Cho Jae-2015-west-301 ( December 17, 2015)

The damages exceeding the damages to the payment itself, which is the content of the contract under Article 132 (10) of the Enforcement Decree of the Corporate Tax Act, mean the damages exceeding the positive damages.

"Compensation exceeding damages to the payment itself, which is the content of the contract in the future" under Article 132 (10) of the former Enforcement Decree of the Corporate Tax Act means damages exceeding the above active damages, not "affirmative damages, such as loss or decrease of existing profits due to the other party's default."

Article 132 of the Enforcement Decree of the Corporate Tax Act

2016Guhap57083 Revocation of disposition, etc. of corporate tax withholding

△ Bank Co., Ltd.

OO Head of the tax office

March 8, 2017

April 7, 2017

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

Each collection disposition (including imposition disposition of additional tax) by the Defendant against the Plaintiff on July 10, 2014 (including additional tax) of KRW 1,178,942,030 (including additional tax), KRW 3,448,30,50 (including additional tax), and KRW 1,200,469,80 (including additional tax) for the business year 2010 shall be revoked.

1. Details of the disposition;

A. The plaintiff's status

The plaintiff is established on December 1, 1959 and runs banking business.

B. Conclusion of a shipbuilding contract

1) AA and BB Industries Co., Ltd. (hereinafter referred to as "stock company" in each name; hereinafter referred to as "domestic shipbuilding companies" in each of the above companies) were awarded a contract for the construction of vessels from the PPS Co., Ltd., Ltd and two foreign corporations (hereinafter referred to as "foreign vessel owners") as listed in the table 1 below (hereinafter referred to as "each shipbuilding contract of this case").

Table 1

No.

Foreign Ship Uniforms

Date of contract

Domestic navigator;

Target vessels

Ship price;

(unit: USD)

1

PP Spering Co., Ltd. Ltd

June 9, 2006

AA

S496

45,150,000

2

F Spering Co., Ltd.

ʺ

ʺ

S497

45,150,000

3

SGroup B. V.

October 27, 2006

BB Industries

S506

84,500,000

4

ʺ

ʺ

ʺ

S507

84,500,000

2) According to each shipbuilding contract of this case, foreign vessel owners shall first pay part of the vessel price to domestic shipbuilding officers prior to the completion of the shipbuilding, and where each shipbuilding contract of this case terminates due to reasons such as termination or termination of a shipbuilding contract, domestic shipbuilding officers shall refund the vessel price already received from foreign vessel owners (hereinafter referred to as "advance payment") and additional dues (hereinafter referred to as "additional dues on refund") calculated by applying a certain interest rate until the date of refund of the aforementioned advance payment. Foreign vessel owners paid each advance payment (hereinafter referred to as "each advance payment") to domestic shipbuilding officers in accordance with each shipbuilding contract of this case.

C. Issuance of an advance refund guarantee certificate by the Plaintiff

The Plaintiff issued an advance refund guarantee as indicated in the table 2 below (as a result, each refund guarantee contract of this case hereinafter referred to as “each refund guarantee contract of this case”) to the effect that if domestic shipbuilding companies violate each shipbuilding contract of this case due to the failure of domestic shipbuilding companies to deliver the vessel on the fixed date, the Plaintiff shall pay the advance payment received by domestic shipbuilding owners and the amount equivalent to additional dues on the refund.

Table 2

No.

Foreign Ship Uniforms

Date of contract

Domestic navigator;

Target vessels

Ship price;

(unit: USD)

Interest Rate

1

PP Spering Co., Ltd. Ltd

August 24, 2006

AA

S496

2,575,000

7% per annum

2

F Spering Co., Ltd.

ʺ

ʺ

S497

2,575,000

ʺ

3

SGroup B. V.

March 31, 2008

BB Industries

S506

50,700,000

ʺ

4

ʺ

ʺ

ʺ

S507

50,700,000

ʺ

D. Cancellation of each shipbuilding contract of this case

1) On August 5, 2010, the PPPPPP Co., Ltd., Ltd (hereinafter “PP”) rescinded a shipbuilding contract with AA on the grounds that the delay in delivery of a ship is grounds for revocation.

