Seoul Administrative Court 2012Guhap4218 ( October 28, 2014)

Tax amount withheld under the name of LLC in the United States is not paid directly by the plaintiff, so it is not directly paid by the plaintiff.

The amount of tax withheld in Japan under the name of LLC in the United States is only paid by each of the above organizations (U.S. domestic funds, LCR), the subject of independent rights and obligations, and it is not directly paid by the plaintiff, and it is not subject to deduction from the amount of tax paid in foreign

Article 57 (Foreign Tax Credit)

2014Nu3510 Revocation of Disposition rejecting a request for corporate tax revision

○○○ Life Insurance Company

The director of the tax office

Seoul Administrative Court Decision 2012Guhap44218 decided February 28, 2014

July 8, 2015

August 19, 2015

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

피고가 2011. 3. 17. 원고에 대하여 한 2006 사업연도(2006.4.1.˜2007.3.31) 법인세 ○○○○원에 대한 경정청구 거부처분 중 ○○○○원을 초과하는 부분 및 2007 사업연도(2007.4.1˜2008.3.31.) 법인세 ○○○○원에 대한 경정청구 거부처분을 모두 취소한다.

2. Purport of appeal

The same shall apply to the order.

1. Partial citement of judgment of the first instance;

The reasoning of the judgment of this court is as follows: (a) the developments leading up to the disposition of this case; (b) whether the disposition of this case is legitimate; (b) the parties’ assertion; and (b) the relevant statute is identical to the corresponding part of the reasoning of the judgment of the court of first instance (from 2, 6, to 11, 5). Therefore, it is cited in accordance with Article 8(2) of the Administrative Litigation Act; and Article 420 of the Civil Procedure Act.

Parts used in bulk

In the 2nd through 13th judgment of the first instance court, "TMK, a special purpose company established in Japan (hereinafter referred to as "TMK"), has invested in various TMK, such as CHTPPK, and each TMK has invested in various investment places by acquiring real estate in Japan". Among them, the investment in real estate in Japan was made by means of acquiring real estate through various TMK, such as CHTPPK, which is a specific purpose company established in Japan (hereinafter referred to as "TMK").

○ From the 3rd side of the first instance judgment, “each corporate tax is reported,” the phrase “when each corporate tax is reported, ○○, the general partner of each of the instant funds, including the Plaintiff, reflects the dividend payment details, etc. of each of the instant funds each quarter from each of the instant funds to the limited partners including the Plaintiff at the time of filing a return of each corporate tax.”

2. Determination

A. Interpretation of relevant legal provisions

Article 57 (1) 1 of the former Corporate Tax Act (amended by Act No. 8831, Dec. 31, 2007; hereinafter the same) provides that the amount of foreign corporation tax may be deducted from the amount of corporate tax for the business year concerned within the limit of the amount calculated by multiplying the amount of corporate tax for the business year concerned by the ratio of income generated from overseas to the amount of corporate tax for the business year concerned, where income generated from overseas is included in the tax base of a domestic corporation for each business year and there is the amount of foreign corporation tax paid or payable on such income generated from overseas (hereinafter

The purport of the Corporate Tax Act, as above, is to prevent a domestic corporation from imposing international double taxation on the same taxpayer, by paying the amount of foreign corporate tax on the income accrued from a foreign country. The interpretation of tax laws and regulations is interpreted in accordance with the legal text, barring special circumstances, barring any special circumstance. The expanded interpretation or analogical interpretation without reasonable cause leads to a result contrary to the principle of fair taxation, which is the basic ideology of the tax law, and thus is not allowed (see, e.g., Supreme Court Decision 2008Du11372, Aug. 20, 209). In light of Article 57(4) and (5) of the former Corporate Tax Act, “the amount of foreign corporate tax already paid or payable” under the above provision means the amount of foreign corporate tax paid or payable by the relevant domestic corporation from a foreign country, which is subject to the application of foreign corporate tax credit, if it is not an independent right or obligation to pay the amount of foreign corporate tax.

B. Whether each of the instant funds belongs to the rights and obligations separate from the Plaintiff

(1) Relevant legal principles

Whether a certain phase of the former Corporate Tax Act can be seen as the subject of independent rights and obligations under the former Corporate Tax Act, should be determined depending on whether it can be seen as identical to that of the Republic of Korea under the private law, in light of the nature and substance of the country established by an organization, unless there is an explicit standard for determination under the former Corporate Tax Act (see, e.g., Supreme Court Decision 2012Du11836, Jun. 26, 2014). Such determination does not change depending on whether a taxable income has a domestic source,

(2) Facts of recognition

① As one of the limited liability companies incorporated into each of the instant funds in the form of limited partnership, the Plaintiff was a partner and only a part of the equity shares was owned. Accordingly, according to the share, the Plaintiff received dividends from each of the instant funds less withholding taxes and operating expenses.

