Seocho 2012west 5143 (O2, 2013)

It is reasonable to judge whether the requirements of holding company in Article 18-2(1) of the Corporate Tax Act for the taxable year concerned are met or not at the time of receiving dividends.

As of the end of the business year, Article 17-2 (1) of the Enforcement Decree of the Corporate Tax Act, which provides for the determination of whether the holding company satisfies the requirements as of February 4, 2009, is deleted, the requirements of the holding company cannot be determined as the end of the business year,

The contents of the decision shall be the same as attached.

Article 18-2 (Non-Inclusion of Holding Company Dividend Amount in Gross Income)

Seoul Administrative Court

Part IV

2013Guhap53547 Revocation of Disposition of Imposing corporate tax

AAAAAAA

BB Director of the Tax Office

September 27, 2013

November 12, 2013

1. The Defendant’s disposition of imposing corporate tax on the Plaintiff on September 7, 2012 is revoked.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff reported the establishment of a holding company on January 1, 2009 in accordance with the former Monopoly Regulation and Fair Trade Act (amended by Act No. 9554, Mar. 25, 2009). However, in the process of the merger of the CC’s investment division, which is a subsidiary, the Plaintiff failed to meet the requirements for holding companies (the total value of the stock value of the subsidiaries as of November 1, 2010, which is the date of the registration of the merger), and was excluded from the holding company on November 1, 2010.

B. The Plaintiff filed a corporate tax base for the business year of 2010 by applying Article 18-2(1) of the former Corporate Tax Act (amended by Act No. 9267 of Dec. 26, 2008 and amended by Act No. 11128 of Dec. 31, 201), which is a provision for exclusion of a holding company’s dividend amount, on the premise that the Plaintiff was a holding company at the time of receiving dividends, with respect to the revenue dividends paid by the invested domestic corporation on April 2010.

C. However, on September 27, 2012, the Defendant: (a) deemed that the point of time of determining a holding company’s judgment was December 31, 2010, which was the end of the pertinent business year; and (b) accordingly, the Defendant corrected and notified ○○○○ (hereinafter “instant disposition”) corporate tax for the business year 2010 by applying the ratio of exclusion from taxable income for import dividends of “general corporation” on the ground that the Plaintiff does not constitute a holding company.

D. On November 6, 2012, the Plaintiff dissatisfied with the instant disposition, filed a request for a trial with the Tax Tribunal, but on February 22, 2013, the said request was dismissed.

Facts that there is no dispute over recognition, Gap No. 1, 2, Eul No. 1, and the purport of the whole pleadings.

2. Relevant statutes, etc.

The relevant Acts and subordinate statutes are as shown in the attached Table, and the history of the amendment of the provisions of this case and Presidential Decrees related thereto among them shall be as listed in the following table:

Article 18-2(1) of the former Corporate Tax Act (amended by Act No. 9267, Dec. 26, 2008; hereinafter referred to as the “former Corporate Tax Act provisions before the amendment”).

The legal provisions of this case

Where the sum computed pursuant to subparagraphs 1 and 2 exceeds the sum computed pursuant to subparagraphs 3 and 4 in the calculation of the income amount for each business year, in cases where the sum computed pursuant to subparagraphs 1 and 2 exceeds the sum computed pursuant to subparagraphs 3 and 4, of profit dividends or surplus distributions or presumed dividend or distribution amount under Article 16 (hereafter in this Article and Article 18-3, the dividend amount) received by a holding company prescribed by Presidential Decree (including a financial holding company under the Financial Holding Companies Act and an industry-academic cooperation technology holding company under the Promotion of Industrial Education and Industry-Academic Cooperation Act; hereafter in this Article, the same shall apply) from its subsidiary (referring to a domestic corporation that has been invested by the holding company concerned, and that satisfies the requirements prescribed by Presidential Decree in consideration of the investment ratio, etc. in its subsidiary; hereafter the same shall apply in this Article) from among a domestic corporation among the domestic corporations

