All
| TITLE | 【Syllabus of Latest Opinion】 Supreme Court Decision 2024Da295876 Decided April 24, 2025 【Lawsuit Seeking Return of Unjust Enrichment】 [full Text] |
|---|---|
| Summary | |
| 【Main Issues and Holdings】 [1] Legal nature of the appropriation of national tax refund In a case where a tax claim to be extinguished by the appropriation of national tax refund is either nonexistent, rendered null and void ab initio, or cancelled, whether a taxpayer may contest the inadequacy of appropriation and request return of national tax refund in civil actions (affirmative), and in a case where the appropriation of national tax refund is to no purpose, rights restored to the extent thereof (held: the right to request a tax refund that was initially determined and applied against other tax liability) Whether this legal doctrine applies likewise to a refund of the tax amount paid in the name of a withholding agent (affirmative) [2] In a case where a withholding agent collected or paid a tax on income that is not subject to withholding, or collected or paid a tax in excess of the amount due from a taxpayer with a withholding tax obligation, the party entitled to a claim for refund of the amount of tax paid in the name of the withholding agent (held: the withholding agent) [3] In a case where: (a) the withholding agents, including Bank A, paid dividends, etc. to intermediary holding companies subordinate to Corporation B, etc., which is related to Foreign Corporation B, etc., and withheld the relevant national tax and paid to the competent tax office; (b) the competent tax office levied an income tax or corporate tax on Corporation B, etc. by deeming Corporation B, etc. as the party to which the source dividend income actually belongs and on the ground that they have their permanent establishment and place of business in the Republic of Korea, and offset the income tax or corporate tax with the refund of withheld taxes; (c) subsequently, after the Supreme Court rendered a decision that corporate tax, not income tax, should be levied on a foreign limited partnership, the competent tax office cancelled the income tax assessment and imposed a corporate tax, and applied the refund of withheld tax against the corporate tax liability as the amount deemed paid; and (d) when a corporate tax assessment was cancelled by a final and conclusive judgment holding that Corporation B, etc. cannot be considered to have permanent establishment, etc. in the Republic of Korea, Corporation B, etc. sought return of unjust enrichment against the state, claiming a right to the unreturned portion of the withheld tax amount that had been applied to satisfy the corporate tax liability, the case holding that the lower judgment, which partially invoked Corporation B, etc.’s claim, to the contrary of a reasonable conclusion that the entitlement to national tax refund for the withheld amount belongs to Bank A, etc. as the withheld tax was paid in the name of the withholding agents, such as Bank A, erred by misapprehending legal doctrine | |
