Whether a nonresident is a non-resident

Income from the operation of real estate located in Korea simply without any occupation, has been transferred to a foreign country and resided in a foreign country for more than 10 consecutive years, and it is difficult to take a long time flight and return to Korea due to health conditions.

Article 1 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act and the definition of residence

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit shall be borne by the Plaintiffs.

The Defendant’s disposition of imposition of KRW 166,005,870 against the Plaintiffs on October 1, 2005 is revoked.

1. Details of the disposition;

A. The Plaintiff Kim○-○ was a woman of Kim○ (the decedent on March 5, 1914, hereinafter “the decedent”), and the Plaintiff Kim○-○ was adopted on January 15, 1974 by the Plaintiff’s adopted on the birth of the decedent’s deceased Kim○.

B. The decedent left the Republic of Korea on May 6, 198, and on September 12, 2002, the decedent made a will by a secret document in the U.S., and obtained a fixed date at the Seoul District Court on September 14, 2002. The main contents are as follows (hereinafter referred to as the “instant will”).

Paragraph (1) ( Testamentary Gift): A testator shall testamentary gift 1/2 of the property, which is a national of the United States of America, after deducting the mutual aid amount under paragraph (5), from the property subject to inheritance and testamentary gift under paragraph (4).

Paragraph (2): The statutory inheritor of the testator shall inherit one half of the property subject to inheritance under paragraph (4) and the property subject to testamentary gift after deducting the mutual aid amount under paragraph (5) from the property subject to inheritance under paragraph (4) in proportion to his/her statutory share of inheritance.

Paragraph (3) (Designation of Method of Division): The executor of a will shall give the donee an opportunity to choose the specific property first among the remaining property from which the deduction under paragraph (5) is deducted from the property subject to inheritance or testamentary gift under paragraph (4), and in case the donee selects the specific property, he shall transfer the property to the donee, and in case where the donee selects the specific property, he shall transfer the other property to the statutory inheritor. The executor may execute a testamentary gift in advance for the property beyond the scope of the mutual aid even

Paragraph (4) (Property to Inheritance and Testamentary Gift): Property subject to inheritance and testamentary gift shall be the real estate, movable property, intangible property rights, bonds, cash and financial assets (bank deposits, insurance deposits, etc.) of the testator located in Korea and abroad. If a testator's property has committed a tort against the testator's property, claims arising from such tort shall also be included in the property subject to inheritance and testamentary gift. The executor of the will may exercise all his/her authority, such as a lawsuit,

Paragraph (5) (Mutual Aid Fund): The executor of a will shall prepare the following expenses from among the property subject to inheritance and testamentary gift under paragraph (4) in an appropriate manner and shall pay or preserve them as necessary:

(i) Funeral expenses of the testator and the creation and continuing management expenses of the cemetery;

(ii) all the costs relating to carrying out a will;

iii) any public charges, including inheritance tax, and obligations of the testators;

(iv) other expenses to be paid with the consent of all the donees and statutory successors.

Paragraph 6 (Entrustment of Designation of Executor): A testator shall confer the authority to designate an executor to execute this will on the head of an attorney-at-law.

C. After that, the decedent died in the U.S. on September 20, 2003, the plaintiff Kim○ requested the approval seal of the testamentary document on October 15, 2003, and on December 1, 2003, the Seoul Family Court obtained the approval seal of the testamentary document in the presence of the plaintiff Kim○-○'s representative and the plaintiff Kim○-○, etc.

D. On December 17, 2003, the head of an attorney-at-law who was entrusted with the authority to designate an executor as an executor designated an attorney Kim Jong-○ as an executor, and on December 18, 2003, the attorney Kim Jong-○ began to deal with the affairs relating to the execution of a will on December 18, 2003.

E. On June 17, 2004, the executor Kim○-○ submitted to the Defendant the report on the tax base of inheritance and the report on the dispatch of the taxable value of inheritance tax, which is KRW 6,349,064,173, the tax base of inheritance tax, KRW 5,847,85,563, the calculated tax amount, KRW 2,463,942,781.

