Seoul Administrative Court-2018-Gu Partnership-72413 ( October 17, 2019)

The loan interest, etc. for acquiring inventory assets shall not be added to the cost for acquisition and shall be included in the deductible expenses for the relevant business year.

Loan interest, etc. for the acquisition of inventory assets, other than fixed assets for business, shall not be added to the cost for acquisition, but shall be included in the loss for the relevant business year incurred.

Article 28 (Non-Inclusion of Interest Paid in Loss)

Article 52 (Scope of Interest on Loans appropriated for Construction Funds under the Enforcement Decree of the Corporate Tax Act

2019Nu4502 Revocation of revocation of revocation of corporate tax rectification

AAA, Inc.

a) the Director of the Tax Office

Seoul Administrative Court 2018Guhap72413

August 29, 2019

September 19, 2019

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant's rejection of the application for rectification of corporate tax against the plaintiff on December 27, 2017 shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning of this court's judgment is as stated in the reasoning of the judgment of the court of first instance, except for the dismissal of 10-18 of the decision of the court of first instance as follows. Thus, it is accepted in accordance with Article 8 (2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

Jin part

Article 14(1) of the Corporate Tax Act provides that "income for each business year of a domestic corporation shall be the amount calculated by subtracting the total amount of losses incurred during the business year from the total amount of earnings accrued during the business year." Article 19(1) provides that "deductible expenses shall be the amount of losses or expenses incurred from transactions which reduce the net assets of the domestic corporation, except as otherwise provided for in this Act, such as refund of capital or financing, disposal of surplus funds, and other transactions that reduce the net assets of the domestic corporation." Article 19(7) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 28640, Feb. 13, 2018; hereinafter "former Enforcement Decree of the Corporate Tax Act") provides that "loan interest" as one of losses. In addition, Article 40(1) of the Corporate Tax Act provides that "the business year of accrual of earnings and losses of the domestic corporation for each business year shall be the business year to which the date on which such earnings and losses are finalized belongs." In full view of the above

2. Conclusion

Since the judgment of the first instance is justifiable, the plaintiff's appeal is dismissed as it is groundless.