Whether a resident who has an address for at least five years before the date of transfer of outstanding shares

In light of the fact that most of the key issues were staying in Korea, not reporting emigration, and the health insurance fee is paid as a resident in Korea during the key issues period, and monetary transactions are made using an individual account opened in a domestic bank, it is reasonable to view that it constitutes a resident in Korea for at least five years until the date of transferring the outstanding shares

The scope of transfer income under Article 118-2 of the Income Tax Act

2016Gudan8948 Revocation of Disposition of Imposing Capital Gains Tax

하〇〇

〇〇세무서장

June 21, 2017

July 5, 2017

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

피고가 2014. 10. 1. 원고에게 한 2009년 귀속 양도소득세 〇원(가산세 포함)의 부과처분을 취소한다.

1. Details of the disposition;

A. On May 1, 1992, the Plaintiff established AA, a corporation located in Hong Kong, and transferred 217,200 shares issued by the said corporation (hereinafter “instant shares”) to B on August 18, 2009 while working as a shareholder and representative director of the said corporation, and did not file a transfer income tax on the ground that the transfer of assets abroad by a resident in Korea for less than five years as of the transfer date is not subject to transfer income tax.

나. 중부지방국세청장은 2014. 6. 16.부터 2014. 9. 5.까지 세무조사를 실시하여, 원고가 이 사건 주식 양도일 현재 5년 이상 국내에 주소 또는 거소를 둔 국내 거주자라고 피고에게 통보하였고, 이에 따라 피고는 2014. 10. 1. 원고에게 2009년 귀속 양도소득세 〇원(가산세 포함)을 고지하였다(이하 '이 사건 처분'이라 한다).

C. The Plaintiff appealed and filed an appeal with the Tax Tribunal on November 20, 2014, but was dismissed on July 27, 2016.

[Ground of recognition] No dispute, Gap 1 to 4, Eul 1's each entry, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Under the Income Tax Act, only a domestic resident who has a domicile or residence in Korea for not less than five consecutive years before the date of transfer of the pertinent asset shall be subject to the taxation of capital gains tax on the transfer of assets overseas. The Plaintiff established AA and continued to work as a representative director and registration director by acquiring all his family members living together with his/her own residence in Hong Kong around 192, and continued to work as the representative director and registration director, while the domestic real estate acquired during his/her residence in Hong Kong was disposed of all of his/her domestic real estate acquired during his/her residence in Hong Kong while the Plaintiff was a non-resident under the Income Tax Act until November 18, 2004, which is the day immediately before the final entry into Korea with his/her spouse for domestic residence after the transfer of the pertinent asset. However, the disposition of this case on the premise that the Plaintiff falls under a resident as of August 31, 2004

B. Relevant statutes

Attached Form is as shown in the attached Form.

(c) Fact of recognition;

1) 원고는 1976.경 〇〇대학교 〇〇학과를 졸업하고 1979.경 CC를 창업하여 1990. 4. 4. CC 주식회사(이하 'CC'이라고만 한다)로 법인전환을 하여 운영하다가 1992. 5. 1. AA를 설립하였다.

2) 원고는 1992. 5.경 배우자 이〇〇 및 두 자녀(당시 8살, 5살)와 함께 홍콩으로 이주하여 1992. 10.경 홍콩영구거주권을 취득하였다.

3) On March 13, 2002, the Plaintiff, a Korean corporation of AA (hereinafter referred to as "D") established in the Republic of Korea, and then resigned from the representative director of AA on March 12, 2003, and left the Republic of Korea with his family members on June 2, 2003 and stayed mainly in the United States before he permanently returned to the Republic of Korea on September 8, 2004.

4) 한편 원고의 주민등록은 아래 표의 기재와 같이 1988. 6.경부터 배우자 이〇〇소유의 과천시 〇아파트 〇호(이하 '이 사건 아파트'라 한다)로 되어 있다가 2005. 5. 24. 원고 소유의 〇시 〇동으로 주민등록상 주소가 이전되었다.

5) 원고와 이〇〇의 국내 부동산 보유 현황은 아래 표의 기재와 같다. 이에 따르면 원고는 홍콩으로 이주하기 전부터 서울 〇구 〇동 〇번지와 서울 〇구 〇동 〇아파트 〇호를 소유하고 있다가 2002. 8.경 모두 처분하였다.

