispositions of taxation in this case is legitimate.

3. Conclusion

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