Open Decision Ledger · Tax & international taxation
Strict construction of entertainment expense and discounted sales as rebates
Supreme Court, Feb. 12, 2026, 2025Du34772 (judgment)
Case name: 법인세부과처분취소[직원 등에 제공한 할인혜택을 접대비로 보아 한도를 초과한 금액을 손금불산입한 사건]
Official text on the National Law Information Center
Question
Under Article 25(1) of the former Corporate Tax Act, must entertainment expense be construed strictly, and is the price difference that a corporation discounts at its employee store to employees of cooperating firms, dispatch firms and an affiliate in the same group an entertainment expense whose amount above the statutory ceiling must be disallowed as a deduction?
Holding
Entertainment expense must be construed strictly, because the wording, content and purpose of Article 25(1) of the former Corporate Tax Act and the fact that disallowing amounts above the ceiling is unfavourable to the taxpayer all point that way. A cost whose other side consists of persons connected with the business and whose purpose is to deepen personal ties with business partners so as to advance transactions is entertainment expense under the Act; otherwise it must not lightly be treated as such. The discount in this case was none of that: it was not a consumptive, one-sided outflow like food, entertainment or gifts, it fell within ordinary discounted selling under reasonable management judgement, and the amount was directly deducted from the supply price so as to have the substance of a sales rebate, with the tax authority's evidence insufficient to show it was otherwise counted as income. The Supreme Court upheld the finding that the assessment was unlawful and dismissed the defendant's appeal.
Summary of the holding, verbatim
위 할인액은 구 법인세법 제25조 제1항에서 정한 접대비에 해당하지 않고 당초부터 익금에서 제외되는 매출에누리금액에 불과하여 위 처분이 위법하다고 본 원심판단을 수긍한 사례.
Unofficial English translation
A case in which the court below held that the said discount amount does not constitute entertainment expenses as provided in Article 25 (1) of the former Corporate Tax Act and is merely a sales discount amount that is excluded from gross income from the outset, and that the said disposition is unlawful, and the Supreme Court affirmed that determination.
Disposition
Dismissed Stated in the decision
상고를 기각한다. 상고비용은 피고가 부담한다.
Unofficial English translation
The appeal is dismissed. The costs of the final appeal shall be borne by the defendant.
Form of the test
Elements stated Stated in the decision
법인이 사업을 위하여 지출한 비용 가운데 상대방이 사업에 관련 있는 사람들이고 지출의 목적이 접대 등의 행위에 의하여 사업관계자들과의 사이에 친목을 두텁게 하여 거래관계의 원활한 진행을 도모하는 데 있는 것이라면, 그 비용은 법인세법상 접대비라고 할 것이지만, 그렇지 않은 경우에는 이를 섣불리 접대비로 단정하여서는 안 된다.
Unofficial English translation
Among the expenses incurred by a corporation for its business, if the counterparty is a person related to the business and the purpose of the expenditure is, through acts such as entertainment, to deepen amicable relations with business associates and to facilitate the smooth conduct of business relations, such expense may be regarded as entertainment expenses under the Corporate Tax Act; but otherwise, it must not be hastily concluded to be entertainment expenses.
Factors
- 구 법인세법 제25조 제1항에서 정한 접대비에 해당하는지는 엄격하게 해석하여야 한다.
- 접대비 한도초과액의 손금불산입이 납세자에게 불리한 것이라는 점
- 상대방이 사업에 관련 있는 사람들이고 지출의 목적이 접대 등의 행위에 의하여 사업관계자들과의 사이에 친목을 두텁게 하여 거래관계의 원활한 진행을 도모하는 데 있는 것이라면
- 통상의 접대, 즉 향응·오락·선물 등의 제공과 같이 갑 회사에 일방적인 손실을 일으키는 소비적이고 출혈적인 지출에 해당한다고 볼 수 없어 합리적인 경영판단의 범위에서 이루어진 통상의 할인판매 거래와 다를 것이 없으며
- 위 할인액은 통상의 공급가액 내지 매출액에서 직접 공제되어 매출에누리금액으로서의 실질을 갖는데
Unofficial English translation
• Whether the term entertainment expenses as provided in Article 25 (1) of the former Corporate Tax Act is applicable must be strictly interpreted.
