The meaning of domestic source income of a foreign corporation

The domestic source income of a foreign corporation means income listed in Article 55(1) of the Corporate Tax Act that is the source of income in Korea, and so long as the source of income is in Korea, the realization of the income has been conducted at a domestic branch or has not been done through the head office or branch of a foreign country immediately without going through a domestic branch.

Articles 1(3) and 55(1) of the Corporate Tax Act

Supreme Court Decision 88Nu978 delivered on August 8, 1989 (Gong1989, 1376) 90Nu6088 delivered on July 23, 1991 (Gong1991, 2260)

Attorney Lee Jae-chul et al., Counsel for the plaintiff-appellant-appellee and one other, Counsel for the plaintiff-appellant-appellee)

The director of the tax office

Seoul High Court Decision 90Gu2118 delivered on March 21, 1991

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

On the first ground for appeal

Examining the reasoning of the judgment below in light of the records, we affirm the reasoning of the judgment below that the notice of tax payment of the corporate tax, etc. of this case was delivered to the plaintiff through the Korean branch of the non-party Spanion Korea (hereinafter referred to as Korea). The court below did not err by failing to exhaust all necessary deliberations or by violating the rules of evidence.

In addition, if the court below acknowledged that the defendant issued a tax notice to the plaintiff and delivered it to the plaintiff and dissatisfied with this taxation disposition, it can be deemed that there was a tax payment notice under Article 9 of the National Tax Collection Act, and the judgment below is just, and on the ground that the content of the evidence No. 1 was the same as that of the lawsuit, it cannot be said that the plaintiff did not have a legitimate tax payment notice of the tax of this case only under the factual basis of the case.

Therefore, there is no reason to discuss.

On the second ground for appeal

In light of the records, we affirm the fact-finding of the court below as to the merits. According to the facts established by the court below, although the seller of the second-term product and service supply contract for the second-term product and service contract concluded with the non-party Posting Co., Ltd. (hereinafter "Posting-in"), the plaintiff entered into the first-term contract with the non-party Posting-in Co., Ltd., but the plaintiff supplied foreign equipment and materials required for the second-term contract construction, thereby receiving the payment of the price of about 16 times the domestic related income from the Posting-out, and the supply price to the plaintiff "Ising-out Korea" is identical to the first-term construction contract that the plaintiff was the seller, and the employees of this non-Korean Cos., Ltd. did not participate in the contract, and the plaintiff's business director signed at the time of the first-term contract with the plaintiff 2, who signed the contract with the plaintiff 1's business director, and the plaintiff 2, who signed the contract with the plaintiff 1000s co.

There is no reason for the issue.

On the third ground for appeal

In light of the records, the court below's decision that sold the plant itself as a system product as a unit and actually entered into a construction sales contract for the plant unit, and the income related thereto is a domestic source income, and it is just to induce the court below's explanation that it is a domestic source income, and there is no error of law by incomplete deliberation or by misapprehending the legal principles on the source determination of taxable income or by violating the rules of evidence.

The domestic source income of a foreign corporation refers to a domestic source of income as listed in Article 55(1) of the Corporate Tax Act, and as long as the place of such income is in Korea, the realizing of such income was conducted at a domestic branch, or is not immediately conducted through a foreign head office or branch without going through a domestic branch (see Supreme Court Decision 88Nu978, Aug. 8, 1989). There is no reason to discuss.

On the fourth ground

In this case, where the plaintiff did not report or submit related data on the classification of domestic source income among the profits from the sale of overseas machinery and equipment and the provision of overseas training services, the part of domestic related income among the foreign income is eventually a countermeasure part in accordance with the ratio occupied by purely domestically in the total amount of the plaintiff's foreign income and the domestic income, and the defendant's calculation of the attributable rate to the domestic place of business by one formula, and thus cannot be deemed illegal. The above is a problem in the method of calculating the income, and therefore, it must be returned to the general estimation method as above. There is no reason to discuss.

Concerning the fifth point

In light of the facts acknowledged by the court below, we affirm the judgment below's explanation that the plaintiff should be deemed to have a fixed business at the construction site of the steel mill for more than six months in order to perform the terms of the contract in accordance with the plant construction contract for the construction of the steel mill 1 and 2. In so doing, the court below did not err by misapprehending the legal principles of the theory of lawsuit, thereby failing to exhaust all necessary deliberations.

There is no reason for this issue.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Jae-chul (Presiding Justice)