Revocation of disposition imposing education tax

Whether the amount of the liability reserve extinguished due to maturity, death, termination, etc. under Article 5 subparagraph 2 (a) of the Enforcement Decree of the Education Tax Act can be deducted from the education tax base by including the liability reserve deducted after expiration.

Article 5 of the Enforcement Decree of Education Tax Act

2016Guhap53029 and revocation of disposition of education

AA

Head of Central Tax Office

May 27, 2016

June 24, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

Each disposition in the attached Form that the Defendant rendered to the Plaintiff on November 3, 2014 shall be revoked.

1. Details of the disposition;

On November 14, 2014, the Plaintiff terminated the liability reserve for insurance premiums for which the extinctive prescription of a claim for payment has expired without paying insurance money (hereinafter referred to as "liability reserve of this case"), and reported and paid education tax from 2011 to 1, 2012 after deducting the tax base of education tax.The Defendant did not actually spent the liability reserve of this case, but rather replaced the account with other appropriation liabilities, and thus does not fall under "the corresponding amount extinguished due to maturity, death, damage, etc." under Article 5 (2) (a) of the Enforcement Decree of the Education Tax Act. Thus, it is deemed that the Plaintiff was included in the tax base of education tax. On November 14, 2014, the Plaintiff corrected and notified education tax and determined and notified additional tax (hereinafter referred to as "disposition of this case").

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 and 2 (including provisional number; hereinafter the same shall apply), the purport of the whole pleadings

2. Relevant statutes;

It is as shown in the attached Form.

3. Whether the instant disposition is lawful

Article 5 (3) of the former Education Tax Act (amended by Act No. 13620, Dec. 29, 2015) provides that the education tax base shall be the remainder after deducting liability reserves, etc. from insurance premiums, etc. received by an insurance business operator. Article 5 (3) of the Enforcement Decree of the Education Tax Act provides that the calculation method of insurance premiums under Article 5 (3) of the Enforcement Decree of the same Act shall deduct the total amount of liability reserves, etc. as of the last day from the total amount of insurance premiums and liability reserves, etc. as of the last day from the total amount of insurance premiums and liability reserves, etc. as of the

Meanwhile, liability reserves mean the amount to be appropriated for the payment of insurance money, refund money, and dividends to policyholders to be paid in the future (Article 63(1) of the Enforcement Decree of the Insurance Business Act), and the method of calculating liability reserves, etc. are stipulated in the Insurance Business Supervision Regulations enacted and publicly announced by the Financial Services Commission (Article 29(2) of the Enforcement Rule of the Insurance Business Act). According to Article 6-11 of the Insurance Business Supervision Regulations, liability reserves should be accumulated as premium reserves (amount to be accumulated for the payment of future insurance money, etc. for the currently maintained contract), payment reserves (amount not yet paid or presumed to be paid for the contract for which the cause of payment, such as insurance money, etc., occurred as of the end of each fiscal year). In other,

Since liability reserves are of the nature necessary to cover the payment of insurance money, refund money, etc. payable in the future, it is necessary to enforce the accumulation of liability reserves, and the insurer shall accumulate them as a specific liability reserves among insurance premiums imported pursuant to the related Acts and subordinate statutes. If liability reserves are imposed by deeming them as the revenue of the premium concerned, it may result in somewhat unreasonable results. Therefore, the relevant accumulated liability reserves as required for tax policies are not subject to education tax, and they are deferred to the following taxable year (it is included in the ‘liability reserves as of the end of the following taxable year' as stipulated in Article 5 subparagraph 1 of the Enforcement Decree of the Education Tax Act). Since liability reserves are used for the purpose of accumulation, namely, if the liability reserves are accumulated as the payment reserves are paid to policyholders after the occurrence of the cause for the payment, they still need not be taxed on the tax policy reserves (if reserves have been used for the purpose of accumulation, it can be interpreted that taxation reserves have not been finally imposed on the tax liability reserves, but are no longer possible to be imposed on the future policy after the lapse of the payment of liability reserves.

Therefore, it is reasonable to interpret the corresponding amount of liability reserve extinguished due to the occurrence of cause for payment and the corresponding amount of liability reserve extinguished due to the occurrence of cause for payment.

The Plaintiff asserts that, in cases where the statute of limitations of the claim for payment expires after the occurrence of the cause for payment, even though the corresponding amount of the liability reserve extinguished due to maturity, death, termination, etc., the liability reserve accumulated during the current term is either under-calculated or the education tax is imposed on the liability reserve which is not subject to education tax, and thus illegal. However, even if it is interpreted as the case where the corresponding amount of the liability reserve extinguished due to maturity, death, termination, etc. is paid according to the cause for payment, the whole amount of the liability reserve accumulated during the current term is deducted. However, since the liability reserve is imposed on the liability reserve which was deferred due to exclusion from the past taxable objects, it is difficult to view that the pertinent liability reserve was under-calculated or the education tax was imposed

Therefore, since the liability reserve of this case is set aside as payment reserve requirements due to the occurrence of the cause for payment, and the extinctive prescription of the right to claim payment expires, it does not constitute "the amount equivalent to the liability reserve extinguished due to maturity, death, termination, etc." as provided in Article 5 (2) of the Enforcement Decree of the Education Tax Act, and the plaintiff's assertion

3. Conclusion

Thus, the plaintiff's claim of this case is dismissed as it is without merit.