【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 / Criteria for determining whether a provision of an enforcement decree conflicts with its enabling statute / 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] Whether Article 61(1)9(b) of the former Enforcement Decree of the Value-Added Tax Act and Article 61(2)9(b) of the Enforcement Decree of the Value-Added Tax Act, which have Article 29(3)6 of the Value-Added Tax Act as their basis of delegation, are void (negative)
[4] In a case where A company, which operates an online shopping mall, entered into business affiliation agreements with credit card companies under which, when a customer paid with a credit card at a merchant of the credit card companies, credit card points would be accumulated at the merchant's expense, and when the customer later used such points at a merchant, the credit card companies would collect from the customer only the price less the amount equivalent to the points and pay the merchant that price plus the amount paid with the points; A company reported and paid value-added tax including in the tax base all amounts paid by customers with such points at the online shopping mall operated by A company, and then filed a request for correction with the competent head of the tax office seeking a refund on the ground that the amounts paid with such points constituted "discounts"; and the head of the tax office refused it, the Court held that the portion of the disposition concerning value-added tax for the first and second taxable periods of 2017, made pursuant to Article 61(1)9(b) of the former Enforcement Decree of the Value-Added Tax Act having Article 29(3)6 of the former Value-Added Tax Act as its basis of delegation, is unlawful, but the portion concerning value-added tax from the first taxable period of 2018 to the first taxable period of 2019, made pursuant to the said Enforcement Decree provision having Article 29(3)6 of the Value-Added Tax Act as its basis of delegation and Article 61(2)9(b) of the Enforcement Decree of the Value-Added Tax Act, is not unlawful
【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.
If, as a result of such determination, the content of a legislative order is recognized as being within the objectively ascertained scope or limits of statutory delegation, or as concretely clarifying what the statute contemplates, the legislative order does not become void. In addition, where it is not clear whether a provision of an enforcement decree conflicts with its enabling statute, if an interpretation that the provision conforms to the enabling statute is also possible upon comprehensively examining the other provisions of the enabling statute and the enforcement decree, their legislative purpose, history, etc., the provision should not be declared void as violating the enabling statute.
Meanwhile, 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"), which has Article 29(3)6 of the former Value-Added Tax Act (before being amended by Act No. 15223, Dec. 19, 2017; hereinafter the same) as its basis of delegation, is inconsistent with the purport of 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, which has Article 29(3)6 of the former Value-Added Tax Act as its basis of delegation, 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] 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 "pre-amendment Enforcement Decree provision") and Article 61(2)9(b) of the Enforcement Decree of the Value-Added Tax Act as amended by Presidential Decree No. 28641 on February 13, 2018 (hereinafter the "post-amendment Enforcement Decree provision"), which have as their basis of delegation Article 29(3)6 of the Value-Added Tax Act as amended by Act No. 15223 on December 19, 2017 and effective January 1, 2018, are consistent with the purport of the enabling statute and prescribe specific taxation requirements within the scope of delegation, and thus cannot be regarded as exceeding the limits of delegated legislation or violating the principle of no taxation without law. The reasons are as follows.
① In the case of a legislative order that takes effect pursuant to statutory delegation, even if it was void for lack of a basis of delegation, it may be regarded as a valid legislative order from the time a basis of delegation is granted by a subsequent amendment of the statute. When Article 29(3)6 of the Value-Added Tax Act was amended by Act No. 15223 on December 19, 2017 and took effect on January 1, 2018, the phrase "transactions in which all or part of the price is paid with mileage, etc. as prescribed by Presidential Decree" was added to its text, unlike before, and thus it can be regarded that the scope of the supply value, which is the tax base of value-added tax, was expanded within the scope prescribed by the pre-amendment Enforcement Decree provision, and conversely the scope of discounts not included in the supply value was reduced accordingly. The same applies to the post-amendment Enforcement Decree provision.
② The scope of transactions subject to value-added tax and the scope of the supply value basically belong to the domain of legislative policy. Through the 2017 amendment of the Value-Added Tax Act, the legislature granted a new basis of delegation to the pre-amendment Enforcement Decree provision, thereby revealing its decision to include in the supply value for value-added tax "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. other than self-accumulated mileage, etc.," as prescribed in the pre-amendment Enforcement Decree provision, and statutory interpretation should be made in a direction that respects this as much as possible.
