Seoul Administrative Court 2008Guhap17318 ( October 18, 2009)

Cho High Court Decision 2005No4260 (No. 21, 2008)

Where it is unclear to distinguish the revenue cost of a non-profit corporation, it shall be calculated according to the profit-making business and non-profit business

Where it is unclear where a non-profit corporation has incurred any profit-making business or non-profit-making business, it shall be calculated in accordance with the method of separate calculation in which the necessity of separate accounting is the necessity of common profit-making business or common loss.

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

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

1. Purport of claim

The Defendant’s imposition of KRW 459,316,30 of corporate tax for the business year 1999 on March 10, 2005 against the Plaintiff; imposition of KRW 2,652,045,540 of corporate tax for the business year 2000 on October 10, 2005; imposition of KRW 1,53,87,420 of corporate tax for the business year 2001 on October 10, 2005; imposition of KRW 1,365,440,980 of corporate tax for the business year 2002 on October 27, 2005; imposition of KRW 1,365,40,980 of corporate tax for the business year 2002; and imposition of KRW 712,030,410 of corporate tax for the business year 203 on October 27, 2005.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Quotation of judgment of the first instance;

The reasons for this Court concerning this case are as follows, except for adding the following two judgments concerning the matters asserted in the trial by the defendant to the corresponding part, and therefore, it is identical to the reasons for the judgment of the first instance. Thus, this Court shall accept it in accordance with Article 8(2) of the Administrative Litigation Act and the main sentence of

2. Additional matters to be determined;

A. The defendant asserts that the plaintiff merely deposited funds in a bank through the indirect loan business and received interest income, and that the indirect loan business constitutes a profit-making business with interest income under Article 3 (2) 2 of the Corporate Tax Act (amended by Act No. 8141 of Dec. 30, 2006, hereinafter the same) where necessary expenses are not recognized, not the financial and insurance-related service business but the indirect loan business.

However, as seen earlier, indirect loan insertion business constitutes a financial and insurance-related service business, so long as indirect loan business falls under a profit-making business under Article 3 (2) 1 of the Corporate Tax Act, the necessary expenses corresponding to the profit should be calculated and the corporate tax of this case must be calculated. Thus, the defendant's assertion against this is without merit.

B. The defendant asserts that a direct loan project constitutes a real estate rental business for which the plaintiff leased a store to the unemployed and received a rent, and thus, it cannot be calculated by adding a corporate tax to gross income and deductible expenses differently from an indirect loan project and its nature.

However, the direct loan business also constitutes a financial and insurance-related service business like an indirect loan business, and even if a direct loan business falls under a real estate rental business as alleged by the defendant of the snow company, as long as the real estate rental business falls under a profit-making business under Article 3 (2) 1 of the Corporate Tax Act, it does not affect the calculation of corporate tax by aggregating indirect loan business and gross income and deductible expenses, so the defendant's assertion is rejected.

3. Conclusion

Since the judgment of the first instance is justifiable, the defendant's appeal is dismissed as it is without merit. It is so decided as per Disposition.