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1. The Defendant’s disposition of refusal to rectify KRW 1,247,179,280 as corporate tax for the year 2012 that reverts to Plaintiff A on April 7, 2017 and the disposition of refusal.
Reasons
1. Details of the disposition;
A. On March 2012, Plaintiff A (hereinafter “Plaintiff A”) entered into a contract (hereinafter “instant contract”) with C Co., Ltd., a domestic corporation (hereinafter “C”), under which Plaintiff A granted C the right to use 3,277 patents (hereinafter “instant patent”) and 7,00 U.S. dollars (hereinafter “instant royalty”) in return for granting C the right to use 3,277 patents (hereinafter “instant patent”).
Of the instant patents, the number of patents registered in each of the world countries, including the United States of America (hereinafter “US”) is 3,110, and the number of patents registered in the Republic of Korea (referring to those with registration number indicated) is 167.
B. Around March 2012, Plaintiff B (hereinafter “Plaintiff B”) entered into a contract (hereinafter “instant contract”) with the effect that Plaintiff B granted C the right to use four patents (hereinafter “instant patent”) and, in return, would be paid USD 1,300,000 (hereinafter “the instant royalty”).
(2) No patent registered in the Republic of Korea among patents in the instant case is available.
C. C: (1) The instant royalty is deemed to constitute a domestic source income subject to withholding; and (2) applying the limited tax rate of 15% pursuant to Article 14(1) of the Convention between the Republic of Korea and the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and the Encouragement of International Trade and Investment (hereinafter “Korea-U.S. Tax Convention”); and (314,150,000 corporate tax against Plaintiff (hereinafter “Korea-U.S. Tax Convention”), and paid corporate tax of KRW 21,871,00 to the Defendant.
The plaintiffs are only 392,402 U.S. dollars in proportion to the number of patents in the case of plaintiffs (i.e., USD 770,000 x 167/3,277, and less than USD 1).