Any gains from forward exchange transactions arising from the swap transactions shall constitute interest income.

It is reasonable to classify profits from forward exchange transactions as interest income in the nature of payment due to the use of money as income similar to interest on deposits received in Korea.

1. Of the Plaintiff’s lawsuit, the part concerning the claim for revocation of the imposition of global income tax exceeding KRW 20,153,009, the part concerning the claim for revocation of the imposition of global income tax exceeding KRW 21,182,315, among the Plaintiff JB’s lawsuit, the part concerning the claim for revocation of the imposition of global income tax exceeding KRW 51,00 among the Plaintiff KimCC’s lawsuit, the part concerning the claim for revocation of the imposition of global income tax exceeding KRW 184,915, among the Plaintiff KimD’s lawsuit, the part concerning the claim for revocation of the imposition of global income tax exceeding KRW 206,00, among the Plaintiff ParkE’s lawsuit, and the part concerning the claim for revocation of the imposition of global income tax exceeding KRW 8

2. The plaintiffs' remaining claims are all dismissed.

3. The plaintiffs bear the costs of lawsuit.

The Defendant’s imposition of global income tax of KRW 7,136,260 on March 10, 2007 with respect to Plaintiff A on 2003; imposition of KRW 26,089,550 on global income tax of KRW 2004; imposition of KRW 17,125,473 on March 10, 2007 with respect to Plaintiff JB; imposition of KRW 17,539,512 on global income tax of KRW 17,539,512 on March 1, 2004; imposition of KRW 215,590 on global income tax of KRW 204 with respect to Plaintiff GCC; imposition of KRW 1,471,350 on March 1, 207; imposition of KRW 360 on global income tax of KRW 2081; imposition of KRW 361,607, Mar. 1, 2007 with respect to Plaintiff D; imposition of KRW 3061,51,207.

1. Details of disposition;

A. The Plaintiffs subscribed to the so-called "Nitch swap deposit (hereinafter referred to as the "GG bank") that was designed by the GG bank (hereinafter referred to as the "GG bank") around 2003 - around 2004 (hereinafter referred to as the "transaction in this case"). In order to subscribe to the above goods, the Plaintiffs entered into three contracts with the GG bank as follows (hereinafter referred to as the "the same contract in this case").

① The contract for the in-kind purchase (original ?N): the contract under which the Plaintiffs immediately pay won currency in kind to the GG bank and receive the in-kind currency from the GG bank at the time of the contract (hereinafter referred to as the “in-kind currency contract in this case”) calculated at the exchange rate of the said in-kind at the time of the contract.

② On-the-spot deposit contract: a contract under which the plaintiffs deposit the full amount of the goods in this case with the GG bank and receive the amount of the principal and interest of the GG bank plus 0.095% per annum or 0.2437% per annum or 0.35% per annum on the maturity (hereinafter “the same contract”).

③ First, upon the maturity date of the contract for the spot currency deposit of this case, the contract under which the plaintiffs pay the principal and interest of the spot currency of this case (in relation to the amount equivalent to the global currency interest, the amount excluding the interest income tax withheld; hereinafter the same shall apply) to the GG bank, and is to receive the spot currency payment calculated at the rate of exchange (N/won) of the gift of this case as agreed upon at the time of each contract of this case from GG bank to the GG bank (hereinafter referred to as the "the same contract of this case").

B. In addition to the amount equivalent to the won currency amount paid to the GG bank at the time of the agreement from the GG bank at its maturity as a result of the instant transaction, the Plaintiffs also received: ① the amount calculated by multiplying the difference between the gift exchange rate of the instant contract and the exchange rate of the instant spot goods by the principal of the instant spot cash deposit (hereinafter “the instant income”); and ② the sum of the amount calculated by multiplying the interest on the instant spot cash deposit by the gift exchange rate of the instant contract was paid in the spot currency.

C. Under the principle of substantial taxation, the Defendant issued a disposition to increase the comprehensive income tax against the Plaintiffs on the ground that the instant income constitutes interest income under Article 16(1) of the former Income Tax Act (amended by Act No. 8144, Dec. 30, 2006; hereinafter the same shall apply), as indicated below, on the ground that the instant income falls under the interest income under Article 16(1) of the same Act. After that, the Plaintiffs’ subsequent claim (the final disposition of global income tax determined through the aforementioned process is referred to as “the disposition of this case”). As a result of a national tax proceeding conducted on June 5, 2007; Plaintiff KimCC, KimD, KimD, GaD, GaF, and GaF on May 29, 2007, the portion of the tax return and payment was reduced in the amount of national tax assessment; and only the amount indicated in the column of the remaining tax amount in the table below (hereinafter “final disposition of global income tax”).

