The excessive benefits paid to executive officers of the controlling shareholder, etc. without justifiable grounds shall be deemed as non-deductible expenses.

Where a corporation pays remuneration to an officer who is a controlling stockholder in excess of the amount paid to an officer in the same position without justifiable grounds, the excess amount shall be excluded from deductible expenses, and the internal regulations of the corporation, such as articles of incorporation, do not constitute justifiable

2012Guhap29240 Revocation of Disposition of Corporate Tax, etc.

AAA Development Corporation

Head of the Seocho Tax Office and one other

February 27, 2013

March 15, 2013

1. The plaintiff's claims against the defendants are all dismissed.

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

On April 1, 2011, the imposition of corporate tax of 000 won (including additional tax) and corporate tax of 0000 won (including additional tax) for the business year 2007 business year by the Head of the Seocho Tax Office, and the imposition of the income income of 5 April 201, 201 by the Head of the Seoul District Tax Office as KimB, and the notification of the change in the income amount of 000 won for the business year 2006 and 000 won for the income amount of 2007, respectively, shall be revoked.

1. Details of the disposition;

A. The Plaintiff, a registered director, paid 000 won for the year 2006 salary, 000 won for the year 2007 salary, and 000 won for the retirement allowance calculated on the basis of average salary of 000 won for the previous three months as of April 1, 2007. In the business year and 2007, the Plaintiff owned 85.24% of the Plaintiff’s total issued stocks in the business year 2006 and 2007, and 14.76% for the spouse.

B. On April 1, 201, the head of the Seocho District Tax Office revised and notified the Plaintiff of “(including additional taxes) of the annual average increase rate of monthly salary (115.09%) from 2006 to 2005 from the annual average increase rate of monthly salary (115.09%) for the Plaintiff’s payment in 2006 and 2007, as the Plaintiff’s excessive payment of KRW 2006 salary, and KRW 000 for the year 2007 salary without justifiable grounds, it shall be excluded from deductible expenses, on the ground that the difference between the retirement allowance and the retirement allowance paid to KimB, and the difference between the corporate tax (including additional taxes) for the business year 2006 and the corporate tax (including additional tax) for the business year 2007, the head of the Seoul District Tax Office notified the Plaintiff of the disposition of the above retirement allowance and the amount of income for the year 2006.

C. The Plaintiff filed an appeal on April 15, 201, and received a decision of dismissal from the Tax Tribunal on May 31, 2012.

[Grounds for recognition] The whole purport of the arguments, as described in Gap evidence 1, 2, and 3 (including household numbers), and the whole argument

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

(1) In accordance with the Plaintiff’s articles of incorporation and internal regulations, the 2006 and 2007 salaries paid to KimB after the resolution of the general meeting of shareholders and the board of directors are legitimate personnel expenses, and all of them must be included in deductible expenses, and each of the dispositions of this case, on the other premise, is unlawful.

(2) Although there are no executives in the same position as the controlling shareholder KimB, and there are officers in the same position, the 2006 and 2007 benefits paid to KimB reflects KimB’s contribution, so long as there are justifiable grounds for paying more remuneration than those in the same position, and all of the benefits in 2006 and 2007 should be included in the calculation of losses, and each of the dispositions in this case is unlawful.

(3) The retirement pay paid to KimB is paid as provided by the Plaintiff’s articles of incorporation and the rules of retirement allowance for officers, and all of them should be included in deductible expenses, and each of the dispositions in this case based on the amount excluding non-deductible benefits is unlawful.

(4) Even if the excessive amount of the salaries and retirement allowances paid to KimB in 2006 and 2007 is excluded from deductible expenses, and the annual simple average increase rate, which forms the basis for the calculation of each of the above salaries and retirement allowances, has no legal basis, and each of the dispositions in this case is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) Current representative director status

On the corporate register, the representative director was changed as shown in Table 1 below. KimB was in the office of the president during the period of resignation from the representative director.

Present status of representative director of the Table 1.

(Omission)

(2) Status of remuneration by executive officer, etc.

