(a) Method of determining the concept of income when the Corporate Tax Act cites the provisions of the Income Tax Act to divide income;

(b) Classification of income under the Income Tax Act in case where the interest on bonds or securities issued by a domestic corporation or the interest or discount amount on deposits in the Republic of Korea falls under the income accruing from the financial business of a domestic corporation carrying on the financial business (=

(c) Whether the duty to withhold corporate tax under Article 39(1) of the Corporate Tax Act and the duty to submit written evidence of payment under Article 63(1) at the time of paying interest on the certificate of deposit issued to a financial institution which is a financial business entity

D. Whether the proviso of Article 100-4(1)3 of the Enforcement Decree of the Corporate Tax Act is violated (affirmative), and whether the delegation provision of Article 39(6) of the Corporate Tax Act can be interpreted as delegation to include the income subject to withholding as income subject to withholding, even if it is not listed in Article 39(1) of the Corporate Tax Act (negative)

A. While the Corporate Tax Act does not stipulate the concept of a corporation's income by type, while the income of an individual is divided into nine types according to the cause of occurrence of the income or the degree of the ability to pay taxes under Articles 17 through 25 of the Income Tax Act, and provides that the calculation of each income shall be calculated by different methods depending on each income. Thus, if income is divided by citing the provisions of the Income Tax Act as necessary, the concept of income shall be determined in accordance with the provisions of the Income Tax Act.

B. In light of the provisions of Article 17(1)2 and 3 of the Income Tax Act, Article 20(1)8 and (3) of the same Act, subparagraph 1 of Article 36 and Article 39 of the Enforcement Decree of the same Act, even if the interest or discount amount on bonds or securities issued by a domestic corporation or the interest or discount amount on deposits received in the Republic of Korea, if it falls under income arising from the financial business of a domestic corporation operating a financial business, it shall be deemed that it falls under “business income” other than “interest income” under

C. Since interest on the certificate of deposit paid to a financial institution which is a domestic corporation carrying on financial business does not amount to “interest income” as set forth in Article 142(1)1 of the Income Tax Act, it is not subject to the obligation to withhold corporate tax on such income pursuant to Article 39(1) of the Corporate Tax Act or the obligation to submit a written statement of payment pursuant to Article 63(1)

D. According to the principle of no taxation without law, matters concerning the scope of income of a domestic corporation subject to withholding of corporate tax should also be prescribed by law. Thus, Article 39(1) of the Corporate Tax Act should be interpreted as restrictive list of income subject to withholding. As seen in the above Article 39(2) of the Corporate Tax Act, insofar as interest or discount income of a domestic corporation operating a financial business does not constitute interest income under the Income Tax Act, all of the revenue amount of the financial and insurance business should not be deemed as falling under the interest income under the provisions of Article 100-4(1)3 of the Enforcement Decree of the same Act, although the proviso of Article 100-4(1)3 of the same Act does not include the interest and discount amount of a certificate issued by a financial institution among the interest income amount of the financial and insurance business, which excludes the interest and discount amount of a certificate that can be transferred to another person from the interest income amount under Article 39(1) of the same Act, it cannot be interpreted as a violation of the parent law that only deducts corporate tax under the income tax under the Income Tax Act.

(a)(c)Article 17(1)2 and 3, Article 20(1)8(a) of the Income Tax Act; Article 9(1)1 and Article 39(1)3 of the Enforcement Decree of the Income Tax Act; Article 39(1)1 of the Corporate Tax Act; Article 142(1)1 of the Income Tax Act; Article 63(1)4 of the Corporate Tax Act; Article 38 and Article 59 of the Constitution; Article 39(6) of the Corporate Tax Act; Article 100-4(1)3 of the Enforcement Decree of the Corporate Tax Act;

A.B. (c) Supreme Court Decision 91Nu407 delivered on May 24, 1991 (Gong1991,1795). Supreme Court Decision 89Nu4512 delivered on December 8, 1989 (Gong1990,273). Supreme Court Decision 91Nu3154 delivered on December 10, 1991 (Gong1992,540). Supreme Court Decision 90Nu9773 Delivered on June 14, 1991 (Gong1991,1954). (b) Supreme Court Decision 85Nu446 delivered on March 10, 1987 (Gong1987,653).

Han Han Bank Co., Ltd.

The Head of the Maternization Tax Office

Seoul High Court Decision 90Gu7151 delivered on December 7, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The defendant's grounds of appeal are examined.

