National High Court Decision 2000Gu1980 ( December 15, 2000)
It is difficult to recognize that the workplace is not registered as a business operator and that it has specialized in the price business at the same place, and it is difficult to recognize that the interest income of the at issue bonds is realizing interest income under the Income Tax Act because the interest income of the non-business loan should be determined by the principle of confirmation of right.
Article 2 of the Income Tax Act: Scope of Tax Liability / Income Tax Cumulative Taxation on Property Income under Article 61
National High Court 1996Du2178/ National Trial 1996Before 0578/
I dismiss the appeal.
1. Summary of disposition;
In 197 and 1998, the claimant lent bonds of KRW 1,497,00,000 (hereinafter referred to as "inter-corporate bonds") to 23 non-corporates (hereinafter referred to as "OOs, etc.") other than OOs (hereinafter referred to as "Os") with the applicant's wife other than Os (hereinafter referred to as "Os").
The agency determines and notifies the claimant 149,441,920 won of global income tax for 1997 and 217,080,610 won of global income tax for 1998 as global income tax for the claimant 1997 and the claimant 217,080,610 won of global income tax for 1998, in respect of which the claimant and theOO did not report global income tax, even though interest income was leased at issue bonds and accrued interest income;
The claimant appealed against this and filed an appeal on October 27, 199 and the appeal on February 21, 200.
2. Opinions of the claimant and disposition agency;
A. The claimant's assertion
(1) The claimant borrowed funds from OOO et al. and lent the bonds to OO et al. through newspaper advertisement or bond broker at a certain place;
Since interest income accrued from the bonds at issue was used in repaying the interest of the funds borrowed from non-claim OO et al., the interest income did not actually accrue;
Since OOO et al., the debtor of the key bonds, failed to recover the principal of the key bonds due to dishonor, missing and insolvent, it is improper for the disposition agency to consider that interest income has occurred only on the basis of the loan contract of the key bonds.
(2) The key bonds are all leased by the claimant; however, it is unreasonable to deem that OO lent bonds to the claimant on the basis that they set up a collateral in the name of OO for convenience on the security offered by some debtors of the key bonds, and to impose joint and several tax liability on them;
Even if it falls under the joint and several liability for tax payment, it is necessary to terminate the joint and several liability for tax payment by OO because it receives KRW 109,179,591 from the claimant in relation to the disposition of this case at the disposal agency as of June 26, 200 and exceeds KRW 40,500,000.
(b) Opinions of disposition agencies;
(1) The claimant had interest in the issue bonds and imposed interest income on them. Thus, the claimant did not err in imposing the gross interest income in the pertinent year under Article 16 of the Income Tax Act as interest income.
(2) If the claimant has inferred the impossibility of recovering the principal and interest of the bonds in question by itself, the reason should be confirmed by objective and specific evidence. However, it is difficult to deem that the claimant’s assertion that the secured real estate, such as OO, is subordinate and that he/she has no property cannot be seen as objectively and specifically confirming the impossibility of recovering the bonds.
(3) Since the fact that an OO has a profit from a non-business loan can be confirmed by the relevant loan documents, unless the claimant presents specific evidence that the actual owner of the income actually reverts, the interest income of the OO is subject to property deduction and the OO is deemed to have a joint and several tax liability according to the disposition of this case.
3. Hearing and determination
(a) Points in dispute;
(1) Whether the interest income of the debentures in question is a non-business profit; and
(2) Whether interest income can be seen as not being realized since the amount recoverable as principal and interest of the pertinent bonds was not yet repaid as principal and interest income; and
(3) If the claimant alone lends the whole amount of the bonds, then whether the claimant's wife lends the bonds or not.
(b) Related statutes;
(1) Article 2 (Scope of Tax Liability) (3) of the Income Tax Act
The main income earner and his spouse are jointly and severally liable for tax on property income subject to cumulative taxation under Article 61.
Article 61 (Cumulative Taxation on Property Income)
If a resident or his spouse has any interest, dividend or real estate rental income (hereinafter referred to as “property income”), the principal income earner prescribed by the Presidential Decree among the resident and his spouse (hereinafter referred to as “principal income earner”) shall be deemed to have property income of his spouse (hereinafter referred to as “spouse subject to summing up of assets”), and the tax amount shall be calculated by summing it up in the global income of the principal income earner.”
(2) section 16 (interest income) of the same Act.
The interest income shall be the following incomes accruing during the corresponding year:
1. The omission of subparagraphs 1 and 11.
12. providing for "The interest of non-business loans";
Paragraph 2 of the same Article
"Interest income shall be the total amount of income of the year concerned".
Article 24 (Calculation of Gross Amount of Income)
"The total amount of the income of residents shall be the sum of the amounts received or received during the pertinent year."
(3) Article 45 (Receipt Date of Interests) of the Enforcement Decree of the same Act
The receipt date of the total amount of interest income shall be as follows:
1 and 9 omitted.
9-2. Profits accruing from a non-business loan;
The date of payment of interest pursuant to the agreement: Provided, That in cases where there is no agreement on the date of payment of interest or the interest is paid before the date of payment of interest pursuant to the agreement, such date
C. Facts and determination
(1) First, we examine the issues (1).