Where the sum computed pursuant to subparagraphs 1 and 2 exceeds the amount computed pursuant to subparagraph 3 in calculating the income amount for each business year, in cases where the sum computed pursuant to subparagraphs 1 and 2 exceeds the amount computed pursuant to subparagraph 3, of the dividend amount or surplus distribution amount or the presumed dividend or distribution amount under Article 16 (hereafter in this Article and Articles 18-3 and 76-14, the dividend amount) received by a holding company under the Monopoly Regulation and Fair Trade Act, a financial holding company under the Financial Holding Companies Act, and an industry-academic cooperation technology holding company under the Promotion of Industrial Education and Industry-Academic Cooperation Act (hereafter in this Article, referred to as a "holding company") from its subsidiary (referring to a domestic corporation that has invested in the holding company concerned, and meets the requirements prescribed by Presidential Decree in consideration of the ratio of investment in the holding company'

[Corporate Tax]

Article 17-2 (1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 21302 of Feb. 4, 2009) (hereinafter referred to as "Enforcement Decree provision before the amendment").

Article 17-2 (1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 21302, Feb. 4, 2009; Presidential Decree No. 23589, Feb. 2, 2012; hereinafter referred to as the "former Enforcement Decree of the Corporate Tax Act") (hereinafter referred to as the "Enforcement Decree provision of this case")

Enforcement Decree of the Corporate Tax Act (Amended by Presidential Decree No. 23589, Feb. 2, 2012)

Article 17-2 (1) (hereinafter referred to as "Enforcement Decree provision after the amendment").

The term "holding company prescribed by the Presidential Decree" in the main sentence of Article 18-2 (1) of the Act means a domestic corporation that is reported to a holding company to the Fair Trade Commission pursuant to the Monopoly Regulation and Fair Trade Act as of the last day of the business year (hereafter in this Article, referred to as a "holding company"). In this case, where a person who fails to report the establishment and conversion of a holding company under the same Act as of the last day of the business

Articles 1 and 24 Deleted.

A holding company referred to in Article 18-2 (1) of the Act shall be a domestic corporation that has been reported as a holding company under the Monopoly Regulation and Fair Trade Act, the Financial Holding Companies Act, the Technology Transfer and Commercialization Promotion Act, and the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act as of the end of the relevant business year: Provided, That where a person whose deadline for filing a report on the establishment and conversion of a holding company under the relevant Act has not yet arrived as of the end of the relevant business year files a report on the date of filing the tax base prescribed in Article 60 of the Act on the income of the relevant business year,

[Enforcement Decree of the Corporate Tax Act]

3. Whether the instant disposition is lawful

A. The parties' assertion

(1) Plaintiff’s assertion

Unlike the legal provisions prior to the amendment and the former Enforcement Decree prior to the amendment, which had been required to determine whether a holding company was a holding company on the basis of the end of the business year, according to the legal provisions of this case where all such contents are deleted, it is reasonable to see the point of time of determining the holding company's judgment, which is a premise for the application of the legal provisions of this case in light of its language, legislative intent, relationship with related provisions, etc., as the point of time of dividend,

(2) Defendant’s assertion

(A) Even if the former Enforcement Decree provision prior to the amendment was deleted to determine the delegation provision and holding company as of the end of each business year, the standard point at which holding company's judgment is still to be considered as the end of each business year in interpreting the legal provision of this case in consideration of the following:

○ When interpreting the tax law, the entire legal text of the pertinent provision should be taken into consideration. Article 17-2(5)3 of the former Corporate Tax Act provides that any interest on borrowings shall be excluded from the amount of non-Inclusion, and the standard for calculating the exclusion amount shall be the total amount of assets on the balance sheet as of the end of the pertinent holding company’s business year. Therefore, the amount of exclusion from gross income can be calculated as of the end of the business year, so the requirements of the holding company should be determined as of the end of the business year.

○ Tax requirements and non-taxation requirements should be determined based on the time when the tax liability is established, and the time when the corporate tax liability is established is the end of the business year.

In addition, this case’s enforcement decree provision was deleted on February 4, 2009 and re-established on February 2, 2012, and it did not have any particular delegation provision under the Corporate Tax Act during the process of the amendment.

