The bankruptcy trustee of Malaysia Co., Ltd., the bankrupt person, the Maximum of the bankruptcy trustee (Attorney Gyeong-soo, Counsel for the plaintiff-appellant)

Head of Yeongdeungpo Tax Office

April 7, 2005

1. The Defendant’s imposition of KRW 37,88,450 on June 2, 2003 against the Plaintiff and KRW 2,226,40,00 on income tax for the business year 196 and income tax for the business year 197 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. The Defendant illegally transferred USD 10,000 ($8,096,000) to the non-party 1,000,000 to the non-party 1,000 U.S. subsidiaries, the U.S. subsidiaries (hereinafter “U.S. subsidiaries”), using the LAC L/C (RD L/C) and illegally transferred the amount calculated by adding the amount to be illegally remitted to the Hong Kong subsidiaries, by 167,633.20 ($137,76,193) to the Hong Kong subsidiaries, and then, transferred the amount to the Hong Kong branch to the Hong Kong branch to the Hong Kong branch, and the amount of the income tax imposed on the non-party 25,000 won to the non-party 1,000 won (hereinafter “the non-party 2,05,000 won”) and the amount of the income tax imposed on the non-party 2,005,000 won for each business year to be reverted to the Hong Kong subsidiaries.

B. On May 23, 2001, the Plaintiff filed an objection against the initial imposition of corporate tax with the director of the Seoul Regional Tax Office. On December 17, 2001, the director of the Seoul Regional Tax Office rendered a quoted ruling on the revocation of the said imposition of corporate tax by citing the Plaintiff’s objection, and the Defendant was notified by the director of the Seoul Regional Tax Office of the decision of revocation on January 2, 2002, and revoked ex officio the initial imposition of income tax not included in the objection while revoking the said imposition of corporate tax.

C. After that, the Defendant was pointed out by the Board of Audit and Inspection that it was erroneous for the Board of Audit and Inspection to ex officio cancel the initial imposition of income tax, and again, on June 2, 2003, the Defendant imposed the Plaintiff the respective imposition of income tax of KRW 37,888,450 for the business year 1996 and the income tax of KRW 2,226,40,000 for the business year 197 (hereinafter “instant disposition”).

D. On August 2003, the plaintiff sought revocation of the disposition of this case from the Board of Audit and Inspection, but on October 28, 2004, it was ordered by the Board of Audit and Inspection to dismiss the request.

[Ground of recognition] Evidence Nos. 1-1, 2, and 3-1, 2, and evidence Nos. 6-1, 2, 7, 1, 2, and 3, and the purport of the whole pleadings

2. Determination on the legitimacy of the instant disposition

A. The parties' assertion

(1) The plaintiff's assertion

① On October 30, 1995, the Plaintiff provided a beneficiary of the Plaintiff’s issued bill as a security for a local subsidiary of the U.S. financial institution for which it is not capable of independently borrowing money from the U.S. local financial institution. On June 29, 1996, the Plaintiff opened a guarantee letter of credit at the first instance bank branch of the U.S., Han Bank’s Han Bank’s Han Bank’s Han Bank’s Han Bank’s Han Bank’s Han Bank’s Han Bank’s Han Bank’s Han Bank’s loan to the first instance bank’s Han Bank’s Han Bank’s Han Bank’s Han Bank’s Han Bank’s Han Bank’s loan of money from the first instance bank’s first instance bank’s loan of money for business purposes. However, the Plaintiff refused to extend the term of credit from March 1997 to the first instance bank’s first instance bank’s loan of money to the first instance bank’s Han Bank’s Han Bank’s Han Bank’s Han Bank’s loan to the first instance Bank’s Han Bank’s loan.

