Seocho 2012west 2545 ( November 20, 2012)

It is not impossible to realize interest income as the loan was converted into capital.

The instant disposition is lawful, since interest income was realized on the basis of the agreed date of the loan agreement and the capital was invested in the capital is not a reason for impossibility of collection.

Article 16 of the Income Tax Act / [Interest Income]

Article 51 (7) of the Enforcement Decree of the Income Tax Act / [Calculation of Gross Income Amount]

2013Guhap5425 Global income and revocation of disposition

AAA

○ Head of tax office

May 24, 2013

June 21, 2013

1. The plaintiff's claim is dismissed.

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

Each disposition taken by the Defendant on February 13, 2012 against the Plaintiff on the global income tax in 2008, the global income tax amount in 2009, the global income tax amount in 2009, and the global income tax amount in 2010 shall be revoked.

1. Details of the disposition;

A. From November 3, 2011 to December 27, 2011, the director of the regional tax office conducted an investigation into gift tax on the Plaintiff. The director of the regional tax office confirmed that the Plaintiff lent funds to the “CC International Tring, Inc., located in the United States (hereinafter “CCC”), and notified the Defendant of the data for taxation as follows.

Investment Report Date

Lending Amount

(USD)

Interest Rate

Interest Payment

Interest Payment Date

Interest Amount

(USD)

1

208.

4. 8.

OOO

3%

(18% by delay)

On the 25th of each month

(24 times in total)

From June 25, 2008 to May 25, 2010

208: OO

209: OO

2010:OO

2

208.

5. 28.

OOO

3

208.

11. 10.

OOO

October 30 each year;

(total 2 times)

From October 30, 2009 to October 30, 2010

Total

OOO

OOO

B. Accordingly, the Defendant respectively corrected and notified the Plaintiff of Article 16 of the Income Tax Act, Article 80, and Article 45 of the Enforcement Decree thereof, the global income tax OOO(including additional taxes), the global income tax OOO(including additional taxes) in 2008, and the global income tax OO(including additional taxes) in 2009, and the global income tax OOO(including additional taxes) in 2010.

C. The Plaintiff appealed and filed an appeal on May 10, 2012, and was dismissed by the Tax Tribunal on November 20, 2012.

D. On January 10, 2013, the Plaintiff filed a civil petition for grievance with the Director of the Regional Tax Office for the reason that “the overdue interest on the instant loan has not arrived at the time of receipt.” The Director of the Regional Tax Office partially accepted the application, and revised the reduction by either the reduction of the amount to OOO(including additional tax) on January 25, 2013, global income tax OO(including additional tax), global income tax OOO(including additional tax) on 2009, and the global income tax OO(including additional tax) on 2010 (hereinafter “the instant disposition”).

[Based on Recognition] The non-strifed facts, Gap evidence 1, 2, and 3 (including household numbers), and Eul evidence 1, 2, and 3 (including household numbers), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

CCC has experienced chronic deficit and financial shortage since 2009, and the Plaintiff agreed to convert the instant loan into capital on March 10, 2012, and entered into an agreement to waive interest claim on June 8, 2012, and the realization of interest income is practically impossible, and the instant disposition is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) The Plaintiff, in addition to the instant loan, also lent USD OO to CCC by September 24, 2010, and the Plaintiff’s total loans to CCC reached USD OO.

(2) The assets, liabilities, etc. of the CCC from 2008 to 2010 are:

(unit: US$)

208

209

2010

2011

Assets:

OOO

OOO

?

OOO

Debt

OOO

OOO

?

OOO

Capital;

Capital

OOO

OOO

OOO

OOO

OOO

OOO

OOO

OOO

Surplus

(OOO)

(OOO)

(OOO)

(OOO)

(3) On December 16, 2011, the Plaintiff prepared a written confirmation from the Director of the Regional Tax Office that “No interest on the instant loan was paid” to the Director of the Regional Tax Office.

(4) On March 10, 2012, the Plaintiff entered into a share purchase and sale contract with CCC and “CCC’s 21,683.0604 shares issued and sold to OOO, and OOO$ out of total loan OO$ was converted into investment. CCC held board on May 29, 2012, and “the Plaintiff shall convert loan OO$ into investment by acquiring 12,600 shares issued and sold to CCC OOO.”

(5) On June 8, 2012, the Plaintiff entered into an agreement on the waiver of interest claim against CCC and loan OOO dollars.

[Reasons for Recognition] 4, 6 (including household numbers), and 1, and the purport of the whole pleadings

D. Determination

(1) The Income Tax Act, even if there is no actual income, adopts the so-called "right to calculate taxable income" on the basis that the income is realized if the right that is the cause of the income has become final and conclusive, and adopts the so-called "right to calculate taxable income." However, even if a claim that is the cause of income has occurred, if it is objectively evident that the claim subject to income becomes impossible to recover due to the debtor's bankruptcy, etc. and that it becomes no possibility of realizing the income in the future, the income tax on the economic benefits should lose its premise, and such income cannot be imposed on the taxable income. However, it must be clearly stated that the taxpayer has no income subject to taxation by asserting and proving such circumstance, and at that time, the issue of whether the claim is impossible should be determined by an objective method of assessment by taking into account the debtor's financial status and payment ability (see Supreme Court Decision 2001Du1536, Oct. 25, 2002).

(2) On June 8, 2012, the Plaintiff: (a) waived the interest claim of the instant loan, acquired stocks instead, converted the interest claim into stocks; and (b) made it possible to deem that the Plaintiff received payment in kind; (c) CCC had assets equivalent to the OOO won in 2008 and 2009, and operated without closing the business until now; and (d) Article 51(7) of the Enforcement Decree of the Income Tax Act amended by Act No. 23588 of February 2, 2012 limited the grounds for the impossibility of collecting the claim to "the debtor's bankruptcy, compulsory execution, sentence or discontinuation of business, and the debtor's death or missing; and (e) considering that the circumstances asserted by the Plaintiff do not fall under this, it cannot be deemed that the impossibility of collecting the interest claim of the instant loan was objectively clear.

(3) Therefore, it is reasonable to deem that interest income was realized on the date of each payment agreement, and it does not fall under the impossibility of collecting claims, and the instant disposition is lawful.

3. Conclusion

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