(B) If the legal provision of this case provides that if the point of time of the determination of a holding company cannot be deemed the end of the business year, the former Enforcement Decree prior to the amendment is to relax the determination of the requirements of the holding company, i.e., to apply the exclusion rate from gross income of the holding company if the holding company was reported only one day as of the end of the business year, so the requirements of the holding company in the absence of the above provision should be more strict. Therefore, even if the holding company does not meet the requirements even during the business

B. Determination

(1) In light of the principle of no taxation without law, or the requirements for non-taxation or tax reduction and exemption, the interpretation of tax laws shall be interpreted in accordance with the text of the law, barring any special circumstance, barring any special circumstance (see, e.g., Supreme Court Decisions 82Nu142, Jun. 28, 1983; 2010Do1191, Jan. 27, 201; 2010Du4810, Nov. 29, 2012).

However, according to the language and text of the legal provision of this case, it is natural to view that a holding company subject to exclusion from gross income is merely a holding company under the Monopoly Regulation and Fair Trade Act, and that such a holding company should be a holding company that receives dividends from its subsidiary, unless otherwise expressly provided for in the former and the former Enforcement Decree of the former Enforcement Decree or the Enforcement Decree of the former Enforcement Decree of the Act, the holding company should meet the requirements of the holding company at the time of receiving dividends. It is difficult to view that the above language and text alone meet the requirements of the holding company at the time of receiving dividends, as alleged by the Defendant, at the end of the business year or before the business year.

(2) Furthermore, the legislative intent of the instant legal provision, i.e., the provision on the exclusion of a holding company’s dividend income, is to coordinate the double taxation issue of dividend income, and to exclude the amount equivalent to a certain percentage of the dividend income that the holding company received from the subsidiary from the subsidiary from the corporate tax subject to corporate tax, thereby supporting the smooth establishment and operation of the holding company. Therefore, it cannot be deemed as going against the legislative intent of the instant legal provision to adjust double taxation and provide tax support to the company

(3) In the systematic interpretation of the relevant provisions, it cannot be deemed that the determination of holding company should be based on the end of the business year. In other words, Article 17-2(5)3 of the former Corporate Tax Act cited by the Defendant requires the calculation of the interest amount on loans that are deducted from the revenue dividends based on the "total assets amount on the balance sheet as of the end of the business year of the holding company," but this is no relation with the issue of whether the holding company should be determined at a certain point because it is a provision not to reduce the taxes through the stocks acquired from the loan, and it is no relation with the issue of which the calculation of the amount of interest on the deduction is based on the concept of the period. However, since the calculation of the amount of interest on deduction is based on the premise

Rather, Article 17-2 (2) 1 of the former Enforcement Decree of the Corporate Tax Act applies the provision on exclusion of dividend income of a holding company in cases where the holding company directly holds at least 40/10 [20/10 in cases of a stock-listed corporation under the Financial Investment Services and Capital Markets Act (hereinafter referred to as a "stock-listed corporation") or a venture business under Article 2 (1) of the Act on Special Measures for the Promotion of Venture Businesses for at least three months as of the basic date of dividend of the relevant domestic corporation, which is the same as the requirements for restriction on holding companies under Article 8-2 (2) 2 of the Monopoly Regulation and Fair Trade Act. In full view of the above provisions, it is room to view the legal provision of this case as the base date for determining the requirements of a holding company.

(4) On the other hand, even if the time when the corporate tax liability is established ends, all the time when determining the requirements of individual laws and regulations necessary to constitute corporate tax assessment for the pertinent business year cannot be said to be the time when the said tax liability is established. For example, in the provision of wrongful calculation under Article 52 of the former Corporate Tax Act, the issue is whether the requirements of the specially related person were determined at the time of the transaction, or not at the time of the establishment of the tax liability, i.e., the time of the establishment of the tax liability. Therefore, as alleged by the Defendant, the circumstance that the time when the corporate tax liability is established ends at the end of the

(5) Lastly, considering the fact that the provisions of the former Enforcement Decree prior to the amendment were newly established on February 2, 2012, with regard to the history of the amendment, it would be an legislative error to interpret the provision of this case where the provisions prior to the amendment were deleted as identical to the time when such provisions exist. Rather, it would be an extended interpretation where the provision of this case where the former Enforcement Decree was newly established after the amendment was made on February 2, 2012 to the point where the standard of judgment of the holding company was not accepted as the "the end of the business year", and thus, it would be necessary to legislatively resolve this.

