[1] The meaning of the provisional payment without any legal basis under the Corporate Tax Act, which is the object of non-deductible of interest paid in accordance with the corporate tax Act, and the legal evaluation in a case where the corporation delays the collection of the purchase price

[2] The case holding that there is no justifiable reason in recovering delay in the purchase price where a company completed the registration of transfer of ownership in the name of a specially related person with respect to the subject matter of sale without receiving the purchase price from a specially related person, and did not receive any overdue interest even after the lapse of several months after the agreed payment date of the purchase price

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

[1] Supreme Court Decision 95Nu3589 delivered on December 26, 1995 (Gong1996Sang, 609) Supreme Court Decision 2002Du11479 delivered on February 13, 2004 (Gong2004Sang, 488) Supreme Court Decision 2003Du7651 Delivered on May 12, 2006

Plaintiff, Ltd.

Head of Yeongdeungpo Tax Office

Seoul High Court Decision 2004Nu3764 delivered on December 24, 2004

The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the Seoul High Court.

We examine the grounds of appeal.

The provisional payment related to the non-deductible interests under the Corporate Tax Act includes not only purely meaningful loans, but also loans corresponding to the nature of claims, such as claims for reimbursement. Whether related to the business should be objectively determined on the basis of the purpose of business or the contents of business of the relevant corporation. The delay of the collection of the purchase price to be paid by a corporation without any justifiable reason is substantially having the same effect as that of the provisional payment after the full collection of the purchase price within the period for the performance of contractual obligations. Thus, the provisional payment should be deemed to have been made as the provisional payment regardless of the business on the date when the purchase price should be recovered (see Supreme Court Decisions 95Nu3589 delivered on December 26, 1995; 2003Du7651 delivered on May 12, 2006).

Comprehensively taking account of the evidence employed by the court below and Eul's evidence No. 7 copy, the company extended 2 billion won to the non-party 1 corporation on October 31, 1997 and completed provisional registration of the right to claim the creation of a neighboring mortgage and the right to claim the transfer of ownership on the real estate owned by the non-party 1 corporation as security of the loan claim, and sold the secured real estate in KRW 1.3 billion to the non-party 3,000,000 won on November 11, 1998. The contract deposit amount of KRW 30 million was 1.3 billion on the date of the contract, and the remaining 1.3 billion won was 1.3 billion won on December 11, 1998 to the non-party 1.3 billion won on the date of the contract, and the company did not receive the ownership transfer registration from the non-party 1 corporation on March 11, 1999.

Nevertheless, the court below did not properly examine whether there is a justifiable reason and determined that the provisional payment, which is irrelevant to the business, was not made solely on the ground that the plaintiff company received late payment of the purchase price. In such a case, the court below erred in the misapprehension of legal principles as to the provisional payment in office and incomplete deliberation as to whether there was a justifiable reason, and the ground of appeal pointing this out has merit.

Therefore, the part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the lower court. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Hyun-chul (Presiding Justice)