2012 middle 3824

Since the principal and interest are recovered by each transaction and the re-investment including interest is a separate investment, taxation on the already recovered interest income is legitimate.

Even if the principal and interest were collected by each transaction of lending funds and the money including interest was re-investmented, this is considered to be a separate investment transaction different from the original transaction, and thus a disposition imposing the already recovered amount as interest income is legitimate.

2013Guhap814 Global Income and Revocation of Disposition

00AA

Head of the Office of Government

October 15, 2013

December 3, 2013

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of the global income tax for the Plaintiff on May 21, 2012 and the global income tax for the year 2009 shall be revoked.

1. Details of the disposition;

A. From 2008 to 2011, the Plaintiff was recommended to guarantee the investment principal within three months and to pay interest equivalent to 10% of the principal when investing in money from Nonparty KimB and InCC. Within three months after paying the principal and interest equivalent to 10% of the principal, the Plaintiff received 10% interest from KimB and InCC and repeated the process of receiving 10% interest on the principal and interest thereon within three months after paying the principal again to the said two persons.

B. The details of the amount paid or received by the Plaintiff to KimB or HumanCC from 2009 to 2010 are as follows.

Table 2 see Court Decision 2

C. Meanwhile, on November 201, KimB and SCC paid only the remainder to the Plaintiff as the early settlement amount, while they concluded that the Plaintiff would offset the investment principal on September 9, 10, 10, and November 201 by the sum of the investment principal equivalent to 10% of each investment principal, which the Plaintiff had been punished as interest up to that point.

D. The director of the Seoul Regional Tax Office notified the Defendant that the Plaintiff should levy the global income tax on the grounds that the amount of 10% (10% of the principal collected from 2009 to 2010) is interest income. Accordingly, on May 21, 2012, the Defendant decided and notified the Plaintiff on May 21, 2012, 209 and OOOOOOOOO of the global income tax for the year 2009 and the year 2010 (hereinafter “instant disposition”). E. The Plaintiff dissatisfied with the request filed with the Tax Tribunal on August 17, 2012, but was dismissed on December 6, 2012.

[Ground of recognition] Facts without dispute, Gap evidence 1-1, 2-2, Gap evidence 2-1, 2-2, Eul evidence 1-1, 2-2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Money transaction by the Plaintiff, KimB, and KoCC is not a separate independent contract for each transaction, but a multiple act of receiving money based on a single contract to pay the investment principal and interest, and the interest that the Plaintiff received each time is paid for the purpose of inducing the re-investment as part of the loan principal paid by the Plaintiff, and thus, it cannot be deemed a substantial interest that is subject to taxation under the Income Tax Act.

(2) Article 51(7) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 23588, Feb. 2, 2012; hereinafter the same) provides that with respect to the calculation of gross income, where the pertinent non-business amount falls under the bonds under Article 55(2)1 or 2 of the Enforcement Decree of the same Act before the final return on tax base or the determination and correction of tax base and tax amount, and where all or part of the principal and interest cannot be recovered from the debtor or a third party, the amount recovered shall be calculated by first subtracting the principal from the recovered amount, and if the recovered amount falls short of the principal, the total amount shall be deemed nonexistent. Thus, the defendant should have considered only the amount that the plaintiff acquired from 2008 to 2011 less the principal paid during the above period. However, since the plaintiff imposed an OO on the plaintiff's total amount acquired in 209 and 10% of the investment principal, the plaintiff and the third party lost its investment principal from 110% agreement.10%.

4) In addition, on June 18, 2013, the Plaintiff expressed its intent to revoke the art investment contract to KimB and InnCC as it was by deception. As such, the said contract was lawfully revoked. Accordingly, the amount equivalent to 10% of the investment principal acquired by the Plaintiff lost its nature as interest.

B. Relevant statutes

The entries in the attached Table-related statutes shall be as follows.

