Cheongju District Court 2008Guhap506 ( August 20, 2009)

early 2007 Jeon 4459 ( December 27, 2007)

Any gains from forward exchange transactions arising from the swap transactions shall constitute interest income.

It is reasonable to classify profits from forward exchange transactions as interest income in the nature of payment due to the use of money as income similar to interest on deposits received in Korea.

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

1. All appeals filed by the plaintiffs are dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

The judgment of the first instance is revoked. The Defendant’s imposition of global income tax of KRW 3,301,430 on March 5, 2007 and the imposition of KRW 3,527,920 on Plaintiff KimB on March 5, 2004 shall be revoked, respectively.

1. Details of the disposition;

A. At around 2003 and 2004, the plaintiffs subscribed to "CC Bank (hereinafter referred to as "CC Bank")'s "NE deposit" (hereinafter referred to as "the transaction in this case") at the same time to subscribe to the above goods, the plaintiffs entered into three of the following three contracts with theCC Bank (hereinafter referred to as "the same contract in this case").

① The UN/original gift redemption agreement: A contract under which the plaintiffs paid won currency to theCC bank immediately after the contract is concluded and receives the UN/original gift rate calculated at the rate of exchange at the time of the contract (hereinafter referred to as the “instant gift exchange agreement”).

② The contract for the United Nations regular deposit: a contract under which the plaintiffs deposit the full amount above with theCC bank and receive the amount of the principal and interest of 0.095% per annum or 0.2437% per annum or 0.35% per annum with the maturity (hereinafter referred to as “the contract for the United Nations regular deposit”).

③ On the first hand, upon the expiration of the contract for the sale of the UN / original futures exchange, the Plaintiff pays the said UN principal and interest (in the case of the amount equivalent to the UN interest, the amount excluding the interest income tax withheld; hereinafter the same shall apply) to theCC Bank at the expiration of the said contract, and the contract under which it is to receive won currency calculated at the futures exchange rate at the time of the contract from theCC Bank at the time of the contract (hereinafter referred to as “the same contract”).

B. The Plaintiffs, as a result of the instant transaction, received in Korean currency the sum calculated by multiplying the difference between the futures exchange rate and the said futures exchange rate by the principal of the said UN regular deposit (hereinafter “instant income”) and the sum calculated by multiplying the interest on the said UN regular deposit by the agreed futures exchange rate, as well as the amount calculated by multiplying the difference between the said agreed futures exchange rate and the said futures exchange rate (hereinafter “instant income”).

C. Under the principle of substantial taxation, the Defendant issued a disposition to increase the comprehensive income tax against the Plaintiffs on the ground that the instant income constitutes interest income under Article 16(1) of the former Income Tax Act (amended by Act No. 9270, Dec. 26, 2008; hereinafter the same). Following the Plaintiffs’ request, as a result of a national tax proceeding, the portion of the additional tax on the return and payment in bad faith is reduced from the amount of the above disposition, and only the amount indicated in the column of the remaining tax amount in the table below remains (hereinafter the “instant disposition”).

[Reasons for Recognition]

Facts without dispute, Gap evidence 1, Eul evidence 1 through Eul evidence 4, Eul evidence 27 and 28, the purport of the whole pleadings

2. Whether the instant disposition is lawful

(a) Relevant statutes;

It is as shown in the attached Table related statutes.

B. Whether the instant income is interest income under the former Income Tax Act

(1) The parties' assertion

(A) The plaintiffs' assertion

Each of the instant contracts has separate legal and economic substance and should be identified as separate transactions, respectively. However, the instant income is "gains from foreign exchange transactions" arising out of the instant forward exchange contract and the instant forward exchange contract (hereinafter collectively referred to as "the instant forward exchange swap contract"), and its legal and economic substance is both capital gains and does not constitute interest income having the nature of price for the use of money. The subject of the instant exchange swap contract is a currency, and thus, the instant income is not similar to the repurchase agreement marginal profit of bonds or securities.

Therefore, the Defendant’s disposition of this case is unlawful in violation of the principle of no taxation without the law, although it is impossible to impose interest income tax under Article 16(1)13 of the former Income Tax Act on the instant income.

(B) Defendant’s assertion

Each contract of this case is intended to conceal actual transactions in Korean won deposit and to pretend that its interest is a profit from foreign exchange transactions, or even if not, each contract of this case should be understood as a single transaction as being integrated with close relations with each other. In such a view, the income of this case is substantially waived the use of Korean won by the Plaintiffs, and received as consideration by theCC Bank.

Therefore, the income of this case is similar to the interest of deposits or similar to the marginal profits from repurchase agreements of bonds or securities, and is in the nature of the consideration for the use of money, so it is subject to taxation of interest income tax.

(ii)the basic knowledge and recognition of foreign exchange transactions;

(a)basic knowledges on foreign exchange transactions;

(i) Foreign exchange transactions;

이는 통화의 표시가 다른 두 통화를 약정된 환율로 매매하는 거래를 말한다. 여기에는 ① 2 영업일 이내에 결제가 이루어지는 선물환거래(spot transaction)와 ② 2 영업일 초과 이후에 결제가 이루어지는 거래 중 거래소 외에서 거래되는 선물환거래 (forward transaction) 및 거래소 내에서 거래되는 통화선물거래(currency futures transaction), ③ 결제일이 서로 다른 외환을 상호 반대 방향으로 동시에 매매하는 외환스왑거래(foreign exchange swap transaction, FX swap transaction)가 포함된다.

(ii) monetary, futures and forward exchange transactions, and foreign exchange swap transactions;

(1) The difference between monetary futures trading and futures exchange trading is a transaction in which the target currency, the trading unit, the date of settlement (or the maturity) and the trading method are standardized among many and unspecified persons via the Exchange. On the other hand, futures exchange trading is a transaction in which the parties concerned freely determine the above conditions on a private basis outside the exchange, and the monetary futures price is a kind of forward transaction, which is a kind of currency forward transaction, depending on multiple trading results on the exchange market. On the other hand, futures exchange price is determined by an individual agreement between the parties concerned.

