early 2012 Mine3787 ( December 26, 2012)

The amount equivalent to 10% of the principal of each investment received by the plaintiffs as interest name constitutes interest income in the actual meaning.

Even if the plaintiffs have re-invested the amount including interest for each transaction, each individual contract is a separate and independent monetary loan contract. As long as the plaintiffs received all principal and interest pursuant to an individual contract during each taxable period and realized interest income finally, the amount equivalent to 10% of each investment principal constitutes interest income.

Article 5 (Taxable Period) of the Income Tax Act, Article 51 (Calculation of Gross Income Amount) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010);

2013Guhap953 Global Income and Revocation of Disposition

1. The YangA 2.L. 3. GaCC 4.Korea DoD 5.E

2.H Head of the GG Tax Office

June 10, 2015

August 3, 2015

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

1. On May 29, 2012, the head of the Defendant GG Tax Office revoked each disposition of imposition of KRW 24,95,530 of global income tax for the year 2008, global income tax for the year 2009, global income tax for the year 2009, global income tax for the year 208, global income tax for the year 208, global income tax for the year 208,709,840, and each disposition of imposition of KRW 43,905,300 of global income tax for the year 2009, global income tax for the year 2009, and global income tax for the year 2010 to Plaintiff B.

2. The disposition imposing global income tax of KRW 17,428,830, global income tax of KRW 17,830, global income tax of KRW 38,877,430, global income tax of KRW 81,449,570, global income tax of KRW 81,570, global income tax of KRW 2010, global income tax of KRW 51,248,150, global income tax of KRW 482,505,140, global income tax of KRW 482,50, global income tax of KRW 209, global income tax of KRW 926,732,550, global income tax of KRW 74,604,40, global income tax of KRW 209, global income tax of KRW 200, global income tax of KRW 208, KRW 208, KRW 208, KRW 308,207, KRW 209, KRW 2008.

1. Details of the disposition;

A. From 2008 to 2011, the Plaintiffs received a recommendation from KimF and Ansan (hereinafter “GGF, etc.”) to pay interest equivalent to 10% of the principal and interest on the principal within three months, and paid 10% interest on the principal and interest thereon to KimF, etc. within three months, and repeated the process of receiving 10% interest on the principal and interest thereon within three months from KimF, etc., and then receiving 10% interest on the principal and interest thereon. Each of the Plaintiffs’ monetary payment was made on a regular basis regardless of the timing of collecting the principal and interest.

B. The annual total amount paid or received by the Plaintiffs to KimF, etc. from 2008 to 2010 is as follows:

Year

(won) Total amount of payment (won)

The number of general meetings ( won)

Total payment interest (cost)

The two AA

208

710,000,000

781,000,000

71,000,000

209

2,610,000,000

2,871,000,000

261,000,000

2010

5,530,000,000

6,083,000,000

53,000,000

Maximum Round

208

320,000,000

352,880,000

32,880,000

209

1,240,000,000

1,364,000,000

124,000,000

2010

3,350,000,000

3,685,000,000

35,000,000

CC Kim

208

460,000,000

505,700,000

45,700,000

209

1,668,000,000

1,834,800,000

166,800,000

2010

2,421,000,000

2,663,100,000

242,100,000

AD

208

1,504,000,000

1,654,400,000

150,400,000

209

13,808,000,000

15,193,200,000

1,385,200,000

2010

19,959,00,000

21,954,900,000

1,995,900,000

E

208

1,900,000,000

2,089,500,000

189,500,000

209

6,265,000,000

6,891,500,000

626,500,000

2010

17,353,00,000

19,083,300,000

1,730,300,000

C. Meanwhile, in November 201, KimF, etc. paid early settlement of the invested principal to the Plaintiffs on September 201, October 201, and November 201, the Plaintiffs offset the total amount equivalent to 10% of the invested principal received as interest up to that time by the Plaintiffs. As a result, Plaintiff YangA was not paid KRW 2.4 million in terms of the invested principal, Plaintiff AD was KRW 2.8 billion in terms of the invested principal, and Plaintiff E was not paid KRW 5.328 billion in terms of the investment principal.

