The judgment below is reversed, and the case is remanded to the Daegu High Court.

The grounds of appeal are examined.

1. Case summary and key issue

A. A. A summary of the case (1) The Plaintiff paid the dividend of KRW 8,41.1 billion (hereinafter “instant dividend income”) to H, a corporation located in the Hungary (hereinafter “H”), which owns 50% of its equity interest, six times from September 20, 2006 to March 30, 2009, at the limited tax rate of 5% under Article 10(2)(a) of the Convention between the Government of the Republic of Korea and the Government of the Republic of Hungary for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (hereinafter “Korea-Hungary Tax Treaty”). The Plaintiff withheld and paid corporate tax according to the limited tax rate of 5% under Article 10(2)(a) of the Korea-Hungary Tax Treaty.

(2) On September 2, 2011 and October 12, 2011, H applied the limited tax rate of 15% under Article 12(2)(a) of the Convention between the Republic of Korea and the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and the Encouragement of International Trade and Investment (hereinafter “Korea-U.S. Tax Treaty”), and notified the Plaintiff of the correction of KRW 53 billion in total of the corporate tax withheld for the business year 2006 through 2009, by deeming that H was the beneficial owner of the instant dividend income.

After the decision of the Tax Tribunal, the reduction was made by applying the 10% limited tax rate under Article 12(2)(b) of the Korea-U.S. Tax Treaty.

(B) The remaining part of the original disposition, which remains reduced as above, is about 36.4 billion won (hereinafter “instant disposition”).

The key issue of the instant case is whether Article 10(2) of the Korea-Hungary Tax Treaty applies to the dividend income of the instant case.

2. Regarding ground of appeal No. 1

A. (1) Article 10(2)(a) of the Korea-Hungary Tax Treaty is a beneficial owner who is a resident of the other country and whose recipient is not less than 25% of the shares of the corporation paying dividends.