Because of such a free exchange transaction, in foreign exchange swap transactions as seen below, currency gifts generally use a year forward.

(2) Foreign exchange swap transactions.

This refers to a transaction between the parties to the transaction in the opposite direction at the same time with a different maturity of a gift exchange. The most general transaction form is to purchase (sale) exchange in kind in a specific foreign exchange, and sell (purchase) the same foreign exchange exchange at the same time, and most transactions are to be carried out between the same parties, and is a furch swap. The instant foreign exchange swap contract is a forward exchange and forward exchange swap, and is a fusion swap.

In general, foreign exchange swap transactions are short-term transactions with a maturity of less than one year, and interest is not exchanged because the difference between currencies is reflected in the futures exchange rate. In addition, this is generally used for the purpose of termination of exchange risk (referring to removal of hedge and exchange risk) as profits and losses at the time of the contract are determined in advance regardless of exchange rate fluctuations after trading in the opposite direction at the agreed exchange rate.

The foreign exchange swap transactions are widely conducted between banks and customers. The bank set the trading limit in advance in consideration of the credit rating, etc. of customers, and the bank provides a certain deposit or security to prevent the performance of futures exchange settlement. The ordinary won deposit is deposited as a security deposit, and the amount is about 10% to 20% of the transaction amount. The reason why the deposit is small is that the customer is not able to return the currency received by the customer at maturity due to the payment of the counterpart currency to the contract company, if the customer is unable to return the currency at maturity, the exchange exchange rate can prevent the impossibility of performing the forward exchange.

(iv) transaction of foreign exchange posation and coveration;

(1) The term "foreign exchange" means the difference between the assets denominated in foreign currency and the liabilities denominated in foreign currency. The same balance between the assets denominated in foreign currency and the liabilities denominated in foreign currency will lose the risk of exchange due to the exchange fluctuation in foreign currency, and if a difference occurs, the risk of exchange according to the exchange fluctuation will occur.

2. The term “crow transaction” means any transaction conducted in order to remove or reduce risks arising from the exchange rate fluctuations arising from assets and liabilities denominated in foreign currency held or intended to be held by a bank, and includes any transaction conducted in order to terminate a large-scale customer transaction. In other words, a transaction conducted in order to create a balance in the exchange rate fluctuations. In addition, a transaction conducted in order to terminate the risks arising from the exchange rate fluctuations in the currency exchanged in the exchange rate swap transactions is also a big transaction.

③ For example, if a bank in a balanced state makes only one of the futures exchange transactions or futures exchange transactions, such transaction causes imbalances between assets denominated in foreign currency and liabilities denominated in foreign currency, and thus, causes exchange risks. In this context, in order for the bank to eliminate the exchange risks arising from such transaction, it is necessary to make the bank into a balanced state by trading in a direction opposite to the same foreign exchange.

However, foreign currency swap transactions are simultaneously conducted in a opposite direction (e.g., sale of foreign currency exchange and purchase of the same amount at the same time), and there is no change in foreign currency exchange assets and foreign currency exchange liabilities (such two transactions will be intertrut transactions). Therefore, it is unnecessary to make a new swap transaction to remove the exchange. However, it is necessary to prevent risks arising from the change of swap points.)

In addition, the foreign currency deposit in the way that the bank returns the foreign exchange to the maturity after being deposited with the customer with the foreign exchange brought by the customer is not bringing about any change in the foreign exchange circulation if the bank does not consider interest.

5) Marginal transactions

This is a financial transaction in which the price of the same product differs from one another in the two markets, and at the same time, purchases the product in a low price in a low price market and gains profit from selling the product in a low price. This financial transaction also plays a role in resolving the imbalance between the two markets by lowering the price by increasing the supply of the product in a low price, while at the same time, increasing the demand for the product in a low price and raising the price in a low price. Since the foreign exchange market is less than the cost of the transaction and is close to the full price market, it is difficult to enjoy profits from the financial transaction constantly resulting from active financial transactions.

6) Exchange rate and swap points (sw capital)

1. The exchange rate is generally indicated as ‘standard or commercial currency' and is calculated as the exchange rate of a base currency per unit of reference currency. For example, USD 1,000 shall be indicated as the exchange rate of a base currency, but only the UN/won exchange rate shall be expressed as the exchange rate of won per 100 UN won.

(2) The futures exchange rate shall have a market exchange rate directly formed as a result of a transaction between banks, and shall be calculated in a way that averages the transaction volume and the market exchange rate thereof for a certain period of time, and there is a base rate for trading publicly notified by banks. Generally, in a large-scale foreign exchange transaction, the market exchange rate shall be applied directly, but in a small-sum foreign exchange transaction, the base rate for trading shall apply.

In addition, the exchange rate between the currencies that are not directly traded in the market or whose trading volume is low shall be calculated on the basis of the exchange rate between the currencies that are traded in the market and that are traded in the market, which shall be the fiscal exchange rate. The general UN/won exchange rate shall be calculated on the basis of US/N exchange rate and US/N exchange rate as the fiscal exchange rate.

(3) In general, the onward rate of exchange means the rate of forward exchange used at the time of forward exchange transactions, not the price of monetary futures traded in the market for the future. This is calculated by adding a swap point to the futures exchange rate.

④ The swap point is a transaction price in which the actual profits and losses between the parties are adjusted on an equal basis by revising the difference in the interest rates of two currencies exchanged in the swap transaction. (1) Such swap point is not arbitrarily determined by a specific bank conducting the relevant exchange swap transaction, but is formed in the transaction market between banks or calculated based on it, like the futures exchange rate. In addition, the swap point is the swap rate in which it is converted into a annual rate.

7) The frame and the sale rate, the purchase rate, the preferential exchange rate

(1) Generally, a pressd shall refer to a difference between two prices, and shall be used in various ways.

