2017Du72935, revocation of disposition of imposing corporate tax, etc.

Maura Lbay Lbay Lbays Overshion

Law Firm Barun (Attorney LLC, Counsel for the defendant-appellant)

Ireland Korea Leisure Co., Ltd.

Attorney Ba-young et al., Counsel for the defendant-appellant

Samsung Head of Samsung Tax Office

Law Firm Adoz., Counsel for the plaintiff-appellant

Gangnam-gu et al., Counsel for the defendant-appellant

Supreme Court Decision 2015Du51415 Decided July 14, 2016

Seoul High Court Decision 2016Du56051 Decided October 20, 2017

June 25, 2020

The appeal shall be dismissed.

The cost of appeal shall be borne by the defendant, including the part resulting from the participation.

The grounds of appeal are examined (to the extent of supplement of the grounds of appeal in case of supplemental appellate briefs not timely filed).

1. Judgment on the grounds of appeal Nos. 1 and 2

(a)Article 7(1) of the Convention between the Republic of Korea and the Republic of the Philippines for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income shall only be taxed in that other Contracting State if the enterprise’s profits are not engaged in a business in the other Contracting State through a permanent establishment located in the other Contracting State. In the event that the enterprise runs the business as described above, only those parts of its profits which may accrue to the same permanent establishment may be taxed in that other Contracting State."

Examining the language, content, and purport of the above provisions in light of the aforementioned legal principles, where an Philippines corporation operates a business through a fixed place of business in the Republic of Korea, only profits earned by a separate company independent of the Switzerland corporation that runs business independently from the Switzerland corporation can be reverted to this permanent establishment and taxed in the Republic of Korea, and the tax office bears the burden of proof with respect to profits accrued to the permanent establishment.

B. The lower court acknowledged the following facts by comprehensively taking account of the Plaintiff’s essential evidence to be admitted. (1) On June 30, 207, the Plaintiff, a corporation of the Republic of Korea, was engaged in the solicitation of customers (referred to as Junk; hereinafter referred to as “responding”), and entered into a contract with the Plaintiff’s Intervenor to recruit customers and to receive 70% of the lost money from the Plaintiff’s Intervenor (hereinafter referred to as “the instant contract”). From July 2007, the lower court: (a) received the Plaintiff’s sales of the instant office chip to the Plaintiff’s sales of the instant office chip, including the Plaintiff’s sales of the instant office chip; and (b) received the Plaintiff’s sales of the instant office chip and the Plaintiff’s sales of the instant office chip to the Plaintiff’s sales of the instant office chip to the Plaintiff’s sales of the instant office chip; and (c) concluded that the Plaintiff’s sales of the instant office chip to the Plaintiff’s sales service.

D. Examining the record in accordance with the aforementioned provisions and legal principles, the lower court’s aforementioned determination is justifiable. In so doing, it did not err by misapprehending the legal doctrine regarding the calculation of income amount or estimated taxation attributed to a fixed place of business during the period, nor by misapprehending the legal doctrine regarding psychological failure, etc.

2. Judgment on the ground of appeal No. 4

A. On the grounds indicated in its reasoning, the lower court determined that the instant disposition based on a different premise was unlawful, since the roller was a money that the Plaintiff is obliged to pay to the static diskettes, it is difficult to deem that the Plaintiff did not pay roller to the static diskettes. Of the instant recruitment fees, the portion corresponding to rollering cannot be included in the corporate tax and the value-added tax assessment standard, and thus, the instant disposition based on a different premise was unlawful.

B. As to the judgment of the court below, the ground of appeal disputing the payment of rollerer system is merely the purport of disputing the selection of evidence and fact-finding, which are the exclusive authority of the court below, which is a fact-finding court, and cannot be deemed a legitimate ground of appeal. Furthermore, even if examining the reasoning of the court below in light of the records, the judgment of the court below is justifiable. In so doing, the court below did not err by exceeding the limit of free evaluation of evidence against logical and empirical rules

3. Judgment on the ground of appeal No. 3

A. If it is impossible to calculate the legitimate amount of tax to be imposed lawfully because the parties concerned failed to submit arguments and materials that support the objective tax base and tax amount until the closing of the arguments in fact-finding proceedings, the entire disposition should be revoked. In such a case, the court does not ex officio demand ex officio to identify the amount of tax to be imposed on the tax obligor and calculate the reasonable amount of tax to be imposed (see Supreme Court Decision 2016Du36116, Jul. 27, 2016).

B. In the same purport of the lower judgment, it is justifiable to revoke the entire disposition of the instant case, inasmuch as there is no evidence to calculate the legitimate amount of tax in the instant case, in determining that the disposition of the instant case was unlawful. It did not err by misapprehending the legal principles as to the scope of revocation of the disposition of taxation, or

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party, including the part arising from the participation in the appeal. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Min You-sook

Justices Kim Jae-hyung

Justices Lee Dong-won

Jeju High Court Decision 205No10