(Omission)

(A) The monthly salary status by officer shall be as follows: (a) the monthly salary status by officer shall be as follows: (b) the salaries and retirement allowances received by KimB shall be as follows: (c) the monthly salary trend by KimB, and (d) the monthly salary trend by KimB shall be as follows:

(Omission)

Details of receipt of the payment and retirement allowance of KimOO

(Omission)

Note 4. Table 4. KimB’s monthly benefit trend

(Omission)

(B) Article 38(2) of the articles of incorporation provides that "the payment of retirement allowances for directors shall be made in accordance with the rules on the payment of retirement allowances for executives after the resolution of the general meeting of shareholders, and "the rules on retirement allowances for executives" Article 4 provides that "the calculation method of retirement allowances; the retirement allowances for executives shall be calculated by multiplying the monthly average remuneration at the time of retirement by (the number/12) the monthly average remuneration for executives who have worked for at least one year from the date on which the executives are appointed." The monthly average remuneration at the time of

(C) KimB disbursed the expenses from the Plaintiff as the provisional payment. Extraordinary stated that the construction-specialized company paid the expenses for its business activities without any documentary evidence, as the construction-specialized company could not remain and remain, KimB made a statement that it would have spent the expenses for its business activities without any documentary evidence.

(3) Current status of obligations

(A) The sales amount and net profit per business year are as listed below:

Table 5. Sales and net income for the current term

(Omission)

(B) On the audit report, the details of short-term loans to shareholders, executives, and employees (endend balance) are as follows:

Table 6. Details of short-term loans

(Omission)

(4) Status and organization of the project;

(A) According to the OOO association, while its capacity is 10 out of 7 and 458 specialized construction companies across the country in 2007 and 7,531 specialized construction companies across the country in 2008. The revenue amount and trends in new contract amount by business year are as follows:

Table 7 Amount of income and trends in new contract amount

(Omission)

(B) As the construction competition in 2005 was invaded, and the minimum bid price system in 2006 was expanded, the plaintiff was under restructuring. 54 employees in 2005 and 82 employees in 2006 were retired, and 10 on-site management officers from among the retired employees in 2006.

(C) On April 17, 2006,CC Construction Co., Ltd. established measures: the national expressway No. 10 lines 10 lines 10 lines : D Construction Co., Ltd., and D Construction Co., Ltd., on September 25, 2006; Nov. 28, 2006; and May 18, 2007, 197; EEE Construction Co., Ltd, on October 20, 2006, established and resumed off the construction of the expressway between Ji-Seuk-gu and Sejong-gu Highway Construction Co., Ltd. (section 9 sections); and, on May 20, 2007, 207, 207, 207.

(D) The Plaintiff is responsible for the management planning office and depreciation under the representative director, and is responsible for the management department (accounting team, financial team, computer team), the construction division (construction management team, material search, maintenance team, and quality management team), and the technology division (marketed budget team). The Plaintiff does not have a separate business organization for the contracting director.

(5) The duties of KimOO in 2006 and 2007.

In this Court, Extraordinary stated that the Plaintiff was registered as a contractor and could have the opportunity for participation in the construction site. In 2006, the Plaintiff directly visited and managed the site and resolved the problems, such as the gap of the site director following the restructuring in 2006, the escape and attitude of labor personnel, the process delay, and the display of the original contractor’s anxiety. The Plaintiff’s director and the general secretary visited the site of the construction site at least 1-2 times a year by 2005, but they visited the construction site at several times in 2006 and 2007, after visiting the construction site at several times in order to boost the morale of the employees affected by the restructuring and to pay bathing or meal expenses.The Director prepared and submitted a written statement to the effect that he directly visits the site of the original contractor and directly pays the cost of meals and meals on several occasions.

[Ground of Recognition] The non-satched facts, Gap 5, 8 through 13, 15, 18, 19, and 20 evidence, and Eul 1 through 6 (including household numbers), and the purpose of the whole pleadings, as the whole.

