Madern 2014 Schedule 1424

disposition that is imposed on a corporation by deeming that it has transferred at a low price the vessel at issue to a person with a special relationship

In full view of the fact that the sale and purchase of the vessel at issue between the Plaintiff and its related parties does not appear in the process of autopsy and takeover and it is difficult to view the vessel as a normal transaction, the disposition imposing corporate tax on the Plaintiff deeming that the vessel at issue was at a low price transferred

Article 52 of the Corporate Tax Act

Busan District Court 2014Guhap2282, revocation of disposition of imposing corporate tax, etc.

AA

○ Head of tax office

January 22, 2015

February 12, 2015

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 0,00,000,000 (including additional tax of KRW 000,000,000) of corporate tax for the business year 2, 2009 on December 2, 2013 against the Plaintiff and the imposition of KRW 00,000,000 for the second period of December 3, 2013 (including additional tax of KRW 00,000,000) on the second period of value-added tax for the business year 2009 shall be revoked.

1. Details of the disposition;

A. On July 1, 2009, the Plaintiff: (a) agreed to sell passenger ships owned by the Plaintiff to BB, the representative of △△ Shipping, for KRW 0 billion (hereinafter “instant first sale”); and (b) completed the registration of ownership transfer of the instant ships in the name of BB on August 6, 2009.

B. However, on August 4, 2009, BB prepared a ship sales contract to sell the ship of this case to KRW 0 billion (hereinafter referred to as "the second sale contract of this case"), and completed the registration of ownership transfer of the ship of this case in the name of △△ on August 10, 2009.

C. Accordingly, the Defendant determined that the Plaintiff transferred the instant vessel at a low price to a specially related person at a low price, and applied the provision of the denial of unfair calculation, determined the market price of the instant vessel in the first sale and purchase as KRW 0 billion, which is the difference between the sales price reported by the Plaintiff in the business year 2009 and the sales price reported by the Plaintiff in the business year 2009, included 0 billion, and on December 2, 2013, 2009, the Defendant issued a revised and notified the Plaintiff of the amount of KRW 0,000,000 (i.e., unpaid corporate tax + penalty tax + KRW 00,000,000 in the calculation, and below KRW 00,000,000 in the aggregate (i.e., value-added tax including the corporate tax for the second sale and purchase of KRW 20,000,000 in the calculation).

D. Accordingly, the Plaintiff filed an appeal with the Tax Tribunal on October 00, 000, but the Plaintiff’s claim was dismissed on October 00, 000.

Facts that there is no dispute over recognition, Gap evidence 1, 2, 3 (if there is an additional number, including branch numbers; hereinafter the same shall apply), Eul evidence 1, 2, 5, and 6, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. Summary of the parties' assertion

1) Plaintiff

It is reasonable to view that the market price of the ship of this case is KRW 0 billion, which is the selling price of the ship of this case for the following reasons. Therefore, the disposition of this case on the premise that the market price of the ship of this case is KRW 0 billion is unreasonable.

A) The market price under Article 52(2) of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter the same) includes the appraisal price of a reliable appraisal institution. In the first sale of the instant case, the price of a ship is KRW 0 billion based on the appraisal price at two locations of an appraisal institution. Thus, the market price of the instant ship is equivalent to KRW 0 billion.

B) From May 15, 1995 to July 25, 2007, the Plaintiff used the instant vessel by paying the lessee the lease fee of KRW 0,00,000,000 to the lessee. Upon termination of the lease contract, the Plaintiff purchased the instant vessel to the lessee on July 25, 2007. At the time of the first sale of the instant vessel, the remaining market price of the instant vessel was KRW 00,000,000 on the Plaintiff’s account book; the current market price of the instant vessel was KRW 00,000,000 under the Local Tax Act on the instant vessel; rather, the sale price of the instant vessel under the first sale of the instant vessel was KRW 0,000,000,000 at an unreasonable low price; rather,, the sale price of the instant vessel from the second sale to the exchange price of the instant vessel could not be deemed to have been significantly higher than the sale price of the instant vessel in addition to the sale price of the instant vessel at the time of the instant vessel.

