(a) The meaning of allowances for overseas service under Article 8 subparagraph 11 of the Enforcement Decree of the Income Tax Act; and

(b) Whether education allowances for children and supplementary retirement allowances received by a foreigner working in Korea fall under the foreign service allowances under Article 8 subparagraph 11 of the Enforcement Decree of the Income Tax Act;

(a) The allowances for foreign service under Article 8 subparagraph 11 of the Enforcement Decree of the Income Tax Act shall mean the amount received in addition to the ordinary benefits which the foreigner may receive when he worked in his home country by being employed in the Republic of Korea, which is paid according to the company’s salary standards within the scope not recognized to be more beneficial than when the foreigner has worked in his home country in consideration of the price, living standard, living environment, exchange rate, etc. with the foreigner’s home country. In this case, it is not required that

B. The allowance paid by a foreigner working in Korea, who would not have been required to pay according to the compulsory education system of his country, but would not purchase a new household because he had worked in Korea, is a child education allowance received by him, and a new household, if he had worked in Korea, is a non-taxable income as a salary of the nature of compensation for actual expenses, which falls under the allowance for overseas service under Article 8 subparag. 11 of the Enforcement Decree of the Income Tax Act.

(a)Article 5 subparagraph 4 (g) of the Income Tax Act, Article 8 subparagraph 11 of the former Enforcement Decree of the Income Tax Act;

Spain Co., Ltd., Attorney Kim Jin-jin, Counsel for the defendant-appellant

Head of Yongsan Tax Office

Seoul High Court Decision 82Gu192 delivered on December 14, 1982

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal are examined.

According to the reasoning of the judgment of the court below, Article 8 subparag. 4 (g) of the Income Tax Act (amended by Presidential Decree No. 1065, Dec. 31, 1981) provides that foreign-capital invested companies under the Foreign Capital Inducement Act and foreigners who provide labor under technology introduction contracts shall not be subject to income tax on the allowances of the nature of the foreign-capital invested companies, which are paid to the foreigners who work for the Republic of Korea in addition to the ordinary benefits that the foreigners would have worked for the Republic of Korea, such as the price of their home country, living standards, or exchange rate. The court below determined that the above allowances were paid to the non-party 1 to the non-party 2 who were employed by the non-party 4 and the non-party 11 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 1065, Dec. 31, 1981). The court below stated that the non-party 2's new educational expenses were not paid for the non-party 1's own country. The plaintiff's new educational expenses were paid to the plaintiff 1's own country.

The issue is groundless.

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kang Jong-young (Presiding Justice)