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TITLE Supreme Court Decision 2013Du7711 Decided March 26, 2015 【Revocation of Disposition Imposing Corporate Tax】 [full Text]
Summary
[1] Where a Germany-based fiscally transparent entity, which falls under “foreign corporation” according to the Korean corporate tax law, is not liable for tax in Germany (residence country), the applicability of the Korea-Germany Tax Treaty and the tax rate applicable to the dividend income accrued in Korea (source country)

[2] Where the Defendant recognized the beneficial owner of the dividend income in the present case as TMW, a Germany-based limited partnership that wholly owns issued shares of Germany-based limited company TMW Hansol which it established, and imposed by disposition a 25% corporate tax pursuant to Article 98(1)3 of the former Corporate Tax Act on the Plaintiff, a limited company set up in Korea by TMW Hansol which has whole ownership of issued shares; the Plaintiff, after purchasing real estate in Korea, accrued income (such as rental income and capital gains) which were paid in the form of dividends to TMW Hansol, and paid the withholding corporate tax by applying the limited tax rate of 5% prescribed in Article 10(2)(a) of the Korea-Germany Tax Treaty; the case holding that TMW rather than TMW Hansol should be the beneficial owner of the dividend income in the present case
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