② In addition, the Plaintiff should transfer USD 139,603.20 equivalent to the cost of parts to be returned to the Hong Kong subsidiaries, USD 7,030 equivalent to the cost of purchasing office equipment from the Hong Kong Branch, USD 21,63.20 equivalent to the cost of purchasing office equipment from the Hong Kong Branch, and USD 1,67,63.20 equivalent to the market value of the Han Heavy Cultural Center. The Defendant’s disposition of this case based on the premise that the Plaintiff illegally remitted foreign currency equivalent to the above amount to the Hong Kong Branch, even though it was an opportunity to transfer foreign currency to the Republic of Korea Branch, was unlawful.

③ Even if the Plaintiff illegally remitted foreign currency to a U.S. subsidiary and Hong Kong subsidiary, the instant disposition was unlawful since the Plaintiff’s original tax liability for the said subsidiary became extinct due to the expiration of the exclusion period for taxation imposition.

④ On May 23, 2001, the Plaintiff filed an objection against the initial disposition of imposition of corporate tax with the director of the Seoul Regional Tax Office. On December 17, 2001, the Seoul Regional Tax Office rendered a decision of acceptance that revokes the said disposition of imposition of corporate tax by citing an objection on December 17, 2001, and even though the Defendant did not ex officio revoke the above disposition of imposition of corporate tax and there was no disposition of imposition that is the premise of the instant disposition, which is the disposition of imposition of corporate tax, by the Defendant’s revocation ex officio,

⑤ The instant disposition is based on the legal basis of the disposition of income under the Corporate Tax Act. Article 32(5) of the former Corporate Tax Act (amended by Act No. 5581, Dec. 28, 1998; hereinafter the same) provides that “In filing a report on the corporate tax base pursuant to the provisions of Article 26 or determining or revising the corporate tax base pursuant to the provisions of paragraphs (1) through (4) of this Article, the amount included in the calculation of earnings shall be disposed of as prescribed by the Presidential Decree, such as bonus, dividend, outflow from the company, and retained reserves, according to the person to whom the income belongs.” Thus, the Defendant cannot be included in the calculation of earnings because it is obvious that the corporate tax base against the Plaintiff cannot be determined or corrected by the binding force of the ruling. Accordingly, the instant disposition based on the premise that the disposition of income is valid is unlawful.

6. Since Article 32(5) of the former Corporate Tax Act was invalidated by the Constitutional Court’s decision of unconstitutionality, the instant disposition based on an invalid statute is unlawful.

(2) The defendant's assertion

① On May 21, 1997, inasmuch as the Plaintiff did not intend to export and import the machinery from the U.S. subsidiaries, the Plaintiff falsely prepared the relevant trade documents, such as orders, as if he imported the machinery and equipment from the U.S. subsidiaries, and illegally remitted the amount of US US $10 million to the U.S. subsidiaries, it is legitimate that the said amount was included in deductible expenses when the corporate tax adjustment for the business year 1997 reverts to the Plaintiff, and disposed of the income of the U.S. subsidiaries and other income to the U.S. subsidiaries. subsidiaries.

② In addition, when the Plaintiff remitted brokerage commission to the Republic of Korea branch with respect to the transit trade in Vietnam, the Plaintiff additionally transferred USD 167,633.20 (US$ 137,776,193) in addition to normal brokerage commission from April 9, 1996 to December 13, 196, in addition to normal brokerage commission, in addition to the Plaintiff’s transfer of the brokerage commission, the Plaintiff made a disguised transfer of the said amount to the Hong Kong branch, and the said amount was delivered to the Hong Kong local subsidiary through the false account section called brokerage commission, and the said amount was delivered to the Hong Kong local subsidiary, the Plaintiff’s transfer of the said amount to the Hong Kong local subsidiary is legitimate.

③ The obligation to pay income tax is established and determined as expense by the notification of change in the amount of income resulting from the disposition of income. Since the Defendant notified the Plaintiff of change in the amount of income on April 4, 2001, the Plaintiff paid withholding tax for the amount of income disposed of by May 10, 2001, and the Defendant can exercise the right to impose tax from the time when the statutory due date for payment expires, the initial date of the exclusion period for imposition shall be May 11, 2001, and the expiration date shall be May 11, 2006. Accordingly, the instant disposition cannot be deemed a disposition made after the lapse of the exclusion period for imposition.