D. Determination

(1) As to benefits

(A) Acts and subordinate statutes on the basis of non-deductible expenses

Article 43(3) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 20619, Feb. 22, 2008) provides the following two provisions: First, in cases where remuneration has been paid in excess of the amount paid to executives or employees other than controlling shareholders, etc. in the unification position without justifiable grounds to the executives or employees who are controlling shareholders, etc., the excess amount shall not be included in deductible expenses (Article 43(3)); Second, except for cases falling under wrongful calculation, remuneration paid to executives of a non-permanent corporation shall be included in deductible expenses (Article 43(4) of the former Enforcement Decree). Meanwhile, Article 43(2) provides that "where the corporation paid to executives of a non-permanent corporation in excess of the amount paid by the articles of incorporation or general meeting of shareholders, or by a resolution of the society, the excess amount shall not be included in deductible expenses for the reason that it exceeds the amount paid for 20 years after the lapse of 20 years from the annual amount paid to the executives or employees of the corporation, and it shall not be included in deductible expenses.

(B) Non-deductible elements

1) The purport of Article 43(3) of the former Enforcement Decree of the Corporate Tax Act is that “if a corporation pays remuneration to an executive officer, etc., who is a controlling shareholder, etc., in excess of the amount paid to an executive officer, etc., without justifiable grounds, the corporation’s tax burden was unjustly avoided or reduced, and thus, the excess amount should be excluded from deductible expenses.” The executive officer in the same position should be based on the actual duties actually engaged in under the internal organization system regardless of the position in the corporate register, and the justifiable reason should be determined based on economic rationality in light of the business performance of the executive officer, the nature, importance, and required time of the work, the seriousness of the responsibility, and sound social norms

(ii) an officer in the same position;

According to the above facts, KimB established the plaintiff and worked as the representative director from January 12, 2004, and from October 1, 2009 to October 1, 2009, and the rest of KimB worked as the representative director who does not exist in the corporate register. Considering that KimB was engaged in the management of construction order and construction site, it is reasonable to deem that KimB actually performed the duties of the representative director on behalf of the plaintiff inside and outside the country, and that KimB was a representative director at the time of payment of the wages in 2006 and 2007, and there are officers on the same position. Meanwhile, unlike other representative directors, KimB took overall charge of the construction site management with the construction order and construction site management, the plaintiff is not in the same position as other representative director. However, the plaintiff's position in the articles of incorporation or corporate register does not exist, and the same officer in the construction order division is judged based on actual duties, but it does not include the representative director in fact the same duties as the representative director, and there is no reason to view that the plaintiff's position.

(C) Justifiable reasons

위 인정사실에 의하면， 원고의 내부조직체계상 공사수주를 위한 영업업무를 담당하는 부서가 없는 점， 김BB은 공사수주와 공사현장관리를 한 점， 일부 원도급사들이 원고에게 2006년 및 2007년 부전공정， 건설현장 인원 및 안전관리자 등의 문제를 제기한 점， 원고의 재무상태가 2007년 적자에서 2008년 흑자로 전환된 점은 인정된다. 그러나 ① 2006 사업연도 및 2007 사업연도 수입금액 및 신규계약액이 감소한 점， 2006년 당기순이익이 전년 대비 절반가량 감소되고， 2007년 사실상 결손이 발생한 점， 2006. 3.부터 2007. 6.까지 급여가 대표이사로 채직하던 때의 급여에 비하여 현격하게 증가한 점 등을 고려할 때，높은 보수를 지급받을 만한 기여를 하였다고 보기 어렵고，② 김BB이 대표이사에서 사임한 2004. 1.부터 2006. 2.이전까지 종전 급여수준을 유지하다가 2006. 3.부터 2007. 6.까지 현격하게 증가된 점， 2007. 7. 이후 종전 급여수준으로 회귀된 점， 연간 단순평균상승률이 115.09%를 초과할 정도로 과다 한 점을 고려할 때， 창업주이고， 원고를 유지， 발전， 지속시킨 공로를 감안하더라도， 경제적 합리성이 결여되어 있고，③ 김BB은 원고에게 2005년 0000원， 2006년 0000원， 2007년 0000원의 가지급금 채무를 부담하고 있었으나 2008년말 이를 모두 변제한 점， 김BB은 원고로부터 지급받은 가지급금￡로 경비를 지출한 점，예OO은 이 법원에서 "김00은 아무런 증빙을 남기지 않고 현금으로 영업활동비를 지출하였다"고 진술한 점 등을 고려할 때， 급여로 가지급금 채무를 변체하도록 편법을 사용한 것으로 보이는데， 이는 기업회계나 세무회계의 정당한 방법이 아니므로(이를 용인할 경 우 탈법적인 수익의 감소 등을 초래하여 분식회계의 위험이 발생한다)， 정당한 사유가 없다.

