[1] Whether the proviso of Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act is null and void beyond the scope of delegation under Article 67 of the former Corporate Tax Act (negative)

[2] Where the tax authority deemed that the amount of gross income out of the company belongs to an officer or employee and disposed of as a bonus, the date when the tax authority established the liability to pay global income tax ( earned income tax) of the person to whom the income belongs (=the time when the taxable period to which

[1] Article 67 of the former Corporate Tax Act (amended by Act No. 8831 of Dec. 31, 2007); Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 20619 of Feb. 22, 2008) / [2] Articles 20 (1) 1 (c), 39 (1), and 135 (4) of the Income Tax Act; Articles 49 (1) 3 and 192 (2) of the Enforcement Decree of the Income Tax Act; Articles 21 (1) 1 and 21 (2) 1 of the Framework Act on National Taxes

[2] Supreme Court Decision 2004Du4604 decided Jul. 13, 2006 (Gong2006Ha, 1554) Supreme Court Decision 2004Du9944 decided Jul. 27, 2006 (Gong2006Ha, 1560)

Plaintiff (Attorney Lee Jae-soo, Counsel for the plaintiff-appellant)

Gangwon-gu Director of the District Office

Seoul High Court Decision 2004Nu18346 delivered on December 1, 2005

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

1. On the first ground for appeal

Under the principle of no taxation without law, the interpretation of tax laws shall be interpreted in accordance with the text of the law unless there are special circumstances, and it shall not be permitted to expand or analogically interpret without reasonable grounds. However, if it is necessary to clarify the meaning through mutual interpretation between laws, it shall be allowed to make a combined interpretation in consideration of the legislative purport and purpose within the scope that does not undermine the legal stability and predictability oriented by the principle of no taxation without law

Article 67 of the former Corporate Tax Act (amended by Act No. 8831, Dec. 31, 2007; hereinafter the same) provides that "in filing a return, determination, or correction of the corporate tax base, the amount included in the calculation of earnings shall be disposed of as prescribed by Presidential Decree, such as bonus, dividend, other outflow from the company, and reserves in the company, according to the person to whom the corporate tax belongs," and Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 20619, Feb. 22, 2008; hereinafter the same) provides that "where the reversion is unclear, it shall be deemed that it has been reverted to the representative

The disposal of income under Article 67 of the former Corporate Tax Act, in filing a return on, determining, or correcting the corporate tax base, shall determine whether the amount included in the calculation of earnings has been reserved or has been leaked to a corporation inside or outside the scope of the corporate tax. If the amount was leaked to a private place, it is a procedure under the tax law that specifies what kind of income belongs to and determines the type of the person to whom the income belongs and the type of income has already been verified after the specific taxable year. If it is clear that the amount included in the calculation of earnings has leaked to a private place, it shall be deemed that there is a person to whom the income belongs, but if it is obvious that the amount included in the calculation of earnings has already been leaked to a private place, it can be sufficiently expected that the case of "unreverted amount" which cannot be objectively determined through taxation data, so Article 67 of the former Corporate Tax Act provides that "The amount included in the calculation of earnings shall be disposed to the person to whom the income belongs," and thus, it shall be deemed that the type and contents of

In the same purport, the judgment of the court below that the proviso of Article 106 (1) 1 of the former Enforcement Decree of the Corporate Tax Act is not invalid beyond the delegation scope of the parent law is just, and there is no error of law such as misunderstanding of legal principles as to disposal of income

2. On the second ground for appeal

In cases where the tax authority deemed that the amount of gross income distributed from the company is reverted to an officer or employee and disposed of income as a bonus, unlike the fact that the withholding agent is liable on the date when the notice of change in the amount of income was served on the corporation as the payer of the amount of income concerned, if the income is disposed of regardless of whether or not the notice of change in the amount of income to the corporation was served on the corporation, the person to whom the income accrued shall be subject to taxation of the amount of earned income tax by falling under the "amount disposed of as bonus under the Corporate Tax Act" under Article 20 (1) 1 (c) of the Income Tax Act, and the relevant amount of income shall be the date of receipt of the labor provided during the pertinent business year in which the amount of income is subject to taxation. Thus, the liability to pay global income tax on the person to whom the income accrued shall be established at the time when the taxable period to which the income accrued expires as prescribed in Article 21 (1) 1 of the Framework Act on National Taxes expires (see Supreme Court

Although the court below is somewhat inappropriate in its reasoning, even if the notice of change in the amount of income was not served on the non-party 1 chemical industry company (hereinafter "non-party 1 company"), so long as the notice of change in the amount of income is legitimately served on the plaintiff, who is the representative director of the non-party 1 company, the amount omitted in the sales of this case, etc. as the representative director, the court below's decision that the detailed disposition on global income of this case against the plaintiff is justified is justified, and there is no violation of law

3. On the third ground for appeal

According to the reasoning of the judgment below, since a person who is registered as the representative director on the corporate register can be presumed to be operating the company, the representative director on the corporate register must prove the fact that he actually failed to operate the company, and then, the court below rejected the evidence that the plaintiff was merely a nominal representative director on the grounds that he did not participate in the management of the non-party company, and recognized the facts based on the evidence adopted by the court below, and judged that the plaintiff was presumed to have been actually operating the non-party company with the non-party who is the husband at least. In light of the records and related legal principles, the court below's fact-finding and decision are just, and there is no violation of the rules of evidence

4. On the fourth ground for appeal

The Plaintiff’s assertion that the amount of the instant award should be divided into 1/2 each of the Plaintiff and the Nonparty on the premise that the Nonparty, who is the husband, actually operated the non-party company, should be based on the Plaintiff’s global income detailed and disposition with respect to the Plaintiff, is not a new fact alleged in the lower court’s ground of appeal. Therefore, it cannot be a legitimate ground of appeal.

5. 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.

Justices Shin Hyun-chul (Presiding Justice)