Busan High Court 2013Nu20097 ( October 25, 2013)

The profit earned by the plaintiff's employee by receiving a joint rental house shall not be excluded from the scope of wage and salary income.

The joint rental house provided by the plaintiff cannot be seen as a "cases where other employees, etc. move to the house concerned when they move to, retire or move to the house during the term of the lease". Therefore, it cannot be seen as a "private house" under the main sentence of Article 15-2 (2) of the Enforcement Rule of the Income Tax Act.

Article 38 (Scope of Earned Income)

2013Du35082 Action Demanding the cancellation of a refund for wage and salary income tax;

AA Corporation

BB Director of the Tax Office

Busan High Court Decision 2013Nu20097 Decided October 25, 2013

April 10, 2014

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

1. Article 20 (1) of the Income Tax Act provides that "the salary, salary, remuneration, annual wage, wage, bonus, allowance, and other benefits of a similar nature that are received due to the provision of labor" as earned income, and Article 38 (1) 6 of the Enforcement Decree of the Income Tax Act provides that "the gains that a person receives a house" is included in the scope of such earned income, but the proviso provides that "the case where a person receives a company house as determined by Ordinance of the Ministry of Strategy and Finance is excluded from the scope of such earned income."

On the other hand, Article 15-2 (1) of the Enforcement Rule of the Income Tax Act provides that "the company house prescribed by Ordinance of the Ministry of Strategy and Finance" in the proviso of Article 38 (1) 6 of the Decree means a house owned by an employer is provided at no charge or at a low price to employees under the same proviso, or a house directly leased by an employer to be provided to employees, etc.," and the main sentence of paragraph (2) provides that "in applying the provisions of paragraph (1), if an employer provides a leased house as a company house, if an employee, etc. is relocated to, retires or directors during the lease period,

2. According to the reasoning of the lower judgment and the reasoning of the first instance judgment cited by the lower court, the Plaintiff provided the leased house (hereinafter referred to as “joint leased house”) by means of entering into a joint lease agreement with the Plaintiff, where the lease deposit for the house to be provided to an employee accompanied by his/her dependent according to the “Standards for Supporting Residential Stabilization Operation” established by himself/herself from 2008 to 2010 is within the scope of the maximum amount of support by region, the Plaintiff directly entered into a lease agreement and provided the leased house (hereinafter referred to as “joint leased house”) if the lease deposit exceeds the maximum amount of support by directly entering into the lease agreement. ② The Plaintiff directly selected the leased house to move into the joint leased house (hereinafter referred to as “joint leased house”) and the Plaintiff applied for the exemption from the return of the lease deposit that the Plaintiff provided with the applicant’s qualification and support. ③ In the event of retirement, purchase, transfer, temporary retirement, etc., the Plaintiff determined the full amount of the lease deposit to be repaid at once, while other employees move into the house.

Examining these facts in light of the above laws and regulations, the joint rental house offered by the Plaintiff cannot be deemed to fall under the case where other employees, etc. move to the house concerned when they move to, retire or move to the house during the term of the lease. Thus, the profit gained by the Plaintiff’s employees by receiving such a joint rental house cannot be deemed to be the case where they move to the house concerned. Therefore, it cannot be deemed to be excluded from the scope of wage and salary income under the main sentence of Article 38(1)6 of the Enforcement Decree of the Income Tax Act.

The judgment below to the same purport is just, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to the scope of wage and salary income provided by Article 38 (1) 6 of the Enforcement Decree of the Income Tax Act or the scope of company houses provided by Article 15-2 of the Enforcement Rule of the Income Tax Act. In addition, Supreme Court Decision 2004Du7993 Decided May 11, 2006 is related to the subject of the application of the wrongful calculation under the Corporate Tax Act, and it is not appropriate

3. 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 on the bench.