[Ground of recognition] Facts without dispute, Gap evidence 1, Eul evidence 1 to 8, each entry in 1 and 2, and the purport of the whole legal theory

2. Whether the action against the additional tax is proper; and

According to the facts found in Paragraph (1), the part of the Plaintiff’s claim for revocation of the imposition of global income tax exceeding KRW 20,153,009 among the lawsuits of the Plaintiff JB, the part of the Plaintiff’s claim for revocation of the imposition of global income tax exceeding KRW 21,182,315 among the lawsuits of JB, the part of the claim for revocation of the imposition of global income tax exceeding KRW 51,00 among the lawsuits of the Plaintiff KimCC, the part of the claim for revocation of the imposition of global income tax exceeding KRW 184,915 among the lawsuits of Plaintiff GE, the part of the claim for revocation of the imposition of global income tax exceeding KRW 206,00 among the lawsuits of Plaintiff HE, and the part of the claim for revocation of the imposition of global income tax exceeding KRW 839,514 among the lawsuits

3. Issues related to the disposition of the instant case.

The main issues related to the instant disposition are (1) whether the pertinent income is deemed income generated from the entire transaction in this case; (2) whether the pertinent income is in the nature of consideration for the use of money as income similar to the interest on deposits, bonds, or repurchase/back agreement marginal profits on bonds or securities received in Korea; and (3) whether the instant disposition violates the principle of respect for tax practice under Article 18(3) of the former Framework Act on National Taxes (amended by Act No. 8830, Dec. 31, 2007; hereinafter the same) or the original rule of protection for trust. The key issues are as shown in the attached Form.

4. Whether the income of this case has the nature of consideration following the use of money as income generated from all of the transactions of this case

A. Summary of the plaintiffs' assertion

Each contract of this case has separate legal and economic substance, so it should be identified as a separate transaction. However, the income of this case is "the gains from the transfer of the goods contract of this case and the gift contracts of this case (hereinafter collectively referred to as "the gift from the transfer of this case")" and its legal and economic substance is "the gains from the transfer of capital, not the interest income with the nature of payment for the use of money." In addition, since the object of the DNA swap contract of this case is a currency, the income of this case is not the income similar to the gains from the repurchase agreement of bonds or securities. Accordingly, the interest income of this case cannot be imposed pursuant to Article 16 (1) 13 of the former Income Tax Act as to the income of this case, notwithstanding the fact that the Defendant’s disposition of this case was unlawful in violation of the no taxation without law.

(b) Fact of recognition;

1) Each of the instant contracts is concluded between the same parties at the same time, and is entirely combined with both its establishment, existence, and termination, and the subject of transactions.

① In other words, while designing the instant transaction goods as a single product for the purpose of leading to the new attraction of large-amount customers of won currency deposits that are traded with other financial institutions, GG Bank made always enter into each of the instant contracts to eliminate exchange risks and to ensure that deposits or bonds provided at the time of forward exchange transactions or foreign exchange swap transactions need not be separately provided. In addition, the instant transaction is not the return by each of the instant contracts, but rather the return by each of the instant contracts, but is anticipated and designed to divide the amount of 0.50% in proportion to the domestic currency deposits to customers and banks on the basis of the return rate at the time of the entire transaction of this case. In general, the interest rate announcement on large-amount foreign currency deposits is in charge of each of the financial markets, and in the case of the instant transaction, the futures exchange rate announcement is transferred to the financial market division, and in particular, the GG Bank receives the rate of exchange from the financial market division to make the forward deposit and the deposit interest rate announcement in a lump sum.

② The GG Bank explained that the instant transaction was more favorable than ordinary deposit at the time of the lapse of the tax return rate, while publicizing its customers including the Plaintiffs as one product. Accordingly, both customers including the Plaintiffs and the GG Bank entered into each of the instant contracts at the same time with the aim of trading one product, and the customers including the Plaintiffs compared the instant contract with the ordinary won deposit based on the yield that can be gained from the entire instant transaction. In fact, only a part of each of the instant contracts was concluded.

