Tax withholding in the case of payment of interest on bonds to an unidentified creditor;

According to Article 16 subparag. 11 of the former Corporate Tax Act (amended by Act No. 3270 of Dec. 13, 1980), Article 94 subparag. 5 of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 9961 of Jul. 11, 1980), and Article 21 subparag. 1(c) and Article 142 subparag. 4 of the former Income Tax Act (amended by Act No. 3271 of Dec. 13, 1980), in cases where bonds are paid to creditors whose existence is unclear, a corporation shall not withhold and pay the income tax on the above bonds, but shall withhold and pay the Class A employment income tax on the bonds as bonus for the representative. In such cases, a corporation shall not be obligated to withhold or pay the income tax on the bonds company separate from the obligation to withhold Class A employment income tax.

Article 142(1)1 and 4, and Article 21(1)1(c) of the former Income Tax Act (amended by Act No. 3270 of Dec. 13, 1980), Article 16 subparag. 11 of the former Corporate Tax Act (amended by Act No. 3271 of Dec. 13, 1980), Article 94(2)5 of the Enforcement Decree of the Corporate Tax Act (amended by Act No. 9961 of Jul. 11, 1980)

Defendant 1 and one other

Prosecutor

Eastern Law Firm, Attorneys Kim Khyeong, Bag-Jon, the enteng-Jak, and leaps

Seoul Criminal Court Decision 83No5655 delivered on February 9, 1984

The appeal is dismissed.

The prosecutor's grounds of appeal are examined.

According to Article 142 (1) 1 of the former Income Tax Act (amended by Act No. 3271 of Dec. 13, 1980), the Defendants’ payment of interest income shall withhold income tax and pay it. On the other hand, Article 16 subparagraph 11 of the former Corporate Tax Act (amended by Act No. 3270 of Dec. 13, 1980) and Article 94 (2) 5 of the Enforcement Decree of the same Act (amended by Act No. 9961 of Jul. 11, 1980) stipulate that interest income shall not be included in deductible expenses, and that the creditors who paid the income tax shall not be included in deductible expenses, and that Article 21 (1) 1 (c) of the former Income Tax Act (amended by Act No. 3271 of Dec. 13, 1980) provides that the Defendants’ payment of withholding income tax shall not be included in deductible expenses, and that the corporation shall withhold and pay it to the creditors who paid it.

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Jong-sik (Presiding Justice)