② The management of each of the instant funds was in charge of general partners. The revenue distribution data submitted by the Plaintiff based on the calculation of the amount of foreign tax credit, and most of the documentary evidence, including the Schedula K-1 and Drawdow K-1 and Dradowe, related to the tax burden in Japan, are materials prepared and notified to the Plaintiff, one of the limited partners.

③ Each of the instant funds, a limited partnership, directly employed tax agents, including LAWA accounting corporations, to arrange and submit taxation-related data to the U.S. tax authorities.

④ Japanese real estate investment through TMK is part of the various investment items of each of the instant funds, and the various investment offices have been operated.

" ⑤ TMK를 통한 일본 부동산 투자와 관련하여, 이 사건 각 펀드 중 ○○○ 부동산투자 펀드 4호는 aaa LLC를, 투자 펀드 5호는 ccc LLC를, 투자 펀드 6호는 ddd LLC(이하 위 각 LLC를 통틀어 '이 사건 각 LLC'라 한다)를 각 경유하도록 투자구조가 설계되었다. 한편, TMK에 대한 일부 지분은 케이만군도에 설립된 회사가 가지도록 하여, 그 지분만큼은 이 사건 각 LLC가 위 회사를 통하여 TMK를 지배하도록 설계되었다.", ⑥ 이 사건 각 펀드는 이 사건 각 LLC의 지분 중 약 30˜60%의 지분을 가진 구성원이고, 이 사건 각 LLC의 구성원으로는 이 사건 각 펀드 외에도 다른 펀드들이 있었다.

7) Each of the instant LC, like each of the instant funds, organized and submitted taxation-related data to the U.S. tax authorities.

8. The U.S. tax law, a country where each of the instant funds and each of the instant LLC is established, permits the LP or LLC to choose whether to impose corporate tax on its own.

Evidence, Gap evidence 12-1 to 14, and the whole spawns of the pleadings before the basis of recognition

(3) The legal nature of each of the instant funds and each of the instant LLC

Examining the above facts in light of the legal principles as seen earlier, even if a company established in the Kmandododo, which has tax preference for income generated from overseas sources of an overseas investment company, is a nominal company that only performed the role of a transaction party in the form, i.e., Do government, the choice of corporate taxation of each of the instant funds and each of the instant LALC is only within the meaning of the U.S. tax law, and does not determine whether it can be deemed an independent entity under the private law of Korea. As such, each of the instant LCLC can be deemed as an independent entity for profit established for the purpose of efficient management and operation of investment, such as the collection of earnings related to foreign real estate investment through TMK, in particular, as an entity for profit-making purposes established for the purpose of efficient management and operation of the investment, and it is reasonable to view that each of the instant funds is an entity for profit-making purposes, separate from its members, and whose own business activities are conducted by the Plaintiff, etc. as an entity for which the foreign tax credit was made for 13rd 1 business year or Do1.

C. Whether the Japanese withholding tax amount was paid directly by the Plaintiff

As seen above, in view of the circumstances such as the fact that each of the funds in this case and each of the LCL in this case received dividend income from Japan directly or through subordinate organizations as the subject of rights and obligations separate from the Plaintiff, etc., and the Plaintiff received dividend income after deducting Japanese withholding tax, operating expenses, and earnings, etc. from each of the funds in this case. Each of the funds in this case and each of the LCR in this case selected to be treated as a non-taxable organization under the U.S. tax law, and there is no room to deduct the tax withheld in Japan at the taxation stage of each of the funds in this case or each of the LCR in this case. It does not affect the determination of the subject of rights and obligations under the Korean tax law. The above organization selected to be subject of corporate taxation in the U.S. at the taxation stage of the U.S. and selected to be subject to corporate taxation in the United States, it cannot be concluded that it is disadvantageous to the Plaintiff from the final income of each of the fund members in this case.

D. Sub-determination

The plaintiff's assertion on a different premise is without merit without further review.

3. Conclusion

Since the disposition of this case is legitimate, the plaintiff's claim shall be dismissed, and since the judgment of the court of first instance is unfair with different conclusions, the defendant's appeal is accepted and the judgment of the court of first instance is revoked and the plaintiff'