Cho High Court Decision 201Do2069 ( October 25, 2011)

One house non-taxation for one household because it is transferred within two years from the date of departure;

One house non-taxation for one household where a house is transferred within two years from the date of departure because the date of receiving the local permanent sovereignty falls under the category of "local resident who acquired the local permanent sovereignty during his/her stay in a foreign country."

Article 89 of the Income Tax Act

Article 154 of the Enforcement Decree of Income Tax Act

2011Gudan26094 Revocation of Disposition rejecting a request for rectification of capital gains tax

The AA

The Director of the Pacific District Office

May 2, 2012

June 27, 2012

1. The Defendant’s rejection of a claim for correction against the Plaintiff on March 22, 2011 for the transfer income tax of 000 won belonging to the year 201 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Facts of recognition;

A. The Plaintiff’s acquisition and transfer of real estate

(1) After graduation from a graduate school, the plaintiff (1968 students and women) left the United States on August 13, 2001 to study in the state of unmarried person while working in BBB as the chief designer, and on December 10, 2001, the plaintiff (1968 students and women) donated OOO20 OO apartment 00 Dong 000 (hereinafter referred to as the "former apartment") to the plaintiff so that the plaintiff can attend the Republic of Korea and live in the Republic of Korea.

(2) On August 2001, the Plaintiff was issued with student visa and tried to have a design register for admission to a technical school in New York located in the U.S. and to have been employed in the Republic of Korea on May 2003, 200, but did not have been employed in the Republic of Korea on or around October 2004. Until now, the former apartment was reconstructed and the Plaintiff was engaged in a business in the U.S. located in the company located in the U.S...... Around February 27, 2009, the Plaintiff purchased the apartment unit No. 17OO No. 112, 1903 (hereinafter “instant apartment”).

(3) The Plaintiff, while staying in the U.S. as an employment visa, obtained U.S. permanent sovereignty on June 5, 2010, and was issued a residence passport from the New York consular official on June 9, 2010, and the Plaintiff’s resident registration in the Republic of Korea up to that time was cancelled due to locally obtained emigration.

(4) On November 22, 2010, the Plaintiff entered into a contract to sell the instant apartment to thisGG for KRW 000, and completed the registration of ownership transfer on January 27, 201.

(5) After the Plaintiff left the Republic of Korea on August 2001, the period of domestic stay was about nine years and four years until January 201, 201, which was about 84 days in total.

(b) Details of disposition;

(1) The Plaintiff, after transferring the instant apartment to thisGG, sentenced and paid the transfer income tax of KRW 153,652, and 460 with the preference of 00 won, acquisition price of KRW 00, and necessary cost of KRW 000, in order to obtain a certificate of transit by the head of the tax office for Korean nationals residing abroad.

(2) Thereafter, the Plaintiff filed a claim for correction of the transfer income tax already paid to the Defendant by asserting that the transfer of apartment in this case becomes subject to non-taxation pursuant to Article 154(1)2(b) of the Enforcement Decree of the Income Tax Act (hereinafter “instant provision”). However, on March 22, 2011, the Defendant left the Republic of Korea for study purpose at the time of the acquisition of old apartment, and thus, the Plaintiff was deemed to have acquired the apartment in the status of non-resident, and thus rejected the Plaintiff’s claim for correction.

(3) The Plaintiff fulfilled the pre-trial procedure.

[Ground of Recognition] The non-contentious facts, Gap evidence 1 through 8, 13 through 16 (including household numbers), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

“As the Plaintiff was a resident at the time of acquiring old apartment, and the Plaintiff was issued a U.S. permanent sovereignty on the date of departure from Korea on June 9, 2010 to the date of departure from Korea on January 27, 201, which was about seven months after the date of departure from Korea, and transferred the instant Amphart within two years from the date of departure from Korea, the transfer of the instant apartment constitutes a non-taxation of one house for one household pursuant to the provisions of item (b) of this case. Therefore, the instant disposition rejecting the Plaintiff’s request for correction is unlawful.”

(b) Relevant statutes: as shown in attached Form.

C. Determination

(1) Whether the Plaintiff was a non-resident at the time of acquiring the old apartment

Under the Income Tax Act, a resident means a person who has a domicile in the Republic of Korea, and a person who has a domicile in the Republic of Korea for at least one year, and his/her domicile must be determined based on objective facts of his/her living relationship, such as the existence of a family living together in Korea and of assets located in Korea (see, e.g., Supreme Court Decision 96Nu2927, Nov. 14, 1997). As revealed in the above facts, it is apparent that at the time when the plaintiff acquired old apartment, the plaintiff had his/her domicile in the Republic of Korea for 4 months after he/she left Korea for study, and both his/her parents and siblings were living in the Republic of Korea, and the former apartment was acquired by the plaintiff from his/her mother to reside in the Republic of Korea, and at the time of the acquisition of the apartment house, it is reasonable to view the plaintiff as a domestic resident. In addition, Article 2-2(2) of the Enforcement Decree of the Income Tax Act provides that the plaintiff is a non-resident who is a resident in Korea or a non-resident in the Republic of Korea.

(2) Whether this case’s provision falls under item (b)

According to the above facts, the plaintiff graduated from the Republic of Korea for the purpose of studying, and found employment in the Republic of Korea again. On June 9, 2010, while staying there as employment visa in the United States, the plaintiff acquired the permanent sovereignty of the United States and obtained the passport of residence in the United States. However, Article 71 (6) of the Enforcement Rule of the Income Tax Act provides that "the date of departure" of this case is "the date on which the plaintiff acquired permanent residency or other equivalent long-term residency under the Emigration Act" and "the date on which the plaintiff obtained employment visa or other equivalent long-term residency." This provision provides that "the date of departure" of this case 20 years after the date on which the plaintiff obtained employment visa of the United States, and that "the date on which the plaintiff transferred employment visa of this case 20 years after the date on which the plaintiff was issued employment visa of this case 20 years after the date on which the plaintiff had been issued employment visa of this case 20 years, and that it constitutes "the date on which the plaintiff transferred employment visa of this case 20 days." of this case.

Thus, since the transfer of apartment house of this case satisfies the requirements of non-taxation for one household, the disposition of this case which rejected the plaintiff's request for correction is unlawful.

3. Conclusion

Therefore, the plaintiff's claim seeking the cancellation of the disposition of this case is accepted on the ground of the reasons.