Open Decision Ledger · Tax & international taxation
Welfare points under a selective welfare scheme as earned income
Supreme Court, Sept. 11, 2025, 2023Du59391 (judgment)
No holding summary · checked against points at issue. The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Case name: 근로소득세경정청구거부처분취소
Official text on the National Law Information Center
Question
Are the welfare points that a company's employees receive and use under a selective welfare scheme earned income within Article 20(1) of the former Income Tax Act?
Holding
Yes. The Supreme Court held that the points, although not direct consideration for labour, are remuneration given in a certain correlation and economic rationality to the labour the employees provided, and that the employees obtain a substantial economic benefit by freely buying the goods or services they need within the set period and uses. Article 3(1) of the Framework Act on the Welfare of Workers takes basic working conditions such as wages and working hours out of the concept of worker welfare only because the Labour Standards Act governs them, and does not make welfare and labour conditions mutually exclusive. Because the court below misunderstood the law on the scope of earned income and its error affected the judgment, the judgment was reversed and the case remanded.
Points at issue, verbatim
갑 공사 소속 임직원들이 선택적 복지제도의 시행으로 배정받아 사용한 복지포인트가 구 소득세법 제20조 제1항의 근로소득에 해당하는지 문제 된 사안에서, 위 복지포인트는 구 소득세법 제20조 제1항의 근로소득에 해당한다고 한 사례
Unofficial English translation
In a matter where it was at issue whether the welfare points that the executives and employees of A Corporation were allocated and used through the implementation of an optional welfare system fall under the earned income prescribed in Article 20(1) of the former Income Tax Act, it was held that the said welfare points fall under the earned income prescribed in Article 20(1) of the former Income Tax Act
Disposition
Reversed and remanded Stated in the decision
원심판결을 파기하고, 사건을 대전고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed, and the case is remanded to the Daejeon High Court.
Form of the test
Existing test applied Stated in the decision
이 사건 복지포인트는 구 소득세법 제20조 제1항의 근로소득에 해당한다고 봄이 상당하다.
Unofficial English translation
It is reasonable to regard the welfare points at issue in this case as falling under the earned income prescribed in Article 20(1) of the former Income Tax Act.
Factors
- 구 소득세법 제20조 제1항에서 정한 근로소득의 범위
- 갑 공사 소속 임직원들이 선택적 복지제도의 시행으로 배정받아 사용한 복지포인트가
- 구 소득세법 제20조 제1항의 근로소득에 해당하는지 문제 된 사안에서
Unofficial English translation
• The scope of earned income as defined in Article 20(1) of the former Income Tax Act
• the welfare points that the executives and employees of A Corporation were allocated and used through the implementation of an optional welfare system
• in a matter where it was at issue whether they fall under the earned income prescribed in Article 20(1) of the former Income Tax Act
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2016. 10. 27. 선고 2016두39726 판결(공2016하, 1838)
Unofficial English translation
Supreme Court Decision 2016Du39726 decided October 27, 2016 (Gong 2016 Ha, 1838)
Decisions referred to
[1] 대법원 2016. 10. 27. 선고 2016두39726 판결(공2016하, 1838), 대법원 2024. 12. 24. 선고 2024두34122 판결(공2025상, 413)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
If an employee can convert the welfare points into money or transfer them to another person, when does the earned income arise and who bears the withholding obligation?
The remand judgment of the Daejeon High Court on the amount and the correction of the tax will show how the holding is worked out. Any amendment to Article 20(1) of the Income Tax Act or Article 3(1) of the Framework Act on the Welfare of Workers, or a later decision on the welfare points at issue, calls for this entry to be read again.
Cross-family AI independent reading & axis check
7 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-26
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on 7 of the 8 axes; the readings differed on axis 8 (open question and revisit condition).
Axis 8 (Open question and revisit condition): Primary “If an employee can convert the welfare points into money or transfer them to another person, when does the earned income arise and who bears the withholding obligation?” vs Independent “Do welfare points mandatorily used for group insurance premiums also constitute employment income?”