③ Under the Value-Added Tax Act, where a supplier receives money or anything of monetary value in connection with the supply of goods or services, whether it constitutes consideration for the supply must be determined normatively on the basis of the laws and regulations applicable to the case in accordance with the principle of no taxation without law. Therefore, from the time the pre-amendment Enforcement Decree provision lawfully acquired a basis of delegation upon the Value-Added Tax Act taking effect on January 1, 2018, the amount equivalent to settlement payments made among business operators in connection with the so-called "third-party-accumulated mileage, etc.," that is, mileage, etc. other than "self-accumulated mileage, etc." as defined in the pre-amendment Enforcement Decree provision, may be evaluated as consideration for the relevant supply under the newly changed normative circumstances. From this standpoint, after the 2017 amendment of the Value-Added Tax Act, the pre-amendment Enforcement Decree provision and the post-amendment Enforcement Decree provision may also be understood as provisions intended to include the amount equivalent to settlement payments in the supply value of the second transaction under certain requirements where payment is made with mileage, etc., on the premise that settlement payments mutually made among business operators in connection with third-party-accumulated mileage, etc. may constitute consideration for the supply in the second transaction.
④ Article 29(3)6 of the Value-Added Tax Act cannot be regarded as violating the principle of parliamentary reservation or the principle of no taxation without law merely because, while taking as its basic premise that a certain portion of the amount paid to a business operator with mileage, etc. may be included in the supply value, which is the tax base of value-added tax, it delegated to the enforcement decree matters concerning the definition of "mileage, etc." and the scope of the supply value without prescribing them directly.
[4] In a case where A company, which operates an online shopping mall, entered into business affiliation agreements with credit card companies under which, when a customer paid with a credit card at a merchant of the credit card companies, credit card points would be accumulated at the merchant's expense, and when the customer later used such points at a merchant, the credit card companies would collect from the customer only the price less the amount equivalent to the points and pay the merchant that price plus the amount paid with the points; A company reported and paid value-added tax including in the tax base all amounts paid by customers with such points at the online shopping mall operated by A company, and then filed a request for correction with the competent head of the tax office seeking a refund on the ground that the amounts paid with such points constituted "discounts"; and the head of the tax office refused it, the Court held that the portion of the disposition concerning value-added tax for the first and second taxable periods of 2017, made pursuant to 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 "pre-amendment Enforcement Decree provision") having Article 29(3)6 of the former Value-Added Tax Act (before being amended by Act No. 15223, Dec. 19, 2017) as its basis of delegation, is unlawful, but the portion concerning value-added tax from the first taxable period of 2018 to the first taxable period of 2019, made pursuant to the pre-amendment Enforcement Decree provision having as its basis of delegation Article 29(3)6 of the Value-Added Tax Act as amended by Act No. 15223 on December 19, 2017 and effective January 1, 2018, and Article 61(2)9(b) of the Enforcement Decree of the Value-Added Tax Act as amended by Presidential Decree No. 28641 on February 13, 2018 (hereinafter the "post-amendment Enforcement Decree provision"), cannot be regarded as unlawful; nevertheless, the lower court, which held otherwise that even the portion of the disposition concerning value-added tax from the first taxable period of 2018 to the first taxable period of 2019 was unlawful, erred in its misapprehension of legal principles concerning the validity, etc. of the pre-amendment and post-amendment Enforcement Decree provisions.
【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 Value-Added Tax Act; 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)); Article 61(2)9(b) of the Enforcement Decree of the Value-Added Tax Act [4] 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 29(3)6 of the Value-Added Tax Act; 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)); Article 61(2)9(b) of the Enforcement Decree of the Value-Added Tax Act
【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 Decision 2011Du6264, January 16, 2014 (Gong2014Sang, 402)
Supreme Court en banc Decision 2012Du23808, August 20, 2015 (Gong2015Ha, 1419)
Supreme Court en banc Decision 2016Du32992, September 3, 2020 (Gong2020Ha, 1950)
Supreme Court Decision 2020Du39655, July 29, 2021 (Gong2021Ha, 1647)
Supreme Court Decision 2022Du32382, January 9, 2025 (Gong2025Sang, 463)
[2][3] Supreme Court en banc Decision 2015Du58959, August 26, 2016 (Gong2016Ha, 1433)
[2] Supreme Court Decision 2011Du8178, April 11, 2013 (Gong2013Sang, 877)
[3] Supreme Court en banc Decision 2015Du45700, April 20, 2017 (Gong2017Sang, 1191)
(Source: Supreme Court Decision 2025Du34707, July 22, 2026 (en banc) | Judicial Information Disclosure Portal, Precedents)
2026. 10. 14. · By Attorney Dongwoo Shin
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