1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

Purport of claim and appeal

1..

The reasoning of the judgment of the court of first instance, which cited the judgment, is the same as the reasoning of the judgment of the court of first instance, except for dismissal or addition of the corresponding part of the judgment of the court of first instance as follows. Thus, it is accepted in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of

[Supplementary or additional parts] 3-4 pages - 3

The part of the "paragraph" is as follows:

A. The latter part of the proviso of Article 93 subparag. 8 of the former Corporate Tax Act (amended by Act No. 13555, Dec. 15, 2015; hereinafter the same) stipulates that even if a foreign corporation registered a patent right outside of Korea, and a patent right, etc. was used in manufacturing, selling, etc. in Korea, income received in return for the use thereof shall be deemed domestic source income. However, Article 28 of the former Adjustment of International Taxes Act (amended by Act No. 16099, Dec. 31, 2018; hereinafter the same shall apply) stipulates that “The classification of domestic source income of a nonresident or a foreign corporation shall be preferentially applied to a tax treaty notwithstanding Article 119 of the Income Tax Act and Article 93 of the Corporate Tax Act,” so it shall not be determined in accordance with the Korea-U.S. Tax Convention as domestic source income in cases where a patent right, etc. registered outside of Korea was used in manufacturing, selling, etc. in Korea.

However, when considering the context of the Korea-U.S. Tax Convention and the ordinary meaning of the language and text, Articles 6(3) and 14(4) of the Korea-U.S. Tax Convention provide that the right of patent holders to exclusively produce, use, transfer, lend, import, or exhibit patent products shall have effect only within the territory of the country where the patent right is registered, and thus the U.S. corporation has a patent license in Korea upon registration of the patent right.