In other words, foreign exchange rate, including banks, provides two trade prices (exchange rates) for the same currency to customers at the same time, is the sale exchange rate and the purchase exchange rate applied by banks at the time of selling foreign exchange to customers. In addition, the difference between such sale exchange rate and the purchase exchange rate is the frame.

In addition, the sale exchange rate and the purchase exchange rate shall be determined by adding a certain ratio to the sale rate or the market exchange rate (i.e., the sale rate). The purchase exchange rate shall be determined by subtracting a certain ratio (i.e. the purchase at the container) from the sale rate or the market exchange rate. Such addition is also the frame or the margin rate.

In the case of foreign exchange swap transactions, a bank shall increase or decrease a certain numerical value in the swap points formed in the market (for bank, in favor of the bank), calculate and present it to the customer, and the said numerical value added or decreased shall also be pressd.

② These presses play a role in a bank’s transaction commission, and at the same time, play a role in preventing any loss to a bank in the event of a rapid change in exchange rates and swap points change, while customers are also obligated to bear transaction expenses.

Generally, when a bank trades with a customer, it makes a transaction by applying the sale exchange rate and the purchase exchange rate (hereinafter simply referred to as "sale exchange rate or "purchase exchange rate") that is publicly announced in advance (the automatic processing in the computer) by reducing or reducing a certain percentage frame in advance when it trades with the customer, and in particular, it makes a transaction at the preferential exchange rate that reduces the frame (hereinafter referred to as "the preferential exchange rate").

(B) Facts of recognition

1) Each of the instant contracts is concluded between the same parties at the same time, and is entirely combined with both its establishment, existence, and termination, and the subject of transactions.

① In other words, theCC bank: (a) designed the instant transaction goods as a single product for the purpose of leading to the new attraction of large-amount customers of won currency deposits that are traded with other financial institutions; (b) concluded each of the instant contracts at the same time with a view to eliminating exchange risks and preventing the need to separately receive deposits or bonds provided at the time of forward exchange transactions or foreign exchange swap transactions. In addition, the instant transaction was not a return on each of the instant contracts, but rather a return on each of the instant contracts, but rather a return on each of the instant contracts, and was designed and designed to estimate the amount of 0.50% (explosion, etc. according to market conditions) at the rate of return after the close return of won currency deposits based on the results of the instant

In addition, the interest rate announcement on large-amount foreign currency deposits generally takes place in the financing division, and the futures exchange rate announcement is now placed in the financing market, respectively, andCC bank, especially in the case of the instant transaction, provided that the fund market division receives the UN deposit interest rate from the financing division and made a public announcement of the futures exchange rate and deposit interest rate.

② TheCC bank, while publicizing the Plaintiffs and other customers as a single product, explained the instant transaction more favorable than the ordinary deposit in terms of the tax effective return rate.

Accordingly, all of the customers including the plaintiffs andCC banks entered into each of the instant contracts at the same time with a view to trading one product, and the customers including the plaintiffs, compared with the ordinary won-regular deposit based on the return on profit that can be obtained from the entire transaction of the instant case. In addition, there is no example that only part of the instant contracts was entered into.

③ From among the instant contract, only the UN regular deposit contract or the instant gift exchange contract may not be terminated separately, and where the instant gift exchange contract is terminated at the same time, the instant gift exchange contract shall be liquidated at the same time. The same shall apply to the instant gift exchange contract. In this case, the interest rate on early termination (for less than seven days, less than 30% of the agreed interest rate, less than 6 months, and less than 50% of the agreed interest rate) shall apply to the instant gift deposit, and the instant gift exchange rate shall be newly applied through the correction of the initial date of commencement, and the gift exchange rate shall be terminated by applying the maturity and exchange rate newly, but the gift exchange premium shall be paid a fair and fair price for the forward exchange. The gift exchange evaluation price, which, as it is so, is the amount of money calculated by adding the difference to the market at the time of the earlier exchange, and the opposing and discount interest rate may be determined by theCC bank.

However, there are many cases of termination in fact, and even in the case of termination in the middle, it is not a case whereCC bank paid the globalization in Korean currency, and all of the plaintiffs' income in this case was paid in Korean currency, and it is not an income accrued at the time of maturity, but an income accrued at the maturity.

④ The maturity date of the instant gift exchange contract and the settlement date of the instant gift exchange contract are always consistent. Moreover, a general foreign currency deposit may be agreed in advance to be re-deposited under the same conditions automatically, barring any separate declaration of intent at maturity. However, the said deposit is automatically terminated without any separate declaration of intent at maturity.

⑤ The amount of the gift exchange contract of this case at all times is equal to the principal amount of the international currency regular deposit of this case plus the subsequent interest. The Korean won due to the transaction of this case is to be paid together with the designated account in advance.

2) From 2002 to 2004, the annual rate of return from the instant transaction was 3% to 4% per annum. The difference was about 0.5% near the instant transaction, and there was a number of cases where the annual rate of return from the instant transaction was lower than that of the fixed deposit in Korean won. In addition, when imposing tax on the instant income, there was a number of cases where the annual rate of return from the instant transaction was lower than that of the fixed deposit in Korean won.

The total redemption rate of theCC bank is 0.99% added to the sale standard rate, and the total redemption rate was calculated by subtracting 0.99% from the sale standard convergence. In addition, theCC bank received US/original swap points and US/N swap points from Thomter Korea Co., Ltd., and calculated and used the UN/N swap points based on the financial exchange rate calculation method.

[Ground of Recognition] A without dispute, evidence Nos. 2 and 3, evidence Nos. 7-1 through 17, evidence Nos. 52, 53, 55, 59, evidence Nos. 6-2, evidence Nos. 7 through 12, evidence Nos. 13-3, Eul Nos. 18, 21, 26, 29, 30, and 31, and the purport of the whole pleadings

[Evidence Evidence] Evidence No. 18, Evidence No. 48, Evidence No. 54, Evidence No. 57-1, and Evidence No. 8-2

(3) Provisions and legal principles of the former Income Tax Act

(A) The Korean Income Tax Act only imposes income tax on which the income subject to income tax is identified as the form of income and defined as the income subject to taxation, and it does not impose tax if it is not so (Article 3 of the former Income Tax Act).

