【Holding】
[1] Whether, after a corporation has provided a non-business-related provisional payment to a specially related person, it can be concluded that the grounds under the proviso of Article 11 subparag. 9-2 of the former Enforcement Decree of the Corporate Tax Act and each subparagraph of Article 6-2 of the former Enforcement Rule of the Corporate Tax Act regarding exclusion from gross income are met merely because a decision to commence rehabilitation proceedings was rendered against that specially related person and individual exercise of rights on rehabilitation claims outside the rehabilitation proceedings was prohibited (negative) / With respect to the grounds under Article 6-2 subparags. 1 and 4 of the former Enforcement Rule of the Corporate Tax Act, the method of determining whether a non-business-related provisional payment and interest thereon should be included in the gross income of the corporation where rehabilitation proceedings have commenced against the specially related person / Party bearing the burden of proving the existence of "justifiable grounds" under the proviso of Article 11 subparag. 9-2 of the former Enforcement Decree of the Corporate Tax Act and each subparagraph of Article 6-2 of the former Enforcement Rule of the Corporate Tax Act (= the taxpayer)
[2] Where a discharge has been granted in rehabilitation proceedings with respect to a loan claim corresponding to a non-business-related provisional payment, whether it affects the inclusion in gross income under Article 15(1) of the former Corporate Tax Act and the main text of Article 11 subparag. 9-2 of the former Enforcement Decree of the Corporate Tax Act (negative)
【Summary of Decision】
[1] The main text and each item of Article 11 subparag. 9-2 of the former Enforcement Decree of the Corporate Tax Act (before being amended by Presidential Decree No. 29529, Feb. 12, 2019; hereinafter the same) are provisions intended, where a corporation has failed without justifiable grounds to collect a non-business-related provisional payment or interest thereon by the date on which the special relationship ceases [item (a)], or has failed without justifiable grounds to collect interest on a non-business-related provisional payment from a specially related person by the date on which one year has elapsed from the end of the business year to which the date of accrual belongs [item (b)], to include the amount equivalent to such claim in the gross income of the corporation as a premise for disposing of income with respect to the specially related person, on the view that, for tax law purposes, the corporation has substantially waived the claim or released the debt so that the amount equivalent to the claim has flowed out of the corporation.
In addition, the proviso of Article 11 subparag. 9-2 of the former Enforcement Decree of the Corporate Tax Act and each subparagraph of Article 6-2 of the former Enforcement Rule of the Corporate Tax Act (before being amended by Ordinance of the Ministry of Economy and Finance No. 730, Mar. 20, 2019; hereinafter the same) purport to exclude inclusion in gross income under Article 15(1) of the former Corporate Tax Act (before being amended by Act No. 16008, Dec. 24, 2018) and the main text of Article 11 subparag. 9-2 of the former Enforcement Decree of the Corporate Tax Act only where there are justifiable grounds, such as where, even though the corporation seeks to actually collect the non-business-related provisional payment and interest thereon from the specially related person, collection is objectively impossible due to litigation over the claims and debts or circumstances equivalent thereto, or where security or assets available for satisfaction thereof have been substantially secured so that the likelihood of collection is high. Considering these points, even if, after a corporation has provided a non-business-related provisional payment to a specially related person, a decision to commence rehabilitation proceedings is rendered against that specially related person and the effect arises whereby individual exercise of rights on rehabilitation claims outside the rehabilitation proceedings is prohibited pursuant to Articles 118 and 131 of the Debtor Rehabilitation and Bankruptcy Act (hereinafter the "Debtor Rehabilitation and Bankruptcy Act"), it cannot be concluded on that basis alone that the grounds under the proviso of Article 11 subparag. 9-2 of the former Enforcement Decree of the Corporate Tax Act and each subparagraph of Article 6-2 of the former Enforcement Rule of the Corporate Tax Act are met. In particular, with respect to the grounds under Article 6-2 subparags. 