[Breaking] Supreme Court Overturns and Remands 2nd Instance Ruling in MS 'Corporate Tax Refund' Case... "Insufficient Deliberation"

[Asia Economy Choi Seok-jin, Legal Affairs Specialist Reporter] The Supreme Court overturned the appellate court's partial ruling in favor of the plaintiff in the corporate tax refund lawsuit filed by the U.S. company Microsoft (MS) against the Korean tax authorities.

On the 10th, the Supreme Court's 3rd Division (Presiding Justice Kim Jae-hyung) dismissed MS's appeal in the corporate tax reassessment refusal cancellation lawsuit filed by MS and its subsidiary MS Licensing against the Dong Suwon Tax Office, overturned the appellate court's partial ruling in favor of MS Licensing, and remanded the case to the Suwon High Court.

The court ruled that the appellate court's decision that MS did not have the right to request reassessment was illegal because it failed to fully examine whether MS was the actual beneficiary of the patent royalty income, which affected the judgment.

Additionally, the appellate court was found to have violated the law by not examining or judging the defendant's claim that the royalties in this case included payments for rights other than patents, such as copyrights, know-how, and trade secrets, which are subject to withholding tax as domestic source income.