2020년 소득과세 관련 판례 회고

[Purpose]This article reviews six Korean Supreme Court cases of 2020 regarding (corporate) income taxation. [Methodology]The article analyzed 6 selected cases with facts, issues, court rulings and the writer’s opinions. [Findings]Supreme Court decision (en banc) 2016Du43411 rexplicitly provided that it was constitutional and valid that the Presidential Decree of the Individual Income Tax Law applied Inheritance and Gift Tax Law mutastis mutandis when denying unfair transaction and calculating capital gain tax. It is reasonable that the amended Presidential Decree of Individual Income Tax Law which unified the fair market value calculation method with Corporate Income Tax Law. Supreme Court decision 2016Du35854 confirmed the meaning of ‘liable to tax’ under Korea－Luxembourg tax treaty and the existing Supreme Court’s legal principle regarding the beneficial owner. The case also provided the interpretation of the ‘holding companies’ which is excluded from applying the Korea－Lux tax treaty. Supreme Court decision 2017Du72935 ruled on the scope of income attributable to a foreign company’s Korean permanent establishment for the first time. The Supreme Court confirmed that if the business activities were conducted both in and outside Korea, income allocable to head office should be excluded when imposing both Corporate Income tax and VAT. Supreme Court decision 2017Du63788 provided that deficit reduction which belongs to the fiscal year after January 1, 2020 could be the object of appeal litigation under the amended Corporate Income Tax law. Such case likely impacts and changes current litigation practice. However, remedies are necessary against the non－litigated deficit reduction which were reserved for litigating the consequent assessment in the later fiscal years. Supreme Court decision 2017Du44084 reaffirmed the existing legal theory of interpreting the purchase of the non－performing asset, when denying the unfair transactions. The case first dealt with the company’s share owned by company itself. Supreme Court decision 2018Du32330 provided that if a non－profit corporation expended its income earned from profit－making business for reserve fund for essential business, it cannot be deemed as an expense for profit－making business. The case considered the separate accounting of non－profit corporation and the purport of the provisions where reserve fund for essential business is deemed as expenses. [Implications]In sum, 6 Supreme Court cases of 2020 regarding income taxation all include meaningful rulings either substantially or procedurally.