1 and 4 of the former Enforcement Rule of the Corporate Tax Act, where Article 131 of the Debtor Rehabilitation and Bankruptcy Act applies due to the commencement of rehabilitation proceedings against the specially related person, individual exercise of rights on rehabilitation claims outside the rehabilitation proceedings is prohibited in principle, but as long as it is possible to collect the claim by participating in the rehabilitation proceedings and exercising rights as a rehabilitation creditor, it is difficult to uniformly evaluate the claim as having objectively become uncollectible despite the creditor corporation's attempts to actually collect it. In this regard, with respect to the grounds under Article 6-2 subparags. 1 and 4 of the former Enforcement Rule of the Corporate Tax Act, whether a non-business-related provisional payment and interest thereon should be included in the gross income of the corporation where rehabilitation proceedings have commenced against the specially related person should be determined according to whether justifiable grounds are recognized for the non-collection of the non-business-related provisional payment and interest thereon, by considering as a whole and comprehensively such circumstances as whether the corporation had made serious efforts to collect the claim, such as continuously managing the claim amount even before the commencement of rehabilitation proceedings, whether the corporation filed a report of its rehabilitation claim as part of the exercise of its rights as a rehabilitation creditor after the commencement of rehabilitation proceedings, whether the corporation examined the possibility of repayment under the rehabilitation plan during the rehabilitation proceedings, and whether there was any act or expression of intent between the specially related person and the corporation that could be regarded as voluntarily waiving or releasing the collection of the claim. As such, the taxpayer who asserts the existence of "justifiable grounds" under the proviso of Article 11 subparag. 9-2 of the former Enforcement Decree of the Corporate Tax Act and each subparagraph of Article 6-2 of the former Enforcement Rule of the Corporate Tax Act must prove it.
[2] If a claim against a debtor arose before the decision to commence rehabilitation proceedings, the claim becomes a rehabilitation claim (Article 118 subparag. 1 of the Debtor Rehabilitation and Bankruptcy Act), and if a decision to approve the rehabilitation plan is rendered without such claim being entered in the list of creditors or reported, the debtor is discharged from liability for the claim (main text of Article 251 of the Debtor Rehabilitation and Bankruptcy Act). However, even where such discharge has been granted, the debt itself continues to exist, apart from the fact that performance of the debt cannot be compelled against the debtor; therefore, even where a discharge has been granted in rehabilitation proceedings with respect to a loan claim corresponding to a non-business-related provisional payment, as long as the claim is recognized as still remaining, the inclusion in gross income under Article 15(1) of the former Corporate Tax Act (before being amended by Act No. 16008, Dec. 24, 2018) and the main text of Article 11 subparag. 9-2 of the former Enforcement Decree of the Corporate Tax Act (before being amended by Presidential Decree No. 29529, Feb. 12, 2019), which presupposes the continued existence of such claim, is not affected by whether such discharge has been granted.
【Referenced Statutes】
[1] Article 15(1) and (3) of the former Corporate Tax Act (before being amended by Act No. 16008, Dec. 24, 2018); Article 11 subparag. 9-2 of the former Enforcement Decree of the Corporate Tax Act (before being amended by Presidential Decree No. 29529, Feb. 12, 2019); Article 6-2 of the former Enforcement Rule of the Corporate Tax Act (before being amended by Ordinance of the Ministry of Economy and Finance No. 730, Mar. 20, 2019) [2] Article 15(1) of the former Corporate Tax Act (before being amended by Act No. 16008, Dec. 24, 2018); Article 11 subparag. 9-2 of the former Enforcement Decree of the Corporate Tax Act (before being amended by Presidential Decree No. 29529, Feb. 12, 2019); Articles 118 subparag. 1, 251, and 252 of the Debtor Rehabilitation and Bankruptcy Act
【Referenced Precedents】
[1] Supreme Court Decision 2020Du39655, July 29, 2021 (Gong2021Ha, 1647)
Supreme Court Decision 2018Du34305, August 12, 2021
[2] Supreme Court Decision 2001Da3122, July 24, 2001 (Gong2001Ha, 1919)
Supreme Court Decision 2017Da286577, November 29, 2018 (Gong2019Sang, 142)
(Source: Supreme Court Decision 2026Du30419, August 12, 2026 | Judicial Information Disclosure Portal, Precedents)
2026. 10. 14. · By Attorney Dongwoo Shin
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