Local residents under the Income Tax Act.

In light of the Plaintiff’s family relationship, economic activities in Korea, number of days of stay, etc., the Plaintiff is a domestic resident under the Income Tax Act during the taxable

Supreme Court Decision 2014Du13959

○ ○

The Director of Gangnam District Office

February 26, 2015

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

1. As to the grounds of appeal Nos. 1 and 2

Article 1 (1) 1 of the former Income Tax Act (amended by Act No. 9270 of Dec. 26, 2008; hereinafter "the Income Tax Act") provides that an individual who has a domicile in Korea or has a domicile in Korea for not less than one year shall be "resident" and Article 3 provides that income tax shall be imposed on all income prescribed by the Income Tax Act for a resident. In addition, Article 2 (1) and (2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034 of Feb. 18, 2010) which provides for the classification of his domicile and residence according to delegation under Article 1 (4) of the Income Tax Act shall be determined based on the objective facts of his/her living relationship, such as the existence of a family living together in Korea and of a asset located in Korea for a long time other than his/her domicile, and Article 1 (1) 4 and 3 of the same Act provides that the period of his/her residence in Korea shall be at least one year after his/her entry Korea.

The lower court determined that: (a) the Plaintiff was staying in Korea for 255 days annually from 2002 to 2008, including ① 270 days 206, 2007, 287, and 232 days 2008; (b) the Plaintiff married with Kimt who is a national of the Republic of Korea on June 10, 2003; and (c) Kimt was residing in Seocho-gu, Seoul; (b) the Plaintiff acquired and sold the shares of GgN Entertainment Co., Ltd. (hereinafter referred to as “Gg”) which is a corporation established in Kindo; and (c) the Plaintiff was found to have been paid a total of 20g days from around December 2002 to the date of the instant taxation disposition by the Defendant; and (d) the Plaintiff was found to have been paid a total of 6g days of the Plaintiff’s stay in Korea from around 207, 2007 to the date of the instant taxation disposition.

In light of the above provisions and relevant legal principles and records, the above judgment of the court below is just, and there is no error of law by misapprehending the legal principles on the interpretation of residents under the Income Tax Act, contrary to what is alleged in

2. Regarding ground of appeal No. 3

If a certain individual falls under both a domestic resident and a foreign resident under the Income Tax Act, and thus, constitutes a person liable for income tax, etc. under the relevant foreign law, a separate provision is established upon entering into a tax treaty among countries to prevent such double resident. If it is acknowledged that the person liable for tax payment is a dual resident, the determination of the resident country and the tax rate pursuant to the relevant tax treaty shall be made in accordance with the provisions of the tax treaty concluded with the pertinent country. In such a case, the resident country and the tax rate pursuant to the said tax treaty shall be deemed taxable requirements, but the taxpayer, who is a domestic resident, bears the burden of proving that the tax treaty shall apply at the same time as the taxpayer is a foreign resident (see Supreme Court Decision 2006Du3964, Dec. 1

The lower court determined that the Plaintiff is liable to pay income tax as a resident of the Republic of Korea even in light of the provision on the determination of a dual resident under the tax treaty concluded with the United States or China, on the ground that the Plaintiff is a dual resident, and there is no evidence to acknowledge the fact that the Plaintiff is a dual resident, even if the Plaintiff is a dual resident, and that the former is a spouse of the Republic of Korea; ② in light of economic activities in the Republic of Korea, the number of days of stay, and family relations in Korea, the most closely related country is the Republic of Korea and the latter is the Republic of Korea; ② in light of the number of days of stay in Korea up to the average 255 days each year, the Plaintiff

In light of the aforementioned legal principles, relevant regulations, and records, the above determination by the court below is just and acceptable, and there is no error of law by misapprehending the legal principles as to dual residents, etc., as otherwise alleged in the grounds of appeal.

3. Regarding ground of appeal No. 4

The ground of appeal on the purport that the judgment of the court below that the decision of the court below was unlawful because it was erroneous in the selection of evidence or fact-finding, which belongs to the exclusive authority of the court below, is nothing more than an error in the selection of evidence or fact-finding, which belongs to the original authority of the court below, at the time when the plaintiff entered into a contract to sell 280,000 shares to bB corporation.

4. Regarding ground of appeal No. 5

In light of the relevant legal principles and records, the court below is just in holding that the grounds alleged by the plaintiff belong to the land or mistake of the law, and it cannot be viewed that there is a justifiable reason not to cause the plaintiff's neglect of tax liability. In so doing, contrary to what is alleged in the grounds of appeal, there is no error of law by misapprehending the legal principles

5. Conclusion

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.

Supreme Court Decision 20

Hee-de

Justices Park Jae-young

Injury

Justices Park Jae-hoon

Kim Chang-suk