③ Among each of the instant contracts, the instant contract cannot be terminated at the same time, and where the instant contract for the spot currency regular deposit is terminated, the instant contract for the spot currency is liquidated at the same time, and the same applies to the calendar. The instant contract for the spot currency regular deposit is subject to the interest rate for early termination (less than seven days: 30% of the agreed interest rate, less than six months: 50% of the agreed interest rate), and the instant forward currency is subject to the application of the maturity and exchange rate, and the forward currency exchange is subject to the fair payment of the gift exchange value, and the forward currency exchange value is subject to the fair payment of the gift exchange value. Furthermore, the forward exchange valuation value is the amount at which the difference was set at the won currency interest rate by conducting the opposing trade in the market at the time of the forward exchange, but the opposing purchase price and discount interest rate may be set at the Korean currency bank. However, there are no incomes accrued at the time of termination, not at the time of termination, but at the time of termination.

④ The maturity date of the instant contract on the spot deposit and the date of settlement of the instant gift agreement was always consistent. Moreover, the general foreign currency deposit may be agreed in advance to be re-deposited under the same conditions automatically, barring any separate declaration of intent at maturity. However, the instant contract on the spot deposit is automatically terminated unless otherwise declared at maturity.

⑤ At all times, the amount of the gift internationalization contract of this case is equal to the principal amount of the contract for the spot currency deposit of this case plus the subsequent interest. The Korean won currency amount due to the transaction of this case is to be paid together with the designated account in advance.

2) From 2002 to 2004, the interest rate on time deposits in Korean won in kind was 3% per annum after the tax year, and the rate of return was 3% to 4% per annum. The difference was 0.5% near the instant transaction, and there was a number of cases where the annual rate of return arising from the instant transaction was lower than that on the spot Korean won regular deposit account. In addition, when the instant income is taxed on the instant income, a number of cases where the annual rate of return was lower than that on the spot Korean won regular deposit account. The rate of exchange for the telegraph redemption publicly notified by the GG bank was calculated by adding 0.99% to the base rate of sale, and the number of telegraph redemption rates was calculated by deducting 0.99% from the base rate of sale. Moreover, GG bank transmitted US KK Korea’s percentage and calculated and used USD / source swap through the financial exchange rate of exchange, based thereon.

[Reasons for Recognition] The facts without dispute, evidence described in Paragraph (1), Gap 2 through 5, Gap 9 through 21, and the purport of the whole pleadings

(c) Provisions and legal principles of the former Income Tax Act;

1) old Income Tax Regulations

Article 3 of the former Income Tax Act provides that the income subject to income tax is subject to taxation only by identifying the income subject to income as the form of income and not subject to taxation (Article 3 of the former Income Tax Act). However, Article 16 (1) of the former Income Tax Act provides that "interest and discount amount of deposits (including installment savings, installments, deposits and postal transfers) and bonds or securities as prescribed by the Presidential Decree (Article 9) as interest income shall be listed as the interest income in the Republic of Korea (Article 16 (1) of the former Income Tax Act). From January 1, 2002, Article 16 (1) of the former Income Tax Act provides that "the interest income shall be imposed on the same income as those referred to in subparagraphs 1 through 12, which are similar to those in subparagraphs 1 through 13 of the same Article." However, even under the above provisions, the interest income cannot be imposed on the foreign exchange transaction profits arising from the exchange rate difference.

2) Legal principles

Meanwhile, in light of the purport of the provision on interest income that a taxpayer selects in the course of conducting economic activities, the tax authority shall respect the legal relationship that the taxpayer selects, but in light of the substance over form principle and the purport of the provision on interest income that adopts the principle of substantial taxation, whether the profit from any transaction constitutes interest income under Article 16 (1) 13 of the former Income Tax Act shall not be determined simply based on the content or form of the relevant contract, but shall be determined by considering the purpose, characteristics of the transaction, transaction practice, parties’ intent, relationship between each contract, process of conclusion of the contract, results of conclusion of the contract, etc. (see, e.g., Supreme Court Decisions 91Nu254, Jan. 21, 1992; 95Nu15476, Jun. 13, 1997; 2001Du6227, Dec. 26, 2002; 105Du12037, Oct. 13, 2006).