1. Summary of the facts established by the lower judgment

The Plaintiff, a domestic corporation carrying on financial business, issued a certificate of fixed deposit to the non-party Credit Guarantee Fund, the Export-Import Bank of Korea, the Daegu Investment Finance Corporation, the Chungcheong Bank, and the Chungcheong Bank, the Joint Stock Company (hereinafter referred to as the “Non-Party Financial Institutions”). The non-party financial institutions have acquired the certificate of fixed deposit directly from the Plaintiff and continued to hold it until the due date, and received interest from the Plaintiff after the due date.

The plaintiff did not withhold corporate tax pursuant to the provisions of Article 39 (1) of the Corporate Tax Act (amended by Act No. 4020 of Dec. 26, 1988, hereinafter referred to as the "Act") with respect to the interest of the Credit Guarantee Fund and the business year of 1987 and the business year of 1988 paid to the Export-Import Bank from among the non-party financial institutions, and the non-party financial institutions did not submit the payment record to the Government in accordance with the provisions of Article 63 (1) of the Act.

On June 30, 1989, the defendant applied the proviso of Article 38 (6), Article 41 (2), Article 39 (1) of the Act, and the proviso of Article 100-4 (1) 3 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12565 of Dec. 31, 1988, hereinafter referred to as the "Decree") to the plaintiff, with the provisions of the proviso of Article 38 (6), Article 41 (2), Article 39 (1) of the Act, and the proviso of Article 100-4 (1) 3 of the Enforcement Decree of the same Act, and issued the tax disposition of this case as the corporate tax for which the additional tax is not paid for each business year, and for which the additional tax is imposed and collected.

2. “법” 제39조 제1항 에 의하면 ＂ 소득세법 제142조 제1항 제1호 및 제5호 에게기한 이자소득금액 또는 기타 소득금액”을 내국법인에게 지급하는 자가 그금액을 지급하는 때에는 그 지급하는 금액에 소득세법 제144조 제1호 또는 제6호 에 규정하는 세율을 적용하여 계산한 금액에 상당하는 법인세를 징수하여정부에 납부하도록 규정되어 있고, '법' 제63조 제1항 제2호 에 의하면 “ 소득세법 제142조 제1항 제1호 내지 제6호 에 게기하는 소득금액“을 지급하는 자가 그 금액을 지급한 때에는 그 지급한 날이 속하는 달의 다음달 말일까지 대통령령이 정하는 바에 의하여 지급조서를 정부에 제출하도록 규정되어 있는데, 소득세법(1989.12.30. 법률 제4163호로 개정되기 전의 것, 이 뒤에도 같다) 제142조 제1항 은 국내에서 거주자나 비거주자에게 다음 각 호의 소득금액 또는 수입금액을 지급하는 자는 이절의 규정에 의하여 그 거주자나 비거주자에대한 소득세를 원천징수하여야 한다고 규정하면서 그 제1호에 “이자소득금액”을 들고 있으므로, 소득세법 소정의 “이자소득금액”을 지급하는 자가 그 금액을 지급하는 때에는 그에 대한 법인세를 원천징수하여 정부에 납부하고, 지급조서를 정부에 제출하여야 할 의무를 부담하게 되어 있음을 알 수 있다.

Article 9(1) of the Income Tax Act provides that "the amount obtained by deducting the total amount of losses which belong or comes to the business year from the total amount of profits which belongs or comes to belong to the business year" shall be the income of a domestic corporation for each business year (Article 9(1) of the Income Tax Act); while Article 17 through 25 of the Income Tax Act provides that an individual's income shall be classified into nine kinds of income (interest, dividends, real estate, labor, retirement, transfer, forest, and other income) according to the cause of the occurrence of the income or the upper priority of the tax-bearing capacity, and the calculation of each income amount shall also be made by any other method, so the concept of income shall be determined in accordance with the provisions of the Income Tax Act (see Article 8(1) of the Income Tax Act). Article 9(2) of the Income Tax Act provides that "the amount of interest income of the domestic corporation or the business income of the domestic corporation falling under subparagraph 3 of Article 8(3) of the Act shall be deemed as the interest income of the domestic corporation and the amount of deposit or insurance business (see Article 10(2) of the Korea Standard Tax Act).

In the same purport, the court below is just in holding that the interest on the certificate of deposit in this case paid by the plaintiff to the non-party financial institution, which is a domestic corporation operating financial business, does not fall under the "interest income amount" as set forth in Article 142 (1) 1 of the Income Tax Act, and therefore, the plaintiff does not have any obligation to withhold corporate tax on the income and to pay it to the government pursuant to Article 39 (1) of the Act, or to submit the payment record pursuant to Article 63 (1) of the Act "the Act". Thus, it is just in holding that the tax disposition in this case on the premise that the plaintiff has such obligation is illegal (see, e.g., Supreme Court Decision 91Nu407, May 24, 1991; 90Nu9773, Jun. 14, 191; 91Nu827, Jun. 25, 199).

