Whether a foreign company is liable to withhold taxes from an importer of a bank site, where the foreign company has dispatched the general supervisor, professional engineer, and employees to the site of the establishment of the facility in accordance with a contract for manufacturing or importing the bank site.

If the Korea Minting Corporation entered into an import contract for the manufacture facilities of bank spheres with a foreign company, and then dispatched the foreign company to the facility site to the general supervisor, professional engineer, and employees to provide such technical services for not less than six months in accordance with the agreement, then the foreign company shall be deemed to have a permanent establishment in Korea in accordance with Article 5(4) of the Convention between the Government of the Republic of Korea and the Switzerland's Government for the Avoidance of Double Taxation and Article 56(1)4 of the Corporate Tax Act. Thus, the above foreign company shall not be deemed to have a permanent establishment in Korea.

Article 5(4) of the Convention between the Government of the Republic of Korea and the Switzerland, Article 56(1) of the Corporate Tax Act, Article 56(1) of the Corporate Tax Act

Korea Minting and Security Printing Corporation

Daejeon director of the tax office

Seoul High Court Decision 85Gu437 delivered on April 17, 1986

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

According to the reasoning of the judgment below, the court below found that the plaintiff entered into an import contract under Article 1 of the production facilities for bank sphere with the Siqui printing Co., Ltd., and paid 29,349,151 Mamc for the installation cost of the above facilities, and that the amount equivalent to 3,080,60 Mamc is determined by a separate contract as expenses for technical services, etc. and that the expenses for technical services, etc. are related to the planning and management for the above facilities, technical services, assembly and trial operation, etc., and that this constitutes the price for personal services corresponding to the domestic source income under Article 55 (1) 6 of the Corporate Tax Act and Article 122 (2) 4 of the Enforcement Decree of the same Act. Further, the court below's determination that the above company's total supervisor and employees should be paid to the above site for the installation of facilities and that the above 3,080 Mamc for the above 3,000 Mamc is unlawful under the premise that the above provision of technical services was unlawful within Korea.

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

Justices Kim Jong-hee (Presiding Justice)