(영문) 서울고등법원 2019.5.15. 선고 2018누47303 판결

2. On September 11, 2013, the disposition of refusal to correct the amount stated in the column of "attached Form 1 to the same business year of the corporate tax for each business year" issued by the director of the regional tax office of the regional tax office, and the disposition of imposition of KRW 1,143,371,780 (including additional tax 102, 713, 019) of the corporate tax for each business year as of May 2, 2014 by the director of the regional tax office of the regional tax office of the regional tax office, shall be revoked.

3. All costs of the lawsuit are borne by the Defendants.

Purport of claim and appeal

The same shall apply to the order.

Reasons

1. Details of the disposition;

The reasoning for this Court’s explanation is as follows: (a) the relevant part of the judgment of the court of first instance is the same as that of the part concerning “the developments of the disposition” in 1. 2 to 7 of the judgment of the court of first instance; and (b) such part is cited in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

○ 6 below the two pages “from the same side to the 3rd day below”.

【The development of 17 game programs was suspended in the course, and one game program is being developed, and the remaining 12 game programs were commenced after the development was completed. Of the 30 game programs, three game programs developed from the beginning with the objective of the entry into a foreign country and one game program developed with the aim of the entry into a domestic and foreign country is developed. The 12 game programs, the development of which was completed, were launched in the Republic of Korea and other countries according to the first goal at the time of the first entry, and the four game programs were launched in the Republic of Korea according to the first goal at the time of the first entry, and thereafter, the four game programs were withdrawn from the country and were withdrawn from the country to the foreign distributor at the time of the conclusion of the game agreement with the foreign distributor at the time of the first entry into the country.】

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

This Court's reasoning is as follows. A. The plaintiff's assertion is the same as the part of "the plaintiff's assertion" in Article 8 (2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

B. Relevant statutes

The reasons for this part are as stated in Section 8 of the judgment of the court of first instance. (b) The reasons for this decision are as stated in Section 2 of Article 8 of the Administrative Litigation Act and Section 420 of the Civil Procedure Act.

C. Determination

1) Relevant legal principles

The court's explanation on this part is the same as the entry of "1" part of the relevant legal principles, which is stated in 8-11 of the judgment of the court of first instance. Thus, this part is cited in accordance with Article 8 (2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

2) Determination

In light of the aforementioned facts and the following circumstances, the evidence submitted by the Defendants alone, which are the aggregate amount of research and development expenses for each game program that was not sent to a foreign country, among the research and development expenses of this case, cannot be deemed as common expenses related to domestic and foreign source income in accordance with the respective ratio of the Plaintiff’s self-production game program’s domestic source income and foreign source income. Therefore, in calculating the credit limit for foreign tax amount, each disposition of this case on the premise that the whole research and development expenses for the game program of this case among the research and development expenses of this case is deemed as common expenses related to the Plaintiff’s domestic and foreign source income, and thus, the amount equivalent to the ratio of foreign source income of the Plaintiff’s self-production game program’s domestic and foreign source income of the production game program is deducted from the foreign source income amount.

① With respect to the instant research and development costs incurred prior to the running of the game, the Defendants: (a) rendered each of the instant dispositions on the premise that the instant game was indirectly related to all domestic and foreign businesses, regardless of which it is related to any of the domestic and foreign source revenues.

② Research and development costs of this case refer to the cost incurred before the planning and commercialization of a specific game among the costs required for the development of a specific game. The commercialization of a specific game leads to only the commencement of a service for the customers of a specific domestic or foreign market. However, research and development costs of this case are directly incurred for the development of a specific game, and it is difficult to regard the development cost of a specific game as the cost incurred for the development of a "common game that generates domestic or foreign source" as the cost incurred for the development of a "common game". Even after the commercialization of a specific game, development costs such as a specific game are continuously carried out in the domestic or foreign commercialization of the cost incurred for the specific game, considering that the possibility of the increase of the cost of research and development of a specific game is less likely to be reflected in the domestic or foreign source of revenue in the domestic or foreign market regardless of the cost of research and development costs of the specific game in the domestic or foreign commercialization of the cost of the game in question.

