【Holding】
[1] Whether an enforcement decree may, without delegation by statute, alter or supplement provisions on individual rights and duties prescribed by statute or prescribe new matters not provided for in the statute (negative) / Where a statute delegates a specific matter to subordinate legislation, the method of ascertaining the scope of delegation of the enabling statute or determining whether the subordinate legislation observes the limits of delegation / Method of determining whether a matter constitutes an essential matter that the National Assembly must itself prescribe by formal statute / Whether prescribing basic and essential matters concerning tax liability by administrative legislation without statutory delegation, or establishing interpretive provisions that arbitrarily analogize or expand matters prescribed by statute, violates the principle of no taxation without law (affirmative)
[2] Whether Article 61(1)9(b) of the former Enforcement Decree of the Value-Added Tax Act, which has Article 29(3)6 of the former Value-Added Tax Act as its basis of delegation, is void (affirmative)
[3] In a case where A company, under an affiliation agreement with B company, operated and managed an online shopping mall opened by B company, and when B company's customers used points accumulated from B company to have part of the purchase price deducted at the shopping mall and paid only the remaining amount, A company received settlement of the amount equivalent to such points from B company; A company reported and paid value-added tax including in the tax base even the portion of the price paid by customers with such points, and then filed a request for correction with the competent head of the tax office seeking a refund on the ground that such portion constituted "discounts"; and the head of the tax office refused it, the Court held that the lower court erred in its misapprehension of legal principles by holding the disposition lawful on the premise that Article 61(1)9(b) of the former Enforcement Decree of the Value-Added Tax Act was valid
【Summary of Decision】
[1] Article 75 of the Constitution provides that "The President may issue presidential decrees concerning matters delegated to him or her by statute with the scope specifically defined and also matters necessary to enforce statutes." Accordingly, an enforcement decree of a statute may prescribe only matters delegated by its enabling statute or detailed matters necessary for the actual enforcement of the statute within the scope prescribed by the statute, and absent delegation by statute, it may not alter or supplement provisions on individual rights and duties prescribed by statute or prescribe new matters not provided for in the statute.
Where a statute delegates a specific matter to subordinate legislation, in ascertaining the scope of delegation of the enabling statute or determining whether the subordinate legislation observes the limits of delegation, one must comprehensively consider whether the matters prescribed by the subordinate legislation are essential matters that the legislature must itself regulate by formal statute, so as to fall within the area where the principle of parliamentary reservation must be observed, as well as the legislative purpose and content of the relevant statutory provision, the structure of the provisions, and the relationship with other provisions, and must specifically examine whether the subordinate legislation has exceeded the limits of the literal meaning even though the delegating provision itself clarifies the limits of delegation using terms whose meaning can be precisely understood, whether the content of the subordinate legislation falls within a range in which the outline of the delegated content can be predicted from the enabling statute itself, and whether it can be evaluated as having gone beyond the stage of concretizing the delegated content and enacted new legislation by expanding or narrowing the scope beyond the meaning of the terms used in the enabling provision.
Here, whether a matter constitutes an essential matter that the National Assembly must itself prescribe by formal statute should be determined individually in each specific case, taking into account the importance of the interests or values involved and the degree and method of regulation or infringement; however, the more important the subject of regulation is in relation to the fundamental rights and basic duties of citizens, and the greater the need for public debate thereon or for adjustment among conflicting interests, the greater the need for it to be regulated directly by statute enacted by the National Assembly. Article 37(2) and Article 38 of the Constitution provide that all freedoms and rights of citizens may be restricted by statute only when necessary for national security, the maintenance of law and order, or public welfare, that even when such restriction is imposed, no essential aspect of the freedom or right shall be violated, and that all citizens shall have the duty to pay taxes under the conditions as prescribed by statute. Articles 59 and 75 of the Constitution set the limits that the types and rates of taxes shall be determined by statute and that delegation by statute must specifically define its scope. In light of these provisions, in order to impose a tax liability on citizens, the basic and essential matters concerning tax liability, such as the types and rates of taxes, must be prescribed by statute enacted by the National Assembly, the representative body of the people, and prescribing basic and essential matters concerning tax liability, such as taxation requirements, by administrative legislation such as orders or rules without statutory delegation, or establishing interpretive provisions that arbitrarily analogize or expand matters prescribed by statute, violates the principle of no taxation without law.
[2] Article 61(1)9(b) of the former Enforcement Decree of the Value-Added Tax Act (before being amended by Presidential Decree No. 28641, Feb. 13, 2018) (hereinafter the "Enforcement Decree provision") is inconsistent with the purport of Article 29(3)6, etc. of the former Value-Added Tax Act (before being amended by Act No. 15223, Dec. 19, 2017; hereinafter the same), its enabling statute, and expands the taxation requirements by administrative legislation beyond the scope of delegation, and is thus properly regarded as void for violating the principle of no taxation without law. The reasons are as follows.