2) Around September 8, 2010, Fpering Co., Ltd., Ltd. (hereinafter referred to as “FF”) also rescinded a shipbuilding contract with AA as grounds for revocation of delay in delivery of vessels.

“3) On August 11, 2010, the Sro Group B.V. (hereinafter “SS Gro Group”) rescinded each agreement on shipbuilding contracts with BB industries, and E. The implementation of each of the instant refund guarantee contracts by the Plaintiff.

Based on each of the instant refund guarantee agreements, foreign vessel owners filed a claim with the Plaintiff for the payment of the amount equivalent to each of the instant advance payments and the amount equivalent to each of the instant additional refund payments (hereinafter “instant additional refund”). The Plaintiff paid the amount equivalent to each of the instant advance payments and the amount equivalent to each of the instant additional refund payments to foreign vessel owners as indicated below 3.

Table 3

No.

Foreign Ship Uniforms

Date of Payment

Target vessels

An advance payment

(unit: won)

Additional dues on refund

(unit: won)

1

PP

August 25, 2010

S496

26,987,283,749

5,456,680,897

2

F

September 16, 2010

S497

26,259,239,999

5,358,827,411

3

Slar Group

August 17, 2010

S506

49,800,074,999

7,837,114,765

4

ʺ

August 17, 2010

S507

ʺ

ʺ

F. Disposition of this case, procedure of the previous trial, etc.

1) On July 10, 2014, the Defendant rendered a disposition of collecting corporate tax of KRW 1,374,05,310 and an additional tax for collecting corporate tax of KRW 137,405,831, a disposition of collecting corporate tax of KRW 4,019,03,212, and imposition of additional tax of KRW 401,90,321, corporate tax of KRW 1,39,148,948, and additional tax for collecting KRW 1394,948,994, and KRW 1394,994,994,9948, and KRW 1994,914,99,994, as other income provided for in Article 93 subparagraph 11 (b) of the former Corporate Tax Act (amended by Act No. 10423, Dec. 30, 2010; hereinafter referred to as “additional Corporate Tax Act”).

2) On October 6, 2014, the Plaintiff was dissatisfied with the above collection disposition and disposition, and filed an appeal with the Tax Tribunal. On December 17, 2015, the Tax Tribunal decided that the Defendant’s imposition of corporate tax by deeming the sum of the withheld taxes on each of the instant refund charges as the amount subject to withholding taxes on December 17, 2015, on the ground that it was unlawful for the Defendant to impose corporate tax by deeming it as the amount subject to withholding taxes on each of the instant refund charges as the amount subject to withholding taxes on each of the instant refund charges as 26,489,737

3) According to the decision of the Tax Tribunal, the Defendant reduced 302,292,828 of corporate tax withheld for the business year 2010 from 1,374,058,310 to 302,292,828 of corporate tax withheld for the business year 2010, and 30,229,283 of additional tax 137,405,831, and 884,187,307 of corporate tax withheld for 4,019,03,212, and additional tax 401,903,321 of corporate tax, 88,730 of corporate tax withheld for 1,39,149,148, and 307,812,768 of corporate tax withheld for the business year 2010 to 307,914,894,8949, and 30,781,7777 of corporate tax collected for each of the remaining amounts(hereinafter referred to as above).

(g) the addition of the reasons for the disposition;

The Defendant added a preliminary disposition to the effect that each of the instant additional charges is "other income under Article 93 subparagraph 11 (j) of the former Corporate Tax Act" or "interest income under Article 93 subparagraph 1 (a) of the former Corporate Tax Act" and constitutes a foreign corporation's domestic source income.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 6, 18, 19, Eul evidence 1 and 2 (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. The plaintiff's assertion

The instant disposition should be revoked on the grounds that it is unlawful for the following reasons.

A. Main assertion

For the following reasons, each of the instant charges does not constitute domestic source income.