D. Specific determination

Comprehensively taking account of the aforementioned legal principles and the following facts, the instant transaction is a single transaction that is similar to the ordinary deposit in Korean won. The entire profit accrued from the instant transaction is similar to the interest on the spot deposit in Korean won. Therefore, it is reasonable to view the entire profit as the price for the use of money. Therefore, the instant income, which is a part of the entire profit of the instant transaction, constitutes interest income under Article 16(1)13 of the former Income Tax Act. The Plaintiffs’ assertion on this part is rejected.

① The instant spot exchange rate and futures exchange rate applied to the instant transaction were determined differently from the case where only each contract is concluded on a separate basis. GG Bank could appropriately adjust the overall return rate of the customers, including the Plaintiffs, by adjusting the pressd (the exchange rate, including the bank, at the same time, applied at the time of the sale and purchase to the customer when the bank sells foreign exchange to the customer. The purchase exchange rate applied at the time of the sale and purchase to the customer, is that, and the difference between such sale and purchase exchange rate.).

② In the instant transaction, the exchange risk or swap point (the swap point is the transaction price to adjust the actual profit and loss on an equal basis by revising the difference in the interest rate of two currency exchanged in the swap transaction) that appears in the general foreign exchange transaction, and thus, there was no risk of change in the transaction to avoid such risk.

③ Each of the instant contracts was legally completely combined, inasmuch as either of the instant contracts is unable to achieve the purpose of transaction solely by the remaining contracts, and thus, it is impossible to conclude only a part of the instant contracts.

④ Since there exists a contract for the commercialization deposit in the instant case, the customer, including the Plaintiffs, did not pay the deposit money for the foreign exchange swap transaction to the GG Bank.

⑤ In general foreign exchange swap transactions, holding and using won currency and the UN currency funds are practically exchanged, and as a result, swap points are given and received. On the other hand, in the instant transaction, only won currency deposits in the same kind as the ordinary won regular deposit are deposited in the bank at maturity, and the swap points were given and received even if the actual funds of the spot currency are not available.

(6) The total profits that a customer, including the plaintiffs, can obtain through the instant transaction are the same as the interest for time deposits in Korean won provided for the instant transaction. The instant income, i.e., swap points serve to adjust the difference between the interest on the Korean won regular deposit and the interest on the Korean won regular deposit as some of them, and have no independent economic substance or meaning otherwise.

7) If the interest income tax is not imposed on the instant income, the bank and the customer, including the Plaintiffs, instead of the Korean won deposit with which the interest income tax is imposed, may always avoid tax while acquiring the interest on the Korean won deposit at a transaction in the same form as the instant transaction by using the currency with lower interest rate than the Korean won deposit rate.

(8) It is clear that, at the same time, GG Bank borrows the 20th of June 8, 2010 of its borrowings in kind from abroad (the Plaintiff’s legal brief (1) may know that the interest rate in kind is the initial interest rate) is the nature of the consideration for the use of the money. If the GG Bank borrows the NA in kind from overseas and holds it as it is, it shall not be subject to the risk of redemption in kind due to the fluctuation in the exchange rate, with the exception of the initial interest rate in kind. If the GG Bank borrows the NA in kind from overseas to its Korean won at the same time, it shall not be subject to the adequate risk of repayment in kind, other than the initial interest rate in kind, if it receives the NA currency deposit from its domestic customers in lieu of the initial currency from its domestic customers, it shall not be subject to the repayment of the NA currency deposit in kind in excess of the interest rate in the initial currency, and shall not be subject to the repayment of the NA currency deposit in kind.

9) The product designer for the instant transaction is the GG Bank, and the GG Bank, which is the product designer, unilaterally determines the transaction variables, and the GG Bank constituted each of the instant contracts as a single product. It is not a structure for customers, including the Plaintiffs, to determine an exchange rate, exchange rate, refund rate, return rate, return rate, etc. under their respective responsibilities, but rather a structure for which the customer, including the Plaintiffs, determines the exchange rate, exchange rate, refund fee, return rate, etc., and the customer, including the Plaintiffs, has no power to make any decision on the exchange rate, exchange rate, exchange rate, deposit rate in Korean won, etc. (the Korean won value at the time of purchase and at the time of sale, the difference between the purchase rate and the sale rate, exchange rate, exchange rate, and exchange rate, which would cause losses to the customer due to the purchase rate, exchange rate, exchange rate, and customer exchange rate, which would not result in the change of the rate of exchange rate between the Plaintiffs and the customer’s pre-sale interest in the instant transaction.

