Open Decision Ledger · Tax & international taxation
Interest on a joint operator's personal loan as a necessary expense
Supreme Court, Mar. 12, 2026, 2025Du35585 (judgment)
Case name: 종합소득세부과처분취소[공동사업자가 출자비율에 따른 출자금을 마련하기 위해 대출을 받는 경우, 대출금의 이자가 공동사업장의 필요경비에 해당하는지가 문제 된 사건]
Official text on the National Law Information Center
Question
Where one of two joint business operators contributes assets raised from its own funds and the other borrows personally to raise the contribution due in proportion to its share, is the interest on that loan a necessary expense of the joint business?
Holding
Not in principle. Read with Article 27(1) and (3), Article 33(1)(xiii) of the Income Tax Act and Article 55(1)(xiii) and Article 78(iii) of its Enforcement Decree, such interest is a personal debt borne to raise a contribution, not a debt shared with the remaining operators, so it may not be taken as a necessary expense of the joint business unless there are special circumstances.
Summary of the holding, verbatim
그 대출금의 이자는 출자금을 마련하기 위하여 부담하는 개인채무에 해당할 뿐 나머지 공동사업자와 함께 부담하는 것이 아니어서, 공동사업장의 소득금액을 계산함에 있어 그 지급이자는 특별한 사정이 없는 한 공동사업장의 필요경비로 볼 수 없다.
Unofficial English translation
The interest on such loan funds merely constitutes a personal debt incurred to raise the contribution funds and is not borne together with the remaining joint business operator; therefore, in calculating the amount of income of the joint place of business, the interest paid thereon cannot be regarded as a necessary expense of the joint place of business in the absence of special circumstances.
Disposition
Dismissed Stated in the decision
상고를 기각한다. 상고비용은 원고가 부담한다.
Unofficial English translation
The appeal is dismissed. The plaintiff shall bear the costs of the final appeal.
Form of the test
Elements stated Stated in the decision
그 대출금의 이자는 출자금을 마련하기 위하여 부담하는 개인채무에 해당할 뿐 나머지 공동사업자와 함께 부담하는 것이 아니어서, 공동사업장의 소득금액을 계산함에 있어 그 지급이자는 특별한 사정이 없는 한 공동사업장의 필요경비로 볼 수 없다.
Unofficial English translation
The interest on such loan funds merely constitutes a personal debt incurred to raise the contribution funds and is not borne together with the remaining joint business operator; therefore, in calculating the amount of income of the joint place of business, the interest paid thereon cannot be regarded as a necessary expense of the joint place of business in the absence of special circumstances.
Factors
- 2인의 공동사업자 중 1인이 자기 자본으로 마련한 적극재산을 출자하는 반면 다른 1인은 출자비율에 따른 적극재산의 출자금을 마련하기 위해 개인적으로 대출을 받는 경우
- 그 대출금의 이자는 출자금을 마련하기 위하여 부담하는 개인채무에 해당할 뿐 나머지 공동사업자와 함께 부담하는 것이 아니어서
- 공동사업장의 소득금액을 계산함에 있어 그 지급이자는 특별한 사정이 없는 한 공동사업장의 필요경비로 볼 수 없다
Unofficial English translation
• Where, of two joint business operators, one contributes active assets prepared with his or her own capital while the other takes out a personal loan to raise the contribution funds for active assets corresponding to the contribution ratio
• The interest on such loan funds merely constitutes a personal debt incurred to raise the contribution funds and is not borne together with the remaining joint business operator
• In calculating the amount of income of the joint place of business, the interest paid thereon cannot be regarded as a necessary expense of the joint place of business in the absence of special circumstances
Relation to precedent
States a new standard Read from the decision
그 대출금의 이자는 출자금을 마련하기 위하여 부담하는 개인채무에 해당할 뿐 나머지 공동사업자와 함께 부담하는 것이 아니어서
Unofficial English translation
The interest on such loan funds merely constitutes a personal debt incurred to raise the contribution funds and is not borne together with the remaining joint business operator
Decisions referred to
해당 본문 참조
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
What circumstances would make the interest on a loan taken to raise a joint contribution a necessary expense of the joint business?
A later decision setting out the special circumstances the Court left open would require this entry to be read again. Any amendment to Article 27 or Article 33(1)(xiii) of the Income Tax Act, or to Article 55(1)(xiii) or Article 78(iii) of its Enforcement Decree, would also call for a fresh reading.
Cross-family AI independent reading & axis check
7 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-24
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on 7 of the 8 axes; the readings differed on axis 6 (relation to precedent).