1) Each additional refund of this case is not a compensation for damages paid according to the scheduled amount of damages for each of the instant shipbuilding contracts, but a return of unjust enrichment received by restitution following the cancellation of each of the instant shipbuilding contracts. Therefore, each of the instant additional refund of this case does not constitute “money paid in excess of damages for the payment itself which is the original contract terms, regardless of its title or pretext,” which is the other income provided in Article 93 subparag. 11 (b) of the former Corporate Tax Act and Article 132(10) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22577, Dec. 30, 2010; hereinafter “former Enforcement Decree of the Corporate Tax Act”).

If each additional refund of this case constitutes damages, the foreign vessel owners suffered damages equivalent to the amount of the expenses incurred in trust in each shipbuilding contract of this case, such as borrowing advance payment from a foreign financial institution and paying interest at the interest rate of 3% or 4% per annum (hereinafter “Lononon inter-bank inter-bank off rate”). Thus, each additional refund of this case constitutes “money received in excess of the damages for the payment itself as stipulated in Article 132(10) of the former Enforcement Decree of the Corporate Tax Act,” and thus, it cannot be deemed that each additional refund of this case constitutes “money received in excess of the damages for the payment itself as stipulated in the former Enforcement Decree.”

2) Since a foreign vessel owner did not operate a business in Korea, did not provide human services in Korea, and did not hold assets in Korea, each of the instant additional charges cannot be deemed as falling under other income under Article 93 subparag. 11 (j) of the former Corporate Tax Act.

3) Since foreign vessel owners did not lend each of the instant advance payments to domestic vessel owners or receive interest thereon, each of the instant additional charges on refund cannot be deemed as falling under interest income under Article 93 subparagraph 1 (a) of the former Corporate Tax Act.

(b) Preliminary one argument

The Plaintiff cannot impose withholding tax on the Plaintiff merely because it guarantees the domestic shipbuilding company’s each of the instant advance payments and the obligation to refund additional dues for refund under each of the instant shipbuilding contracts.

(c) Preliminary 2 argument

1) PP and F, as Liberia corporate, are only companies on special purpose (SPC) or documents (hereinafter referred to as “special purpose companies”) established by the Zpring Co. Ltd. (hereinafter referred to as “Zpring”) in the tax haven for convenience. Accordingly, the PP and F should be denied legal personality of PP and F.

2) Each additional refund set forth above Nos. 1 and 2 is attributed to PP, a formal prior owner, and to Zping, a substantial prior owner, not F.

3) Therefore, since the taxpayer with respect to the refund of each of the instant cases is Zinping, which is not Liberia PP, a corporation of Liberia, and ZS, the lease corporation, “the Convention between the Republic of Korea and the Republic of Korea for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (hereinafter “Tax Treaty between the Republic of Korea and the lease”) shall be applied. Article 22(1) of the said Tax Treaty provides that “other income of a resident of a Contracting State shall be taxed only in that Contracting State,” the Plaintiff does not bear the obligation to withhold each of the instant refund.

3. Relevant statutes;

The entries in the attached Table-related statutes are as follows.

4. Determination

A. Whether the Plaintiff’s domestic source income falls under the Plaintiff’s primary assertion

1) Domestic source income and withholding obligation of a foreign corporation

According to the main sentence of Article 98(1)3, the main sentence of Article 93 subparag. 1 (a), Article 11 (b) and (j) of the former Corporate Tax Act, and Article 132(10) of the former Enforcement Decree of the Corporate Tax Act, a foreign corporation shall withhold 20/10 of the amount paid as domestic source income falling under Article 16(1) of the Income Tax Act and other interest and trust profits (Article 93 subparag. 11 (b) of the former Corporate Tax Act), which is actually related to the domestic place of business and is paid in excess of the damages to the payment itself under the original contract terms (Article 93 subparag. 11 (b) of the former Corporate Tax Act), (2) the income accrued from the personal services provided in the Republic of Korea or assets located in the Republic of Korea, or other similar ones provided in the Presidential Decree (Article 93 subparag. 11 (j) of the former Corporate Tax Act), and pay the amount withheld at the domestic place of business by the 10/10th of the following month.

First of all, we examine whether the additional dues for each of the instant cases constitute domestic source income under Article 93 subparagraph 11 (b) of the former Corporate Tax Act.

