Early High Court Decision 2013west 4865 (O2, 2014)

No error in imposing additional tax on interest income on which no application for non-taxation or exemption has been filed;

If an application for non-taxation and exemption is not filed with respect to interest income not taxable pursuant to the Corporate Tax Act, a disposition imposing additional tax on non-submission of the payment record is legitimate, since the law was amended to require the submission of the payment record.

The contents of the decision shall be the same as attached.

Article 76 of the Corporate Tax Act

Article 162 of the Enforcement Decree of the Corporate Tax Act

Seoul Administrative Court

Part III

2014Guhap58075 Revocation of Disposition of Imposing Corporate Tax

AAAAA

BB Director of the Tax Office

August 13, 2014

September 26, 2014

1. All of the plaintiff's claims are dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

On August 8, 2013, the Defendant imposed corporate tax on the Plaintiff for the business year 2010, ○○○ and additional corporate tax on the business year 2011, respectively, shall be revoked.

1. Details of the disposition;

가. 원고는 AAAAAA법에 의하여 전원개발을 촉진하고 전기사업의 합리적인 운영을 기함으로써 전력수급의 안정을 도모할 목적으로 설립된 내국법인으로 국외에서 외화로 표시된 채권을 발행하고 채권소지자인 외국법인에 대하여 2010년 7월 〜 12월 에는 ○○○원, 2011년 1월 〜 12월에는 ○○○원의 이자(이하 통틀어 '이 사건 지급이자'라 한다)를 각 지급하였다.

B. The Plaintiff did not submit a payment record on the instant interest payment pursuant to Article 120-2 of the former Corporate Tax Act (amended by Act No. 11128, Dec. 31, 201; hereinafter “Enforcement Decree”), and Article 162-2(1)1 of the Enforcement Decree, deeming that the instant interest payment constitutes a domestic source income on which corporate tax was not imposed or exempted under the Restriction of Special Taxation Act.

C. However, on August 8, 2013 pursuant to Article 76(7) of the Corporate Tax Act, the Defendant: (a) deemed that the instant interest payment was not exempt from submitting an application for non-taxation and exemption pursuant to the Restriction of Special Taxation Act; and (b) accordingly, determined and notified the Plaintiff on August 8, 2013, the amount of additional tax (corporate tax) accrued for the business year 2010 and the amount of ○○○○ for the business year reverted to 2011 (hereinafter “the instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, 3, Eul evidence 1 (including each number), the purport of the whole pleadings

2. The plaintiff's assertion

The instant disposition is unlawful as follows, and all of the dispositions should be revoked.

A. Article 162-2(1)1 of the Enforcement Decree provides that “Where an application for non-taxation and tax exemption is not filed,” a statement of payment should be submitted as an exception to “where an application for non-taxation and tax exemption is not submitted.” This is limited to cases where an application for non-taxation and tax exemption is not performed despite the obligation to submit an application under the Corporate Tax Act or the Restriction of Special Taxation Act. However, the interest payment of this case is naturally exempted from corporate tax pursuant to Article 21 of the Restriction of Special Taxation Act without the need to submit an application for non-taxation and tax exemption. Accordingly, it cannot be deemed as subject to the submission of a statement of payment pursuant to the original provision of Article 162-2(1)1 of the Enforcement Decree of the same Decree.

B. Cruelly, even if Article 162-2(1)1 of the Enforcement Decree orders the submission of a statement of payment for the purpose of securing tax information in all cases where the application for non-taxation and tax exemption is not submitted as a result, there is no way to derive such legislative intent through the interpretation of the statutes. Therefore, it is unlawful to impose penalty tax even for such cases, since there is a justifiable reason that the Plaintiff cannot be found to have caused the failure to submit a statement of payment on the interest paid in this case.

3. Relevant statutes;

Attached Form is as shown in the attached Form.

4. Determination

(a) Scope of objects to submit a statement of payment prescribed in Article 120-2 (1) 1 of the Enforcement Decree;

1) Provisions regarding the duty to submit a statement of payment

Article 120-2 (1) of the Corporate Tax Act provides that any person who pays domestic source income to a foreign corporation shall, in principle, submit a statement of payment to the head of the tax office having jurisdiction over the place of tax payment. However, the proviso provides that any person who pays income prescribed by Presidential Decree, such as income confirmed as eligible for non-taxation or exemption, shall not submit a statement of payment. In this regard, Article 162-2 (1) 1 of the Enforcement Decree of the Corporate Tax Act and the Restriction of Special Taxation Act provides that no person is obligated to submit a statement of payment for domestic source income that is exempt from corporate tax or exempted from corporate tax under the Corporate Tax Act and the Restriction of Special Taxation Act (hereinafter referred to as "special provision").