However, Article 16 (1) of the former Income Tax Act lists interest and discount amounts of deposits (including installment savings, installment savings, deposits, and postal transfers) and bonds or securities as prescribed by the Presidential Decree as interest income (Article 16 (3) of the former Income Tax Act) as one of the interest income. From December 31, 2001, Article 16 (1) of the former Income Tax Act newly establishes subparagraph 13 in the form of a tangible comprehensive principle that allows the same taxation of similar income in order to enhance the fairness of taxation, and newly establishes subparagraph 13 in the form of a similar comprehensive principle that allows the same taxation.

However, even according to the above provisions, interest income tax shall not be levied on the foreign exchange transaction profits arising from the exchange rate difference in the foreign exchange transaction as it cannot be deemed as interest income.

(B) Meanwhile, in light of the purport of the provision on interest income that a taxpayer selects in the course of economic activities, the tax authority shall respect the legal relationship that the taxpayer selects, but in light of the substance over form principle and the purport of the provision on interest income that adopts the principle of substantial taxation, whether the profit from any transaction constitutes interest income under Article 16 (1) 13 of the former Income Tax Act shall be determined by considering the following factors: (a) not simply dependent on the content or form of the relevant contract, but rather on the purpose and purpose of the relevant transaction, characteristics of the transaction, transaction practice, the parties’ intent, relationship between each contract, the process of conclusion of the contract, the outcome of the contract, etc. (see, e.g., Supreme Court Decisions 2007Du337, Apr. 23, 2009; 205Du11203, Oct. 13, 2006; 201Du627, Dec. 26, 1992; 205Nu19615, Jun. 15, 197

(C) In light of the above legal principles, the issue of the instant case depends on (i) whether the instant income should be viewed as income generated from the entire transaction of the instant case, and (ii) whether the instant income falls under the consideration for monetary use as income similar to the interest on deposits, bonds, or repurchase/back agreement marginal profits on bonds or securities received in Korea.

(4) The exchange rate applied to the instant transaction

(A) Summary of the plaintiffs' assertion

The Plaintiffs asserted to the effect that each of the instant futures exchange contracts was separately executed, and that the instant futures exchange contract, as a general rule, applied preferential exchange rate within the same extent as the case where only the gift exchange contract was entered into, and within the extent of the adjustment rate, preferential exchange rate within the same as the case where the instant futures exchange contract was entered into. The instant futures exchange contract also asserts that the instant futures exchange contract was entered into by adjusting the frame within the extent of the amount calculated by deducting 0.99% from the adjustment futures exchange rate.

(B) Determination

1) On the other hand, in general, where a bank sells futures exchange only to a customer by applying a basic rate for sale, which is not a market exchange rate, it shall be sold by applying the sale exchange rate, and in special cases, preferential exchange rate shall not be applied, and even in this case, it shall not be sold more than the basic rate for sale. This is because the standard for sale is the average value for the market exchange rate increase, which is the cost of financing by a bank, and the bank shall be the result of selling foreign exchange as a result, and the risk of loss by a bank is more likely to occur when there is a sudden change in the exchange rate (the plaintiff asserts that a sale is made more than the basic rate for sale at the time of foreign exchange, but considering the above points, the adjusted exchange rate stated in Gap evidence 11-1 is higher than the basic rate for sale at the time of foreign exchange or sale, and the exchange rate determined lower than the basic rate for sale at the time of purchase shall not be viewed as the plaintiffs' assertion).

However, in this case, 39 transactions listed in the Plaintiff’s preparatory statement (attached Form 2-1) dated November 24, 2009 did not have been sold at the selling rate. Rather, 2 cases where the sale was made at the exchange rate such as the lowest base rate for sale on the same day, and 10 cases where the sale was made at the lower exchange rate.

In light of this point, the exchange rate applied to the gift exchange contract of this case is determined differently from the case where only the gift exchange transaction is made.

2) However, this does not mean that theCC bank arbitrarily decided the futures exchange rate or futures exchange rate regardless of the sale and purchase base rate or market exchange rate in the instant transaction.

In other words, the total transaction of the forward forward forward exchange contract and the forward exchange contract constitutes the forward exchange swap transaction. However, unlike the separate transaction of the forward exchange and the forward exchange, the exchange rate and the forward exchange rate, respectively, are in question, and only the amount of the swap point is a problem. This is because, in the forward exchange transaction where the forward exchange and the forward exchange transaction are made at the same time, the exchange rate and the forward exchange rate are the price at which the parties determine profits and losses. Since the forward exchange rate are calculated by adding the forward exchange rate to the forward exchange rate, the forward exchange rate is lower than the forward exchange rate, and there is no change in the size of the forward exchange point. Accordingly, when the forward exchange rate is determined in the ordinary exchange swap transaction, it is common to simply apply the market exchange rate.

3) In full view of the above circumstances and the purport of the entire arguments as seen earlier, the instant forward exchange contract and the forward exchange contract are not traded separately, but were traded in one exchange swap transaction, and the forward exchange rate and the forward exchange rate are likely to have been determined in the same way as the general exchange swap transaction.

4) If, in the instant transaction, theCC bank decided on the futures exchange rate and futures exchange rate in the manner as alleged by the Plaintiffs, it has the discretion to deduct from the swap point the transaction base rate or the market exchange rate of 1.98% (=0.99% x 2) from the swap point in the instant exchange swap transaction, and this would immediately constitute 1.98% of the principal amount of the transaction (However, even if it is based on such method, no profit may be paid to customers higher than the swap point formed in the market). If the maturity maturity is three months, it would be 7.92% of the principal amount (i.e., 1.98% x 4) if the maturity is six months, and 3.96% of the principal amount (i.e., 1.98%) x 2) in the instant transaction. This would exceed the maximum size of the swap profit the customers, including the Plaintiffs, or constitute most of them.