F. After conducting a tax investigation on the above reported details, the Defendant confirmed that KRW 165,047,00,000,000,000,000 ○○○○○○-ri, ○○○○-ri, ○○○-ri, 165,047, which is owned by the inheritee, was omitted from the list of inherited property and added it to the value of inherited property. On the ground that the decedent is a non-resident under the Inheritance Tax and Gift Tax Act (amended by Act No. 8139 of Dec. 30, 2006) on the ground that the decedent is a non-resident, the Defendant denied funeral expenses deduction, the inheritance tax deduction and the lump sum deduction, etc. (hereinafter referred to as "resident deduction"), and recognized the basic deduction only, and notified the Plaintiffs of the inheritance tax,005,070,000 won,870,000 won (hereinafter referred to as "the inheritance tax and gift tax") and imposed penalty tax on October 17, 2005.

G. The plaintiffs were dissatisfied with the disposition of this case and filed an appeal with the National Tax Tribunal on January 13, 2006, but was dismissed on July 28, 2006.

[Based on the recognition] Evidence No. 4-1 to Evidence No. 7-3, Evidence No. 14-1, Evidence No. 19, Evidence No. 20, Evidence No. 1 to No. 2-6, Evidence No. 4-2, Evidence No. 5, Evidence No. 7, and the purport of the whole pleadings

2. Determination on the legality of the instant disposition

A. The plaintiffs' assertion

(1) As to the imposition of penalty taxes for failure in filing a return on any real property omitted from the return;

In the execution of the instant will, the executor was selected and appointed, and the executor of the will had all the authority over the administration of the inherited property and the execution of his will including the filing of the inheritance tax base report. The instant real estate was not included in the list of real estate that was entrusted by the decedent to the Plaintiff Kim○○, and the attorney Kim○-○, an executor, visited the Plaintiff ○○○○○○○○○○○○○○○○○○○○○○○○○○○○, and did not appear to have made an inquiry about the ownership status of the inheritee’s real estate, and thus, was omitted from the list of inherited property. It is too harsh that imposing penalty tax on the Plaintiffs due to nonperformance of their duty to cooperate, and thus, it is consistent with

(2) Whether the decedent is a non-resident under the Inheritance Tax and Gift Tax Act

On May 6, 198, an inheritee left the Republic of Korea to visit the Plaintiff Kim○○, who is living in the United States on May 6, 1988, and had been staying in the United States at the time of death in the country since the Plaintiff Kim○ was unable to lose his aircraft due to health aggravation, and the address of both Plaintiff Kim○, who was living in the United States, was in the Republic of Korea and is also in the location of its main asset, and thus, the inheritee

B. Relevant statutes

Article 1 of the Inheritance Tax and Gift Tax Act (amended by Act No. 8139 of December 30, 2006) (amended by Act No. 8139 of December 30, 2006

(1) In case where, owing to inheritance [including a testamentary gift, a donation becoming effective due to the death of a donor (including the relevant donation in case where a donor dies during the performance of a donated obligation under Article 14 (1) 3; hereinafter the same shall apply), and a divisional donation of inherited property to a special relative under the provisions of Article 1057-2 of the Civil Act; hereinafter the same shall apply], there is inherited property falling under one of the following subparagraphs as of the commencement date of inheritance (in case inheritance commences due to an adjudication of disappearance, referring to the day on which such adjudication of disappearance is made; hereinafter the same shall apply

1. In cases of the death of a person who has established a domicile in the Republic of Korea or has established a temporary domicile in the Republic of Korea for not less than one year (hereinafter referred to as a "resident"), all of the resident's inherited property (including property bequeathed by an ancestor and donated property becoming effective due to the death

2. In case of the death of a person who is not a resident (hereinafter referred to as “non-resident”), all the inherited property of a non-resident in Korea;

(2) Matters necessary for the definitions, etc. of addresses, residences and residents and nonresidents shall be prescribed by Presidential Decree.