• the fact that the exclusion from deductible expenses of amounts exceeding the limit on entertainment expenses is disadvantageous to the taxpayer
• if the counterparty is a person related to the business and the purpose of the expenditure is, through acts such as entertainment, to deepen amicable relations with business associates and to facilitate the smooth conduct of business relations,
• it cannot be regarded as consumptive and hemorrhagic expenditure that causes a unilateral loss to Company A, as in the case of ordinary entertainment, that is, the provision of hospitality, amusement, gifts, and the like, and there is no difference from an ordinary discounted sales transaction conducted within the scope of reasonable business judgment, and
• the said discount amount is directly deducted from the ordinary supply price or sales amount, thereby possessing the substance of a sales discount amount,
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2010. 6. 24. 선고 2007두18000 판결(공2010하, 1477)
Unofficial English translation
Supreme Court Decision 2007Du18000 decided June 24, 2010 (Gong 2010 Ha, 1477)
Decisions referred to
[1] 대법원 2010. 6. 24. 선고 2007두18000 판결(공2010하, 1477)
Burden of proof
The party asserting Read from the decision
관할 세무서장이 제출한 증거만으로는 위 할인액이 이와 달리 익금으로 귀속되었다고 인정하기 부족하다는
Unofficial English translation
on the ground that the evidence submitted by the head of the competent tax office alone is insufficient to recognize that the said discount amount was differently attributed to gross income
Open question and revisit condition
What evidence would show that a discount granted to employees of a cooperating firm was intended to cultivate personal ties with that firm rather than to promote sales?
A record showing that the discount was recorded as income rather than deducted from the supply price would reopen the sales rebate finding. A case governed by the amended text of Article 25 of the Corporate Tax Act rather than the version applied here (the version before Act No. 19193 of 31 December 2022), or a later decision construing entertainment expense in discounted selling, would require this entry to be read again.
Cross-family AI independent reading & axis check
8 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-24
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on all 8 axes.
Raw 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 Seoul High Court, in its judgment of 23 July 2025 (2025Nu6434), held that the discount was not entertainment expense on three grounds. The benefit was given under a worldwide policy of the brand to the plaintiff's own employees and to entertainers and athletes with recommendation value as well, so an intent to cultivate ties with particular counterparties could not be presumed. Ordinary discounted selling serves varied business purposes such as boosting sales or market share and brand recognition, and the amount was deducted directly from the supply price so that it had the substance of a sales rebate rather than income already recognised.
Supreme Court standard: The Supreme Court found no error. Reading the appellate reasons against the provisions, the legal principle and the record, it held that the court below had not misread the criteria for entertainment expense and sales rebates in a way that affected the judgment, so the finding that the discount was not entertainment and that the assessment was unlawful stood. With the concurrence of all participating Justices, it dismissed the appeal and put the costs on the defendant.
Distinguishing conditions
- A cost whose other side consists of persons connected with the business and whose purpose is to deepen personal ties with business partners so as to advance transactions.
- An outflow that is consumptive and causes a one-sided loss to the corporation, like the provision of food, entertainment or gifts.
- An amount that was in fact recognised as income rather than deducted directly from the supply price, so that it does not have the substance of a sales rebate.
Record verification notes
Before relying on this decision, check whether the benefit was a policy applied to the corporation's own employees and to recommenders as well, or whether it was confined to employees of particular firms with which the corporation had transactions. Then trace the money: the finding turned on the discount being deducted from the sale price actually received, so the accounting entries matter. Finally confirm that the disputed fiscal years, here 2015 to 2020, fall before the Corporate Tax Act amended by Act No. 19193 of 31 December 2022.