D. After conducting a tax investigation for the taxable year from 2008 to 2010, the director of the Seoul Regional Tax Office notified the defendants that the plaintiffs should levy the comprehensive income tax as interest income and 10% collected together with the principal from January 1, 2008 to December 31, 2010. Accordingly, the defendants decided and notified the plaintiffs that the comprehensive income tax should be imposed as follows.

Agency

Date of Disposition

Tax amount imposed and collected by notice (unit: Won)

208

209

2010

guidance.

The two AA

GG Head of the tax office

May 29, 2012

24,995,530

94,015,920

208,709,840

327,721,290

LB

GG Head of the tax office

May 29, 2012

43,905,300

89,339,380

133,244,680

CC Kim

H Head of HH Tax Office

June 1, 2012

17,428,830

38,877,430

81,449,570

137,755,830

AD

H Head of HH Tax Office

June 1, 2012

51,248,150

482,505,140

926,732,550

1,459,485,840

E

H Head of HH Tax Office

June 1, 2012

74,604,440

205,783,160

742,209,080

1,022,596,680

E. The Plaintiffs filed an appeal with the Tax Tribunal on August 17, 2012, but the Tax Tribunal dismissed all of the appeals filed by Plaintiffs YangA, ChoiB, and KimCC on December 26, 2012.

[Ground of recognition] Facts without dispute, Gap evidence 1 to 11, Eul evidence 1 to 11, the purport of the whole pleading

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

1) Money transaction by the Plaintiffs, KimF, etc. is not a separate contract for each transaction, but an increase in the amount of investment to pay the investment principal and interest, and it is merely a multiple act of receiving money based on a single contract to pay the investment principal and interest. The interest that the Plaintiffs received at each time was paid for the purpose of inducing the re-investment in part of the leased principal that the Plaintiffs paid, and thus, it cannot be deemed an

2) Article 51(7) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010; hereinafter the same) provides that where the pertinent non-business amount falls under a claim under Article 19-2(1)8 of the Enforcement Decree of the Corporate Tax Act before the final return on tax base or the determination and correction of tax base and tax amount, and all or part of the principal and interest cannot be recovered from the debtor or a third party, the amount recovered shall be calculated by first subtracting the principal from the recovered amount, and where the recovered amount falls short of the principal, the total amount shall be deemed non-existent. Thus, in the case of Plaintiff BB and KimCC, the Defendants should have considered the remainder after subtracting the principal from the recovered amount as interest income. However, in the case of Plaintiff LB, the Defendants considered the amount equivalent to 10% of the invested principal acquired in 209 and 2010, in the case of Plaintiff KimCC, 2008, 2009 and the remaining interest income amount were not recovered.

3) The Plaintiffs, KimF, etc. rescinded the agreement on the investment of art works in November 201, and appropriated the amount equivalent to 10% of the total amount received by the time of restitution from the original state to the principal invested in September 201, October 10, and November 201. Therefore, since the said agreement became retroactively effective, the amount equivalent to 10% of the investment principal acquired by the Plaintiffs was lost its nature as interest.

4) In addition, the Plaintiffs, on June 18, 2013, expressed their intent to revoke the art investment contract to the KimF, etc. as it was by deception, and thus, the said contract was lawfully revoked. Accordingly, the amount equivalent to 10% of the invested principal acquired by the Plaintiffs has lost its nature as interest.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) As to the first argument

A) Comprehensively taking into account the facts acknowledged earlier, evidence, and the overall purport of oral arguments, the following circumstances are revealed: (a) the Plaintiffs did not recognize that they entered into a basic contract to regulate all monetary transactions with KimF, etc.; (b) during the taxable period of taxation regarding the instant disposition (hereinafter referred to as the “instant taxable period for dispute taxation”); (c) the Plaintiffs appears to have recovered both their principal and interest from KimF, etc. during the pertinent taxable period; and (d) further, when the Plaintiffs appears to have received both the principal and interest paid to KimF, etc. and paid the money again, it is deemed that the identity of each principal paid to KimF, etc. during the pertinent taxable period is not recognized; (e) even if the evidence and the arguments submitted by the Plaintiffs were to be considered, it is reasonable to view that each monetary transaction contract during the pertinent taxable period between the Plaintiffs and KimF, etc. (hereinafter referred to as the “individual contract”) under each of the instant individual contracts for consumption loan or interest payment for each of the instant case, in light of the legal nature of each of the Plaintiffs’s principal and interest payment for each of the instant contract.

