(a) The nature of a corporation’s obligation to withhold taxes in a case where the representative has already died when a notice of change of the amount of income was given as recognition of the representative of the corporation (negative);

(b) As to Class A earned income of which withholding tax is omitted, the imposition of global income tax on such income earner (affirmative)

(c) The meaning of income generated as a taxable object of income tax and the criteria for judgment thereof;

(d) In the case of the disposal of income as referred to in paragraph (a) above, which is deemed to have been paid at any time after the taxable year ends, a mature income at the end of the business year concerned, the case denying the establishment of the income tax liability on the grounds that it cannot be deemed to have been determined;

A. The amount of income disposed of as a result of the recognition of the representative’s income pursuant to the provisions of the Corporate Tax Act is deemed to have been paid by the relevant corporation on the date of receipt of the notice of change of income amount, which is not the actual payment to the representative, but the legal fiction is made by law. Therefore, in order to establish a withholding obligation of a corporation that received the above notice of change of income amount, it shall be deemed that the payment was made at the time of receipt of the above notice of change of income amount, which is the time of establishment of the obligation, i.e., the transaction partner, the representative must survive, and if

(b) If the income tax on Class A earned income to be withheld was omitted, the income earner may impose such income tax on him as global income tax.

C. In order to ensure that certain income subject to taxation of the Income Tax Act has been realized, even if it is unnecessary to realize the income, it shall be considerably mature and finalized in terms of the possibility of realizing the right to generate income. Therefore, it cannot be said that there has been income generated as a subject of taxation of the income tax, and in detail, it shall not be uniformly said that the right to generate income is mature and finalized, and it shall be determined by comprehensively taking into account the nature and content of each specific right and other de facto matters of law.

(d) The case holding that the establishment of the income tax liability for mature and non-determined income cannot be affirmed, on the grounds that in the case of the disposal of income in the above Paragraph (a) which is deemed as the payment of income pursuant to the Corporate Tax Act at any time after the end of the taxable year, it cannot be deemed that the amount equivalent to the income in the corresponding business year, which is the time when the income is attributed, is mature and confirmed as the representative, etc. who will be the person subject to the disposal of income in the future.

(a) Article 21(1) of the Framework Act on National Taxes, Article 150(4) of the Income Tax Act, Article 198(1) and (2) of the Enforcement Decree of the same Act, Article 94-2(1)1(b) of the Enforcement Decree of the Corporate Tax Act, Articles 15 and 142(c) of the Income Tax Act, Article 28(d) of the same Act, Article 53(3) of the same Act, Article 57(5) of the Enforcement Decree of the

A. Supreme Court Decision 86Nu323 delivered on October 28, 1986 (Gong1986, 3143) (Gong1986, 1983) 85Nu775 delivered on February 24, 1987 (Gong1987, 554). Supreme Court Decision 79Nu447 delivered on June 19, 1980 (Gong1980, 12917) 79Nu347 delivered on September 22, 1981 (Gong1981, 14384), 895 delivered on March 27, 1990 (Gong190, 103), 87Nu166 delivered on June 23, 1987 (Gong1987, 1258), 198Nu183888, Nov. 28, 1988)

[Defendant-Appellee] Plaintiff 1 et al., Counsel for defendant-appellee

Head of Sungbuk Tax Office

Seoul High Court Decision 88Gu4616 delivered on August 27, 1991

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

1. According to the reasoning of the judgment below, the court below found that the defendant's non-party 1 and the non-party 2's non-party 1's representative's bonus income at the time of the disposition of this case was disposed of as the non-party 1 and the non-party 2's dividend income subject to the above non-party 1's wife and the non-party 1's wife's family members living together with the above disposition of this case on June 15, 1987 when the notice of change in the income amount was delivered to the non-party company, and determined on April 19, 1987 that the above non-party 1, who was the person subject to the disposition of income, was deceased on April 19, 1987, and determined that the time when the tax liability of the non-party 1 was established for the non-party 1's non-party 1 and the above non-party 1, who was subject to the disposition of income deduction, received the notice of change in income amount, and thus the tax liability for the plaintiff's succession.