"6) 원고와 이〇〇 등이 주식을 보유한 회사 및 그 관계 회사들의 현황은 아래 표의기재와 같고, 위 회사들 사이의 거래구조는 그 아래 그림과 같다. 이에 따르면 원고는 그 가족들과 함께 국내에 소재한 CC에 대하여 100% 지분을 보유하고 있는데, 원고는 CC를 통하여 AA를 비롯하여 DD, EE공사(이하 'EE'라고 한다)를 지배・운영하고 있다.",7) 위에서 본 바와 같이 원고는 홍콩 이주기간 동안 국내 법인의 임직원으로 근무하였고, 직장가입자로 건강보험을 유지하면서 건강보험료를 납부하였다. 또한 아래에서 보는 바와 같이 원고는 국내 법인으로부터 고액의 소득을 취득하였고, 국내에 개설되어 있던 원고 명의의 기업은행 계좌를 이용하여 금전거래를 하였다.

8) 원고와 이〇〇이 2000년도부터 2006년도까지 국내에서 신고한 소득과 연말정산을 한 내역은 아래 표의 기재와 같다.

9) The Plaintiff and its family members revised and paid income tax as non-resident on the disposition of income for the year 2002 and 2003, andCC also withheld the Plaintiff and its family members as non-resident income and dividend income. On the other hand, the Defendant considered KRW 293,352,930, which was received from AA on April 1, 2005 as dividend from April 1, 2005, as domestic residents' overseas dividend income, and paid in full without any objection by the Plaintiff on September 1, 2009.

10) The number of days of stay in Korea from 2001 to 2009 of the Plaintiff and their families are as listed in the following table. The Plaintiff resided in Hong Kong and China in 2002, 325 days in the United States in 2003, 210 days in the United States in 2003, and 116 days in Hong Kong. In particular, the Plaintiff stayed in the United States in 2004, 10 days in Hong Kong, 1 days in Hong Kong, and 69 days in China. The Plaintiff’s stay in Korea is 36 days in August 30, 204.

11) 원고와 이〇〇의 2004년도 출입국 현황은 아래 표의 기재와 같은바, 이에 따르면 원고는 2004. 4. 9.에 최초 국내로 입국하여 중국과 홍콩으로 입출국을 반복하다가 2004. 9. 8. 이후로 계속해서 국내에 체류하였다.

[Reasons for Recognition] Further to the evidence mentioned above, Gap 11, Gap 15 through 17, 19, 20, 22, Eul 3 through 13 (including each number), the purport of the whole pleadings

D. Determination

1) Relevant legal principles

Article 1 (1) 1 of the former Income Tax Act (amended by Act No. 7319 of Dec. 31, 2004) provides that "an individual who has a domicile in the Republic of Korea or has a domicile in the Republic of Korea for not less than one year, i.e., an individual who has a domicile in the Republic of Korea, is liable to pay income tax on each individual's income. Article 2 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19254 of Dec. 31, 2005) provides that an address shall be determined based on the objective facts of his/her living relationship, such as the existence of a family living together in the Republic of Korea and an asset located in the Republic of Korea. Meanwhile, Article 1 (2) of the same Act provides that "a place of residence" means

Meanwhile, as the Republic of Korea and Hong Kong do not enter into a tax treaty, if a national is a resident of the Republic of Korea under the Income Tax Act ( even if he/she has resided in Hong Kong), taxation can be conducted as a matter of course, and in determining which individual has his/her domicile or residence in Korea, it should be determined in light of his/her individual’s living relationship in the Republic of Korea, not by determining that individual is not a domestic resident on the ground of his/her personal possession of assets or family relations located in a foreign country (see Supreme Court Decision 92Nu169

2) In the instant case:

According to Article 118-2 subparagraph 3 of the former Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009), which applies at the time of the disposition of this case, the transfer income tax shall be imposed on the income from the transfer of overseas assets, i.e., a resident, a person who has his domicile or residence in a foreign country for at least five consecutive years prior to the date of transfer of the pertinent assets. In the case of the stocks issued by Hong Kong corporations falling under overseas assets, the transfer date shall be August 31, 2009, the transfer date shall be August 31, 2009, and the five-year period from August 30, 2004 to August 31, 2009, the issue of whether the Plaintiff’s resident is the resident (hereinafter “the dispute period”) does not conflict between the parties. Accordingly, in order to be legitimate for the Defendant’s disposition of this case, it depends on whether the Plaintiff can be deemed a domestic resident from at least the point of issue period to the date of transfer.

From this perspective, the instant case is examined in light of the relevant statutes and legal principles as seen earlier. In full view of the facts acknowledged earlier and the following circumstances acknowledged by the evidence revealed earlier, it is reasonable to deem that the Plaintiff constitutes a domestic resident, i.e., a domestic resident, if the Plaintiff had an address or residence in the Republic of Korea continuously for five years or longer

○○ Stocks of this case from November 2004, which the Plaintiff claimed as permanent return date to Korea permanently.

Around 4 years and 9 months until August 31, 2009, the transfer date, recognized that the Plaintiff is a domestic resident. This constitutes a major issue period (95%) and the Plaintiff actually entered the Republic of Korea as of September 8, 2004.

