Suwon District Court 201Guhap14068 (2012.06.08)

early 201J 0289 ( October 30, 2011)

The initial disposition that was imposed as business income when considering the commercial nature, repetition, etc. of patent lending is legitimate.

In light of social norms, the initial disposition imposed as business income in light of social norms, considering various circumstances, such as the commercial nature of patent lending, the existence of continuous and repeatedness, the length of the transaction period, and the amount provided.

2012Nu19726 global income and revocation of disposition

NoAAAA

Head of Sungnam Tax Office

Suwon District Court Decision 201Guhap14068 Decided June 8, 2012

October 26, 2012

December 7, 2012

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The imposition of global income tax of 000 won for the Plaintiff on November 1, 2010 and global income tax of 000 won for the global income tax of 2008 and the global income tax of 2009 shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning of this court's ruling, and the reasoning of the plaintiff's argument are as stated in the reasoning of the judgment of the court of first instance, except for adding the following judgments to the plaintiff's argument, and they are cited in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the

2. Additional determination

A. The plaintiff's assertion

Article 21 (1) 7 of the former Income Tax Act explicitly states "money and valuables received in return for lending industrial property rights as other income, and there is no limit to the scope of "temporary income" unlike subparagraph 19 of the same paragraph, and the plaintiff's key income should be regarded as other income regardless of continuity and happiness. In addition, as income similar to income under subparagraphs 1 through 19 of Article 19 (1) of the amended Income Tax Act as of December 31, 2009, which is similar to income under subparagraphs 1 through 19 of Article 19 (1) of the former Income Tax Act as of December 31, 2009, which is continuously and repeatedly conducted for profit-making purposes, it was newly established a ground provision that 'business income from lending industrial property rights', but the plaintiff's key income is not applicable since the former Income Tax Act was amended on December 31, 2009, which is contrary to the principle of no taxation without law, and thus, it is unlawful as well as the defendant's disposition against the principle of no taxation without law.

B. Determination

In light of the following circumstances cited above and the structure and contents of the relevant legal principles and relevant regulations, and the Plaintiff’s key income shall be deemed as business income, and the Plaintiff’s key income shall not be deemed as “other income”. Therefore, the Plaintiff’s assertion on a different premise is without merit.

1) According to the structure, contents, etc. of the relevant provisions of the former Income Tax Act, whether the Plaintiff’s key income constitutes “business income” should be first determined, and if it is determined that the Plaintiff’s key income does not fall under “business income”, it should be determined in light of social norms, taking into account various circumstances, such as the Plaintiff’s commercial activity of patent lending, the existence of continuous and repeatedness, the length of the transaction period, and the amount provided.

2) Article 29 of the former Enforcement Decree of the Income Tax Act provides that the scope of businesses under each subparagraph of Article 19 (Business Income) of the former Income Tax Act shall be based on the Korean Standard Industrial Classification, and according to the Korean Standard Industrial Classification, activities such as patent rights and the right to use them to a third party and receiving royalties such as royalties shall be "other financial businesses" until January 31, 2008 (Statistics Notice No. 2000-1), and from February 1, 2008, "unauthorized property rights lease business (Statistics Notice No. 2007-53)" are classified as "non-specified property rights lease business (Statistics Notice No. 2007-53). Therefore, the plaintiff's interpretation and disposal of patent rights to a limited company BB case andCC Construction corporation is not possible, and the above premise that the plaintiff's above disposal of business income is against the above 10th anniversary of the above abstract requirements of Article 19 (1) of the former Income Tax Act.

3) The purport of Article 19 (Business Income) of the former Income Tax Act amended on December 31, 2009 is that it is necessary to partially change the classification of business income according to the revision of the Korean Standard Industrial Classification, and that it appears to be in order to change the classification of existing business income by reflecting the classification of business type in the current Korean Standard Industrial Classification, and that the amended Article 19 (1) 1 through 19 of the Income Tax Act, as income similar to income under Article 19 (1) 20 of the amended Income Tax Act, which is obtained through continuous and repeated activities under one's own calculation and responsibility for profit-making purposes, apart from the newly established income, is that it is stipulated in Article 19 (1) 11 and 12 of the amended Income Tax Act, and Article 19 (3) of the amended Income Tax Act provides that the scope of business income shall comply with the Korean Standard Industrial Classification publicly notified by the Commissioner of the National Statistical Office pursuant to Article 22 of the Korean Income Tax Act, and that the plaintiff's assertion to the purport of this case can not be accepted.

3. Conclusion

If so, the judgment of the first instance is justifiable, and the plaintiff's appeal is dismissed as it is without merit.