Axis 6 (Relation to precedent): Primary “States a new standard” vs Independent “Cannot be determined”
The text articulates a rule through statutory interpretation without identifying its relationship to earlier decisions, allowing the primary to emphasize a new rule and the independent to leave precedent status undetermined.
그 대출금의 이자는 출자금을 마련하기 위하여 부담하는 개인채무에 해당할 뿐 나머지 공동사업자와 함께 부담하는 것이 아니어서Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The Seoul High Court, in its judgment of 22 October 2025 (2025Nu6707), held that although the loan had been used to buy the property, the plaintiff, as a joint operator, had borrowed only the funds corresponding to the contribution due from him in the agreed share ratio for the joint real estate letting business, so the loan was in principle a personal debt for the joint contribution and not a debt of the joint business to be borne jointly. It rejected the plaintiff's contention that he had in fact contributed only labour and credit and had agreed with the other operator to make the loan a joint debt, because no material showed that the content and value of those contributions had been objectively assessed so that their value could be fixed. It also found no unlawful discrimination in allowing interest to be deducted by an individual operator while refusing it to a joint business.
Supreme Court standard: The Supreme Court found no error. Reading the appellate reasons against the related provisions, the settled law and the record, it held that the court below had properly treated the loan as the plaintiff's personal rather than a joint business debt and the interest as outside the necessary expenses, and that it had neither misunderstood the law on necessary expenses of a joint business nor departed from the limits of free evaluation in breach of the rules of logic and experience. The Justices unanimously dismissed the appeal and put the costs on the plaintiff.
Distinguishing conditions
- A case in which special circumstances make the interest on the borrowed contribution a burden of the joint business, since the Court excluded it only absent such circumstances.
- Debt directly used to obtain the total income of the joint business, which Article 55(1)(xiii) of the Enforcement Decree counts as a necessary expense, since the loan here merely raised a contribution.
- A case where the operators in fact agreed, on an objectively assessed value of labour and credit contributions, that the loan debt would be borne jointly, since the plaintiff's claim of such an agreement failed only for want of material.
Record verification notes
Establish first who the borrower of record was, who provided the collateral, and whether the debt was registered or agreed as a debt of the joint business, since the decision turns on the loan being the plaintiff's personal debt. Then compare the contribution ratio with the profit and loss sharing ratio, and gather anything showing special circumstances that would make the interest a burden of the joint business. Confirm also that the loan was not debt directly used to obtain the business's total income under Article 55(1)(xiii) of the Enforcement Decree.
From the official text
Points at issue
2인의 공동사업자 중 1인이 자기 자본으로 마련한 적극재산을 출자하는 반면 다른 1인은 출자비율에 따른 적극재산의 출자금을 마련하기 위해 개인적으로 대출을 받는 경우, 그 대출금의 이자가 공동사업장의 필요경비에 해당하는지 여부(원칙적 소극)
Unofficial English translation
Where, of two joint business operators, one contributes active assets prepared with his or her own capital while the other takes out a personal loan to raise the contribution funds for active assets corresponding to the contribution ratio, whether the interest on such loan constitutes a necessary expense of the joint place of business (negative in principle)
Summary of the holding
소득세법 제27조 제1항, 제3항, 제33조 제1항 제13호, 소득세법 시행령 제55조 제1항 제13호, 제78조 제3호의 내용에 비추어 보면, 2인의 공동사업자 중 1인이 자기 자본으로 마련한 적극재산을 출자하는 반면 다른 1인은 출자비율에 따른 적극재산의 출자금을 마련하기 위해 개인적으로 대출을 받는 경우, 그 대출금의 이자는 출자금을 마련하기 위하여 부담하는 개인채무에 해당할 뿐 나머지 공동사업자와 함께 부담하는 것이 아니어서, 공동사업장의 소득금액을 계산함에 있어 그 지급이자는 특별한 사정이 없는 한 공동사업장의 필요경비로 볼 수 없다.
Order
상고를 기각한다. 상고비용은 원고가 부담한다.
Unofficial English translation
The appeal is dismissed. The plaintiff shall bear the costs of the final appeal.
Provisions referred to
소득세법 제27조 제1항, 제3항, 제33조 제1항 제13호, 소득세법 시행령 제55조 제1항 제13호, 제78조 제3호
Read 2026-10-24 · Cross-read 2026-10-24. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
Every entry is published only after all quotes have been matched character by character against the official text, and audited by an independent second reading from a different model family across all eight axes. Both agreed axes and text-grounded interpretive divergences are recorded openly. The ledger is a research record, not an assessment of the court or advice on any matter.
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