Therefore, in the event of these methods, the swap points established in the market will only be less than those that can be given to customers as much as possible, and there is no particular meaning. In other words, theCC bank can determine the rate of return due to the instant transaction in consideration of the interest rate on time deposits within the swap point range.

(5) The existence of such transaction

(A) Summary of the plaintiffs' assertion

The Plaintiffs separately concluded each of the instant contracts, and the instant income was the capital income, andCC bank asserts that the instant transaction was conducted in order to avoid exchange risk due to the instant futures exchange transaction.

(B) Determination

For the following reasons, it is difficult to reverse the following only on the basis of the following: Gap's evidence 16 to Gap's evidence 29, Gap's evidence 48 to Gap's evidence 51, Gap's evidence 56-1 to Gap's evidence 57-2, Gap's evidence 60.

1) In other words, among the instant transactions, the instant futures exchange contract and the instant futures exchange contract are mutually covered and thus, there would be no change in the internationalization of theCC Bank. Moreover, given that the international currency deposit of this case does not change in the international currency exchange, there is no change in the foreign currency exchange exchange agreement in the instant transaction. Accordingly, there is no new big transaction for the purpose of avoiding exchange risk.

In other words, CC bank has no change in terms of the amount of UNFCCC futures exchange (the increase in the UNCLOS assets) at the same time as it sells the UNFCCC to customers and purchases (the increase in the UNFCCC assets) the same amount. Moreover, CC bank has a duty to return the UNFCCC deposited at maturity (the increase in the UNFCCC assets) upon deposit under the UNFCCC regular deposit contract in this case. In addition, there is no change in the UNCLOS related to the principal amount of the UNFCCC deposit. Moreover, since the UNFCCC bank entered into the gift exchange contract in this case with respect to the interest rate of the UNFCCC regular deposit, there is no change in the UNCLOS due to the occurrence of the UNFCCC interest payment obligation (the increase in the UNFCCC assets) and the purchase (the increase in the UNFCCC denominated assets) of the UNFCCC interest equivalent to the UNFCCC and the purchase (the increase in the UNCLOS assets).

Therefore, since theCC bank does not bear a new exchange risk due to the instant transaction, it is not possible to terminate the transaction.

2) In the event of a foreign exchange swap transaction only, the bank is likely to have a substantial loss due to a change in the swap points due to the change in the interest rate of the composition paid. Therefore, it is necessary to increase the meaning of removing the risk. On the other hand, in the instant transaction, there is no such change in the meaning.

This is because the foreign exchange swap contract of this case and the UN regular deposit contract of this case are simultaneously concluded in the instant transaction, so no risk of the said swap point change occurs. In other words, theCC bank will simultaneously acquire the UN forward exchange and won currency as a result of the instant transaction, thereby providing an opportunity to operate won currency additionally while operating the same as the transfer of the transaction. Therefore, even if the CC bank suffers loss from the UN currency exchange contract of this case due to the decline of the UN currency interest rate, the profits and losses are offset as it increases, even if the CC bank suffers loss from the UN currency exchange contract of this case due to the decrease of the UN currency rate, the profits and losses will be offset as they increase. On the other hand, even if the CC bank suffers loss from the CC bank’s initially agreed on the UN currency deposit contract of this case due to the increase of the UN currency rate, the profits and losses will be offset as compared to the increase of the Korean currency currency rate in the instant exchange swap contract of this case.

However, theCC bank is at risk of incurring loss due to the change in the interest rate in Korean won compared to the transaction in this case, which does not differ from the case of the ordinary deposit in Korean won.

Therefore, sinceCC bank does not incur any risk of the swap points change due to the change in the international currency interest rate due to the instant transaction, it is difficult to terminate the transaction.

3) Ultimately, in the instant transaction, the instant forward exchange contract and the forward exchange contract are ruptures transaction for the termination of exchange risk (the instant forward exchange swap contract). Since the instant forward exchange contract are ruptures transaction for the removal of risk changes in the swap points of the instant forward exchange contract (i.e., the instant forward exchange transaction included a mutual forward forward transaction in the instant exchange agreement), CC bank is in a complete balance state without any risk related to the said transaction as it itself. Accordingly, there is no risk of exchange risk or swap point change arising from the instant transaction, and thus, there is no new server transaction for the termination thereof. This is also the same from the customer’s perspective.

Therefore, even if theCC bank newly purchased a foreign currency exchange in Korean currency acquired from the instant transaction as alleged by the Plaintiffs and traded a foreign currency exchange transaction at the same time, it does not necessarily terminate the exchange risk or swap point change risk of the instant transaction, but rather, at the same time, bears additional risk of swap points change due to a new transaction without such risk. Thus, it is only a new transaction for using the won currency procured as a result of the instant transaction, and it cannot be said that it is a large-scale transaction of the instant transaction.

4) In light of the above points, although Gap's evidence Nos. 19, 24, 25, 27, 28, and 29 are written on the respective foreign exchange bank's whole list, it is not evidence that other bank blacks traded with third parties in the instant transaction.

(1) Specifically, evidence Nos. 19 and 24 are the slips inside the foreign exchange bank prepared in the course of the instant transaction with KimD on August 6, 2004. If there was a chain transaction immediately before the instant transaction, that transaction shall be a transaction that purchases the international currency exchange from another bank (or any other third party) and sells the international currency exchange to another bank at the same time, and the exchange rate or swap point shall be applied to the currency exchange transaction with the bank more favorable than the exchange rate or swap point of the foreign exchange deposit transaction in the case of the forward exchange transaction.

