[2] Whether the amount that a shareholder of a corporation received as a refund of a loan from the corporation constitutes "other income under Article 25 (1) 12 of the former Income Tax Act" (negative)

[3] The scope of income amount subject to withholding by domestic residents or nonresidents under the Income Tax Act

[2] Article 25 (1) 12 of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994) provides that the person having a special relationship with a resident, non-resident, or corporation receives economic profits from the resident, non-resident, or corporation, which are not considered as wages, dividends, or donations, as other income. Article 49 (4) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994) provides that "economic profits" under Article 25 (1) 12 of the former Income Tax Act shall be the amount of income of a corporation under the Corporate Tax Act other than dividends and taxes disposed of by the government in determining and correcting the corporation's income under the Corporate Tax Act, and it shall not be refunded to the corporation under the name of "the person having a special relationship with the resident, non-resident, or corporation for the use of assets at low or low prices, but shall not be refunded to the corporation's own money.

[3] According to Articles 142(1), 143, and 144(1) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994), a person who pays a resident or a nonresident interest income, dividend income, a certain business income amount as determined by the Presidential Decree, a labor income amount belonging to Class A, other income amount, and a retirement income amount belonging to Class A to a resident or a nonresident in Korea shall withhold the income tax calculated by applying the specified withholding tax rate on the paid income or income amount and pay it to the Government by the 10th day of the month following the month in which the date of collection falls. Thus, other income than the above shall not be subject to withholding

1. Summary of the judgment below

According to the reasoning of the judgment below, the court below held that the non-party 2's disposal of the above non-party 9-2's non-party 9-2's non-party 9-1's non-party 9-2's non-party 9-1's non-party 9-2's non-party 9-1's non-party 9-2's non-party 9-1's non-party 9-2's non-party 9-1's non-party 9-1's non-party 9-2's non-party 9-1's non-party 9-1's non-party 9-1's non-party 2's non-party 9-1's non-party 9-party 2's non-party 1's non-party 1' and non-party 4-party 9-6'''' as non-party 1' and non-party 2''.

2. As to the grounds of appeal Nos. 1 and 2

In a lawsuit seeking revocation of taxation, etc., the subject matter of the lawsuit is the objective existence of the tax base and tax amount recognized by the disposition of the tax authority, and the tax authority may exchange and change the grounds for disposition within the scope that maintains the identity of the disposition in order to support the legitimacy of the tax base and tax amount recognized by the disposition in question until the closing of pleadings in the fact-finding court. Unlike the disposition that the defendant, who is the tax authority, is deemed to have paid the amount of income pursuant to Article 94-2 of the Enforcement Decree of the Corporate Tax Act until the closing of arguments in the fact-finding court, the assertion that the same amount of income in support of the legitimacy of the disposition collecting withholding income tax was attributed to the representative director or investors, and the assertion that only the source of income is different within the scope of the global income subject to cumulative taxation, within the scope that maintains the identity of the disposition, constitutes a change in the grounds for disposition within the scope that maintains the identity of the disposition (see Supreme Court Decision 97Nu9666, Sept. 17, 199).

In the same purport, the court below is just in holding that the defendant's act of changing the grounds for disposition by asserting that each of the above amounts received by the above non-party separately from the bonus from the disposition of income until the closing of argument at the court of fact-finding has been actually reverted to the above non-party, and that the change of the grounds for disposition is permitted regardless of whether the change of the grounds for disposition was made after the expiration of the exclusion period for the imposition of national taxes as a result of the change of the grounds for disposition within the scope of maintaining the identity of the disposition, and it is not erroneous in the misapprehension of legal principles as to the change of the grounds for disposition, limitation of exclusion period, and change of the type of income, etc., as alleged in the grounds for appeal. The Supreme Court precedents cited in the grounds for appeal are different from this case. All of the grounds for appeal as to this part

3. As to the third ground for appeal

Article 25 (1) 12 of the former Income Tax Act provides that the economic profits that a person having a special relationship with a resident, non-resident or corporation receives from the relevant resident, non-resident or corporation due to such special relationship, which are not considered as salary, dividend or donation, as one of other income. Article 49 (4) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994) provides that "economic profits" under Article 25 (1) 12 of the former Income Tax Act shall be the profits that a person receives by using the assets provided as the source of income of a corporation or an individual for the business of a corporation other than the dividends and profit disposed of by a corporation under the Corporate Tax Act or by using the assets provided as the source of income free of charge or at a low price and are paid by the individual for the use of such assets, but if the amount paid at a lower price than the ordinary amount to be paid, it shall be the deducted amount.

However, the income earned by Nonparty 2, Nonparty 3, and Nonparty 4 is itself the instant money received from the Plaintiff for the return of the funds for acquiring the above goodwill, and thus, it cannot be viewed as other income under Article 25(1)12 of the Income Tax Act.

Nevertheless, the court below determined that the above amount received by Nonparty 2, Nonparty 3, and Nonparty 4 constituted other income under Article 25 (1) 12 of the Income Tax Act is erroneous in the misunderstanding of legal principles as to other income, which affected the conclusion of the judgment. The ground of appeal assigning this error is with merit.

4. As to the fourth ground for appeal

According to Articles 142(1), 143 and 144(1) of the former Income Tax Act, a person who pays a resident or a nonresident interest income, dividend income, a certain business income prescribed by the Presidential Decree, a wage and salary income of Class A, other income amount, and a retirement income amount of Class A shall withhold the income tax calculated by applying the specified withholding tax rate to the income amount or income amount paid and pay it to the Government by the 10th day of the month following the month in which the date of collection falls. Thus, other income than the above is not subject to withholding of income tax.

However, according to each description of evidence Nos. 1-2 and 12-2 of evidence Nos. 12 and 11-2, the Defendant calculated the tax base of each income tax for the portion reverted to the Plaintiff in 1987 and the portion reverted to the year 1988 by aggregating the real estate income amount of Nonparty 2 and the business income amount of Nonparty 3, which cannot be subject to income tax withholding.

Nevertheless, the court below rejected the plaintiff's assertion that the calculation of the tax amount by adding the above other income amounts of the non-party 2 and the non-party 3, who did not pay the plaintiff to the tax base of each income tax of this case, was illegal, on the ground that there is no evidence to acknowledge it, and there is an error of law by violating the rules of evidence or failing to exhaust all necessary deliberations,

5. Therefore, of the judgment below, the part of the collection disposition on the income of the non-party 2, non-party 3 and non-party 4 (the part exceeding KRW 40,145,870 of Class A earned income and KRW 7,299,250 of the collection disposition on Class A earned income of 1987 and the defense tax of KRW 7,29,250 of the collection disposition on Class A earned income of 1988 and exceeding KRW 44,594,320 of Class A earned income and KRW 8,108,060 of the defense tax collection disposition on Class A earned income of 198 and the defense tax collection disposition on Class A earned income of 198 shall be reversed, and this part of the case shall be remanded to the court below. The remaining appeal shall be dismissed, and the costs of appeal on the dismissed part shall

Justices Seo Sung-sung (Presiding Justice)