Whether the special relationship under Article 46 (1) 1 of the Enforcement Decree of the Corporate Tax Act is established in case where a taxpayer corporation trades with another corporation having received its investment as an investor as the other party (affirmative)

In a case where a corporation which is liable for tax payment trades with another corporation or an individual who is in the status of an investor with respect to the corporation, the special relationship under Article 46 (1) 1 of the Enforcement Decree of the Corporate Tax Act is established as well as the special relationship under Article 46 (1) 1 of the Enforcement Decree of the Corporate Tax Act. On the contrary, the special relationship is established in a case where the corporation which is liable for tax payment directly trades with

Article 20 of the Corporate Tax Act, Article 46 (1) 1 of the Enforcement Decree of the same Act

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Domin, Attorneys Park Jae-soo and 1 other, Counsel for plaintiff-appellant-appellant-appellant-appellant-appellant-appellant-Appellee-Appellee-Appellant-Appellee-Appellee-Appellee-Appellant-Appellee-Appellee-Appellant-Appellee-Appellee-Appellant-Appellee-Appellee-Appellant-Appellee-Appellee-Appellant-Appellee-Appellee-Appellant-Appellee-Appellee-Appellant-Appellee-Appellee-Appellee-Appellee-Appellee-Appellant-Appellee-Appellee-Appellant-Appellee-Appellee-Appellee-Appellee-Appellant

Educational Foundation:

Head of Suwon Tax Office

Seoul High Court Decision 84Gu1117 delivered on May 19, 198

The part of the judgment below against the defendant is reversed and that part of the case is remanded to the Seoul High Court.

The grounds of appeal by the defendant litigant are examined.

According to the reasoning of the judgment below, the court below held that even if the corporation is a shareholder of the non-party company, it cannot be denied the calculation of the act because it reserveds the non-party company without receiving dividends from the non-party company, on the ground that the non-party company is a shareholder of the non-party company, and the non-party company reserved the same without receiving dividends from the non-party company without receiving dividends from the non-party company.

However, in case where a certain corporation which is liable for tax payment makes a transaction with another corporation or an individual who is in the status of an investor with respect to the corporation, the special relation as provided by Article 46 (1) 1 of the Enforcement Decree of the Corporate Tax Act shall be established as well as the special relation as well as the case where the corporation which is liable for tax payment voluntarily makes a transaction with the other corporation which is in the status of an investor and has received the investment as the other party, the above special relation shall be established. If the transaction is deemed to have reduced the tax burden on the corporation's income, the calculation of the act or income amount may be denied (see, e.g., Supreme Court Decisions 83Nu84, Apr. 10, 1984; 83Nu160, Mar. 26, 1985; 87Nu901, Jan. 17, 1989). Accordingly, it is obvious that this has affected the judgment.

Therefore, the part of the judgment below against the defendant is reversed, and this part of the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Choi Jae-ho (Presiding Justice)