(a) Where the source tax liability of a recipient of employment income fails to be established, the nature of the payer's obligation to withhold taxes;

(b) Whether a corporation is liable to withhold taxes even if its representative has already died at the time notice of change in the amount of income was received in cases of recognized contributions;

A. Under Article 142 (1) 4 of the Income Tax Act, a person who pays a Class A to a resident or a nonresident in the Republic of Korea the income tax on such resident or nonresident shall be liable to withhold and pay the income tax on such resident or nonresident, regardless of whether the withholding agent has actually collected or is not able to collect the income tax from the person who received the wage and salary income which is the original person liable for tax, but this is the case where the withholding agent is legally liable for tax withholding, and the person who pays the wage and salary income who is the withholding agent bears the obligation to collect and pay the income tax on such resident or nonresident. In addition, it is the case where the withholding agent bears the obligation to collect and pay the income tax on the basis of the recipient’s source tax liability and both are in a relationship

B. Under Article 150(4) of the Income Tax Act and Article 198(1) and (2) of the Enforcement Decree of the Corporate Tax Act, the amount of income disposed of as a result of the recognition 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 in the amount of income. This does not mean that the relevant corporation actually pays the amount of income to the representative, but merely means the legal fiction as a law, in order to establish a withholding obligation of the corporation that received the above notice of change in the amount of income, it shall be deemed to have received the amount at the time of receipt of the above notice of change in the amount of income, namely, the opposite contractual party and the representative shall be deemed

(a) Article 142(1)4 of the Income Tax Act; Article 150(4) of the Income Tax Act; Article 198(1) and (2) of the Enforcement Decree of the same Act; Article 94-2 of the Enforcement Decree of the Corporate Tax Act; Article 21(2)1 of the Framework Act on National Taxes;

B. Supreme Court Decision 86Nu324 delivered on October 28, 1986

Seoul High Court Decision 200Na1448 delivered on August 1, 200

The director of the tax office

Seoul High Court Decision 85Gu900 delivered on March 11, 1986

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Under Article 142 (1) 4 of the Income Tax Act, a withholding agent is obligated to withhold and pay the income tax on a resident or non-resident in the Republic of Korea from the person who pays the income tax of Class A, regardless of whether the withholding agent has actually collected or is not able to collect the income tax from the person who received the income tax of the original taxpayer, but this is the case where the withholding agent is legally constituted the withholding obligation. Thus, the withholding obligation cannot be viewed as the ground that it can be established regardless of whether the withholding obligation is established, and the withholding agent bears the withholding obligation on the basis that the withholding agent bears the withholding obligation on the basis of the recipient’s source tax liability, and both are in a relationship of interest. Therefore, in a case where the source tax liability of the recipient of wage and salary income is not established, the withholding agent’s withholding obligation cannot be established.

Meanwhile, according to the provisions of Article 21(2)1 of the Framework Act on National Taxes, income tax withheld at source shall be deemed liable for tax payment at the time of paying the amount of income. The amount of income disposed of as a result of the recognition of the representative pursuant to the provisions of Article 150(4) of the Income Tax Act and Article 198(1) and (2) of the Enforcement Decree of the same Act shall be deemed to have been paid by the relevant corporation on the date of receiving the notice of change in the amount of income. This is not the actual representative of the corporation, but the legal fiction of the above amount of income. Thus, in order to establish the tax withholding obligation of the corporation which received the above notice of change in amount of income, the corporation shall be deemed to have received the amount of income at the time of receiving the notice of change in amount of income pursuant to the above legal principles, namely, when the corporation is deemed to have received the amount of income, the other party to the transaction shall be deemed to have

According to the facts established by the court below, the defendant disposed of the income of the non-party who was the representative director based on the approval of the non-party who was the representative director of the company's income, and notified the plaintiff corporation of the income change in July 24, 1984, and the plaintiff corporation did not withhold and pay the income tax of the non-party as to the non-party. The non-party had already died on November 15, 1983, before the plaintiff corporation received the defendant's notice of income change. Thus, the judgment of the court below that the tax disposition was unlawful is justified, and there is no error in the misapprehension of legal principles as to the tax withholding obligation, and therefore the appeal on this issue cannot be adopted.

2. If the non-party’s original tax liability was not established, there is no room for the heir to succeed to his tax liability. The lower court’s judgment pointed out the remaining grounds for final appeal merely because it is an unnecessary content to determine whether the heir has a tax liability on a household basis on the premise that the non-party’s original tax liability was established and the Nonparty succeeded to the heir’s tax liability, even if so, it did not affect the

3. Ultimately, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating judges.

Justices Lee B-soo (Presiding Justice)