① Where a business operator has granted points corresponding to a certain percentage of sales in a first transaction with a customer, the amount reduced in a second transaction by the amount equivalent to the accumulated points is a direct deduction or subtraction from the supply value in accordance with the payment terms for the consideration for supply agreed in advance between the business operator and the customer, and thus constitutes a discount. Where a business operator operates such a price deduction system based on accumulated points together with other business operators, even if settlement among the business operators is scheduled after the second transaction, the amount discounted in the second transaction by points accumulated in the first transaction cannot be regarded as not being a discount and included in the supply value of the second transaction.
However, the Enforcement Decree provision divides mileage, etc. into two categories, namely "self-accumulated mileage, etc." as defined in the provision itself and the so-called "third-party-accumulated mileage, etc." falling outside it, and, in the case of the latter, requires that the amount compensated or to be compensated by a person other than the recipient of the goods or services for the portion paid with mileage, etc. be included in the supply value constituting the tax base of value-added tax, thereby treating it differently from the former. This excludes, without statutory basis, "third-party-accumulated mileage, etc.," which constitutes a discount under Article 29(5)1 of the former Value-Added Tax Act, the superior law, from the scope of discounts; it thus not only conflicts with Article 29(5)1 but also expands the scope of the supply value beyond the scope of statutory delegation.
② The Enforcement Decree provision, which has Article 29(3)6 of the former Value-Added Tax Act as its basis of delegation, expanded the scope of taxation solely by presidential decree without an amendment of the statutory provision based on a new legislative decision. This also violates the principle of no taxation without law.
[3] In a case where A company, under an affiliation agreement with B company, operated and managed an online shopping mall opened by B company, and when B company's customers used points accumulated from B company to have part of the purchase price deducted at the shopping mall and paid only the remaining amount, A company received settlement of the amount equivalent to such points from B company; A company reported and paid value-added tax including in the tax base even the portion of the price paid by customers with such points, and then filed a request for correction with the competent head of the tax office seeking a refund on the ground that such portion constituted "discounts"; and the head of the tax office refused it, the Court held that Article 61(1)9(b) of the former Enforcement Decree of the Value-Added Tax Act (before being amended by Presidential Decree No. 28641, Feb. 13, 2018) is inconsistent with the purport of Article 29(3)6, etc. of the former Value-Added Tax Act (before being amended by Act No. 15223, Dec. 19, 2017), its enabling statute, and expands the taxation requirements by administrative legislation beyond the scope of delegation, and is thus void for violating the principle of no taxation without law; therefore, the lower court, which held the disposition lawful on the premise that the Enforcement Decree provision was valid, erred in its misapprehension of legal principles concerning the constitutional principle of statutory reservation and the principle of no taxation without law.
【Referenced Statutes】
[1] Articles 37(2), 38, 59, and 75 of the Constitution [2] Articles 59 and 75 of the Constitution; Article 29(1), (3)6, and (5)1 of the former Value-Added Tax Act (before being amended by Act No. 15223, Dec. 19, 2017); Article 61(1)9(b) of the former Enforcement Decree of the Value-Added Tax Act (before being amended by Presidential Decree No. 28641, Feb. 13, 2018) (see current Article 61(2)9(b)) [3] Articles 59 and 75 of the Constitution; Article 29(1), (3)6, and (5)1 of the former Value-Added Tax Act (before being amended by Act No. 15223, Dec. 19, 2017); Article 61(1)9(b) of the former Enforcement Decree of the Value-Added Tax Act (before being amended by Presidential Decree No. 28641, Feb. 13, 2018) (see current Article 61(2)9(b))
【Referenced Precedents】
[1] Supreme Court Decision 89Nu2493, September 28, 1990 (Gong1990, 2186)
Supreme Court en banc Decision 93Da37342, January 24, 1995 (Gong1995Sang, 904)
Supreme Court en banc Decision 98Du11731, March 16, 2000 (Gong2000Sang, 989)
Supreme Court en banc Decision 2011Du30878, December 20, 2012 (Gong2013Sang, 240)
Supreme Court en banc Decision 2012Du23808, August 20, 2015 (Gong2015Ha, 1419)
Supreme Court en banc Decision 2016Du32992, September 3, 2020 (Gong2020Ha, 1950)
[2] Supreme Court Decision 2011Du8178, April 11, 2013 (Gong2013Sang, 877)
Supreme Court en banc Decision 2015Du58959, August 26, 2016 (Gong2016Ha, 1433)
(Source: Supreme Court Decision 2025Du33035, July 22, 2026 (en banc) | Judicial Information Disclosure Portal, Precedents)
2026. 10. 14. · By Attorney Dongwoo Shin
Call
KakaoTalk
E-mail