2. According to the provisions of Article 24 of the Framework Act on National Taxes, the obligation to pay the national taxes, additional dues, and disposal expenses to be imposed on or to be paid by the decedents is established at the end of the taxable period, and the obligation to pay the income tax to be withheld is established at the time of the termination of the taxable period, but the obligation to pay the income tax to be withheld is established at the time of the payment of the income amount or revenue amount, and without any special procedure, the tax amount is determined at the time of the establishment of the liability to pay it. According to the provisions of Article 150(4) of the Income Tax Act, the bonus disposed of under the Corporate Tax Act shall be deemed to be paid on the date as determined by the Presidential Decree. Article 198(1) and

In sum with the above provisions, the income amount which is disposed of as a result of the recognition and reward of the representative pursuant to the provisions of the Corporate Tax Act is deemed to have been paid by the relevant corporation on the date of receipt of the notice of change of income amount, which is not the actual payment to the representative, but the legal fiction is made by the law. Thus, in order to establish a corporation which received the above notice of change of income amount, the transaction partner and the representative should be deemed to have paid the income amount at the time of receipt of the above notice of change of income amount, which is the time of establishment of the obligation, in other words, if the person has already died, the source of the obligation to withhold tax itself cannot be established, as there is no room for establishment of the obligation to withhold tax on the premise thereof (see, e.g., Supreme Court Decision 85Nu775, Feb. 24, 1987;

3. However, if the withholding tax on Class A earned income subject to withholding is omitted, the income earner may be imposed as global income tax on the party member’s established position (see Supreme Court Decision 79Nu347 delivered on September 22, 1981). According to Article 53(3) of the Income Tax Act and Article 57(5) of the Enforcement Decree thereof, the time when the income deemed as bonus is reverted to the pertinent business year in filing a report or revising the determination of the corporation’s income amount. Thus, there is a question as to whether the income subject to disposition of income is deemed to have been established at the end of the taxable year in which the pertinent income belongs, separate from the original tax liability, as well as the source tax liability. Accordingly, the court below asserted that the court below erred by misapprehending the time when the withholding agent’s withholding tax liability on recognized and recognized income under the Income Tax Act was established and the time when the tax liability was established.

However, in order to ensure that certain income subject to taxation of the Income Tax Act has been realized, even if it is unnecessary until it is realized, it is considerably mature and finalized in terms of the possibility of realizing the income. Therefore, it cannot be said that there has been income as a subject of taxation of the income tax. Specifically, it is not always possible to say that the right to generate income is mature and finalized with certain facts, and it should be determined by comprehensively taking into account the nature and content of each specific right and other de facto facts (see, e.g., Supreme Court Decision 86Nu118, Sept. 20, 198; 87Nu828, Nov. 24, 1987).

In this case, Article 53 (3) of the Income Tax Act, Article 57 (5) of the Enforcement Decree thereof, and Article 57 (5) of the Tax Act, which points out in theory, set the time of attribution of the income concerned, and in this case where the income is deemed to have been paid in accordance with the provisions of the Tax Act at a certain point after the taxable year of the theory of lawsuit expires, it cannot be deemed that the income of the representative, etc. who will be subject to the disposition of income in the future is mature and finalized at the end of the business year concerned, which is the time of the disposition of income in the corresponding case. As such, the establishment of the income tax liability for mature and finalized income cannot be affirmed.

4. As determined by the court below, as long as non-party 1, etc. who is deemed to have received income at the time of the notice of change in the income amount of this case had already died, the income tax liability cannot be established and the plaintiff has no tax liability to succeed as his heir. Therefore, the judgment below to the same effect is just and there is no error in the misapprehension of legal principles as in the theory of lawsuit. There

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

Justices Park Jong-ho (Presiding Justice)