1. As to the grounds of appeal Nos. 1 through 3

A. Article 1(1)1 of the former Income Tax Act (amended by Act No. 9270, Dec. 26, 2008; hereinafter the same) provides that “A person liable to pay income tax has either a domicile in the Republic of Korea or a domicile in the Republic of Korea for at least one year (hereinafter “resident”).

In addition, Article 2(1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034, Feb. 18, 2010; hereinafter the same) provides that "the address shall be judged based on the objective facts of living relationship, such as the existence of a family living together in Korea and of assets located in Korea." Article 1(3)1 of the former Enforcement Decree of the Income Tax Act provides that "when a person has an occupation that requires continuous residence in Korea for at least one year, he/she shall be deemed to have a domestic address in Korea." Meanwhile, Article 2(2) of the former Enforcement Decree of the Income Tax Act provides that "where a person has an occupation that requires continuous residence in Korea, for a long time besides his/her domicile, "the period of his/her residence in Korea shall be from the date following the date of his/her entry into Korea shall be until the date of his/her departure, and where he/she has his/her residence in Korea for at least two years, his/her temporary residence in Korea shall be deemed to have been in Korea."

B. Based on adopted evidence, the court below acknowledged the Plaintiff’s transfer of 640,000 shares of Nando Mutual Savings Bank (hereinafter “Nando Mutual Savings Bank”) to the Nonparty and the non-party stock company upon the transfer of 640,000 shares (hereinafter “instant shares”) to the non-party, and determined that ① both the Plaintiff’s wife and children reside in the United States, and the Plaintiff did not own real estate located in Korea without any family members living together with the Plaintiff. ② The Plaintiff was the largest shareholder of Nando Mutual Savings Bank until January 9, 2008. From February 1, 2008 to April 30, 2008, the lower court determined that the Plaintiff’s transfer of shares to the non-party, 2,100,000 shares of 2,10,000 shares were paid from Nando Mutual Savings Bank (hereinafter “Nando Mutual Savings Bank”). In light of the nature of its business and the amount of employment income and management period of the Plaintiff’s shares, it cannot be deemed that the Plaintiff’s shares were transferred to the Plaintiff’s temporary transfer of 27 years.

C. In light of the above provisions and relevant legal principles and records, such determination by the court below is just, and contrary to what is alleged in the grounds of appeal, there is no error of law by misapprehending the legal principles on the criteria of residents under the former Income Tax Act and Article 4 (2) of the former Enforcement Decree

2. As to the grounds of appeal Nos. 4 and 5

A. Article 119 subparag. 12(a) of the former Income Tax Act provides that one of the domestic source incomes of a nonresident shall be the income accruing from the transfer of stocks, etc. issued by a domestic corporation. Article 121(3) of the same Act provides that a nonresident who has no domestic place of business shall be subject to separate taxation by income under any subparagraph (excluding subparagraphs 8 and 9) of Article 119, and Article 156(1) provides that a person who pays to a nonresident who has no domestic place of business the income amount generated from domestic sources under Article 119 subparag. 12 of the same Act shall withhold and pay the income tax at the time of payment.

According to these regulations, the payer shall withhold and pay the income tax on the income accrued from the transfer of stocks issued by a domestic corporation by a nonresident having no domestic place of business under the former Income Tax Act, and such income tax shall not be subject to the automatic determination of the amount of tax as prescribed by the laws and regulations without a taxpayer's return or decision of imposition by the tax authority, and as long as Article 126-2 of the former Income Tax Act does not apply to the provisions that separately prescribe the duty of return and payment by a nonresident who is a source taxpayer or the authority of decision and correction by the tax authority on non-residents, as well as the tax law relationship between non-residents and the tax authority does not exist in principle. Thus, even if the withholding agent

B. The court below held that the disposition of this case, which imposed capital gains tax on the plaintiff as a non-resident who has no domestic place of business, is unlawful on the ground that the tax payer of this case is subject to separate taxation, on the ground that the transferee of this case shall withhold capital gains tax in full and pay transfer income tax in full and the tax authority is not entitled to directly impose capital gains tax on the plaintiff who is the original taxpayer, on the ground that the non-resident who has no domestic place of business, and the tax authority did not have any grounds to impose capital gains tax on the plaintiff who is the original taxpayer, because the plaintiff is staying in Korea for not less than 183 days in total among the 2008 taxable years, even if the plaintiff is a U.S. resident.

C. Such determination by the court below is just in accordance with the legal principles as seen earlier, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of the legal principles as to the right to withhold and impose on the

3. Regarding ground of appeal No. 6

The lower court determined that the instant lawsuit cannot be deemed as contrary to the principle of trust and good faith or the principle of no speech solely on the ground that the Plaintiff reversed its position on whether the Plaintiff is a resident under the former Corporate Tax Act

In light of the relevant legal principles and records, such determination by the court below is just, and contrary to the allegations in the grounds of appeal, there is no error of law by misapprehending the legal principles on the principle of good faith and sincerity

4. 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 Lee Ki-taik (Presiding Justice)