(ii) the facts of recognition

A) Each shipbuilding contract set forth above Nos. 1 and 2 above shall contain the following:

Article 3 (Adjustment of Contract Amount)

The contract amount shall be controlled by the adjustment to be specified below if there is a contingency (the reduction of contract amount shall be understood by the interests of both parties, which are to be done through the compensation for damage, not penalty, instead of penalty):

Damage compensation under this Agreement shall be in the final and conclusive monetary compensation that may be recoverable for each specific cause specified in this Agreement, and the shipr shall not be liable for any additional compensation that may be claimed by the owner of the vessel for such specific cause and the result thereof.

(1) India

(b) If the delivery of the ship is delayed by more than 30 days after the date of delivery, the contract amount shall be reduced by US$ 10,000 for each such later delay.

(hereinafter omitted)

(2) Speed;

(b) The contract amount shall be reduced to US$ 85,000 for each 1/10 of the vessel's warranty speed, provided that the defect at the trial speed exceeds 3/10 of the vessel's warranty speed, the contract amount shall be reduced to US$85,00.

(hereinafter omitted)

(5) Effect of cancellation

When a shipowner cancels this contract in accordance with this section, the parties clearly understand and agree that the shipowner does not have the right to compensate for damages or other claims for reimbursement unless the provisions of Article 10 of this Agreement are followed.

It is understood that the above damages are cumulative and exclusive, and the prior injection is entitled to claim in accordance with one or more provisions of this Article.

Article 10 (Cancellation of Prior Infection)

(1) Notice

The price paid by the vessel owner before delivery shall have the nature of advance payment to the vessel owner. If the vessel owner refuses to accept the vessel after a sea trial run, or the vessel owner cancels the vessel in accordance with the terms and conditions of this contract and the terms and conditions of this contract allowing the vessel owner to cancel, the vessel owner shall notify the vessel owner in writing or by telefax as confirmed in writing, and the relevant cancellation shall be valid from the date of receipt by the vessel owner.

(2) Refund by a shipbuilding company

Upon receipt of a notice of cancellation of a contract under paragraph (1) of this Article, a shipbuilding company shall immediately pay to a shipowner the total sum of all the amounts paid by a shipowner to the ship account of a shipbuilding company and interest thereon: Provided, That the same shall not apply where a shipbuilding company applies for arbitration under Article 12 of this Agreement.

In such cases, the shipbuilding company shall pay the interest calculated at the interest rate of 7% per annum on the total amount to be refunded to the shipowner.

(hereinafter omitted)

(iii) exemption from obligations;

When a domestic shipbuilding company refunds advance payments to a foreign vessel owner as above, each party’s obligations and obligations under the shipbuilding agreement of this case shall be immediately exempted.

B) Each shipbuilding contract set forth above Nos. 3 and 4 above also contains the following contents:

Article 3 (Adjustment of Contract Amount)

The contract amount shall be controlled by the adjustment to be specified below if there is a contingency (the reduction of contract amount shall be understood by the interests of both parties, which are to be done through the compensation for damage, not penalty, instead of penalty):

Damage compensation under this Agreement shall be conclusive monetary compensation that may be recovered in respect of each specific cause specified in this Agreement, and the shipr shall not be liable for any additional compensation that may be claimed by the owner of the vessel in relation to such specific cause and the result thereof.

(1) India

(b) If the delivery of the ship is delayed by more than 30 days after the date of delivery, the contract amount shall be reduced by US$ 13,000 for each such later delay.

(hereinafter omitted)

(2) Speed;

(b) The contract amount shall be reduced to US$ 145,00 for each 1/10 of the vessel's warranty speed if the defect at the trial speed exceeds 3/10 of the vessel's warranty speed, and the contract amount shall be reduced to US$ 145,00.

(hereinafter omitted)

(8) Effect of cancellation

When a shipowner cancels this contract in accordance with this section, the parties clearly understand and agree that the shipowner does not have the right to compensate for damages or other claims for reimbursement unless the provisions of Article 10 of this Agreement are followed.