However, each of the above slips is composed of the same transaction as the transaction in this case, i.e., the foreign exchange bank sells the foreign currency exchange to KimD (not other bank), and purchases the foreign currency exchange from KimD, and not only is the purchase of the foreign currency exchange rate from KimD, but also is written as a substitute sheet used at the same exchange rate (futures exchange rate and forward exchange rate) with the exchange rate of large customers, and when there is no cash withdrawal, it is entered in the forward sheet. In addition, the forward sheet is a 'FX-DEAL Micker transaction', while the forward sheet is a 'FX-DEAL verification transaction', while the forward sheet is a 'FX-DEAL verification transaction', the forward sheet is also written in the forward sheet of the forward exchange rate.

In light of the above points, each of the above slips is a slips written for internal disposal of the transaction itself of this case, and the indication of the chain transaction listed in the preceding slips is deemed to have been written for a special purpose for internal accounting management between the main points, or is deemed to have been expressed for a group of groups, such as the forward exchange contract of this case and the forward exchange contract of this case, and thus, it cannot be deemed that there was a separate transaction for the transaction of this case.

② For the same reason, evidence No. 25. 27 of the same year is a pre-sale slip to handle the instant transaction upon termination by KimD on September 3, 2004, and the evidence No. 27 of the instant gift exchange agreement is deemed to be aimed at early termination of the instant gift exchange agreement. Moreover, since the evidence No. 25 of the instant gift exchange agreement concluded on August 6, 2004 shows a significant difference between the transaction amount and the transaction amount, it may include part of the pre-sale slip of the instant separate transaction or part of the details to handle the transaction converted into the United Nations currency upon termination of the instant international currency deposit agreement.

In addition, Gap evidence Nos. 28 and 29 appears to be a transaction transfer sheet for the final settlement of the forward exchange at the maturity of the forward exchange which was treated earlier as above.

③ Ultimately, each of the aforementioned slips is a pre-sale slip for the instant transaction itself, not a pre-sale slip for the instant transaction.

5) In short, there is no separate server transactions for the instant transaction.

(6) The transaction of this case and the substance of the income of this case

(A) Summary of the plaintiffs' assertion

CC bank only obtained an opportunity to use Korean currency, not for the use of Korean currency, and the income of this case is merely foreign exchange profits arising out of the result of the foreign exchange swap contract of this case, not for the use of the United Nations. Thus, the transaction of this case is entirely different from the deposit in Korean won currency, and the income of this case is essentially different from the interest of this case.

(B) Determination

1) First, as seen below,CC bank does not additionally provide an opportunity to operate the transaction in this case as the transaction in this case, but additionally provides an opportunity to operate the Korean won currency. Moreover, the transaction in this case is essentially different from the ordinary foreign exchange swap transaction, and is in fact the same as the Korean won deposit transaction.

1. From a legal point of view, in the case of general foreign exchange swap transactions, banks immediately after the conclusion of the contract shall pay to the customers the amount of money in Korean currency and receive the amount from the customers in return. and banks shall be entitled to the amount of money from the customers at maturity and shall be obliged to pay Korean currency.

However, in the case of the instant transaction,CC bank immediately after the conclusion of the contract, is paid in Korean won from the customer, but at the same time, is not paid to the customer because it is deposited withCC bank. In addition,CC bank is obligated to pay in Korean currency to the customer at the maturity of the instant exchange swap contract, but since the right of the customer to be paid in Korean currency is offset with the obligation to return the deposit, the customer andCC bank is always unable to exercise the obligation to pay in Korean currency at maturity. Ultimately, in the instant transaction,CC bank is liable only to pay in Korean currency at maturity when it receives Korean currency only and instead bears the obligation to pay in Korean currency at maturity.

Therefore, without considering the case of termination even in the middle of termination (in the middle of termination, it is not actually paid to the customer, and the possibility of such termination is low due to the characteristics of the customer of the transaction of this case). On the other hand, theCC bank has no possibility to be liable to pay the UNFCCC actually due to the transaction of this case.

In this respect, the instant transaction is different from the general foreign exchange swap transaction, and is the same as the won currency deposit transaction.

② From the perspective of financing flow, in the case of general foreign exchange swap transactions, both the UN and Korean won funds are exchanged at the maturity of the contract with each other in exchange for consideration. On the other hand, in the case of the instant transaction, there is no possibility of exchange of the UN and Korean won funds with such consideration relationship. On the other hand, only when the Korean won funds were deposited into theCC bank at the time of the contract, there is only a fund flow in which the Korean won funds were withdrawn from theCC bank against the maturity of the contract.

In this respect, the instant transaction is different from the general foreign exchange swap transaction, and is the same as the foreign currency deposit transaction.

③ As a result of the above financial flow, in the case of a general foreign exchange swap transaction, the holding rate of the foreign currency currency exchange is reduced, instead of the holding rate of the foreign currency exchange, the increase in the holding rate of the foreign currency currency exchange at the maturity. On the contrary, the increase in the holding rate of the foreign currency exchange and the holding rate of the foreign currency exchange is reduced. Therefore, at the time of the contract, banks must have real possession of the foreign currency exchange, and at the opposite time, customers must have real possession of the UN currency exchange.

However, in the instant transaction, there is no change in all the terms of the contract and the maturity, and there is no change in the holding of the UN futures exchange at the time of the contract, but at the time of the increase in the time of the contract, the maturity will be reduced. Therefore, theCC bank does not need to hold the UN futures exchange in reality at the time of maturity, and there is no need for customers to hold the UN futures exchange in reality at the time of maturity.

In this respect, the instant transaction is different from the general foreign exchange swap transaction, and is the same as the Korean won deposit transaction.

④ Even in terms of the opportunity to use funds, in general foreign exchange swap transactions, banks will be given the opportunity to use funds in Korean won instead of giving up the opportunity to operate the UN until maturity, and customers will have the opportunity to use the opposing funds. Accordingly, in order to correct actual profits and losses, the swap points will be given and received.

However, in the instant transaction,CC bank will not give up the opportunity to use the Korean currency until maturity and will be given additional opportunities to use the Korean currency. On the other hand, the customer will not have the opportunity to use the Korean currency and will only give up the opportunity to use the Korean currency. Nevertheless,CC bank will pay the SPS points to the customer.