(A) The claimant did not register the business but argued that there was a trade name office of the OOOOO's office in the middle-gu OOOOOOO's office, and that there was an exclusive responsibility for the bond affairs at the same place, and that there was an advertisement for the loan of the bonds in daily newspapers, such as OO's report, etc., and that it was also engaged in the payment business, and that it presented the details of the management expenses and the advertisement, etc. as supporting materials.
(B) The term “price business” means, in the case of a business which externally professes that a resident engaged in the price business is a resident and lends money to many and unspecified persons, the payment business is deemed to be the price business, or the monetary lending of a resident who does not externally advocate the price business is deemed to be the profit of a non-business loan (the same majority of the residents other than the same Doz.2178, 197;
In addition, the disclosure of only the telephone number temporarily used on the newspaper site is not considered as an external profession for the price business (Common Rule 2-2-3.17 March 17 of the Income Tax Act).
(C) The claimant asserts that he/she should be deemed to operate the price business since he/she has full-time a place of business, but it is difficult to recognize that he/she was specialized in the price business at the same place because he/she was not registered as a business operator. However, even if the lending period of the bonds at issue was over two years, the number of persons leasing the bonds at issue is only 24 and it is difficult to recognize that he/she was specialized in the price business at the same place. In the advertisement proposal of the daily newspaper presented by the claimant, since only the telephone number is posted, it is difficult to view that the applicant's interest income
(D) Therefore, the claimant’s assertion that interest income from a non-business loan should be deemed as a cost of interest on the loan borrowed by the claimant for the purpose of lending key bonds is difficult, since the total amount of interest income shall be deemed as an interest income pursuant to the exhibition regulations.
(2) We examine the issues (2).
(A) The agency calculated 308,725,00 won and 441,870,000 won and 750,595,000 won with a loan interest rate on a loan certificate drawn up between the claimant and the OO and the claimant, and deemed the claimant as interest income received or received by the claimant, and thus disposed of this case;
The claimant asserts that the principal recovered by lending KRW 1,497,00,000 for the key bonds is only KRW 393,137,057, and the interest income amount was only KRW 98,185,000, and there was no substantial interest income. In the future, the claimant is anticipated to be unable to recover the loan principal due to the winning of the auction on the secured real estate, and the debtor's property is not able to receive the outstanding amount of the bonds because there is no property of the debtor.
This case argues that the interest income of the bonds is not only 98,185,000 won but also there is no possibility of collecting the principal bonds which are the source of income generation, and this case's disposition is unfair.
(B) The realization of interest income under the Income Tax Act should be determined by the principle of confirmation of right, and even if all or part of the interest is not received, the sum of the amounts received or to be received under the agreement should be taxed with the interest income amount (see, e.g., Supreme Court Decision 96Hu578, May 1, 1996), so it cannot be deemed an erroneous disposition that the disposition agency calculated and taxed the interest income pursuant to the loan certificate of the pertinent bonds;
The claimant asserts that the result of the successful bid of the secured real estate for the secured bonds is subordinate to the claimant, and thus, it cannot be recovered. However, if only the successful bid of the secured real estate cannot be said to be a method of recovering the secured bonds, and if the debtor's income is confirmed to have accrued or other real estate is held, the right can be exercised as the creditor. Therefore, evidence such as the distribution schedule presented by the claimant alone cannot be recovered from the secured bonds and interest
(C) In addition, the claimant asserts that the bonds cannot be recovered due to the absence of an OO, etc., but according to the disposition agency's confirmation, it is difficult to recognize this part as different from the claimant's assertion, such as that the debtor of the bonds at issue has property, such as real estate, or the debtor with continuous income
(D) Furthermore, it is difficult to recognize the claimant's assertion that the claimant and the OO leased the key bonds and received only loans from four of 24 members including OOO, and the remaining debtors did not recover the principal from the 19 members.
(3) We examine the issues (3).
(A) The claimant lent 205,000,000 won out of the disputed bonds to third parties, other than the OOO, among the disputed bonds, and set up a collateral under the name of OO. However, it is the claimant who actually performed the act of lending the bonds. As such, OO did not have any income, and therefore, there was no income to aggregate assets, and thus, there was no income to aggregate joint and several tax liability, the claimant asserts that there was no joint and several liability for payment and the head of the Tong in the name of the applicant.
(B) Examining the letter of guarantee presented by the claimant, although the OOO, the originator’s applicant, was involved in the loan arrangement of the disputed bonds, there is no evidence to prove it, so it is not clearly confirmed which relationship with the claimant, and therefore, it appears that the OO did not lend the bonds to the claimant under the letter of guarantee is not reliable; and
The fact that some of the issues, bonds, and interest, etc. are entered and withdrawn in the passbook in the name of the claimant presented by the claimant can be confirmed, but such details of the passbook transaction can only be traded as a single passbook considering that two persons are married, even if the claimant orOO alone engage in the real loan business.
(C) Therefore, it is difficult to recognize the claimant's assertion that the applicant is a de facto lessee, and it is deemed that the OO is a de facto borrower and the OO's interest income is regarded as a de facto borrower by creating collateral mortgages on the secured real estate of the bonds at issue, and that the disposition of this case was not erroneous.
This case shall be decided as ordered in accordance with Articles 81 and 65 (1) 2 of the Framework Act on National Taxes, because the petition for appeal is groundless as a result of the review.