Blisher Industry Development Co., Ltd. (Attorneys Ba-sik et al., Counsel for the plaintiff-appellant)

The director of the tax office

February 7, 2013

Suwon District Court Decision 201Guhap9370 Decided July 4, 2012

1. The plaintiff's appeal is dismissed.

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

The decision of the court of first instance shall be revoked. The defendant shall revoke all the disposition of imposition of KRW 3,063,952,020 of corporate tax for the business year 2004 and KRW 2,521,432,470 of corporate tax for the business year 2005 and corporate tax for the business year 2,345,82,150 of corporate tax for the business year 2006 and KRW 93,279,010 of corporate tax for the business year 2007 and KRW 304,493,630 of corporate tax for the business year 2008.

1. Quotation of judgment of the first instance;

The reasoning of the judgment of the court of first instance is partially dismissed as follows, and the reasoning of the judgment of the court of first instance is the same as that of the judgment of the court of first instance, except for the addition of the judgment of the plaintiff to the judgment of the newly asserted in the appellate court as follows. Thus, it is accepted in accordance with Article 8(2) of the Administrative Litigation Act and Article

The phrase “written evidence No. 19” is added to the column of “(based on recognition) No. 10-12 of the fifth page.”

The "wastewater facility" of the 14th 11st place shall be improved into "wastewater facility".

The 18th page 5 of the 18th page "the fact that the rights are recognized" is "the fact that the rights are recognized, and the business-related assets acquired by the plaintiff during the contract period are transferred to the clinic after the expiration of the contract period."

○ 3rd below the 18th below the following shall be added: “It appears to be necessary to prevent the other party’s loss.”

① Article 24(3) of the former Enforcement Decree of the Corporate Tax Act provides that “In the case of fixed assets purchased on a long-term installment basis, the corporation shall include the value of the fixed assets in its assets and in the depreciable assets regardless of the settlement of the price or transfer of ownership, in the case of the fixed assets used for the business, in which the said facilities are not purchased within 90 days after the termination of the contract.” Article 68(3) of the former Enforcement Decree provides that “The long-term installment condition means the sale or transfer of the assets, which is the sale or transfer of the assets, and the sales amount or revenue amount is not less than one year from the date following the last installment of the date of the delivery of the concerned assets, until the date of the payment of the last installment of the said assets.” However, the assets of this case are the assets that the Plaintiff received during the contract period and used for its own business, and it is not the assets of this case that the said facilities were purchased on the part of the Plaintiff during the contract period, but are not used on the last payment of the fixed assets of this case.”

2. Judgment on the Plaintiff’s additional assertion

A. The plaintiff's assertion

1) The instant transaction is a transaction in which the Plaintiff transferred the instant assets to the Plaintiff at a cost during the contract period, and the Plaintiff used and made profits therefrom during the contract period, and the Plaintiff transferred the instant assets to the Hasheshes without compensation at the time of termination of the contract. In such a case, the acquisition value of the instant assets shall be calculated as the prepaid cost for the use and profits, and in proportion to the period of use

2) Since the inclusion of the depreciation costs of fixed assets in deductible expenses according to the service life was technical and difficult characteristics, justifiable grounds should be widely recognized regarding the determination of the time of attribution of such deductible expenses. In the past, there was authoritative interpretation of the National Tax Service to the effect that in the case of gratuitous transfer after use and profit-making, the acquisition value should be divided into the contract period and included in deductible expenses, and corporate accounting standards also provide for such purport. The plaintiff reported the service life of the assets of this case to 12 years according to the advice of the accounting corporation and included the depreciation costs in deductible expenses accordingly, and the tax authority also accepted them. In light of the circumstances such as the fact that the plaintiff reported the service life of the assets of this case as the contract period and included the depreciation costs in deductible expenses accordingly, the part of the penalty tax of this case at least is unlawful.

B. Determination

1) As to the Plaintiff’s first argument

According to the facts duly admitted by the judgment of the court of first instance cited earlier, the Plaintiff acquired the instant assets from the Hashes by paying the Hashes for the instant assets and managing, operating, repairing, and maintaining them exclusively, and the Hashessssss re-acquisition the instant assets after the expiration of the contract term after paying the Plaintiff the basic service fee that includes the acquisition cost of the instant assets during the contract term. Therefore, the Plaintiff’s payment that the Plaintiff provided to Hashes cannot be deemed as the advance payment cost for the Plaintiff’s use and profit-making of the instant assets. Furthermore, the Plaintiff’s payment that the Plaintiff received the acquisition cost for the instant assets from Hashess during the contract term in the form of basic service fee and transfers it to Hashessssssss after the termination of the contract term. Accordingly, the Plaintiff’s assertion that the instant transaction was transferred without compensation after the use and profit-making is without merit.

2) As to the second argument of the Plaintiff

A) In order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, where a taxpayer violates various obligations, such as a tax return and tax payment, as prescribed by the Act without justifiable grounds, and where there are extenuating circumstances where it is unreasonable to expect the taxpayer to fulfill his/her obligations, etc., and thus, it is not possible to impose penalty taxes (Supreme Court Decision 2004Du930 Decided November 25, 2005). However, in imposing penalty taxes, the taxpayer’s intentional act or negligence is not considered, and the land, error, etc. under the Act does not constitute justifiable grounds that do not cause the breach of such obligations (Supreme Court Decision 2005Du10545 Decided April 26, 2007).

B) Comprehensively taking account of the overall purport of each statement in subparagraph 1-1 through 5 of the evidence Nos. 1-5, among the amount of corporate tax imposed by each disposition of this case, the fact that the amount of penalty tax, such as the following table “additional tax”, is included can be acknowledged.

In general 204 3,063,063,952,020 186,679,9279,274,059 1,008,744,815 1,214,214,698,801 2005 2,521,432,470 166,4660 752,678,678,8039, 345, 2692062,345,82,150,34343,479,6479,9639,647,947,9639,647,947,9639,647,639,645,269,206, 2006, 345,382,150,343,63430,639,196,9747

However, Article 23 of the former Corporate Tax Act, Article 28 of the former Enforcement Decree of the Corporate Tax Act, and Article 15 of the former Enforcement Rule of the Corporate Tax Act provide for the method of allocating depreciation costs as deductible expenses, and there is no material to deem that there is a special significance in the interpretation of the above provision. WSA, which is the basis of the transaction of this case, provides for the rights and obligations between the plaintiff related to the assets of this case and his/her clinic, and according to this, it can be known that the assets of this case fall under the Plaintiff’s depreciation property, and the lifespan of this case seems to be possible to be selected and reported in accordance with the above provision. Nevertheless, in light of the fact and legal relationship and the fact that the plaintiff reported the lifespan of the remaining assets of this case, which were interpreted independently or independently, as the contract term and included the depreciation costs in deductible expenses, it is difficult to recognize that the plaintiff had any justifiable reason not attributable to his/her negligence. Therefore, the part of the penalty tax of this case cannot be accepted.

3. Conclusion

Therefore, the judgment of the first instance court is just, and the plaintiff's appeal is dismissed as it is without merit.

[Attachment Omission of Related Acts]

Judges Lee Tae-tae (Presiding Judge)