In this respect, the instant transaction is different from the general foreign exchange swap transaction, and is the same as the foreign currency deposit transaction.

⑤ From the perspective of risk, as seen earlier, the instant transaction is different from the ordinary foreign exchange swap transaction and is the same as the ordinary foreign currency deposit transaction.

6) Meanwhile, it is true that the increase of the UN regular deposit in the instant transaction, as alleged by the Plaintiffs, does not constitute an asset that may be operated by theCC bank, i.e., the obligation of theCC bank, and the obligation of the Fund. At the same time, the CC currency exchange raised by the CC regular deposit was used at the same time in exchange for Korean currency in accordance with the instant gift exchange agreement, and thus, it does not create an additional opportunity for theCC bank to operate the CC. In addition, the CC bank in the instant transaction is offset by the acquisition of the CC currency exchange, but the obligation to return the CC regular deposit at the same maturity. Accordingly, the CC bank does not have any further opportunity to operate the CC fund.

2) Next, we examine the economic substance of the instant income.

① As seen earlier, the swap points that are given and received in general foreign exchange swap transactions are the same as the interest difference in the two currencies that are exchanged, and this plays a role to revise the actual profits and losses of the parties to the transaction in the foreign exchange swap transaction. Therefore, the foreign exchange swap transaction is an exchange in which no actual profit and loss exists in the transaction itself.

The reason is that, in the case of the complete competition market, if the swap swap transaction between banks differs from the interest rate difference between two currencies, it will immediately create the swap transaction at the same time as the interest rate difference between two currencies. In addition, even in the actual foreign exchange transaction at the time of the actual foreign exchange transaction, it is close to the complete competition market because the same financial transaction at the real foreign exchange market is very prior to the exchange and transaction of information, and the difference between the swap point and the interest rate difference between the two currencies is likely to occur rapidly. Therefore, it is difficult to continuously generate the above financial transaction profit even if it is possible to temporarily generate the same financial transaction at the time of the exchange transaction.

Ultimately, the swap points formed in the bank swap transaction market may vary temporarily from the difference in the interest rates of two currencies that are exchanged, but basically, they correspond to the difference in the interest rates of two currencies exchanged.

② Meanwhile, in the instant transaction,CC bank does not use a swap point that changes in real time in the future (the average value of the swap point on a certain hour transaction is not clear, but is likely to have used it), and in the swap point that applies to inter-bank transactions, it deducts the appropriate margin by taking into account the situation at the time of the transaction. As such, the swap point that applies to the instant transaction is rarely removed factors that may temporarily occur. Accordingly, the swap point that can be continuously obtained by the customer through the instant exchange swap contract remains only the difference between the difference between the Korean won currency and the UN currency interest.

③ In short, the swap point that the customer gains in the instant transaction is merely to correct the difference between the interest on the international currency regular deposit and the interest on the general won regular deposit in the instant transaction. It does not constitute an independent determination regardless of the interest on the international currency regular deposit or the interest on the general won regular deposit.

3) Furthermore, in view of the fact that the instant transactions entered into more complicated and more complicated contracts compared to the instant regular deposit transactions, and the amount of direct expenditure therefrom is larger than the amount of direct expenditure, there is no need for customers orCC banks to engage in the instant transactions instead of the instant regular deposit in Korean won.

However, if the interest on general term deposits is imposed on the interest on the income of this case, but if the interest on the income of this case is not imposed, the difference in the transaction method alone leads to the additional profits equivalent to the amount of tax reduction and exemption in the transaction of this case, compared to the time deposit in the won currency, and such additional profits are continuously generated in the transaction of this case, and the transaction of this case is appropriately divided between theCC bank and its customers (as seen earlier, theCC bank is deemed to have designed the transaction of this case in mind in light of the facts acknowledged earlier). Accordingly, if the income of this case is not imposed on the income of this case, the transaction of this case is continuously conducted as long as there is a difference in the interest rate in the Korean won currency and the UN.

In such a case, theCC bank may adjust the interest and the frame of the instant global regular deposit (as seen above, theCC bank announced the futures exchange rate of the instant transaction and the interest rate on time deposits in the financial market) and adjust the size of the swap points, which are non-taxable income. In addition, theCC bank may appropriately divide the income tax reduced and exempted from the income tax into the customer, and continuously maintain the substantial profit that the customer gains from the instant transaction at a level higher than the interest on time deposits in Korean won.

4) In fact, the interest rate on the regular deposit in the won currency at the time of the instant transaction is at a level of 3% per annum after the date of the instant transaction. In the event that no tax is imposed on the instant income, the rate of return was 3% to 4% per annum, and the difference between the interest rate on the regular deposit in the won currency was 0.5% per annum. However, when applying the income tax rate of 16.5% per annum on the instant income, if the rate of return on the instant income is 4% per annum, the relevant tax shall be 0.48% of the instant income, and if the rate of return on the instant income is 5% per annum, the relevant tax shall be 0.64% of the instant income.

Therefore, it is merely a tax amount that the customer can obtain more than a fixed deposit in Korean won due to the instant transaction. As the taxation problem of the instant income arose, the instant transaction was no longer conducted and suspended.

(Plaintiffs asserted that the swap point becomes or becomes a negative condition, and that such goods have no longer been traded. However, as seen earlier, the overall yield that customers are able to receive by concluding the instant transaction regardless of the size or volume of the swap point is always the same as the interest of the Korean won deposit, and thus, the above assertion is rejected).

5) Ultimately, the acquisition of theCC bank by the instant transaction is not an opportunity for use, but an opportunity to use the instant transaction. The substance of the instant transaction is different from the ordinary foreign exchange swap transaction, and is the same as the regular deposit transaction in Korean won. In addition, without considering taxes, all the customers’ interest arising from the instant transaction is substantially identical to the interest of the fixed deposit in Korean won, and the instant income is merely a part of the instant income. Nevertheless, the reason why the customer and theCC bank does not engage in the instant transaction and rather calls for the instant transaction is to avoid the imposition of interest income tax on the instant income by taking the instant transaction method.