(D) Exclusion of Loss

If a corporation pays more than the amount paid to an executive officer in the same position as a controlling shareholder without justifiable cause, the excess amount shall be excluded from deductible expenses. Accordingly, the representative director of the Plaintiff received the remuneration of 000 won in 2006 and 2007, respectively, and KimO received 000 won in 2006 and 2007, and 000 won in 2006, and 000 won in 2006 (=00 won -00 won) and 0000 won in 207 (=00 won). Each of the dispositions of this case is legitimate since only 2006, 2006, and 2007, and 200 won within the scope of deductible expenses, and each of the dispositions of this case is legitimate (the annual average increase based on the Defendant is not based on laws and regulations, but is not unlawful).

(2) As to retirement pay

(가) ① 구 법인세법 시행령 제44조 제3항， 제4항악 "정관이나 그에 따른 퇴직급여지급규정에서 정해진 금액이 임원에게 퇴직금으로 지급된 경우 그 전액을 손금산입 한다"고 규정한 이유는 정관에 정하여진 퇴직금을 증감사키려면 상법상 변경절차를 거 쳐야 하므로，임원이라도 임의로 퇴직금을 과다지급하는 것이 비교적 어려워 법안의 소득을 부당히 감소시킬 염려가 적기 때문인바， 정관이나 그에 따른 퇴직급여규정에서 정해진 금액대로 임원에게 퇴직금을 지급한 경우에도 법안의 소득을 부당히 감소시킬 우려가 있다면 부당행위계산부인의 대상이 되는 점，② 지배주주등인 염원에게 동일직 위에 었는 임원에게 지급한 금액을 초과하여 보수를 지급한 경우 초과보수를 손금불산입하는 것은 그 실질이 부당행위계산부인인 점，③ 구 법인세법 제44조 제3항 제2호는 "정관이나 그에 따른 퇴직급여규정에서 퇴직금으로 지급할 금액을 정하지 않은 경우 임원이 퇴직하는 날부터 소급하여 1년 동안 당해 임원에게 지급한 총급여액의 1/10에 상당하는 금액에 재정경제부령이 정하는 방법에 의하여 계산한 근속연수를 곱한 금액 한도에서 손금불산입하되，총급여액에서 제43조에 의한 손금불산입한 금액은 제외한다"고 규정한 점 등을 고려할 땐， 정관이나 그에 따른 퇴직급여규정에서 정한 퇴직금 산정의 기초가 되는 총급여액을 산정함에 있어서는 손금불산입된 급여액을 제외해야 상당하다.

(B) According to the case's return to health team, the plaintiff's articles of association, and the rules on monthly retirement pay for officers, the amount of monthly average remuneration at the time of retirement x the number of months of service x 12, and the amount of monthly average remuneration at the time of retirement x the monthly average wage for three months before retirement , including the non-deductible benefits, the amount of monthly average wage for three months before retirement , including the non-deductible benefits, and each of the dispositions of this case are legitimate considering the fact that the amount of the non-deductible benefits is deducted and the monthly average wage for three months before retirement , and the amount of the non-deductible benefits is based on the calculation for three months before retirement .

3. Conclusion

Therefore, the plaintiff's claim against the defendants is without merit, and it is all dismissed, and it is so decided as per Disposition.