Article 14 (Public Imposts, etc. Deducted from Value of Inherited Property)

(1) Where inheritance commences due to the death of a resident, the value or expenses falling under any of the following subparagraphs related to the inherited property shall be subtracted from the value of the inherited property:

1. Public imposts;

2. Funeral expenses; and

3. Obligations (excluding donations made by an ancestor to his/her heir within ten years before the commencement date of inheritance, and donations made by an ancestor to a person who is not his/her heir within five years before the commencement date of inheritance; hereafter the same shall apply in this Article);

(2) Where inheritance commences due to the death of a nonresident, the following value or expenses shall be subtracted from the value of the inherited property:

1. Public imposts on the inherited property concerned;

2. Debts secured by a lien, pledge, right of lease on a deposit basis, right of lease (including cases of concluding a de facto lease contract), right of transfer, security right or mortgage, the object of which is the inherited property concerned;

3. Public imposts and liabilities for business confirmed by an account book kept and kept at the time of the death of the inheritee.

○ Article 21 Integrated Deduction

(1) Where inheritance commences due to the death of a resident, the heir or testamentary donee may deduct the sum of the deductions under Articles 18 (1) and 20 (1) and the larger amount between five hundred million won: Provided, That where no report is made under Article 67, five hundred million won shall be deducted.

(2) In applying the provisions of paragraph (1), where the spouse of an inheritee succeeds solely to the inheritance, only the sum of the amounts deducted pursuant to the provisions of Articles 18 and 20 (1) shall be deducted

Article 22 Inheritance Deductions of Financial Property

(1) Where inheritance commences due to the death of a resident, and there exists, among the value of the inherited property prescribed by the Presidential Decree, the value of the financial property prescribed by the Presidential Decree (hereafter referred to as "value of the net financial property" in this Article), an amount calculated according to the following classifications shall be deducted from the taxable amount of inheritance taxes, but where such amount exceeds 200 million won,

1. Where the value of the net financial property exceeds 20 million won;

An amount equivalent to 20 percent of the value of the net financial property concerned: Provided, That in case where such an amount falls short of 20 million won, 20 million won.

2. Where the value of the net financial property is twenty million won or less.

The value of the net financial property concerned;

○ Article 78 Additional Tax, etc.

(1) When, with respect to inherited property or property received as donation, a report that falls short of the tax base to be reported within the reporting deadline under Article 67 or 68 (hereafter referred to as "insufficient report" in this paragraph), the head of a tax office, etc. shall add an amount equivalent to 10/100 (20/100 in cases where a report is not made within the reporting deadline or where a report is not made within the processing deadline, or a insufficient report is made on the grounds prescribed by Presidential Decree, such as title trust, etc., on the aggregate of the amounts (referring to an amount excluding an amount falling under any of the following subparagraphs) that fall short of the tax base to be reported pursuant to the provisions of Article 76, to the calculated tax amount of inheritance tax, or gift tax, and the amounts added pursuant to

1. An amount reported and under-reported due to a difference in appraised values as prescribed by the Presidential Decree;

2. An amount of property reported which is not determined as inherited or donated property due to such reasons as litigation on ownership, etc.

3. Amount that falls short of a report due to the error in applying the deductions under Articles 18 through 24 and 53 (1).

○ Article 1 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act and the definition of residence

(1) Articles 2 and 4 (1) and (2) of the Enforcement Decree of the Income Tax Act shall apply to the domicile and residence under Article 1 of the Inheritance Tax and Gift Tax Act (hereinafter referred to as the "Act").

○ Tax liability under Article 1 of the Income Tax Act

(1) Any individual falling under any of the following subparagraphs shall be liable to pay the income tax on his income under this Act:

1. Any individual who has a domicile in Korea or has a domicile in Korea for not less than one year (hereinafter referred to as "resident");

2. Any person who is not a resident (hereinafter referred to as "non-resident") and has income from domestic sources;

○ Determination of the address and residence under Article 2 of the Enforcement Decree of the Income Tax Act

(1) The address under Article 1 of the Act shall be judged by the objective facts of living relationship, such as the existence of a family living together in Korea and of the property located in Korea.

(2) The term "place of abode" in Article 1 of the Act means the place where a person has resided for a long time besides his/her address, and in which no close general living relationship is formed as the address.

