A. Whether income accrued from the transfer of business rights is other income under the Income Tax Act (=transfer income)

B. In the case of the Corporate Tax Act, whether the income accrued from the transfer of business rights shall not be subject to special surtax, and whether the income classification of the above “A” should be viewed differently (negative)

A. In full view of the provisions of Articles 23(1)3 and 25(1)7 of the former Income Tax Act (amended by Act No. 4281 of Dec. 31, 1990), and Article 44-2(1)3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 4281 of Dec. 31, 1990), the business rights under Article 23(1)3 of the same Act and Article 44-2(1)3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 4281 of Dec. 31, 1990), i.e., the business rights under Article 23(1)3 of the same Act and Article 44-2(1)3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 13281 of Dec. 31, 190) are transfer income subject to transfer of business rights, and only money and valuables

B. Although the Corporate Tax Act does not stipulate the concept of income by dividing it into the source of income, the Income Tax Act does not stipulate the concept of income by dividing the income of an individual into nine income according to the type of income source in Articles 17 through 25, and calculates the income by different methods, and when classifying income by citing the provisions of the Income Tax Act in the Corporate Tax Act, it should be determined according to the concept of the Income Tax Act. Therefore, the special surtax under the Corporate Tax Act is imposed only on the income from the transfer of the corporation's real estate or right to real estate, and even if the income from the transfer of business right is not subject to the special surtax, it cannot be interpreted that the concept of other income under the Corporate Tax Act should be different from the concept of capital gains and other income

A. (B) Article 23(1)3 and Article 25(1)7 of the former Income Tax Act (amended by Act No. 4281 of Dec. 31, 1990). Article 44-2(1)3(b) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 4281 of Dec. 31, 1990)

(b) Supreme Court Decision 89Nu4512 delivered on December 8, 1989 (Gong1990, 273). Supreme Court Decision 91Nu407 delivered on May 24, 1991 (Gong1991, 1795)

Attorney Kim Jong-soo, Counsel for the defendant-appellant

The Director of the Pacific District Office

Seoul High Court Decision 90Gu14951 delivered on March 14, 1991

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

According to Article 39(1) of the Corporate Tax Act (amended by Act No. 4020 of Dec. 26, 1988), when a person who pays to a domestic corporation the amount of other income as set forth in Article 142(1)5 of the Income Tax Act pays the amount, he shall collect the corporate tax calculated by applying the prescribed tax rate to the amount paid and pay it to the Government by the end of the month following the month in which the collection is made. In addition, according to Article 63(1)2 of the Income Tax Act, when a person who pays a "income as set forth in Article 142(1)1 through 6 of the Income Tax Act" pays the amount, he shall submit a payment report to the Government by the end of the month following the month in which the payment is made. Article 142(1) of the Income Tax Act provides that a person who pays the following income or revenue to a resident or a nonresident shall withhold the income tax to the resident or a nonresident pursuant to the provisions of this Section, and accordingly, a person who pays other tax payment report shall be withheld through the Government:

However, Article 25 (1) 7 of the Income Tax Act (amended by Act No. 4281 of Dec. 31, 1990) provides that "money and valuables received as consideration for transfer or lease of or lending to a business right" as one of other income, while Article 23 (1) 3 of the same Act (amended by Act No. 4281 of Dec. 31, 1990) provides that "if a business right is imposed as transfer income pursuant to Article 23 (1) 3 of the Income Tax Act, this shall not apply to the case where a business right is imposed as transfer income pursuant to Article 23 (1) 3 of the same Act, while Article 23 (1) 3 of the same Act (amended by Act No. 4281 of Dec. 31, 1990) provides that "other assets prescribed by the Presidential Decree ("other assets") other than transfer and transfer of a business right are transferred separately from transfer of a business right." Thus, in full view of each of the above provisions, where a business right is transferred separately by transferring a business right.

In the same purport, the lower court is justifiable to have determined that the Plaintiff did not have the duty to withhold taxes under Article 39(1) of the Corporate Tax Act or the duty to submit a written payment statement under Article 63(1) of the same Act, on the grounds that the Plaintiff’s separate assessment of cleaning service right is not corresponding to other income under Article 142(1)5 of the Income Tax Act, since it did not fall under other income under Article 142(1)5 of the Income Tax Act.

In addition, the Corporate Tax Act provides that the total amount of income which falls or comes under each business year less the total amount of losses which falls or comes to fall under the business year shall be included in the income under the Corporate Tax Act, and does not include the concept of income by dividing it into the source of income. However, the Income Tax Act separates the income of an individual into nine income according to the type of income under Articles 17 through 25, and calculates the amount of income by different methods. Thus, when a classification of income is made by admitting the provisions of the Income Tax Act in the Corporate Tax Act, it shall be confirmed according to its own concept (see Supreme Court Decisions 89Nu4512 delivered on December 8, 1989 and 91Nu407 delivered on May 24, 191). Accordingly, even if the special surtax under the Corporate Tax Act does not impose special surtax on the income of a corporation due to the transfer of a corporation's real estate or real estate right, it shall not be interpreted differently from the concept of transfer income under the Corporate Tax Act or other income under the Income Tax Act.

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 Lee Jae-sung (Presiding Justice)