(7) Whether the pertinent income is proportional to the period and whether it is conclusive interest

(A) Summary of the plaintiffs' assertion

The income of this case is not proportional to the period and cannot be viewed as a conclusive income. Thus, the income of this case is different from the interest. In other words, if the customer does not conclude the gift exchange contract of this case, the customer may have more profit than when the customer entered into the gift exchange contract of this case at the maturity rate, and the loss theory can be seen.

(B) Determination

1) As seen earlier, the swap point essentially has the same structure as the interest, so this case’s income also has the same structure as the interest. Therefore, it can be said that the swap rate with a three-month maturity at the same time is higher than the swap rate with a six-month maturity. However, this is the same as that at the same time, the annual conversion rate with a three-month maturity may be higher than the annual conversion rate with a six-month maturity (in the same case as above, the interest rate with a three-month maturity cannot be deemed as more favorable even in the same case). This is because a depositor with a three-month maturity finds the principal at the maturity and then re-deposit it at the maturity with a three-month deposit rate at the same time.

In addition, as seen earlier, the overall profit that the customer can continuously obtain from the instant transaction is basically the same as the interest rate on the fixed deposit in Korean won. Therefore, unless theCC bank does not artificially adjust the non-taxable income portion, the overall profit that the customer may gain from the instant transaction would have the same structure as the interest rate on the fixed deposit in Korean won.

In fact, there is no evidence as to the fact that the long-term profit less than the short-term profit accrued for the same transaction amount in the same case at the same time.

2) In addition, whether a customer’s profit is conclusive through the instant transaction shall not be determined on the basis of the won currency that the customer had held before the instant transaction. It should not be determined on the basis of the customer’s condition that the customer came into entitizing through the implementation of the instant gift exchange contract. In the latter case, not only the profit the customer gained from the instant transaction, but also the profit the customer can obtain through the instant gift exchange contract only among the instant transaction.

Therefore, in light of the Korean won standard held by the customer prior to the instant transaction, it is clear that the customer gains the instant income at maturity.

3) Ultimately, without considering the tax amount, the entire benefits arising from the instant transaction, including the instant income, are proportional to the same period as the interest, and it is a conclusive interest without exchange risk.

(8) Sub-determination

The aforementioned legal principles and circumstances, i.e., (i) the rate of exchange applied to the instant transaction was determined differently from the case where the gift exchange rate applied to the instant transaction solely enters into the said transaction; and (ii) theCC bank is able to appropriately adjust the overall rate of profit by regulating the presses. ② In the instant transaction, there is no risk of exchange risk or swap point fluctuation in the ordinary foreign exchange transactions, and thus no such risk arises. ③ Each of the instant contracts is legally completely combined with the instant transactions, such as (i) the fact that the remaining contracts are not enough to achieve the purpose of the instant transaction, and (ii) the interest rate of the instant transactions cannot be entered into only a part of the Korean won currency exchange transaction, which is the same as the instant transactions; (iii) because there is a foreign currency regular deposit, the customer is not entitled to the payment of the deposit money in the instant case, instead of the instant foreign currency exchange rate; and (ii) the actual interest rate of the instant transactions is more than the actual interest rate of the instant Korean won currency exchange transaction.

Therefore, the income of this case, which is a part of the entire profits of this case, constitutes interest income under Article 16 (1) and 13 of the former Income Tax Act.

All of the plaintiffs' arguments are not accepted.

C. Whether the principle of good faith is violated

(1) The plaintiffs' assertion

Although most commercial banks, includingCC banks, engaged in the instant transaction from around 2002 to deal with non-taxation on the instant income, the tax authorities did not impose tax on the instant income only once until the disposition of the instant case. Therefore, it should be deemed that the non-taxation practice accepted by many and unspecified general taxpayers, such as the Plaintiffs, was justifiable.

In addition, around September 2003, the National Tax Counseling Center established to the effect that in the case of the instant transaction, it is not subject to the question as to whether the benefits arising from the forward exchange transaction are taxable objects.

Nevertheless, the disposition of this case against it is against the principle of respect for tax practices under Article 18(3) of the Framework Act on National Taxes or the principle of protection of trust.

(2) Determination

(A) In general, in tax law relations, in order to apply the principle of trust and good faith to the tax authority's act, the tax authority should give the taxpayer a public opinion that is the subject of trust, and the taxpayer should not be responsible for the taxpayer's reliance on the legitimacy of the expression of opinion, and the taxpayer should act in trust and in what way it is, and Fourth, the tax authority's disposition against the above expression of opinion would result in infringing the taxpayer's interest.

In addition, Article 18(3) of the Framework Act on National Taxes provides that "an interpretation of tax-related Acts or practices in tax administration, which is generally accepted by a taxpayer" means, even if erroneous interpretation or practices are accepted by an unspecified general taxpayer, who is not a specific taxpayer, without any objection, to the extent that it is not unreasonable for a taxpayer to trust such interpretation or practices. The burden of proving the existence of such interpretation or practices lies on a taxpayer, who is the claimant. In addition, in order to form a non-taxation practice, the tax authority must not impose tax due to special circumstances despite its knowledge that the tax authority is able to impose tax on the matter (see, e.g., Supreme Court Decisions 2001Du403, Sept. 5, 2003; 97Nu1315, Aug. 21, 1998).

(B) In this case, it is difficult to view that the tax authority expressed a public opinion that it would not impose interest income tax on the income of this case other than the futures exchange premium appearing in general futures exchange transactions, and it is difficult to view that the tax authority formed a non-taxable practice on the income of this case, and that this part of the Plaintiffs’ assertion cannot be accepted.

3. Conclusion

Therefore, the disposition of this case is legitimate, and the claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is just, and the appeal of the plaintiffs is dismissed as it is without merit. It is so decided as per Disposition.