(3) Where an individual who resides in Korea falls under any of the following subparagraphs, he/she shall be deemed to have an address in Korea:

1. When a person has an occupation which requires him to continually dwell in Korea for 1 year or longer; and

2. When a person has a family living together in Korea, and is considered to dwell in Korea continuously for 1 year or longer judging from his occupation and property status; and

(4) Where a person residing or working overseas falls under any of the following subparagraphs, he/she shall be deemed to have no address in Korea:

1. When a person has an occupation which usually requires him to continually dwell abroad for 1 year or longer; and

2. When a person with a foreign nationality or citizenship under the foreign laws, who has no family living together with him in Korea, and is not recognized to return home again and mainly dwell in Korea in view of his occupation and property status.

C. Determination on the legality of the instant disposition

(1) As to the penalty for failure to report

Under the tax law, in cases where a taxpayer violates various duties, such as a tax return and tax payment, without justifiable grounds, in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, the taxpayer’s intentional negligence is not considered as administrative sanctions imposed as prescribed by individual tax-related Acts (see Supreme Court Decision 93Nu6744, Jun. 8, 1993): Provided, That where there is a justifiable reason that it is impossible for the taxpayer to be unaware of his/her duty, such as where there is a circumstance that the taxpayer could reasonably present his/her duty or where it is unreasonable to expect the party to perform his/her duty, etc. (see Supreme Court Decision 95Nu3596, Feb. 9, 1996).

In the instant case, the executor appointed the executor and took charge of the affairs pertaining to the management of the inheritee’s inherited property and the execution of his will. The fact that the executor Kim○-○, an executor, was an attorney Kim○-○, as seen above, should be determined on the basis of not the Plaintiffs, but the executor, who is the inheritor and donee. In light of the various circumstances asserted by the Plaintiffs, it is difficult to deem that the executor had justifiable grounds for omitting the instant real estate in the list of inherited property in the report on the inheritance tax base related to the instant inheritance, and there is no other evidence to acknowledge that there was any other reason, and therefore, the Plaintiffs’ assertion seeking revocation of the portion relating to the portion relating to the

(2) As to whether the decedent can be seen as a resident

Article 1 (1) 1 of the Inheritance Tax and Gift Tax Act provides that the term "resident" is "a person who has a domicile in the Republic of Korea or has a domicile in the Republic of Korea for not less than one year," and the term "non-resident" is "a person who is not a resident," and Articles 14, 21, and 22 of the Inheritance Tax and Gift Tax Act allow the resident's deduction only for a resident. Therefore, this case

In the Inheritance Tax and Gift Tax Act, the provisions of the Income Tax Act shall apply mutatis mutandis to the concept of the domicile or residence, which serves as the basis for identifying residents (Article 1(1)2 of the Inheritance Tax and Gift Tax Act and Article 1(1)1 of the Enforcement Decree of the same Act). Thus, whether an ancestor is a resident or not shall be determined by considering the following: (a) the basis for economic activities of the decedent rather than whether the decedent is nationality or resident registration; (b) the living basis of the family living together

In this case, the deceased's resident registration ○○○○-○ apartment, ○○○-○, ○○○-○, ○○○○○, ○○○-○, ○○○○, ○○○○, ○○○, ○○-○, ○○, at the time of the death of the deceased. However, since the deceased left the U.S. around 198 when 74 years old, the deceased was 74 years old, the deceased did not enter the Republic of Korea only once since 198, the deceased Kim ○ was adopted by the deceased deceased, but the deceased Kim ○ was living together with the deceased ○, ○, without living together with the deceased (Evidence 4-2), while the deceased ○, ○, ○-○, ○○, ○○, ○○, ○○, ○○, ○○, her relative, was living in the U.S. at the domicile of the deceased (Evidence 2-6), the plaintiff's allegation that it was legitimate in Korea is difficult to recognize that the deceased's health and health conditions of the deceased.

3. Conclusion

Therefore, the plaintiffs' claim of this case is dismissed in entirety as it is without merit. It is so decided as per Disposition.