early 201-Gu3557 (Ob. 27 December 2012)

Since the offset amount seems to be appropriated for the repayment of the interest on the loan and the damages for delay, it should be viewed as interest income.

The amount of offset in this case seems to be appropriated for the repayment of interest and delay damages on the loan, and the interest and delay damages on the non-business loan constitutes interest on non-business loan and thus the disposition imposing a offset amount as interest income is legitimate.

2012Guhap1879 global income and revocation of disposition

XX Kim

Head of Ansan Tax Office

August 29, 2012

September 19, 2012

1. The plaintiff's claim is dismissed.

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

The imposition of global income tax of KRW 000 on the Plaintiff on February 1, 2011 is revoked.

1. Details of the disposition;

A. On May 9, 2004, the Plaintiff agreed on June 9, 2006, 3% of interest per annum, 60% of interest per annum, and 9 days per month of interest payment (hereinafter “the instant loan”) to make a loan to Nonparty Gamba on a one-time basis to lose the benefit of time and to repay the full amount of the loan in lump sum. Nonparty XX (hereinafter “Nonindicted”) jointly and severally guaranteed the instant loan obligations (hereinafter “joint and several sureties”).

B. During the period from July 23, 2005 to December 15, 2005, the non-party corporation supplied XX amounting to KRW 000 to the Plaintiff. Around December 2005, the non-party corporation agreed with the Plaintiff to set off the joint and several surety obligation and the above product price claim against the Plaintiff on an equal amount (hereinafter referred to as “instant set-off”).

C. On February 1, 2011, the Defendant rendered a decision of correction to reduce the amount of KRW 11,058,530 out of the amount of tax as of July 4, 201 upon the Plaintiff’s objection, to reduce the amount of KRW 11,058,530 from the amount of tax to KRW 11,058,530 from the amount of tax (hereinafter “the disposition of this case”).

D. On September 28, 2011, the Plaintiff filed an appeal with the Tax Tribunal, which was dismissed on February 27, 2012.

[Reasons for Recognition] Unsatisfy, Gap evidence 1 to Gap evidence 5-3, Gap evidence 7, the purport of whole pleadings

2. The plaintiff's assertion is as follows.

According to Article 51 (7) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19327 of Feb. 9, 2006), if all or part of the principal and interest of a non-business loan cannot be recovered from a debtor or a third party due to bankruptcy, etc., it shall be calculated by first subtracting the principal from the recovered amount, and if the recovered amount falls short of the principal, it shall be deemed that there is no gross amount of income. In this case, it shall be deemed that there is no amount of gross income if the recovered amount falls short of the principal. Around December 2, 2005, which was the time of the offset, the principal debtor was unable to recover the principal and interest of the loan of this case due to the capital shortage of the non-party corporation, which is the principal debtor and the joint

3. Related statutes;

Attachment 'Related Acts and subordinate statutes' shall be as shown.

4. Determination

A. According to Article 16 (1) 12 of the former Income Tax Act (amended by Act No. 8144 of Dec. 30, 2006), profits from non-business loans shall be interest income, and pursuant to Article 45 (9) 9-2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19327 of Feb. 9, 2006; hereinafter referred to as the "former Enforcement Decree of the Income Tax Act"), the time of payment of profits from non-business loans shall be determined as the date of payment under an agreement, and if interest is paid without an agreement on the date of payment of interest or before the date of payment of interest under an agreement, the date of actual payment of interest shall be deemed as the date of payment of interest. The delay damages from the interest accrued after the maturity falls under the non-business profits under the Income Tax Act (see Supreme Court Decision 91Nu1240, Mar. 27, 1992).

According to Article 479(1) of the Civil Act, where a debtor pays expenses and interest of one or more obligations, and the person performing the obligation has paid benefits which the obligor has failed to extinguish in whole, such appropriation shall be made in the order of expenses, interest, and principal. In the case of appropriation of the principal, the appropriation order under Article 479 of the Civil Act is stipulated in the order of appropriation. Thus, in principle, such appropriation order shall be made in the order of expenses, interest, and principal, and even though the obligor is not a debtor and the obligee, the order of appropriation cannot be designated unilaterally in the order of appropriation. However, in cases where there is a special agreement between the parties, or where it is deemed that the other party has not raised an objection without delay, and that an implied agreement has not been reached due to the other party’s unilateral designation, the appropriation order may be acknowledged differently from the order of appropriation (see, e.g., Supreme Court Decision 2009Da12399, Jun. 11, 2009).

In full view of the purport of evidence Nos. 6-1 and 2, the non-party corporation filed a lawsuit against the plaintiff on Aug. 11, 2006 seeking confirmation of the non-existence of joint and several surety obligation, and the non-party corporation on Jan. 17, 2007 shall pay the plaintiff 00 won of the principal of the loan of this case and its delay damages (in consideration of the offset amount) until Jan. 31, 2007. If delay occurs, 24% per annum for the principal and interest of this case until Jun. 30, 2007, and 36% per annum for the interest payment from the next day until the day of full payment (Seoul District Court dong Branch Branch 2006Ga712). Thus, the plaintiff's assertion that the principal of the loan of this case was not offset as of Jan. 17, 2007, and damages for delay can not be seen as being used for the set-off of 205 won and damages for delay.

B. According to Articles 51(7) and 55(2)1 and 55(2)2 of the former Enforcement Decree of the Income Tax Act, in calculating the gross income from a non-business loan, if the whole or part of the principal and interest cannot be recovered from the debtor or a third party because the non-business loan is not recoverable due to the debtor's bankruptcy, compulsory execution, execution or discontinuation of business before the final return on tax base or tax base and tax amount are determined and corrected, or because the debtor's death, disappearance, missing, missing, etc., the calculation shall be made by preferentially subtracting the principal from the recovered amount. In this case, if the recovered amount falls short of the principal, the gross income amount shall

Income tax is a so-called "fixed-term taxation" which imposes tax on the income amount for one year from January 1 to December 31 of each year, and since interest income generated from non-business loans is calculated on the gross income amount for the corresponding year, in case where a partial recovery of claims is made and it becomes objectively clear that it is impossible to recover the remaining claims at the time of recovery of claims, it shall be deemed that the pertinent taxable year does not realize the interest income that satisfies the taxation requirement unless the recovered amount falls short of the principal. However, it shall not affect the duty to pay the interest income that has already been specifically realized prior to the occurrence of a cause not to recover (see, e.g., Supreme Court Decision 2005Du5437, Oct. 28, 2005).

In full view of the aforementioned evidence and evidence Nos. 8 through 11, the Plaintiff’s argument as a whole, on April 6, 2006 and June 23, 2006, the Plaintiff’s provisional attachment of 602-2 woodland 1,918 square meters in the Dong-dong-si, Dong-si, Si-si, Si-si, Y-si, Y-si, Y-dong 669 square meters in the warehouse on August 3, 2006, and Park Jong-dong, Y-dong, Y-dong 669 square meters in the warehouse on March 23, 2007. Thus, it can be recognized that the principal, interest, or delay damages of the instant loan were impossible to recover from the Plaintiff in the year 2005. As seen earlier, the Plaintiff’s assertion that the remainder of the loan could not be recovered is without merit.

5. Conclusion

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