Therefore, since the market price of the instant vessel is unclear, it should be determined by an appraisal corporation as prescribed by Article 52 (2) 1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22577, Dec. 30, 2010; hereinafter the same). It is equivalent to KRW 0 billion as seen earlier.

2) Defendant

In light of the terms and conditions of the first sale contract and the implementation process, the first sale contract of this case was made at the same time when a certain period of time is required due to the vessel takeover, and the first sale contract of this case was made at the same time. In light of the contents of the first sale contract of this case and the implementation process, it is strongly doubtful that the Plaintiff was made after the process or actual negotiation to sell the ship of this case, or after the completion of the first sale contract, and that the sale price of this case was set at KRW 0 billion is also insufficient in economic rationality.

Meanwhile, since BBB acquiring the instant vessel from the Plaintiff set the sale price of the instant vessel at KRW 0 billion in the second sale of the instant vessel through a normal negotiation with a third party, not a specially related party, the sales price of the instant vessel may be deemed to reflect the objective exchange price of the instant vessel. Furthermore, insofar as the market price of the instant vessel can be verified, the appraisal price by an appraisal corporation may not be deemed to be the market price.

Therefore, it is reasonable to view the market price of the ship of this case as KRW 0 billion, which is the selling price of the second sale of this case, and the disposition of this case, which corrected and imposed corporate tax and value-added tax on this premise, is legitimate.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

1) BB is the largest shareholder of the Plaintiff who holds 72.5% of the Plaintiff’s shares issued.

2) 원고는 이 사건 제1 매매 이전 주식회사 ◆◆평가법인 및 주식회사 ■■평가법인에 이 사건 선박에 대한 감정평가를 의뢰하였는데, 가격조사완료일인 2009.6. 25.을 기준으로 한 이 사건 선박의 평균 감정가액은 0,000,000,000원〔 = (◆◆평가법인 감정가액 0,000,000,000원 ＋ ■■평가법인 감정가액 0,000,000,000원) × 1/2 〕으로 보고되었다.

3) On July 1, 2009, the Plaintiff drafted a ship sales contract (No. 6-1) for the first sale of the instant case with BB, and agreed to pay the remainder KRW 0 billion at the time of the contract each at August 1, 2009, but did not actually receive the down payment from BB at the time of the contract.

4) 한편, ○○은행 ○○지점장은 ▲▲감정원에 담보평가목적으로 이 사건 선박에 관한 감정평가를 의뢰하였는데, ▲▲감정원 소속 감정평가사 CCC은 가격조사완료일인 2009. 7. 22.을 기준으로 한 이 사건 선박의 감정가액은 0,000,000,000원으로 평가되었다.

5) BB entered into the instant secondary sales contract with △ on August 4, 2009, with the sales value of KRW 0 billion, and the down payment of KRW 0 billion on the date of the contract, and the balance of KRW 0 billion (including value added tax) was paid after the preparation and examination of delivery.

6) On August 4, 2009, 200 million won of the down payment concluded on the second sale contract of this case with BB, and on August 5, 2009, BB transferred to the Plaintiff the down payment of KRW 00 million out of the purchase price under the first sale contract of this case (=the down payment of KRW 00 million + the down payment of KRW 00 million + some of the remainder under some the pretext).

7) From August 5, 2009 to August 7, 2009, △△ inspected the engine condition, etc. of the instant vessel, and on August 10, 2009, the instant vessel was delivered to BB, and the remainder of the purchase price was paid to BB, and BB transferred the remainder of the purchase price to the Plaintiff on the same day (including value-added tax).