(6) In full view of the circumstances above, it is reasonable to deem that the point of time of determining holding companies that are the premise for the application of the legal provisions of this case as the point of time of dividend payment, and that the Plaintiff met the requirements of holding companies at the time of receiving dividend payment from the subsidiary around April 2010, as seen in the circumstances surrounding the above disposition, the instant disposition was unlawful since it was conducted on different premise.

4. Conclusion

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

Judges of the presiding judge

Maximum management

Judges

Giltains

Judges

Doz. Doz.

Relevant statutes

▣ 구 법인세법(2008. 12. 26. 법률 제9267호로 개정되기 전의 것)

Article 18-2 (Non-Inclusion of Holding Company's Received Dividend Amount in Gross Income)

(1) Where the sum computed pursuant to subparagraphs 1 and 2 exceeds the sum computed pursuant to subparagraphs 3 and 4 in the calculation of the income amount for each business year, in cases where the sum computed pursuant to subparagraphs 1 and 2 exceeds the sum computed pursuant to subparagraphs 3 and 4, of profit dividends or surplus distributions, or of presumed dividend or distribution amount under Article 16 (hereafter in this Article and Article 18-3, the dividend amount) received by a holding company prescribed by Presidential Decree (including a financial holding company under the Financial Holding Companies Act and an industry-academic cooperation technology holding company under the Promotion of Industrial Education and Industry-Academic Cooperation Act; hereafter in this Article, the same shall apply) from its subsidiary (referring to a domestic corporation that has been invested by the holding company concerned, and that satisfies the requirements prescribed by Presidential Decree in consideration of the investment ratio, etc. in its subsidiary; hereafter the same shall apply in this

For the purpose of each subparagraph:

▣ 구 법인세법(2008. 12. 26. 법률 제9267호로 개정되고 2011. 12. 31. 법률 제11128호로 개정되기 전의 것)

Article 18-2 (Non-Inclusion of Holding Company's Received Dividend Amount in Gross Income)

(1) Where the sum computed pursuant to subparagraphs 1 and 2 exceeds the amount computed pursuant to subparagraph 3 in calculating the income amount for each business year, in cases where the sum computed pursuant to subparagraphs 1 and 2 exceeds the amount computed pursuant to subparagraph 3, among the dividend amount or surplus distribution amount or the presumed dividend or distribution amount under Article 16 (hereafter in this Article and Articles 18-3 and 76-14, the dividend amount) received by a holding company under the Monopoly Regulation and Fair Trade Act, a financial holding company under the Financial Holding Companies Act, and an industry-academic cooperation technology holding company under the Promotion of Industrial Education and Industry-Academic Cooperation Act (hereafter in this Article, referred to as a "holding company") from its subsidiary (referring to a domestic corporation in which the holding company concerned has invested, and which satisfies the requirements prescribed by Presidential Decree in consideration of the ratio of investment in its

1. The amount equivalent to the total dividend amount received from the subsidiary in cases where a holding company has invested in excess of 80/10 [referring to 40/100 in cases of a listed-stock corporation under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "listed-stock corporation] of the total number of issued stocks or the total amount of investment in

2. The amount computed by multiplying the dividend amount received from the corresponding subsidiary by 80/100 where a holding company has invested in the corresponding subsidiary at a ratio lower than that prescribed by subparagraph 1: Provided, That with respect to the dividend amount received from the corresponding subsidiary during the period from January 1, 2007 through December 31, 2007, it shall be the amount computed by multiplying the dividend amount by 70/100;

3. The amount of interest computed under the conditions as prescribed by the Presidential Decree, considering the ratio of exclusion from gross income under subparagraphs 1 and 2 to interest on loans, the ratio of exclusion from gross income under subparagraphs 1 and 2 to the total assets of a holding company, etc., if any;

4. Deleted;

Article 52 (Disliability of Evaluation of Wrongful Acts)

(1) Where the head of the district tax office having jurisdiction over the place of tax payment or the Commissioner of the competent Regional Tax Office deems that the tax burden of a domestic corporation has been unjustly reduced through transactions with a person with a special relationship as prescribed by the Presidential Decree (hereinafter referred to as a "specially related person"), he may calculate the income amount for each business year of the corporation regardless of the act or calculation of the income amount of the corporation (hereinafter referred

