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(영문) 대법원 2019. 04. 25. 선고 2018두35131 판결

위약금 또는 배상금 명목이라도 현실적인 손해에 대한 전보 범위내라면 지급자체에 대한 손해를넘어 배상받는 금전에 해당하지 않음[국패]

Case Number of the immediately preceding lawsuit

Seoul High Court-2017-Nu-46365 ( April 25, 2019)

Title

If, even if it is a cause of penalty or compensation, it does not constitute money to be compensated in excess of the actual damage to the payment itself;

Summary

Even if a foreign corporation received money as penalty or compensation in the Republic of Korea due to the breach or termination of a contract, if it is within the scope of compensating for actual losses that may cause a decrease in net assets in connection with the contract, it does not constitute “money received in excess of compensation for the payment itself under the first contract terms” as referred to in the instant provision.

Related statutes

Article 93 of the Corporate Tax Act

Cases

2018Du35131 Revocation of disposition, etc. for corporate tax withholding

Plaintiff-Appellant

-Appellee

bB Bank

Defendant-Appellee

-Appellant

BB Director of the Tax Office

Judgment of the lower court

Seoul High Court Decision 2017Nu46365 Decided January 17, 2018

Imposition of Judgment

April 25, 2019

Text

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

Reasons

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Case summary

A. AA Co., Ltd. (former BB shipbuilding Co., Ltd.) and one shipbuilding company (hereinafter referred to as "domestic shipbuilding company") concluded a contract for construction of four vessels with foreign vessel owners from June 9, 2006 to October 27, 2006 (hereinafter referred to as "foreign vessel owners") under which four vessels were awarded a contract for construction of each of the four vessels from Co., Ltd. (hereinafter referred to as "Co., Ltd.") and two foreign corporations (hereinafter referred to as "each shipbuilding contract of this case"). During the shipbuilding contract of this case, the foreign vessel owners paid part of the purchase price to the domestic shipbuilding before the completion of the shipbuilding contract of this case, and the domestic shipbuilding owners exempted the foreign vessel owners from the obligation to pay the purchase price to the foreign vessel owners at the rate of 10% of the advance payment and 20% of the interest rate of each of the parties to the contract of this case (hereinafter referred to as "advance payment") and the domestic vessel owners from 20% of the advance payment to 30% of the interest rate per annum.

E. Accordingly, during the period from August 17, 2010 to September 16, 2010, the Plaintiff paid each advance payment and its interest (hereinafter “interest on the disputed interest”) to the foreign vessel owners.

F. The Defendant issued the instant disposition that collects and imposes corporate tax withheld for the business year 2010 on the Plaintiff on the ground that the interest at issue constituted a foreign corporation’s domestic source income as other income under Article 93 subparag. 11 (b) of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter “former Corporate Tax Act”). As to the grounds of appeal on February 2, 2010, the Defendant did not withhold taxes from the Plaintiff.

A. Article 93 Subparag. 11 (b) of the former Corporate Tax Act provides that “income prescribed by the Presidential Decree as penalty or compensation paid in the Republic of Korea” as one of the domestic source income of a foreign corporation. Article 132(10) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22577, Dec. 30, 2010) upon delegation of the said provision provides that “income prescribed by the Presidential Decree” means “income paid due to a breach or termination of a contract on property rights, which is paid in excess of damages to the original contract itself, regardless of its title or pretext.” The purpose of the instant provision is that “where a penalty or compensation paid in the Republic of Korea due to breach or termination of a contract on property rights is actually reduced due to a decrease in net assets due to a contract or other income generated in the Republic of Korea, it cannot be deemed that a foreign corporation is liable for damages exceeding the scope of damages paid in the Republic of Korea due to actual decrease in net assets due to a contract or other income generated from breach of a contract.”

B. Examining the reasoning of the lower judgment in light of the aforementioned legal principles and records, the lower court is justifiable to have determined that the interest at issue cannot be deemed as falling under the domestic source income of foreign corporations under Article 93 subparag. 11 (b) of the former Corporate Tax Act, based on the circumstances stated in its reasoning. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on penalty or compensation, burden of proof

3. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.