Article 10 (Cancellation of Prior Infection)

(1) Default and validity of shipbuilding company

In any of the following cases, a shipowner has the right to declare the default on this contract, but is not bound by the shipowner:

(g) Where a shipbuilding company fails to provide a ship at the time of completion of the ship;

(2) Notice

The price paid by the vessel owner before delivery shall have the nature of advance payment to the vessel owner. If the vessel owner refuses to accept the vessel after a sea trial run, or the vessel owner cancels the vessel in accordance with the terms and conditions of this contract and the terms and conditions of this contract allowing the vessel owner to cancel, the vessel owner shall notify the vessel owner in writing or by telefax as confirmed in writing, and the relevant cancellation shall be valid from the date of receipt by the vessel owner.

(3) Refund by a shipbuilding company

Upon receipt of a notice of cancellation of a contract under paragraph (2) of this Article, a shipbuilding company shall immediately pay to a shipowner the total sum of all the amounts paid by a shipowner to the ship account of a shipbuilding company and interest thereon: Provided, That the same shall not apply where a shipbuilding company applies for arbitration under Article 12 of this Agreement.

In such cases, the shipbuilding company shall pay the interest calculated at the interest rate of 7% per annum on the total amount to be refunded to the shipowner.

(hereinafter omitted)

(iv) exemption from obligations;

When a domestic shipbuilding company refunds advance payments to a foreign vessel owner as above, each party’s obligations and obligations under the shipbuilding agreement of this case shall be immediately exempted.

C) On August 11, 2010, the SB Group concluded an agreement with each of the following terms and conditions when cancelling each of the shipbuilding agreements with the Heavy Industries.

1. A shipbuilding company shall take measures to repay all advance payments and all interest thereon together or to reimburse the refund guarantor. The interest shall apply to the relevant refund from the date when a shipbuilding company receives each advance payment from a shipowner to the account of a shipowner for a shipowner, no limitation, deduction, or set-off by a shipbuilding company to the account of a shipowner, and the contractual interest rate calculated by the date of remittance to the date of remittance;

2.Each shipbuilding agreement shall remain in force completely until the vessel owner receives all advance payments and all interest thereon in accordance with Article 1 above.

3. Where a vessel owner receives all advance payments and all interest thereon with respect to each shipbuilding contract for a vessel, the shipbuilding contract for the vessel shall be deemed cancelled and the refund guarantee certificate issued pursuant to the shipbuilding contract for the vessel shall be deemed satisfied;

In addition, vessel owners and shipbuilding owners shall exempt each other respectively from all present and future claims, demands, liabilities, legal responsibilities and obligations (other than those under this contract) arising in accordance with or in connection with shipbuilding contracts, and accordingly, they shall not be subject to any legal responsibilities (other than those under this contract) regardless of any contract, tort or other reason continued for both vessel owners and shipbuilding managers.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 3 and 19, the purport of the whole pleadings

3) The legal nature of each additional refund of this case

The term “Liquated” used in English law is generally interpreted as meaning similar to an estimate of the amount of damages under the Civil Code of the Republic of Korea. As seen in the above recognition, the term “Liquated Lages” is written in each shipbuilding contract of this case. However, since the term is written in Article 3 regarding the adjustment of the contract amount due to delay of delivery of a ship, not Article 10 regarding additional dues on refund of this case, the term is written in each shipbuilding contract of this case, so it cannot be readily concluded that the legal nature of each additional dues on refund of this case is either the amount of damages paid according to an estimate of the amount of damages or the return of unjust enrichment paid due to restitution.

However, in light of the following circumstances revealed in addition to the facts admitted as seen earlier and the purport of the entire arguments, it is reasonable to view that each additional refund of this case was paid according to the determination of the amount of damages or the specific amount of damages agreed upon by SSS Group and BB industry in the process of rescinding the agreement.

