The original disposition that was imposed on the failure to submit a statement of payment;

It is difficult to view that the Plaintiff’s failure to submit a statement of payment on the interest payment of this case is justifiable, and there is no evidence to acknowledge it otherwise, so the initial disposition is legitimate.

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

2014Guhap6059 Revocation of Disposition of Corporate Tax Imposition

000 Electricity Generation Co., Ltd.

Gangnam-gu Seoul Metropolitan Government 512 (Seongdong and Korean Electric Power Building)

Maximum*

Law Firm *

Attorney Gangwon-gu*

00. Head of tax office

Litigation Performers Kim*

November 7, 2014

December 16, 2014

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 KRW 100,00,000 of corporate tax for the business year 2010 against the Plaintiff on August 8, 2013, and the imposition of KRW 100,000,000 of corporate tax for the business year 2011, and KRW 100,000,000 of corporate tax for the business year 2012 shall be revoked.

1. Details of the disposition;

A. The Plaintiff issued a foreign currency bond in a foreign country to a domestic corporation established for the purpose of developing electric resources, etc., and thereafter paid 20,092,442,400 won as interest to the foreign corporation holding the bonds in the business year 2010, 33,741, 325,50 won in the business year 201, and 30,463,685,200 won as interest paid in the business year 2012 (hereinafter “interest paid in the instant case”).

B. The Plaintiff did not submit a statement of payment pursuant to Article 120-2 of the Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter the same shall apply) and Article 162-2(1)1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22577, Dec. 30, 2010; hereinafter the same shall apply) on the ground that the interest paid in the instant case constitutes a domestic source income exempt from corporate tax pursuant to Article 21(1)1 of the Restriction of Special Taxation Act on the grounds that it constitutes a domestic source income exempt from corporate tax pursuant to Article 21(1)1 of the Restriction of Special Taxation Act.

C. However, on August 8, 2013, the Defendant issued a correction and notification of the amount of corporate tax of KRW 100,000,000 (additional tax not submitted) for the Plaintiff for the business year 2010, corporate tax of KRW 100,000 (additional tax not submitted) and corporate tax of KRW 100,000 (additional tax not submitted) for the business year 2011, and corporate tax of KRW 100,000,000 (additional tax not submitted) for the business year 2012 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed an appeal with the Tax Tribunal on November 7, 2013, but the said appeal was dismissed on March 17, 2014.

Facts that there is no dispute over recognition, entry in Gap's 1 through 3 (including family identifications which have a serial number), and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Article 162-2(1)1 of the former Enforcement Decree of the Corporate Tax Act provides that "where a person fails to submit an application for non-taxation and exemption, he/she shall submit a statement of payment as an exception." This is limited to cases where a person fails to perform the obligation to submit an application for non-taxation and exemption pursuant to the Corporate Tax Act or the Restriction of Special Taxation Act. However, the interest paid in this case constitutes income which is naturally exempted from corporate tax pursuant to Article 21(1) of the Restriction of Special Taxation Act without the need to submit an application for non-taxation and exemption, and ultimately, it cannot be deemed as subject to the submission of a statement

Unlike this, it is illegal to create the requirements for imposing additional tax according to the failure to submit a statement of payment beyond the scope of interpretation of the language and text of corporate tax law.

(2) Even if Article 162-2(1)1 of the former Enforcement Decree of the Corporate Tax Act orders the submission of a statement of payment for the purpose of securing tax information in all cases where a person fails to submit an application for non-taxation and tax exemption as a result, there is no way to derive such intent of legislation through the interpretation of the statutes. Therefore, the Plaintiff’s failure to submit a statement of payment on the interest paid in this case is deemed to have a justifiable reason that is not attributable to the failure of the Plaintiff to do so. Therefore, imposing

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) The scope of submission of a statement of payment under Article 120-2(1)1 of the former Enforcement Decree of the Corporate Tax Act

(A) Article 120-2(1) of the Corporate Tax Act provides that a person who pays domestic source income to a foreign corporation shall, in principle, submit a statement of payment to the head of the tax office having jurisdiction over the place of tax payment. However, where income prescribed by Presidential Decree, such as income that is confirmed as non-taxation or exemption, is paid, the payment statement shall not be submitted. In this regard, Article 162-2(1)1 of the former Enforcement Decree of the Corporate Tax Act provides that no obligation to submit a statement of payment exists for domestic source income on which corporate tax is not imposed or exempted under the Corporate Tax Act and the Restriction of Special Taxation Act (hereinafter referred to as "special provisions"). However, "where an application for non-taxation or exemption is not filed under

(B) Under the principle of no taxation without law, or under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, barring special circumstances, and it shall not be permitted to expand or analogically interpret without reasonable grounds (see, e.g., Supreme Court Decision 2012Du20540, Feb. 13, 2014).

As seen earlier, the special provisions stipulate that a person who is obligated to submit an application for non-taxation and exemption should submit a statement of payment in principle if he/she fails to do so even though he/she is exempt from the obligation to submit a statement of payment, and limit the scope of exemption. In this regard, the Plaintiff asserts that the provision of exclusion can only be applied if he/she neglects the obligation to submit an application for non-taxation and exemption. However, the provision of exclusion only limits the scope of application for non-taxation and exemption to all cases where he/she fails to submit an application for non-taxation and exemption. Accordingly, it is reasonable to conclude that the application for non-taxation and exemption is not submitted from the beginning and even if it does not meet the obligation to submit an application for non-taxation and exemption from income under the Enforcement Decree of the Corporate Tax Act, it does not include 0 cases where it is not necessary to submit an application for non-taxation and exemption from income under the Enforcement Decree of the Corporate Tax Act (the special provisions that can be viewed as a premise for non-taxation and exemption from income under the Corporate Tax Act).

(C) The interest paid in this case is a domestic source income under Article 93 subparag. 1 (a) of the Corporate Tax Act, which is a foreign corporation’s foreign currency bond issued by a domestic corporation, and is naturally exempted from corporate tax even if the application for non-taxation and exemption is not submitted pursuant to Article 21(1) of the Restriction of Special Taxation Act. Therefore, the interest paid in this case constitutes a domestic source income exempt from corporate tax under the special provisions for non-taxation and exemption, but at the same time, constitutes an income subject to the submission of a payment record to the head of the tax office having jurisdiction over the place of tax payment in accordance with the principle under Article 120(1) of the Corporate Tax Act, subject to the application of the special provisions for non-taxation and exemption. Nevertheless,

(2) Whether there exists a justifiable reason for an exemption from additional duties

In order to facilitate the exercise of taxation rights and the realization of tax claims under the tax law, additional tax is an administrative sanction imposed as prescribed by the Act in cases where a taxpayer violates a duty to report and pay taxes, etc. under the law without justifiable grounds. In addition, a taxpayer’s intentional or negligent act shall not be considered, and in cases where there are circumstances to justify the taxpayer’s failure to know his/her duty, it may not be imposed additional tax. However, the land or mistake in the law cannot be deemed a justifiable reason (see, e.g., Supreme Court Decision 2013Du1829, May 23, 2013). In light of the structure and text of the relevant law, it is difficult to view that the provision provides that the income for which no corporate tax is imposed pursuant to the domestic tax law without a need to submit an application for non-taxation and exemption from taxation as the subject of the submission of a payment statement is limited to cases where the Plaintiff fails to perform the duty to submit an application for non-taxation and exemption from taxation under the exclusion provision without any justifiable reason.

(3) Sub-decisions

Therefore, the disposition of this case is just, and all of the plaintiff's arguments are without merit.

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.