Cho-2012-west-5143 ( October 22, 2013)

It is reasonable to see that the standard point of judgment of a holding company after amendment is the point of time of dividend payment.

Unless otherwise specifically provided as provided in the former and the former Enforcement Decree of the Act before and after the amendment, it is reasonable to see the point of time of determining holding companies as the point of time of dividend payment.

2013Guhap53547 Revocation of Disposition of Corporate Tax Imposition

AAA Holdings Co., Ltd.

Head of Yeongdeungpo Tax Office

September 27, 2013

November 12, 2013

1. The Defendant’s imposition of the corporate tax on September 7, 2012 against 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 to the Fair Trade Commission on January 1, 2009 pursuant to the former Monopoly Regulation and Fair Trade Act (amended by Act No. 9554, Mar. 25, 2009). However, in the course of the merger of the Korea Credit Rating Information Company (the date of registration of the merger), a subsidiary, the Plaintiff failed to meet the requirements for holding companies (the total value of the stocks of the subsidiaries as of November 1, 2010, at least 50% of the total value of the stocks on the balance sheet), 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 the OOO of 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 (hereinafter “instant disposition”).

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's 1, 2, Eul's 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:

[Corporate Tax]

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

A holding company prescribed by Presidential Decree among domestic corporations under the Monopoly Regulation and Fair Trade Act (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.

Where the sum computed pursuant to subparagraphs 1 and 2 exceeds the sum computed pursuant to subparagraphs 3 and 4, of the amount computed pursuant to Article 16 (hereafter in this Article and Article 18-3, the same shall apply) 1 and 2 from among the amount of profit dividends or surplus distributions received by a subsidiary (referring to a domestic corporation in which the holding company concerned has invested, and which satisfies the requirements prescribed by the Presidential Decree, taking into account the equity investment ratio, etc. in its subsidiary; hereafter in this Article, the same shall apply) from the subsidiary, and the amount of profit dividends or dividend distributions under Article 16, exceeds the aggregate computed pursuant to subparagraphs 3 and 4, such excess amount shall not be included in the gross

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'

[Enforcement Decree of the Corporate Tax Act]

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 “former Enforcement Decree of the Corporate Tax Act”) Article 17-2(1) of the Enforcement Decree of the Corporate Tax Act (hereinafter “former Enforcement Decree of the Corporate Tax Act”) (hereinafter “Enforcement Decree of the Corporate Tax Act”).

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 of this case")

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

Newly Inserted by Presidential Decree No. 2352, Feb. 2, 2012>

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. Thus, unless otherwise expressly provided 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 reasonable 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.