C. Determination

1) The legal nature of the act of receiving money between the Plaintiff, KimB, and HumanCC

In light of the following circumstances revealed as above, i.e., that the Plaintiff did not have entered into a basic contract to regulate all monetary transactions with KimB and SCC, 2. Investment principal of each taxable period and interest accrued therefrom are collected; 3. The Plaintiff appears to have enjoyed economic benefits with respect to the interest received by the Plaintiff by periodically lending money regardless of the collection period of principal and interest, etc., it is reasonable to deem that monetary transactions between the Plaintiff, KimB, and SCC is an independent monetary loan contract for each transaction (the Plaintiff has asserted that the contract with KimB and SCC is an investment contract), but its legal nature is strict in light of the fact that the Plaintiff agreed to pay the principal and 10% interest within three months by guaranteeing the principal and 10% interest, in view of the fact that the Plaintiff agreed to pay the principal and 10% interest, it constitutes an independent monetary loan contract for each monetary loan contract between the Plaintiff, KimB, and SCC. (hereinafter referred to as “individual loan contract between the Plaintiff and SCC,” and interest income 2).

A) Under the Income Tax Act, interest income refers to profits from non-business loans or other income similar thereto in the nature of consideration as a result of the use of money. Article 45 of the former Enforcement Decree of the Income Tax Act provides that in the case of profits from non-business loans, the date of payment of interest shall be deemed the date of receipt of interest income under an agreement, but in the case where no agreement is made on the date of payment of interest or where interest is received prior to the date of payment of interest under an agreement, or where interest excluded from the calculation of gross income under Article 5

B) In addition, income tax is a so-called term taxation that imposes tax on the income amount for one year from January 1 to December 31 of each year, and the interest income amount generated from non-business loan is calculated as gross income amount for the pertinent year. Thus, in case where a partial recovery of a claim is made and it becomes objectively clear that collection of the remaining claim is impossible as of the time of recovery, it shall be deemed that there is no realization of the interest income that satisfies the taxation requirement in the pertinent taxable year unless the recovered amount falls short of the principal amount. However, in light of the above legal principles, it shall not affect the duty to pay the interest income that has already been specifically realized prior to the occurrence of an impossible cause (see Supreme Court Decision 2005Du5437, Oct. 28, 2005). Thus, in light of the above legal principles, the health loan of this case is an independent monetary loan contract, respectively, so long as the Plaintiff realized the interest income by receiving the principal and interest under an individual contract during each taxable period, the Plaintiff’s assertion that the money transaction was impossible between the Plaintiff and the Plaintiff’s obligation to recover the money transaction.

3) Whether Article 51(7) of the former Enforcement Decree of the Income Tax Act is applied

A) Article 51 (7) of the former Enforcement Decree of the Income Tax Act provides that when calculating the total amount of profit from a non-business loan pursuant to Article 16 (1) 11 of the Act with respect to the calculation of interest income, where the relevant non-business loan is not recoverable due to the debtor's bankruptcy, compulsory execution, execution of punishment, discontinuance of business or death, disappearance, missing, missing, etc. before the final return on tax base pursuant to Article 70 of the Act or the final return on tax base pursuant to Article 80 of the Act is determined and corrected, the calculation shall be made by preferentially subtracting the principal from the recovered amount if the whole or part of the principal and interest cannot be recovered from the debtor or a third party. In this case, if the recovered amount falls short

B) However, the above provision is a method of calculating interest income where all or part of the principal and interest cannot be recovered from an obligor or a third party. In this case where the Plaintiff received full repayment of principal and interest under an individual contract, the Plaintiff’s assertion that interest income should be calculated by deducting the principal from the collected amount is without merit.

4) Whether the agreement has been rescinded and the deception has been cancelled

In light of the fact that the Plaintiff’s assertion premiseding the validity of the termination of an agreement is without merit, and it is insufficient to deem that the Plaintiff had the intention of deceiving KimB and SCC at the time of the conclusion of an individual contract, and there is no other evidence to prove otherwise. Thus, the Plaintiff’s assertion on this part is without merit, inasmuch as there is no reason to deem otherwise.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.