A) Each shipbuilding contract of this case provides that a domestic shipbuilding company is exempted from all the obligations and responsibilities of both parties related to the shipbuilding contract when a domestic shipbuilding company refunds advance payment and additional dues to a foreign vessel owner. Thus, a foreign vessel owner is not entitled to claim additional damages to a domestic shipbuilding company as long as the domestic shipbuilding company or the Plaintiff received refund of advance payment and additional dues for refund from the Plaintiff. Where the legal nature of additional dues for refund is considered to be restitution, it is concluded that a contracting party agreed not to claim damages already occurred or expected damages in addition to restitution, and the content of this contract is very exceptional.

B) Since the SG Group agreed to cancel each shipbuilding agreement with BB industry, and the BB industry is exempted from all the obligations and responsibilities of both parties related to the shipbuilding agreement if the BB industry returns advance payment and additional dues on refund, the SG Group is not entitled to claim additional damages in BB industry as long as the BB industry or the Plaintiff was returned advance payment and additional dues on refund from the Plaintiff. In the event that the legal nature of the above additional dues on refund is considered to be restitution, it is concluded that the parties to the contract agreed not to claim damages already incurred or expected damages in addition to restitution, and the content of this agreement is very exceptional.

C) It is necessary to set the amount of damages or to cancel the shipbuilding contract and specify the amount of damages in order to conclude the shipbuilding contract and to resolve difficult disputes that may arise in the future in the light of the nature of the shipbuilding contract where the shipbuilding period requires a long period of time and both the shipbuilding company and the vessel owner may incur unexpected damages.

D) Notwithstanding the terms and conditions under which a domestic shipbuilding company is exempt from all the obligations and responsibilities of the Parties related to the shipbuilding agreement, the Plaintiff asserts that a foreign vessel owner may claim damages, other than additional dues, against the domestic shipbuilding company. However, if the objective meaning of the language and text is clear when a certain content of a contract is written between the parties as a disposal document, barring any special circumstance, the existence and content of the declaration of intent should be recognized. In particular, in a case where a legal relationship between the parties is significantly affected by interpreting differently from the objective meaning of the language and text, the more strict interpretation of the language and text should be made (see, e.g., Supreme Court Decisions 2010Da26769, Nov. 11, 2010; 2012Da64253, Oct. 15, 2015). Therefore, foreign vessel owners cannot claim additional dues and additional dues.

4) Whether the payment constitutes money paid in excess of damages on the payment itself under the original terms and conditions of the contract

A) The meaning of losses exceeding the damages to the payment itself under the original contract

Since income can be imposed only on the case where income is generated in the nature of domestic source income, even if penalty or compensation is paid due to non-performance or termination or cancellation of a contract, it is not imposed as other income, but only penalty or compensation paid in excess of the compensation for losses is subject to income. Therefore, "damage exceeding damages to the payment itself, which is the contents of the present contract under Article 132 (10) of the former Enforcement Decree of the Corporate Tax Act" is not "affirmative damages, such as loss or reduction of existing income due to non-performance of the other party to the contract," but "negative damages, such as losses of opportunity, etc. that occur due to non-use of the amount paid to the other party to the contract" (see, e.g., Constitutional Court Order 2008HunBa79, Feb. 25, 2010).

B) Loss and burden of proof suffered by foreign vessel owners

(1) The foreign vessel owners, upon the rescission of each shipbuilding contract of this case, suffered (i) active damages in advance themselves, which were not returned to the domestic shipbuilding owners, and (ii) passive damages of the amount equivalent to the interest accrued due to the failure to use the said advance payment in any other place.

(2) The Plaintiff asserts that, in addition to the aforementioned active and passive damages, the foreign vessel owners suffered damages equivalent to the total expenses incurred in trust in each shipbuilding contract of this case, such as borrowing advance payments from a foreign financial institution and paying interest at an interest rate of 3% to 4% per annum on the interest rate, etc., each of the instant vessel owners should prove that the tax authorities should prove that each of the instant additional charges exceeds the total damages suffered by the foreign vessel owners.