Each entry of evidence Nos. 3, 4, and 1 through 6 of the Grounds for Recognition, the purport of the whole pleadings

D. Determination

1) Relevant legal principles

In a case where a corporation’s wrongful calculation division under Article 52 of the former Corporate Tax Act does not follow a reasonable method by a person with a special relationship, but rather evades or reduces tax burden by abusing the various forms of transactions listed in each subparagraph of Article 88(1) of the Enforcement Decree of the same Act, the said legal system is deemed to have the income objectively and reasonably reasonable by the method prescribed by law and denying it by the person with a right to taxation, and it is limited to the case where a person with a special relationship is deemed to have neglected the economic rationality due to disregarding the calculation of an unnatural and unreasonable act from his/her standpoint. In such a case, the determination of whether the economic rationality exists shall be made based on whether the transaction is abnormal to the extent that it lacks economic rationality in light of sound social norms and commercial practices, but also on the basis of special circumstances at the time of the transaction (see, e.g., Supreme Court Decision 208Du15541, Oct. 28, 2010).

"On the other hand, Article 88 (1) 3 of the Enforcement Decree of the Corporate Tax Act provides that one of the acts of wrongful calculation under Article 52 of the Corporate Tax Act provides that a person with a special relationship such as an investor transfers an asset at a price lower than the market price to the person with a special relationship. Article 89 (1) of the Enforcement Decree of the Corporate Tax Act provides that the scope of market price is similar to the transaction in question if there is a price generally traded between many and unspecified persons other than a person with a special relationship or between a third party who is not a person with a special relationship, the price shall be determined." "The market price defined as the basis for a transfer of low-price which is the rejection of wrongful calculation" refers to an objective exchange price formed by a general and normal transaction (see Supreme Court Decision 2003Du4041, Jan. 16, 2004).

First, we examine whether selling the instant vessel to BB, the largest shareholder of the Plaintiff, in KRW 0 billion, is subject to the avoidance of wrongful act and calculation under Article 52(1) of the former Corporate Tax Act.

In light of the following circumstances: (a) BB did not receive wages, etc. from the Plaintiff; (b) was the largest shareholder; and (c) was actually exercising significant influence on the Plaintiff’s management; (b) BB did not pay the down payment to be paid at the time of the contract at the time of the first sale contract; (c) was paid KRW 00,000 on August 5, 2009, as part of the down payment and remainder; and (d) the first sale and purchase contract of the vessel was prescribed as the payment of the purchase price to the vessel at KRW 200,000,000,000,000,000,000,000,000,000,000,0000,000,000,000,000,000,000,000,000,000,000,000,000,000 won.

3) Determination as to whether the sale price of the instant case No. 2 can be deemed as the market price of the instant ship

Next, we examine whether the second purchase price of this case can be seen as the market price under Article 89(1) of the Enforcement Decree of the Corporate Tax Act.

The following circumstances are: ① Article 52(2) of the former Corporate Tax Act and Article 89(2) of the Enforcement Decree thereof provide that the appraised value by an appraisal corporation shall be deemed to be the market price where the market price is unclear; ultimately, the issue of the instant case is whether it can be deemed the market price under Article 89(1) of the Enforcement Decree of the Corporate Tax Act. ② As seen earlier by the Plaintiff, the Plaintiff decided to sell the instant vessel to BB in the name of BB on July 1, 2009, and the registration of ownership transfer for the instant vessel was completed on August 6, 2009; ③BB concluded a contract to exchange the instant vessel at the time of sale and purchase at least one month prior to the date of conclusion of the first sale contract, which is the same time as that of the instant vessel’s wrongful calculation and calculation as that of the instant vessel, and ④ even if the Plaintiff’s sale and purchase price was determined at the time of sale and sale at least the same time as that of the instant vessel after the date of sale and purchase agreement.

4) Therefore, the disposition of this case where the Defendant applied the rejection of wrongful calculation of the sales contract of this case to the sales contract of this case, and BB imposed corporate tax and value added tax on the market price of this case, which is the sales amount of the ship of this case in △△, is legitimate, and the Plaintiff’s assertion is without merit

4. Conclusion

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