[소득세부과처분취소][미간행]
[1] Requirements for applying Article 13-2 (1) 4 of the former Regulation of Tax Reduction and Exemption Act, which is a special provision on taxation for the gains from exercising the right to purchase (purchase) stocks
[2] The case holding that the profit gained by exercising the right of purchase (purchase) of stocks granted before retirement constitutes other income
[1] Article 13-2 (1) 4 (see current Article 15 (2) 4 of the Restriction of Special Taxation Act) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 5584 of Dec. 28, 1998) / [2] Article 21 (1) 22 of the former Income Tax Act (amended by Act No. 7006 of Dec. 30, 2003), Article 13-2 (1) 4 (see current Article 15 (2) 4 of the Restriction of Special Taxation Act) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 5584 of Dec. 28, 1998)
LLC Co., Ltd. (Attorneys Ahn Yong-soo et al., Counsel for the defendant-appellant)
head of Dongjak-gu Tax Office
Seoul High Court Decision 2004Nu3566 delivered on December 24, 2004
The appeal is dismissed. The costs of appeal are assessed against the plaintiff.
The grounds of appeal (to the extent of supplement in case of supplement submitted after the expiration of the period) are examined.
1. As to the grounds of appeal Nos. 1 and 2
The court below interpreted that the provisions of Article 13-2 (1) 4 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 5584 of Dec. 28, 1998), which is the special provision on taxation on the profits from exercising the stock option, shall exercise the stock option after the lapse of three years from the date on which the stock option was granted: Provided, That in case of retirement after the lapse of three years, the stock option shall be exercised within three months from the date of retirement, in principle, in light of the purport of the system of stock option and related Acts and subordinate statutes, the corporation shall hold the status of employees, and in case of exercise of the stock option three years after the date on which the stock option was granted, the stock option shall be exercised within three months from the date of retirement if the retirement is three years after the date on which the stock option was granted. The court below rejected the judgment of the court below that the other persons except for the non-party 1 and 14 who were considered to be subject to exemption from taxation without law (hereinafter referred to as "non-party 2, etc.), and there are no legitimate grounds for the aforementioned interpretation of the law.
2. As to the third ground for appeal
In full view of the adopted evidence, the court below acknowledged the fact that non-party 2, etc. were entitled to a purchase (purchase) option while in office in the Plaintiff Company after retirement, and determined the benefits of exercising the stock option as other income in light of the following: (a) when exercising the stock option after retirement as above, it is difficult to regard the above benefits of exercising the stock option as wage and salary since the labor contract relationship is terminated; and (b) Article 21(1)22 of the former Income Tax Act (amended by Act No. 6292 of Dec. 29, 2000 and Article 21(1)22 of the former Income Tax Act (amended by Act No. 7006 of Dec. 30, 2003) which was enforced at the time of exercising the said appraisal right as other income; and (c) in light of the relevant Acts and subordinate statutes and the records, the above judgment below is just and acceptable, and there is no illegality in the misapprehension of legal principles as to the income classification of the benefits of exercising the stock option
3. Conclusion
Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.
Justices Yang Sung-tae (Presiding Justice)