In imposing corporate tax, etc. for the business year which ends on September 30, 1990, the reduction and exemption projects of corporate tax and the method of calculating losses common to other projects.

Article 69(4) of the former Regulation on Tax Reduction and Exemption (Elimination by Act No. 4021, Dec. 26, 198) that provides that a domestic branch of a foreign bank shall be exempted from corporate tax on interest and fees paid in foreign currency to a national, and Article 56(2) of the Enforcement Decree of the same Act (Elimination by Presidential Decree No. 12566, Dec. 31, 1988) of the same Act (amended by Presidential Decree No. 12566, Dec. 26, 1988) shall be subject to the previous provision at the time of the enforcement of the amended Regulation on Tax Reduction and Exemption (amended by Presidential Decree No. 1256, Dec. 26, 1988), and Article 24(2) of the former Enforcement Rule of the Corporate Tax Act (amended by Presidential Decree No. 12580, Mar. 26, 198); Article 69(1) of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance No. 1365, Dec. 26, 9, 1989).

Article 69(4) of the former Regulation of Tax Reduction and Exemption Act (Elimination by Act No. 4021 of Dec. 26, 198), Article 24(2) of the Addenda (No. 12566 of Dec. 26, 198), Article 56(2) of the Enforcement Decree of the same Act (Elimination by Presidential Decree No. 12566 of Dec. 31, 198), Article 69(1) of the Enforcement Decree of the same Act, Article 25(1) and (3) of the Enforcement Rule of the same Act, Article 25(1) and (3) of the Addenda (amended by Presidential Decree No. 1780 of Mar. 6, 1989), Articles 25(1) and 25(3) of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Ministry of Finance

Supreme Court Decision 93Nu15205 delivered on October 26, 1993

Australia New Zealand Bank, Attorneys Choi Young-ro et al., Counsel for the defendant-appellant

Attorney Haho-ho et al., Counsel for the defendant-appellant-appellee

Seoul High Court Decision 92Gu35198 delivered on May 26, 1993

The judgment below is reversed and the case is remanded to Seoul High Court.

We examine the grounds of appeal.

1. The reasoning of the judgment below is as follows.

A. In calculating the income from reduction and exemption of corporate tax on the interest and commission that a domestic branch has a domestic place of business, which is the foreign bank having a domestic place of business, the Plaintiff calculated the reduced and exempted income pursuant to the standard method of gross sales profit amount calculated in proportion to the gross sales profit, and filed a return of tax base and tax amount, including corporate tax, for the business year ending September 30, 1990, by calculating the reduced and exempted income in proportion to the gross sales profit. In calculating the common deductible expenses as above, the Defendant calculated the reduced and exempted income in proportion to the gross sales profit, not to the gross sales profit, and imposed the corporate tax and defense tax on the Plaintiff.

B. According to Article 69(4) of the Regulations on the Regulation of Tax Reduction and Exemption (amended by Presidential Decree No. 4021 of Dec. 26, 198; hereinafter the same shall apply) and Article 56(2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12566 of Dec. 31, 1988), a domestic branch of a foreign bank shall lend foreign currency to a national (limited to those with a maturity of 360 days or more if the borrower is not a foreign exchange bank) and shall be exempted from income tax or corporate tax. However, the above provisions of Article 69(4) of the Enforcement Rule of the same Act provide that if the foreign currency loans are deleted under Article 69(2) of the same Act, they shall apply mutatis mutandis to other business operated by the domestic branch of the foreign bank for the first time in proportion to the revenue and expenditure of the foreign currency loans and other profit-making businesses under the previous provisions of Article 69 of the Enforcement Decree of the Corporate Tax Act.

C. Article 25 (3) (proviso) of the Enforcement Rule of the Corporate Tax Act was newly established at the time when the above-mentioned provisions were amended by Ordinance of the Ministry of Finance and Economy No. 156 on February 28, 1983. Before the above provisions were newly established and implemented, the tax authorities have calculated common deductible expenses to calculate the amount of income reduced or exempted by the domestic branch of a foreign bank under Article 69 (4) of the former Enforcement Rule of the Corporate Tax Act by calculating the total amount of income pursuant to Article 25 (3) and (1) 2 of the former Enforcement Rule of the Corporate Tax Act. However, if a foreign bank concurrently runs a foreign currency loan business, which is a domestic branch of a foreign bank, with the above-mentioned distribution method, the above provisions under Article 25 (3) (proviso) of the former Enforcement Rule of the Corporate Tax Act, which stipulate that the above provisions of the Enforcement Rule of the Corporate Tax Act were amended by Ordinance of the Ministry of Finance and Economy, so that the above provisions of Article 69 (4) (2) of the Corporate Tax Act, which applied to the above provisions of the above provisions, were newly established and applied.

2. However, the above determination by the court below is difficult to accept in light of the principle of no taxation without law.

A. The principle of no taxation without the law is required to apply the interpretation and application of the tax law to the legal text, and is prohibited from analogical interpretation by a person, barring any special circumstance. Thus, even if there is insufficient or unreasonable domestic tax law, it is in principle a supplement as a legislation. However, it is natural that there may be cases where the legislative deficiencies of the tax law should be supplemented by the combined interpretation in order to realize the principle of fair taxation, which is the principle of tax justice. However, the principle of fair taxation in this case is to the extent that it can be determined to be reasonable in light of social norms, and it should not be affected by the determination or its determination of temporary, partial, and disadvantage between certain special cases or some of the persons liable for tax payment.

B. According to Article 69(4) of the above Act and Article 24(2) of the Addenda of the above Act even after the provision of Article 56(2) of the above Act was deleted, a foreign bank's domestic branch may be subject to the previous tax exemption provision with respect to foreign currency loans, interest, fees, etc. borrowed or deposited by the former provisions at the time of the enforcement of the above Act. However, as shown in the judgment below, Article 69(1) of the Enforcement Decree of the above Act and Article 25 of the Enforcement Rule of the above Act are naturally applicable with respect to the calculation of common deductible expenses, etc. which cannot be separated by business of a corporation operating another business as a side business, and Article 25(1) and (3) of the above Enforcement Rule of the above Act are applied to the first time after the enforcement of the above Act, since Article 25(1) of the above Act and Article 25(2) of the Enforcement Rule of the above Act as amended by the Enforcement Rule of the Corporate Tax Act are the calculation method in proportion to the revenue or sales amount for the business and other business.

C. In addition, the court below's decision that the defendant's taxation disposition was unlawful in light of the previous provision which was not the law as of the end of the business year of this case and the previous provision deleted, shall be deemed to be a case where a analogical interpretation is made differently from the relevant provisions such as the Enforcement Rule of the Corporate Tax Act, or a case where a expanded interpretation of the scope of tax exemption is made in a manner that does not provide for the relevant provisions, or where a expanded interpretation of the scope of tax exemption is made. It is not acceptable that such analogical interpretation or expanded interpretation is

Therefore, there is reason to point out this issue.

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

Justices Kim Jong-soo (Presiding Justice)