▣ 구 법인세법 시행령(2009. 2. 4. 대통령령 제21302호로 개정되기 전의 것)

Article 17-2 (Non-Inclusion of Holding Company's Received Dividend Amount in Gross Income)

(1) The term "holding company prescribed by the Presidential Decree" in the main sentence of Article 18-2 (1) of the Act means a domestic corporation that is reported to a holding company to the Fair Trade Commission pursuant to the Monopoly Regulation and Fair Trade Act as of the last day of the business year (hereafter in this Article, referred to as a "holding company"). In this case, where a person who has not reported the establishment and conversion of a holding company under the same Act as of the last day of

▣ 구 법인세법 시행령(2009. 2. 4. 대통령령 제21302호로 개정되고 2012. 2. 2. 대통령령 제23589호로 개정되기 전의 것)

Article 17-2 (Non-Inclusion of Holding Company's Received Dividend Amount in Gross Income)

(1) and (1) Deleted.

(2) A domestic corporation that meets the requirements prescribed by Presidential Decree in the part other than the subparagraphs of Article 18-2 (1) of the Act means a domestic corporation that meets all of the following requirements (hereafter in this Article, referred to as a "subsidiary"):

1. A corporation, the holding company under Article 18-2 (1) of the Act of which directly holds at least 40/10 (20/100 in the case of a stock-listed corporation under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "stock-listed corporation") or a venture business under Article 2 (1) of the Act on Special Measures for the Promotion of Venture Businesses) of the total number of outstanding stocks of or total amount of investment in the relevant domestic corporation for at least three

(3) In the application of the provisions of Article 18-2 (1) 1 and 2 of the Act, the ratio of investment made by a holding company in a subsidiary shall be calculated based on the stocks, etc. which have been continuously held for not less than three months as of the basic date of dividend of subsidiary: Provided, That where the preemptive rights granted before becoming a subsidiary of a holding company and the conversion rights are exercised after becoming a complete subsidiary of a holding company, and the total number of stocks issued by a holding company increases due to the exercise of the preemptive rights after becoming a complete subsidiary

(5) "Amount computed as prescribed by Presidential Decree" in Article 18-2 (1) 3 of the Act means the amount computed by multiplying interest on borrowings by the ratio of the sum of amounts falling under subparagraphs 1 and 2 to the amount falling under subparagraph 3:

3. Total assets on the balance sheet of the relevant holding company as of the last day of the business year: Provided, That where a financial holding company under the Financial Holding Companies Act has lent to a subsidiary at the interest rate higher than the interest rate at the time of borrowing, it shall be

▣ 법인세법 시행령(2012. 2. 2. 대통령령 제23589호로 개정된 것)

Article 17-2 (Non-Inclusion of Holding Company's Received Dividend Amount in Gross Income)

(1) A holding company referred to in Article 18-2 (1) of the Act shall be a domestic corporation that has been reported as a holding company under the Monopoly Regulation and Fair Trade Act, the Financial Holding Companies Act, the Technology Transfer and Commercialization Promotion Act, and the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act as of the end of the relevant business year: Provided, That where a person whose deadline for filing a report on the establishment and conversion of a holding company under the relevant Act has not yet arrived as of the end of the relevant business year files a report on the date of filing the tax base under Article 60 of the Act on the income of the relevant business year,

▣ 독점규제 및 공정거래에 관한 법률

Article 8-2 (Restrictions on Holding Companies, etc.)

(2) No holding company shall commit any act falling under any of the following subparagraphs:

2. Holding less than 40/10 [in cases where a subsidiary is a stock-listed corporation under the Financial Investment Services and Capital Markets Act (hereinafter referred to as a "listed corporation"), a corporation listed on an overseas stock exchange publicly notified by the Fair Trade Commission (hereinafter referred to as an "overseas listed corporation"), a joint stock corporation, or a subsidiary of a venture holding company, the percentage shall be 20/100; hereafter the same shall apply in this Article] of the total number of stocks issued by the subsidiary: Provided, That the same shall not apply to any subsidiary that falls short of the subsidiary stock holding standard due to a ground falling under any of the following items:

Each end. each end.