③ The foreign tax credit system was introduced to prevent double taxation between countries on the same income. However, in order to distinguish domestic and foreign source income from the actual source income and to prevent the payment of the amount of the foreign corporate tax payable as part of the corporate tax payable on domestic source income, the amount of the tax paid in the actual foreign country can only be deducted if the amount of the tax paid in the foreign country is within the limit of the tax credit. The Defendants recognized the game-related expenses that were paid in the domestic and foreign country as deductible expenses in proportion to the Plaintiff’s domestic and foreign source income from the instant research and development expenses, but it is very meaningful that the foreign tax authorities would recognize the same research and development expenses that were paid in the domestic and foreign country as common expenses, and that it would be in line with the purpose of the tax credit system, and that it would be possible to uniformly treat the entire domestic and foreign source income as deductible expenses in accordance with the amendment of the Enforcement Decree of the Corporate Tax Act, so that it would be possible to allocate the amount of the tax credit to the domestic and foreign source income in accordance with the purpose of the tax credit system.

④ The Defendants asserted that the entire research and development costs of this case should be treated as common costs related to all domestic and foreign source revenue in consideration of the Plaintiff’s high dependence on the Plaintiff’s online game business at the time of developing the game, which is appropriated as losses. The Plaintiff participated in the development of 30 game during the pertinent business year (from 2009 to 2012) and participated in the development of 12 games, and some of the developed games were released abroad. However, even if the rate of overseas sales was continuously increased compared to the ratio of domestic sales during the pertinent business year, it cannot be ruled out that the Plaintiff’s increase in the ratio of foreign sales of a specific game unrelated to the research and development costs of this case would have made a considerable contribution to 00 million won for the pertinent business year, not only the Plaintiff’s direct development of the game, but also the overall increase in the ratio of overseas sales to the total sales of the game in this case for 200 million won for the pertinent business year.

⑤ The Defendants asserted that it is necessary to recognize that the amount according to the ratio of import of raw materials abroad out of the instant research and development costs should be recognized as losses related to import of raw materials abroad, since the Plaintiff’s success in the game abroad is less than a relatively small additional cost. However, the research and development costs of this case are calculated by each development team that carries out each game project, and it may vary depending on the purpose and progress of each game, and it is not affected by the nature of the specific game project or other game projects. In the event that a specific online game project developed by the Plaintiff was withdrawn abroad, it is difficult for the Plaintiff to enter into a contract with a specific overseas game distribution company to enter into a contract with a specific overseas game distribution company at least 0,000,000,000,000 won, which is difficult for the Plaintiff to enter into a contract with a specific overseas game distribution company to enter into a contract with a specific overseas game distribution company to enter into a contract with a specific overseas game distribution company without the specific overseas game distribution company’s own cultural characteristics, age, and type of the game users to enter into a contract with a specific overseas game distribution company.

6) The Defendant asserts that the Plaintiff has no choice but to calculate common costs as the Plaintiff failed to present a specific standard for determining profit relevance to the costs of developing each specific game among the research and development costs of this case. However, in the case of online games, there are various standards that can distinguish the games for domestic, overseas, or overseas, such as entering into a license agreement with a foreign distributor, receiving a request for development from a foreign company, or aiming at an overseas market at the internal planning stage. The Defendants classified the research and development costs of this case according to such specific standards, and recognized the entire research and development costs of this case as losses in proportion to the common costs related to domestic and foreign source earnings, without responding to domestic and foreign source earnings.

7) The online game program needs to be developed for a long-term period of time, and there is no inevitable change in the timing of attribution of expenses for online game release and of profits accrued from such release. Since there is no relevant Act and subordinate statutes to solve these problems, it is inevitable to respect to the accounting practices of the pertinent legal entity as to how to deal with the development costs before actual profits accrued from the release of online game. However, the Plaintiff does not follow the method of treating the research and development costs of this case at the time of assetizing the total tax base of the tax base and without using the method of cost disposal at the stage following commercialization of the game, even if the game did not generate relevant profits. Whether to dispose of the research and development costs of this case by △△△△△△△△△ is possible to select the Plaintiff, compared with the method of assetizing, it is difficult to conclude that research and development costs of this case should be disposed of by the Plaintiff’s reasonable method of accounting and development costs related to the same expenses arising from the Plaintiff’s domestic sale of the game at its own expense when the Plaintiff’s domestic sale of the total domestic research and development costs related to the commercialization of this case.

3. Conclusion

If so, the plaintiff's claim should be accepted on the grounds of its reasoning. However, since the judgment of the court of first instance is unfair with different conclusions, the plaintiff's appeal is accepted, and the judgment of the court of first instance is revoked, and each disposition of this case is revoked as per Disposition

Judges

Justices Kim Dong-ok

Judges Park Jae-woo

Judges Park Jae-chul

Note tin

1) It means setting a credit limit for each foreign source income to the amount of each foreign source income after calculating the foreign source income by each country.

2) It means a method by which a domestic corporation sets a credit limit for the total amount of foreign payments paid in the global in the business year concerned after calculating the amount of foreign source income for each country.