If the source tax omitted in collection is imposed on a withholding agent, the imposition of global income tax on the income earner (affirmative)

The Plaintiff’s income from January 1, 1972 to December 31, 1974 is the income subject to global income tax, calculated by adding it to the global income amount as Class A dividend income and Class A earned income. The Plaintiff’s income from January 1, 1975 to December 31, 1976 is the dividend income and Class A earned income, which should be added to the global income tax base. The Plaintiff’s income from which each of the above income is to be collected as income for which a withholding tax is omitted, may be imposed as global income tax (excluding short, additional tax for withholding tax) for the Plaintiff, a income earner, as global income tax (excluding additional tax for withholding tax).

Articles 142 and 107 of the Income Tax Act

Supreme Court Decision 79Nu347 delivered on September 22, 1981, 80Nu288 delivered on October 13, 1981

Plaintiff (Attorney Park Young-chul, Counsel for the plaintiff-appellant)

Sejong District Court Decision 200Hun-Ga40 delivered on July 1, 200

Seoul High Court Decision 78Gu455 delivered on November 14, 1979

The judgment below is reversed and the case is remanded to Seoul High Court.

The defendant's attorney's grounds of appeal are examined.

According to the reasoning of the judgment of the court below, the court below found that the non-party company's decision recognized the fact that the non-party company paid dividends to the plaintiff who is a shareholder and paid earned income (including bonuses) among 1.1 to 12.31.1.1977, the non-party company was found to have been subject to ex post facto investigation, and imposed the source tax on the above non-party company, which is the withholding agent, on the ground that the non-party company did not pay the above income, but imposed the source tax on the non-party company's above income from 1972 to 1976 as global income tax and defense tax (including additional tax) for the period from 1978 to 1978. The court below held that the non-party company's withholding agent's income tax was illegal for the above non-party company's withholding agent's income tax imposed on the non-party company's dividend income and withholding agent's income tax imposed on the non-party 1 and withholding agent's income tax from 16.

According to the Income Tax Act before the amendment of December 24, 1974, which entered into force from January 1, 1972 to December 31, 1974, the Plaintiff’s income as Class A dividend income and Class A earned income under Article 43 of the same Act shall be withheld. However, according to the provisions of Article 59 of the same Act and Article 123 of the Enforcement Decree of the same Act, the Plaintiff’s global income tax shall be assessed as Class 1 global income tax by deducting the above global income tax amount from Class 1 global income tax base under Article 62, Article 65 and Article 66 of the same Act, and the Plaintiff’s global income tax shall be assessed as Class 1 global income tax amount under Article 67 of the same Act, if there is no such global income tax return or the reported amount falls short of the above global income tax base under Article 67 of the same Act, the Plaintiff’s global income tax shall be assessed as Class 1 global income tax amount under Article 7 of the same Act.

If so, the court below did not decide whether the above income from January 1, 1972 to December 31, 1976 was calculated by adding it to the global income tax base or global income tax base under the Income Tax Act as above (However, if a withholding agent has already withheld, it shall be imposed by deducting it from the global income tax even if the source income tax collected was not paid to the government, and the global income tax shall not be imposed by adding the penalty tax in bad faith on the withholding agent of the income tax, and if it is global income tax, it shall not be imposed by adding the penalty tax in bad faith on the withholding agent of the income tax). As above, the court below determined that the defendant's imposition of the global income tax against the plaintiff and the person who has no tax liability for the defense tax accordingly against the plaintiff was illegal, and therefore, the judgment of the court below is justified, and it shall not be exempted from the reversal.

Therefore, the judgment of the court below is reversed, and the case is remanded to the Seoul High Court. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jung-tae (Presiding Justice)