2) Interpretation of exclusion provisions

In light of the principle of no taxation without law, or the requirements for tax exemption or tax exemption, the interpretation of tax laws shall be interpreted in accordance with the text of the law, barring special circumstances, and it shall not be allowed to expand or analogically interpret without reasonable grounds (see, e.g., Supreme Court Decision 2012Du20540, Feb. 13, 2014).

As seen earlier, the special law limits the scope of exemption by stipulating that the payment statement should be submitted in principle in the case of "no person who is obligated to submit an application for non-taxation and exemption" with respect to domestic source income exempt from corporate tax, even though the obligation to submit a payment statement is exempted from the obligation to submit a payment statement. In this regard, the plaintiff argues that the provision can only be applied to cases where a person who is obligated to submit an application for non-taxation and exemption fails to do so, but only those cases where "no person is submitted in violation of the obligation to submit an application for non-taxation and exemption" are applicable to all cases where "no person submits an application for non-taxation and exemption". Accordingly, it is reasonable to say that the subject of submission of a payment statement is included not only in cases where the obligation to submit an application for non-taxation and exemption is not fulfilled, but also in cases where it is not necessary to submit an application for non-taxation and exemption from corporate tax from the beginning or in cases where it is not subject to the submission of an application for non-taxation and exemption from income under the Corporate Tax Act and the Restriction Act.

In addition, a statement of payment under the Corporate Tax Act is not a premise for the obligation to submit an application for non-taxation and exemption under its concept by stating the matters concerning a person who pays income and a person who receives it, and the type, date of payment, amount of payment, etc. of the income that is paid, and thus reporting basic information on taxation. The Enforcement Decree newly established a provision that limits the scope of application of special provisions through the amendment on February 18, 2010 (Presidential Decree No. 22035). The purport of the amendment also was difficult to confirm the tax information of a person who received income as a matter of course in case of non-taxation or tax-exempt income under the domestic tax law even if a separate application is not submitted. Furthermore, the Enforcement Decree specifically listed the "where an application for non-taxation or exemption is not submitted" as of February 21, 2014 (Presidential Decree No. 25194). One of them, if the Plaintiff did not clearly submit an application for non-taxation and exemption pursuant to Article 21 (1) of the Restriction of Special Taxation Act, the same as the interest paid.

3) In the case of interest paid in this case

The interest paid in this case is a domestic source income under Article 93 subparag. 1 (a) of the Corporate Tax Act, which is a foreign currency bond issued by a domestic corporation that pays to a foreign corporation, and is naturally exempted from corporate tax even without submitting an application for non-taxation and exemption pursuant to Article 21(1) of the Restriction of Special Taxation Act. Therefore, the interest paid in this case constitutes a domestic source income exempt from corporate tax, but at the same time, it does not submit an application for non-taxation and exemption, and constitutes an income that requires the submission of a statement of payment to the head of the tax office having jurisdiction over the place of tax payment in accordance with the principle under Article 120(1) of the Corporate Tax Act, subject to the application of the exclusion provision. Nevertheless, the

(b) the existence of justifiable reasons for an exemption from an additional duty;

Under the tax law, penalty taxes are administrative sanctions imposed in accordance with the law in order to facilitate the exercise of the right to impose taxes and the realization of tax claims in cases where a taxpayer violates a return and tax liability prescribed by the law without justifiable grounds, and the taxpayer’s intention and negligence shall not be considered, and in cases where there are circumstances where a taxpayer can be justified because he/she cannot be deemed as not having known his/her duty, penalty taxes may not be imposed. However, the land or mistake of the law does not constitute justifiable grounds (see, e.g., Supreme Court Decision 2013Du1829, May 23, 2013).

In light of the health stand, the structure and language of the relevant laws and regulations, etc., the exclusion provisions also stipulate income on which no corporate tax is levied pursuant to the domestic tax law without any need to submit an application for non-taxation and exemption. However, the determination that the Plaintiff’s submission of the payment record pursuant to the exclusion provisions is limited to the case where the Plaintiff failed to perform the duty despite the duty to submit an application for non-taxation and exemption is nothing more than that of the remainder of the law interpreted arbitrarily. Therefore, it is difficult to view that the Plaintiff’s failure to submit the payment record on the interest payment of this case is justifiable and there is no evidence to acknowledge it differently. Accordingly, the Plaintiff’s assertion contrary thereto is without merit.

C. Sub-decision

The disposition of this case, which was made on the above premise, is just, and there is no error of law as alleged by the plaintiff.

5. Conclusion

All of the plaintiff's claims are dismissed, and the costs of lawsuit shall be borne by the plaintiff who has lost, and it is so decided as per Disposition.