3. Meanwhile, Article 39(6) of the Act provides that “The matters necessary for the withholding and payment of corporate tax under the provisions of paragraphs (1) through (5) shall be prescribed by the Presidential Decree,” and accordingly, Article 100-4(1) of the Decree provides that “The interest income amount provided for in Article 39(1) of the Act shall not include the income falling under any of the following subparagraphs” shall be included in the scope of income subject to withholding, and Article 39(3) of the Act provides that “The revenue amount of financial insurance business” shall be specified in subparagraph 3 of the same Article, but it excludes the interest and discount amount of bonds or securities (excluding commercial bills and certificates issued by financial institutions which can be transferred to others) provided for in Article 17(1) of the Income Tax Act.”

However, under the principle of no taxation without law that all citizens are liable to pay taxes under the conditions as prescribed by the law, taxation and collection procedures of taxes must be prescribed by the law enacted by the National Assembly. Since tax-related Acts and subordinate statutes should be strictly interpreted, extended interpretation or analogical application is not allowed. Matters concerning the scope of income of a domestic corporation subject to withholding taxes should also be prescribed by the law. Thus, Article 39 (1) of the Act should be deemed to provide that even the income subject to withholding taxes is limited, and the interest or discount amount of bonds or securities issued by a domestic corporation or securities issued by a domestic corporation is income generated from the financial business of a domestic corporation operating the financial business. Thus, if the income falls under business income other than interest income under the Income Tax Act, it shall be interpreted that the income does not fall under the income amount under Article 39 (1) of the Act, all of which revenue amount of a finance and insurance business shall not be deemed to fall under the income amount under Article 39 (1) of the Income Tax Act, and it shall not be deemed that Article 10-4 (1)3) of the Act does not include interest and discount amount of a prescribed in the Act.

The theory of lawsuit argues that the proviso of Article 100-4 (1) 3 of the "Decree" stipulates the scope of income subject to withholding in accordance with the delegation of Article 39 (6) of the "Act" and is valid. However, in light of the fact that Article 39 (6) of the "Act" expresses "collection of corporate tax under the provisions of paragraphs (1) through (5) of the "Act", it is reasonable to view that this delegation provision cannot be interpreted to extend the scope of delegation so that even income that is not the income subject to withholding listed in Article 39 (1) of the Act can be included in the "Act" and delegated so that it can be defined as income subject to withholding.

In addition, as pointed out in theory, among interest and discount amounts of bonds or securities and certificates of deposit under Article 17 (1) of the Income Tax Act, income tax is not imposed on gains from transfer (such as bonds) that an individual who held bonds, etc. gains by transferring them before the maturity date, i.e., during the interest calculation period, and income tax or corporate tax is withheld on the whole interest amount from the person who received the interest on the maturity date, and in cases where an individual owns the bonds, etc. and transfers the bonds, etc. to the financial and insurance businessmen whose interest income is not withheld at the maturity date, it is possible to avoid tax because income tax is not imposed on the interest corresponding to the period of interest held by the individual, so it is possible to avoid tax because the income tax can be imposed on the interest corresponding to the period of interest held by the individual. Thus, in order to prevent such unreasonable points, even if the above provisions are prescribed in the proviso of Article 100-4 (1) 3 of the "Ordinance," the above evasion of income tax can be deemed to be prohibited by the amendment of the Act.

4. Article 63(7) of the “Act” provides that “The Government may, if deemed necessary, request the submission of a written evidence from time to time.” However, despite the deadline for submitting a written evidence under paragraphs (1) and (5) of the same Article, where the tax authority deems it necessary, it is only a provision that recognizes the special exception that the submission of a written evidence may be requested at any time by the tax authority, and it cannot be deemed as the purport of the provision that the tax authority may request the submission of a written evidence even if the amount of income is paid other

5. Ultimately, we cannot accept the argument that the judgment of the court below which judged that the taxation of this case was unlawful is just, and therefore, it shall be reversed. Therefore, the defendant's appeal shall be dismissed and the costs of appeal shall be assessed against the losing party. It is so decided as per Disposition by the assent of all participating

Justices Kim Yong-ju (Presiding Justice) of the Supreme Court of Justice of the Republic of Korea (Presiding Justice) No. 10,000 No. 10,000