○ 원고는 쟁점기간 내내 주민등록법상 국내 주소를 유지하였다. 원고가 홍콩으로이주하기 전인 1988. 6.경부터 배우자 이〇〇 소유의 이 사건 아파트에 전입신고를 한 이래 귀국한 일시에 해당하는 2004. 9.경까지는 물론 2005. 5. 23. 〇시 〇동 〇번지로 주민등록을 이전하기 전까지 위 주민등록상 주소를 그대로 유지하고 있었고, 원고가 홍콩에서 거주하는 동안 해외거주를 이유로 해외이주신고를 한 적도 없다.

○ The Plaintiff establishedCC on April 1979, and converted it intoCC on April 1990, held 100% of its shares within the key period including the Hong Kong residence period, and maintained its representative director status. AD director established around March 2002 has been also appointed and received considerable benefits. The Plaintiff, in fact, controlled and operated D and E throughCC with a 100% share of 10% shares. During the key period, the Plaintiff paid the health insurance fee as a domestic resident, traded money using the personal account opened in the domestic bank, and received the year-end settlement by reporting the wage and salary income.

○ 원고는 비록 2002. 8.경 모두 처분하기는 하였으나 홍콩으로 이주하기 전부터 서울 〇구 〇동 대지와 아파트 등 부동산을 소유하고 있었고, 그 배우자 이〇〇도 홍콩 이주기간 내내 원고 가족의 종전 거주지인 이 사건 아파트를 소유하였다. 원고는 1999. 7. 27. 홍콩 소재 부동산을 4,700,000 홍콩달러에 구입하여 보유하다가 2006. 3. 11. AA에 매각하였다면서 홍콩 이주기간 동안에 홍콩에도 부동산을 소유하고 있었다고 주장하나, 위 부동산은 AA의 사무실로 이용된 부동산이어서 이를 가지고 원고 개인이 홍콩에 일반적, 객관적 생활관계를 형성하였다거나 홍콩 거주의사가 있었다고 보기는 어렵다.

In addition to the above overall circumstances, the plaintiff resigned from the representative director of AA around November 2003 and stayed mainly in the United States prior to his return to the Republic of Korea on or around November 2004. The plaintiff left the United States where he had been living in the Republic of Korea on April 9, 2004 and repeated his long-term return to China and Hong Kong until September 8, 2004. The period of stay in the Republic of Korea in the Republic of Korea in the year of 2004 reaches 196 days in total, while the period of stay in Hong Kong reaches 196 days in total, there was no fact that the plaintiff remitted the assets acquired in the Republic of Korea in the year of 2004. The plaintiff reported and paid income tax on the earned income and dividend income received in the year of 202 and 2003 as non-resident, while the tax authority imposed income tax on the dividend income in the year of 204 on a domestic resident's dividend income in the Republic of Korea from AA, the plaintiff can be sufficiently maintained within the Republic of Korea.

As of August 30, 2004, when determining whether the Plaintiff is a domestic resident in connection with the transfer of the instant shares, the issue is whether the Plaintiff is a domestic resident at that time. Since the Plaintiff was recognized by the Tax Tribunal as a non-resident until December 31, 2003, the Plaintiff asserts to the purport that the circumstances that occurred until August 30, 2004, which was the above reference date, should be considered mainly from that time. However, in the relevant tax judgment, the tax authority or this court cannot be deemed to be bound by the fact-finding that the Plaintiff was aware that the Plaintiff was a domestic non-resident in 2003. In light of the nature of income tax as a fixed-term taxation and the nature of the domicile or residence, which contains the concept of continuing the period of time as the basis of the income tax as well as the nature of the income tax as a basis of living, it cannot be said that the Defendant erred by taking into account all the circumstances after the transfer and the decision.

○ The Plaintiff asserts to the effect that, around November 2004, the Plaintiff’s family members moved to Hong Kong and acquired the sovereignty of Hong Kong, while living or working mainly with his family members in Hong Kong until his spouse returns to Korea permanently, and thus constitutes a Hong Kong resident. However, in determining whether the Plaintiff had his domicile or residence in Korea, it does not mean that the Plaintiff is not a domestic resident on the ground of the Plaintiff’s asset relationship or family relationship located in a foreign country, which is not determined in light of the domestic living relationship. As such, the above circumstances alone do not lead to a conclusion that the Plaintiff constitutes a domestic resident. This does not apply where the Plaintiff’s wage and salary income received from AA during the pertinent period exceeds the amount of his wage and salary income received from a Korean corporation.

3) Therefore, the instant disposition is lawful.

3. Conclusion

The plaintiff's claim is dismissed. It is so decided as per Disposition.