④ On the Plaintiff’s objection, the Seoul Regional Tax Office’s decision of acceptance on the imposition of corporate tax for the business year of 1997 is not a decision of acceptance on the imposition of the income tax for the first time. Thus, the Defendant’s revocation ex officio of the imposition of the income tax for the first time withheld, and the second disposition is not a disposition contrary to the binding force of the decision.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

(1) On April 4, 2001, prior to the initial imposition of income tax, the Defendant issued a notice of change of income amount (hereinafter “instant notice of change of income amount”) to the Plaintiff on the grounds that the amount of illegal remittance to the Plaintiff was reverted to a foreign subsidiary, and that other income was disposed of to the Plaintiff.

The name and address of the income earner, or other income earner, of the kind of attached income (dividend, bonus, and other income amount to be reverted to the business year), which is included in the text of this Act, and the name and address of the income earner, of January 1, 1996 to December 31, 1996, and other income, which is included in the business year, and the Hong Kong located in the Hong Kong.

(2) After that, on December 26, 2001, prior to the revocation of the initial imposition of income tax ex officio, the Defendant issued a notice on the correction of the change in income amount (hereinafter “instant notice on the correction of the change in income amount”) to the Plaintiff as follows.

The name and address of the income earner, the income earner, the name and address of the business income earner, the income earner to which the business year is included in the main sentence, and other income, which is included in the table in the business year, and the Hong Kong, the Hong Kong, the Hong Kong and other income, which is located in the Hong Kong and other income.

[Reasons for Recognition] Gap evidence 5-1 and 2-1 and the purport of the whole pleading

D. Determination

Article 32 (5) of the former Corporate Tax Act (amended by the Presidential Decree No. 1922, Feb. 1, 2005); Article 192 (1) and (2) of the former Enforcement Decree of the Corporate Tax Act (amended by the Presidential Decree No. 1950, Feb. 1, 2007); Article 123-2 (1) of the former Enforcement Decree of the Corporate Tax Act (amended by the Presidential Decree No. 1922, Feb. 1, 2007); Article 192 (1) and (2) of the former Enforcement Decree of the Corporate Tax Act (amended by the Presidential Decree No. 19201, Feb. 1, 2007); Article 192 (1) and (2) of the former Enforcement Decree of the Corporate Tax Act (amended by the Presidential Decree No. 10680, Feb. 27, 2007); Article 32 (1) of the former Corporate Tax Act (amended by the Enforcement Decree of the Corporate Tax Act) provides that foreign corporation with no domestic place.

Since income tax or corporate tax withheld at source is determined without special procedures when tax liability comes into existence (Article 22(2)3 of the Framework Act on National Taxes). In case where other income is reverted to a foreign corporation by disposal of income, a notice of change of income amount becomes final and conclusive when the notice of change is served to the domestic corporation, the domestic corporation’s liability to pay withholding corporate tax on the foreign corporation’s income is served on the date of receipt of the notice of change.

On April 4, 2001, as seen in the facts of the above recognition and the disposition of this case, the defendant revoked ex officio the above disposition of income tax on the plaintiff's above overseas corporation income on April 4, 2001. The plaintiff's duty to withhold income tax was finalized on July 13 of the same year, and when the first disposition of income tax should be imposed as corporate tax (this disposition should be imposed as corporate tax) was issued on the plaintiff on July 13 of the same year, and the first disposition of income tax was revoked ex officio on December 26 of the same year with the initial disposition of imposition of corporate tax, and the first disposition of income tax was revoked on January 2, 2002 without the notice of correction of income amount to "0" which corrected all income amount in the notice of change of income amount of this case to the plaintiff's local corporation of this case on January 2 of the same year, 202, without the plaintiff's new notice of change of income amount to the plaintiff's local corporation of this case on the premise that the change of income amount of this case was revoked or other notice of withdrawal.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by admitting it.

Judges Shin Dong-dong (Presiding Judge)