Cambodia (Attorney Choi Young-hoon et al., Counsel for the plaintiff-appellant)

Ulsan City Mayor (Attorney Lee Sung-soo, Counsel for the defendant-appellant)

February 16, 1982

The litigation of this case shall be dismissed.

Litigation costs shall be borne by the plaintiff.

The disposition of collection of KRW 1,067,349,375 against the plaintiff as of August 19, 1980 by the defendant shall be revoked.

Litigation costs shall be borne by the defendant.

1. Details of taxation; and

Comprehensively taking account of the whole purport of arguments as stated in Gap evidence 1 and 2-1 and 2-1 and 5-2, the non-party petroleum holding company (hereinafter referred to as "non-party holding company") purchased 23,751,771 shares of the Korea Petroleum Corporation from the plaintiff company as the U.S. corporation in 93,00,000 ($ 93,000) on August 13, 1980, the income from the transfer of the plaintiff company's shares shall be taxable income for corporate tax pursuant to Article 55 subparagraph 10 of the Enforcement Decree thereof Article 122 (4) 5 of the Corporate Tax Act (Article 56 (1) 10 of the same Act; Article 56 (3) of the same Act; Article 53 (2) 】 Article 54 (2) 】 Article 57 (1) 50 of the same Act; Article 50-136 of the same Act; Article 57 (2) / 5019 of the Corporate Tax Act; Article 507 (305-150 of the same Act).

2. Assertion and determination

The plaintiff company's act of withholding corporate tax from the non-party holding company first provides that "the residents of a Contracting State of the above Treaty shall be exempted from taxation by the other Contracting State on the income accruing from the sale, exchange, or other disposition of capital assets except in special cases. Thus, although the income accruing from the transfer of stocks of the plaintiff company is excluded from taxation in Korea, withholding income tax from the plaintiff company is illegal. Second, even if the income is subject to taxation, it is illegal to levy corporate tax on the income that the corporation acquired from the transfer of stocks, it refers to the amount of the acquisition tax, i.e., the amount of the capital contribution of the stocks, and the amount of the stocks distributed from the capital transfer of the revaluation reserve fund of the above stocks, which is the tax base of corporate tax, because the non-party holding company's act of collecting corporate tax is not subject to taxation in Korea, and it is not subject to special collection under the Act on the Protection of Tax Evasion and the Promotion of International Trade and Investment in the Republic of Korea (Article 693). Furthermore, the defendant's act of collecting corporate tax from the above tax office's unlawful collection of corporate tax as a special collection.

Therefore, according to Articles 21(2)1 and 22(2)3 of the Framework Act on National Taxes, the Defendant’s act of paying corporate tax and other tax-related Acts does not constitute an unlawful act of taxation, and thus, even if there were no tax-related Acts, the tax amount automatically determined according to the statutory tax rate, and if corporate tax is withheld pursuant to Article 179(2)3 of the Corporate Tax Act, the pertinent withholding agent shall withhold corporate tax, etc. to be withheld at the same time, and in this case, the pertinent withholding agent shall pay the tax amount calculated by applying the tax rate under Article 176(2) of the Local Tax Act to the person liable for special collection if the person liable for special collection and the person liable for special collection do not have an obligation to pay corporate tax by the due date if the person liable for special collection were not to pay corporate tax and the other person liable for special collection, which is not a tax-related special collection under the premise that the person liable for special collection and the other person liable for special collection are not obligated to pay corporate tax by the due date. Accordingly, the provisions on taxation and tax-related grounds for special collection cannot be deemed to exist.

3. Conclusion

Thus, the plaintiff's objection suit is not an administrative disposition but an administrative disposition as the object of the complaint, so it shall be dismissed, and the costs of the lawsuit shall be assessed against the plaintiff who has lost.

March 9, 1982

Judges Kim Jong-ju (Presiding Judge)