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| TITLE | 【Syllabus of Latest Opinion】 Supreme Court Decision 2022Du33507 Decided April 2, 2026 【Lawsuit Seeking Revocation of Disposition Refusing to Correct (Withholding) Corporate Tax】 [full Text] |
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| Summary | |
| 【Main Issues and Holdings】 [1] Method of interpreting a treaty or convention Ordinary meaning of the phrase “gains contingent on the productivity, use, or disposition” as referred to in Article 14(4)(b) of the Convention between the Republic of Korea and the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and the Encouragement of International Trade and Investment [2] Meaning of the term “capital assets” as referred to in Article 16(1) of the Convention between the Republic of Korea and the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and the Encouragement of International Trade and Investment Whether trademarks are included in “capital assets” under the U.S. Internal Revenue Code at the time of the conclusion of the above Convention in 1976 (affirmative) and this is likewise applicable to the interpretation of the term “capital assets” as referred to in Article 16(1) of the above Convention (affirmative) [3] In a case where Stock Company A acquired a trademark registered in the United States from a U.S. corporation, paid the corporate tax withheld on the purchase price to the head of the competent district tax office, and subsequently filed a request for rectification seeking a refund of the withholding corporate tax paid on the grounds that the purchase price did not constitute domestic source income under the Convention between the Republic of Korea and the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and the Encouragement of International Trade and Investment, but the head of the competent district tax office rejected the request, the case holding that the judgment of the lower court, which determined that the above purchase price did not constitute royalty income under Article 14(4)(b) of the above Convention, and as the above trademark is deemed a capital asset under Article 16(1) of the above Convention, the Republic of Korea had no taxation rights over the capital gains on transfer thereof, was just | |