In a lawsuit seeking revocation on the grounds of illegality of taxation disposition, the tax authority bears the burden of proving the legality of disposition and the existence of the taxation requirement fact. As such, in principle, the tax authority should prove whether the damages paid due to the rescission of the contract exceed all damages caused by nonperformance of obligation. However, the existence of damages is favorable to the taxpayer, and the factual basis related to the damages is within the control area of the taxpayer, and thus it is easy for the taxpayer to prove that the taxpayer is easily. Considering that the tax authority has proved the existence of the ordinary damages known through the nature of the contract itself and the text of the contract, so long as the tax authority has proved the existence of the ordinary damages, the existence of damages that may arise due to the special circumstances of the contracting party, as

Although a vessel owner borrowed advance payment from a financial institution or raised it by issuing bonds with a financial institution, the vessel owner may not be deemed to have borrowed advance payment from a financial institution, etc. in the event that the vessel owner entered into a shipbuilding contract. Therefore, even if the vessel owner borrowed advance payment from a financial institution, etc. and paid interest, it is reasonable to deem that the damage incurred due to the special circumstances of the contracting party, not ordinary damages, as such, there is a need to prove the existence of the Plaintiff.

However, the statement of Gap evidence Nos. 14 through 17 alone is insufficient to recognize that foreign vessel owners borrowed advance payments from financial institutions, etc. to pay advance payments to domestic vessel owners, and there is no other evidence to acknowledge otherwise, it cannot be deemed that foreign vessel owners suffered losses from borrowing advance payments and paying interest.

On the other hand, the Plaintiff did not specifically specify what expenses are incurred in claiming that foreign vessel owners incurred losses by reliance on each of the shipbuilding contracts of this case and paying all of the expenses in addition to the above interest. Thus, it cannot be deemed that foreign vessel owners suffered such losses.

C) Whether the additional payment for each of the instant cases constitutes money paid in excess of the damages to the payment itself under the original terms of the contract

Among the damages incurred by foreign vessel owners due to the rescission of each shipbuilding contract of this case, the amount of active damages paid to the domestic shipbuilding owners for the advance payment of this case was paid by the Plaintiff. Accordingly, each additional refund of this case can be deemed to have been paid to foreign vessel owners in order to compensate for the damages equivalent to the interest accrued due to their failure to use the advance payment paid to domestic shipbuilding owners in other locations. Thus, each additional refund of this case constitutes the money paid in excess of the amount of compensation for the payment itself, which is the contents of the original contract under Article 132(10) of the former Enforcement Decree of the Corporate Tax Act.

5) Sub-committee

Therefore, since each additional refund of this case constitutes other income stipulated in Article 93 subparag. 11 (b) of the former Corporate Tax Act and falls under the domestic source income of a foreign corporation, it is not necessary to examine further whether each additional refund of this case constitutes other income under Article 93 subparag. 11 (j) of the former Corporate Tax Act or interest income under Article 93 subparag. 1 (a) of the former Corporate Tax Act.

B. Existence of withholding duty (Judgment on the plaintiff's conjunctive one argument)

In full view of the fact that Article 98(1) of the former Corporate Tax Act provides that a withholding obligation for domestic source income shall be borne by a foreign corporation at the time of payment by the person who pays the income to the foreign corporation, the essence of the withholding tax system to ensure convenience in taxation and securing tax revenue by withholding at the time of payment from the source of income source, and the content and structure of other provisions related to withholding tax on domestic source income, “a person who pays income under Article 98(1) of the same Act” means a person who actually pays the amount of domestic source income as his/her performance under a contract, etc. (see, e.g., Supreme Court Decision 2006Du7904, Mar. 12, 2009).

In light of the above legal principles, the Plaintiff paid additional dues on the refund of each of the instant cases for the performance of its obligations, not the other party’s obligations under each vessel guarantee agreement. Therefore, the Plaintiff’s duty to withhold withholding taxes on each of the instant additional dues is not reasonable.

C. Whether the tax treaty with the lease is applied (Judgment on the plaintiff's conjunctive assertion 2)

1) Article 28 of the Adjustment of International Taxes Act provides that "the tax treaty shall apply preferentially to the classification of foreign corporations' domestic source income, notwithstanding Article 93 of the Corporate Tax Act," and Article 22 (1) of the Tax Treaty between the Republic of Korea and the relevant lease provides that "the Convention shall apply preferentially to the classification of foreign corporations' domestic source income only in that Contracting State, regardless of the existence of such income."

