Corindo Group Chairman Seung Eun-ho Wins Final Victory in 100 Billion Won Tax Cancellation Lawsuit

[Asia Economy Reporter Kim Hyung-min] Seung Eun-ho (80), chairman of the Indonesian Korean company 'Korindo Group,' has won the final verdict in a tax lawsuit worth 100 billion KRW against the Korean National Tax Service.

According to the legal community on the 11th, the Supreme Court's First Division (Presiding Justice Park Jung-hwa) confirmed the appellate court's ruling on the 27th of last month, which ruled in favor of Chairman Seung in the appeal trial to cancel the comprehensive income tax imposition filed against the Seocho Tax Office.

The Seoul Regional Tax Office, through tax investigations in 2013-2014, identified that Chairman Seung indirectly owned domestic and overseas deposits and shares of Korean corporations through nominal companies (paper companies) established in third countries such as the British Virgin Islands. Accordingly, they notified him of comprehensive income tax of about 51.4 billion KRW, capital gains tax of about 41.2 billion KRW, and gift tax of about 14.2 billion KRW for the years 2003-2012. Chairman Seung filed a lawsuit in objection.

The key issue in the trial was which country Chairman Seung should be considered a resident of. The first trial, after reviewing the income tax laws of Korea and Indonesia and the tax treaty, concluded that Chairman Seung was a domestic resident. During the 10-year taxation period, he stayed in Korea an average of 128 days per year and received salary, qualifying him as a Korean resident. According to Indonesian law, he was also an Indonesian resident during the same period. However, the court judged that the "center of vital interests," the standard under the tax treaty, was Korea.

The second trial reversed this judgment. Considering that the average stay period in Indonesia was longer each year during the taxation period, it was determined that Korea could not be considered the "center of vital interests" under the tax treaty. The tax treaty stipulates that in such cases, the "habitual abode" should be considered. The court judged that Chairman Seung had no domestic income tax payment obligation during the taxation period, citing not only the number of days stayed but also that he visited Korea irregularly for reasons such as medical treatment.

Accordingly, the imposition of comprehensive income tax, capital gains tax, and gift tax was deemed unlawful, and the tax imposition was canceled. The increase in the scope of the comprehensive income tax cancellation claim to about 63 billion KRW by Chairman Seung's side in the second trial was also recognized, making the total canceled tax amount 118.4 billion KRW.

The Supreme Court found no legal errors in the second trial's judgment and dismissed the National Tax Service's appeal without conducting a hearing.

Meanwhile, Chairman Seung is also undergoing a criminal trial after being indicted last year on charges of tax evasion amounting to about 60 billion KRW through paper companies.

This content was produced with the assistance of AI translation services.