They differ because the primary asks about timing and withholding when points are convertible or transferable while the independent asks whether mandatorily used insurance points are also income.
갑 공사 소속 임직원들이 선택적 복지제도의 시행으로 배정받아 사용한 복지포인트가 구 소득세법 제20조 제1항의 근로소득에 해당하는지 문제 된 사안에서, 위 복지포인트는 구 소득세법 제20조 제1항의 근로소득에 해당한다고 한 사례Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The Daejeon High Court, in its judgment of 26 October 2023 (2022Nu13617), held that the welfare points the plaintiff's employees received and used under the selective welfare scheme, excluding the portion forced into use on group insurance premiums, were not earned income under Article 20(1) of the former Income Tax Act. It reasoned that wages under the Labour Standards Act and earned income under the Income Tax Act are distinct concepts, that Article 3(1) of the Framework Act on the Welfare of Workers excludes labour conditions from the concept of worker welfare, that the allocation of the points cannot be evaluated as a 'payment' of money, and that compared with money the points' use, enjoyment and disposal are considerably restricted.
Supreme Court standard: Applying the principle that earned income covers all economic benefits related to the provision of labour by their nature and also payments closely connected with labour that form the content of working conditions, the Supreme Court held that the points are remuneration for which a correlation and economic rationality to the labour provided can be recognised, and that the employees obtain a substantial economic benefit from using them. It held that Article 3(1) of the Framework Act on the Welfare of Workers removes only basic working conditions such as wages and working hours, which the Labour Standards Act governs, and does not exclude all other working conditions such as welfare. The court below misunderstood the law on the scope of earned income and the error affected the judgment, so the defendant's appeal ground on this point was meritorious, and the whole judgment was reversed and remanded to the Daejeon High Court on the unanimous opinion of the Justices.
Distinguishing conditions
- The portion of the points forced into use on group insurance premiums and the like, which the decision itself excluded from the points at issue.
- An allocation that shows no correlation or economic rationality to the labour provided, since the Court rested the finding of remuneration on that link.
- A benefit for which no link to the labour provided as consideration can be recognised, so that Article 3(1) of the Framework Act on the Welfare of Workers need not be reached at all.
Record verification notes
First separate the portion of the points used compulsorily on group insurance premiums, which the decision excluded, from the free-use portion it decided on. Then match each allocation against the labour it was given for, and confirm which version of the Income Tax Act governs, since the decision applies Article 20(1) as it stood before the amendment by Act No. 14389 of 20 December 2016. The file is a claim to cancel a refusal of a request for correction of earned income tax, so the withholding treatment and the tax period should be checked separately.
From the official text
Points at issue
[1] 구 소득세법 제20조 제1항에서 정한 근로소득의 범위 [2] 갑 공사 소속 임직원들이 선택적 복지제도의 시행으로 배정받아 사용한 복지포인트가 구 소득세법 제20조 제1항의 근로소득에 해당하는지 문제 된 사안에서, 위 복지포인트는 구 소득세법 제20조 제1항의 근로소득에 해당한다고 한 사례
Unofficial English translation
[1] The scope of earned income as defined in Article 20(1) of the former Income Tax Act [2] A case in which, in a matter where it was at issue whether the welfare points that the executives and employees of A Corporation were allocated and used through the implementation of an optional welfare system fall under the earned income prescribed in Article 20(1) of the former Income Tax Act, it was held that the said welfare points fall under the earned income prescribed in Article 20(1) of the former Income Tax Act
Summary of the holding
The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Order
원심판결을 파기하고, 사건을 대전고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed, and the case is remanded to the Daejeon High Court.
Provisions referred to
[1] 구 소득세법(2016. 12. 20. 법률 제14389호로 개정되기 전의 것) 제20조 제1항 [2] 구 소득세법(2016. 12. 20. 법률 제14389호로 개정되기 전의 것) 제20조 제1항, 근로복지기본법 제3조 제1항
Read 2026-10-26 · Cross-read 2026-10-26. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
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