5. Whether it has violated the principle of good faith, etc.

A. Summary of the plaintiffs' assertion

Although most commercial banks, including GG Bank, engaged in the instant transaction from around 2002 to handle the instant income as non-taxation, the tax authorities did not impose tax on the instant income only once until the instant disposition was rendered, and thus, it should be deemed that the non-taxation practices accepted by many and unspecified general taxpayers, such as the Plaintiffs, as legitimate. In addition, around September 2003, the National Tax Counseling Center has made it clear to the effect that the instant transaction does not constitute a taxable object for questioning as to whether the benefits arising from the forward exchange transaction are taxable objects. Nevertheless, the instant disposition is contrary to the principle of respect for tax practices or the principle of protection of trust under Article 18(3) of the former Framework Act on National Taxes.

B. Determination

1) Legal principles

In general, in the tax law relationship, in order to apply the principle of trust and good faith to the tax authority's act, first, the tax authority must give the taxpayer a public opinion that is the subject of trust, second, the taxpayer should not be responsible for the taxpayer's reliance on the legitimacy of the tax authority's expression of opinion, third, the taxpayer should trust the expression of opinion and act in which it is against the above expression of opinion. Fourth, the tax authority's disposition against the above expression of opinion would result in infringing the taxpayer's interest.

In addition, “the construction of tax-related Acts or practices in tax administration, which are generally accepted by taxpayers” under Article 18(3) of the former Framework Act on National Taxes, refers to a wrongful interpretation or practice, which is accepted by a general taxpayer who is not a specific taxpayer without any objection to the extent that it is not unreasonable for the taxpayer to trust such interpretation or practice. The burden of proving the existence of such interpretation or practice lies on the taxpayer who is the claimant. In addition, in order to form a non-taxation practice, the tax authority must not impose tax due to special circumstances knowing that it is possible to impose tax on the matter (see, e.g., Supreme Court Decision 97Nu1315, Aug. 21, 1998; 2001Du403, Sept. 5, 2003).

2) Specific determination

In this case, each statement of Gap evidence Nos. 4 through 8 and Gap evidence Nos. 17 alone cannot be deemed to have expressed a public view that the tax authority would not impose interest income tax on the income of this case other than the futures exchange gift gift gift that appeared in the general futures exchange transaction, and it is difficult to deem that the non-taxation practice has been formed on the income of this case (no evidence exists to prove that the defendant or the State has encouraged the trade of this case while actively providing tax reduction and exemption benefits; the plaintiffs or GG bank did not ask the tax authority in writing by reflecting all the conditions; it was not asked by the tax authority; it was consulted with the law firm without indicating all the facts of the transaction of this case; the law firm advice was received without confirming the non-taxation practice as well as the result of the consultation, rather than confirming the non-taxation practice). This part of the plaintiffs' assertion cannot

6. Method by which the State realizing litigation and economy, etc.

In the event that there are a majority of the issues, and one of the parties is the state, it is possible to give the people the words to follow the final judgment of the judiciary on the preceding or specific cases rather than responding to or appeal by the State, or to promise to the same contents as above to the people and the State, and thus, it is necessary to encourage all of the people and the State to take advantage of the protection of the rights of the people and the economy of litigation. However, in this case, there is no probability of the defendant in this case, and it seems that there is no possibility of the defendant in this case, and that it would be sufficient that the defendant will not stay in the case due to the inherent characteristics of

7. Conclusion

Therefore, among the plaintiff's lawsuit, the part of the claim for revocation of the disposition imposing global income tax exceeding KRW 20,153,009, the part of the claim for revocation of the disposition imposing global income tax exceeding KRW 21,182,315 among the plaintiff's lawsuit, the part of the claim for revocation of the disposition imposing global income tax exceeding KRW 51,00 among the plaintiff's lawsuit, the part of the claim for revocation of the disposition imposing global income tax exceeding KRW 184,915 among the plaintiff's lawsuit, the part of the claim for revocation of the disposition imposing global income tax exceeding KRW 206,00,000 among the plaintiff's lawsuit, the part of the claim for revocation of the disposition imposing global income tax exceeding KRW 206,000,000 among the plaintiff's Ga's Ga