A disposition under Article 20 of the Corporate Tax Act providing for the denial of wrongful calculation by a corporation

Article 20 of the Corporate Tax Act provides for a sincere transaction with a corporation in relation to a corporation. However, if the transaction is deemed to have neglected economic rationality by abusing all the forms of the transaction listed in each subparagraph of Article 46(2) of the Enforcement Decree of the Corporate Tax Act, and it seems unfair from a tax legal point of view that it was unfair from a tax law point of view, it would be fair in taxation and prevent tax avoidance by deeming that there was income objectively reasonable from a taxpayer's point of view.

Article 20 of the Corporate Tax Act, Article 46 (2) of the Enforcement Decree of the Corporate Tax Act

Attorney Jeon Jong-soo, et al., Counsel for defendant-appellee

The Head of the Maternization Tax Office

Seoul High Court Decision 86Gu622 delivered on August 25, 1987

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

Article 20 of the Corporate Tax Act provides for the principle of substantial taxation in order to ensure fairness in taxation and prevent tax avoidance by deeming that there was income objectively reasonable from the taxation authority's point of view in view of tax law when it seems that the transaction was unfair due to the abuse of all the transaction forms listed in each subparagraph of Article 46 (2) of the Enforcement Decree of the Corporate Tax Act.

According to the reasoning of the judgment below, the court below determined as follows, based on the evidence adopted by the court below, that the real estate rental chain intended to dispose of the shares of the non-party company, which is the owner of the plaintiff company, for the purpose of raising its funds, and there was no person who wants to acquire the shares of the non-party company, whose financial structure is bad, with the resolution of the reduction of the par value at the general meeting of the non-party company on October 5, 1982, and the non-party company received the funds borrowed from the non-party company on December 8, 1983 after the resolution of the reduction of the refund amount or on December 12, 1983, and received the funds borrowed from the non-party company of the non-party company of the non-party company of the non-party company of this year or on December 8, 1983, in light of the fact that the listed stock price at the time of the reduction of the reduction of the capital amount, and the appraised shares at the time of the original decision.

In light of the record, the fact-finding by the court below did not violate the rules of evidence or make an incomplete hearing, and there is no error of law by misunderstanding the legal principles of wrongful calculation.

The issue is that the court below's decision to criticize the fact-finding or to reduce the capital at a shareholders' meeting given out of the Co., Ltd. to retire at par value on October 5, 1982. However, even if the court below acknowledged on the premise that the date when the refund was actually reduced should be seen as December 8, 1983, in which case the refund was paid, the theory of lawsuit is without merit unless the court below recognizes the premise.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Jae-hee (Presiding Justice)