2) The burden of proof as to the requirements for non-taxation and tax exemption is on the part of the taxpayer (see, e.g., Supreme Court Decision 98Du16095, Jul. 7, 2000). A person who wishes to receive non-taxation benefits through the application of the tax treaty is liable to prove such circumstance where the corporate personality of a special purpose company is denied or income of a company establishing a special purpose company that is not a special purpose

3) First of all, whether PP and F are merely a special purpose company and therefore denied legal personality is general. A special purpose company is established without human and material capital to achieve a temporary purpose. Therefore, the mere fact that a special purpose company has minimum invested property to the extent required by the law of the place of establishment in order to achieve the purpose of its establishment, or that an employee of a special purpose company concurrently operates or controls a special purpose company by holding an officer or employee of the special purpose company, does not necessarily violate the justice and equity as an abuse of legal personality in violation of the principle of trust and good faith. To recognize abuse of legal personality, it should be deemed that the special purpose company has been used without permission as a means to avoid the application of the law to the person behind the corporate personality of the special purpose company, or where the subjective intent or purpose of the company system is recognized, such as abusing its legal system in order to achieve unlawful purposes, such as evading its obligations, avoiding its contractual obligations, and evading its evasion (see, e.g., Supreme Court Decision 2007Da85980, Feb. 25, 2010).

The Plaintiff asserts that the PP and F are special-purpose companies established for the convenience of convenience, and therefore the legal personality should be denied. However, in light of the aforementioned legal principles, such circumstance alone does not lead to the denial of legal personality of PP and F, and there is no evidence to acknowledge that the PP and F have been used as a means to avoid the application of the laws on ZSping. Accordingly, the Plaintiff’s assertion on this part is without merit.

4) Next, the issue of whether additional dues for refund listed in Nos. 1 and 2 are actually attributed to Z-Sing, not PP and F, Z-Sing. The principle of substantial taxation under Article 14(1) of the Framework Act on National Taxes is applied in cases where there is a separate person to whom such additional dues accrue, unlike the nominal owner, with respect to income, profit, property, transactions, etc. subject to taxation, the nominal owner should be the person to whom such additional dues accrue, rather than the nominal owner. Thus, the nominal owner of the property is not capable of controlling and managing the property, and there is a separate person who actually controls and manages the property through the control, etc. over the nominal owner, and the difference between the nominal owner and the real owner arises from the purpose of tax evasion (see, e.g., Supreme Court en banc Decision 2008Du84165, Jan. 19, 2012; 2012Du161565, Feb. 16, 2016).

According to the statements in Gap 3, 7, and 13, MM, the president of the Zing, concluded each shipbuilding contract with AA as the representative of PP and F. ② each shipbuilding contract is agreed to provide that all notifications related to the above shipbuilding contract must be delivered to the address of Z-speing. ③ The fact that the Z-speing, which is not the PP, made an early payment agreement with A on April 25, 2007. ④ the fact that the Z-speing, which is not the PP and FF, declared the cancellation of each shipbuilding contract with A et al. ④ the fact that the Z-speing declared its intention to cancel each shipbuilding contract, ⑤ the declaration of intention that the Z-spe-speing will receive the advance and additional refund to PP and F as the Z-speing account which is not the account of PP and F.

On the other hand, according to the evidence evidence Nos. 10 through 13, it can be recognized that the Zping declared the cancellation of each shipbuilding contract as above or declared that it would receive advance payment and additional refund to the account of Zping, the Zping is in the position of PP and F's guarantor or the agent. Thus, each of the facts acknowledged above is insufficient to recognize that the actual owner of each advance payment of this case is the Zping, and there is no other evidence to acknowledge it. Accordingly, the plaintiff's assertion on this part is without merit.

5) Therefore, the taxpayer with respect to each additional dues of this case cannot be deemed to be the Z-speing, not the PP and F. Therefore, the Plaintiff’s aforementioned conjunctive two arguments are without merit on different premise.

D. Sub-committee

Therefore, the instant disposition is lawful.

5. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.