From the official text
Points at issue
[1] 구 법인세법 제25조 제1항에서 정한 접대비에 해당하는지는 엄격하게 해석하여야 하는지 여부(적극) 및 법인이 사업을 위하여 지출한 비용이 법인세법상 접대비인지 판단하는 기준 [2] 갑 유한회사가 직원매장에서 협력업체, 파견업체, 계열사 직원들에게 일정한 할인가격으로 제품을 판매하는 혜택을 제공하였는데, 이에 대해 최종 소비자가격과 실제 판매가격의 차액 상당액인 할인액은 접대비에 해당하므로 그중 구 법인세법에서 정한 한도를 초과한 금액은 손금불산입되어야 한다며 관할 세무서장이 법인세 부과처분을 한 사안에서, 위 할인액은 구 법인세법 제25조 제1항에서 정한 접대비에 해당하지 않고 당초부터 익금에서 제외되는 매출에누리금액에 불과하여 위 처분이 위법하다고 본 원심판단을 수긍한 사례
Unofficial English translation
[1] Whether the term entertainment expenses as provided in Article 25 (1) of the former Corporate Tax Act must be strictly interpreted (affirmative) and the criteria for determining whether an expense incurred by a corporation for its business constitutes entertainment expenses under the Corporate Tax Act [2] A case in which, where Company A, a limited liability company, provided the benefit of selling products at a certain discounted price to the employees of its cooperating companies, dispatched companies, and affiliated companies in its employee store, and the head of the competent tax office imposed a corporate tax assessment on the ground that the amount of the discount, equivalent to the difference between the final consumer price and the actual selling price, constitutes entertainment expenses and that, among such amount, the amount exceeding the limit set forth in the former Corporate Tax Act must be excluded from deductible expenses, the court below held that the said discount amount does not constitute entertainment expenses as provided in Article 25 (1) of the former Corporate Tax Act and is merely a sales discount amount that is excluded from gross income from the outset, and that the said disposition is unlawful, and the Supreme Court affirmed that determination
Summary of the holding
[1] 구 법인세법(2022. 12. 31. 법률 제19193호로 개정되기 전의 것, 이하 같다) 제25조 제1항은 접대비란 ‘접대, 교제, 사례 또는 그 밖에 어떠한 명목이든 상관없이 이와 유사한 목적으로 지출한 비용으로서 내국법인이 직접 또는 간접적으로 업무와 관련이 있는 자와 업무를 원활하게 진행하기 위하여 지출한 금액’을 말한다고 정하면서, 제4항 등은 일정 범위의 접대비 한도액을 초과하는 금액은 손금에 산입하지 않는다고 정하고 있다. 접대비는 기업활동의 원활과 기업의 신장을 도모하기 위해 지출한 경비로서 손금에 해당하나, 조세회피 목적을 이루기 위한 수단으로 남용되거나 변칙적으로 지출될 우려가 있어 손금에 산입하는 한도를 이와 같이 일정한 범위로 제한하고 있다. 이러한 규정의 문언, 내용 및 취지와 함께 접대비 한도초과액의 손금불산입이 납세자에게 불리한 것이라는 점 등을 고려하면, 구 법인세법 제25조 제1항에서 정한 접대비에 해당하는지는 엄격하게 해석하여야 한다. 법인이 사업을 위하여 지출한 비용 가운데 상대방이 사업에 관련 있는 사람들이고 지출의 목적이 접대 등의 행위에 의하여 사업관계자들과의 사이에 친목을 두텁게 하여 거래관계의 원활한 진행을 도모하는 데 있는 것이라면, 그 비용은 법인세법상 접대비라고 할 것이지만, 그렇지 않은 경우에는 이를 섣불리 접대비로 단정하여서는 안 된다. [2] 갑 유한회사가 직원매장에서 협력업체, 파견업체, 계열사 직원들에게 일정한 할인가격으로 제품을 판매하는 혜택을 제공하였는데, 이에 대해 최종 소비자가격과 실제 판매가격의 차액 상당액인 할인액은 접대비에 해당하므로 그중 구 법인세법(2022. 12. 31. 법률 제19193호로 개정되기 전의 것, 이하 같다)에서 정한 한도를 초과한 금액은 손금불산입되어야 한다며 관할 세무서장이 법인세 부과처분을 한 사안에서, 갑 회사에 할인혜택을 통해 협력업체 직원 등 특정인과 사이에 친목을 두텁게 하여 거래관계의 원활한 진행을 도모하려는 접대의 목적이 있었다고 단정하기 어렵고, 위 할인혜택은 통상의 접대, 즉 향응·오락·선물 등의 제공과 같이 갑 회사에 일방적인 손실을 일으키는 소비적이고 출혈적인 지출에 해당한다고 볼 수 없어 합리적인 경영판단의 범위에서 이루어진 통상의 할인판매 거래와 다를 것이 없으며, 위 할인액은 통상의 공급가액 내지 매출액에서 직접 공제되어 매출에누리금액으로서의 실질을 갖는데, 관할 세무서장이 제출한 증거만으로는 위 할인액이 이와 달리 익금으로 귀속되었다고 인정하기 부족하다는 이유로, 위 할인액은 구 법인세법 제25조 제1항에서 정한 접대비에 해당하지 않고 당초부터 익금에서 제외되는 매출에누리금액에 불과하여 위 처분이 위법하다고 본 원심판단을 수긍한 사례.
Order
상고를 기각한다. 상고비용은 피고가 부담한다.
Unofficial English translation
The appeal is dismissed. The costs of the final appeal shall be borne by the defendant.
Provisions referred to
[1] 구 법인세법(2022. 12. 31. 법률 제19193호로 개정되기 전의 것) 제25조 제1항, 제4항 / [2] 구 법인세법(2022. 12. 31. 법률 제19193호로 개정되기 전의 것) 제25조 제1항
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