B) In addition, the term “interest” generally refers to the money received or its substitute in proportion to the principal amount and the lending period, regardless of the name thereof, and when based on the facts and evidence, etc. acknowledged above, the Plaintiffs regularly lend money to KimFF, etc. during the pertinent taxable period in accordance with the individual contract of this case and received additional money in proportion to the principal amount and the principal amount, and enjoy economic benefits therefrom. In light of the circumstances where it appears that the Plaintiffs had enjoyed economic benefits, the evidence submitted by the Plaintiffs and the circumstances of their assertion, even though all of the evidence presented by the Plaintiffs were considered, the money in addition to the principal amount received by KimF, etc., is deemed to constitute interest income under Article 16 of the Income Tax Act. The Plaintiffs’ assertion is not merely a part of the principal leased by the Plaintiffs, or a part of the principal amount,

C) Ultimately, this part of the plaintiffs' assertion is without merit.

2) As to the second argument

A) Whether there exists interest income from "non-business proceeds" under Article 16 (1) 11 of the Income Tax Act shall be determined by applying Article 51 (7) of the former Enforcement Decree of the Income Tax Act, which applies to the disposition of this case by individual loans. Thus, if there are claims for the principal and interest of a loan already recovered at the time of the final return on tax base or the determination or correction of tax base and tax amount among multiple loans, such claims shall be deemed as interest income unless there are special circumstances, and the same applies even if the multiple loans are claims for the same debtor (see, e.g., Supreme Court Decision 2014Du35010, May 29, 2014).

B) In light of the above legal principles, with respect to each of the loans lent by the Plaintiffs to KimF, etc. according to the individual contracts of this case as of the time of the disposition of this case, it is recognized that the loan principal and interest are recovered in full, and there is no other counter-proof. In light of the above legal principles, the claim for the principal and interest on each of the loans under the individual contracts of this case under the monetary loan loan contract of this case is already extinguished at the time of the disposition of this case, and it cannot be applied Article 51 (7) of the former Enforcement Decree of the Income Tax Act. However, in calculating the total amount of interest income pursuant to Article 51 (7) of the former Enforcement Decree of the Income Tax Act with regard to calculation of interest income, it shall be deemed that the final return on tax base pursuant to Article 70 of the Act or the tax base and tax amount pursuant to Article 80 of the Act cannot be recovered from the debtor's bankruptcy, etc., and it shall be deemed that the interest income cannot be recovered from the whole or part of the principal and interest income amount collected from this case.

C) Ultimately, this part of the plaintiffs' assertion is without merit on the premise that Article 51 (7) of the former Enforcement Decree of the Income Tax Act can be applied to the plaintiffs of this case.

3) On the third, fourth argument

A) According to the evidence evidence No. 20, if KimF et al. borrowed money, it can be acknowledged that the defendant was convicted of five years of imprisonment due to the crime of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) on October 17, 2014 (Seoul Western District Court 2014Dahap97, 200 (combined)) by stating that it constitutes an individual investment contract of this case after the filing of the lawsuit of this case, and that the above contract constitutes a false declaration of intent as provided by Article 110 of the Civil Code, and that the defendant sent 10% of the principal and interest to KimF et al. for 3 months after the filing of the lawsuit of this case by mail, and that the plaintiffs were not guilty of the principal and interest payment of the contract of this case, and that the plaintiffs could not be acknowledged to have received from the plaintiff 10% of the principal and interest payment of this case as well as from the objective evidence No. 110% of this case's cancellation of the contract.

B) Ultimately, the plaintiffs' assertion on the existence of a legitimate and effective rescission of agreement or cancellation of the above contract on the individual contract of this case on the grounds of fraud such as KimF, etc. is without merit without further review.

3. Conclusion

Therefore, all of the plaintiffs' claims are dismissed as it is without merit, and it is so decided as per Disposition.