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Do I Have to Make Any Filing Including Tax Report with the Korean Authority Regarding the U.S. House Gifted by My Korean Parent – Korean Tax Implication of International Gifts

When receiving gifts of money or other property, we should check any tax issues involved.  When the gifts cross the national borders or involve foreign parties, it becomes more complicated.  It could entail an additional filing with a government of the foreign country where the foreign party resides.  And even further, foreign tax liability could arise.  Today, we are going to introduce what report and tax liability the parties should take care of and under what condition, when a U.S. resident receives a U.S located house as a gift from his Korean resident parent.

Report to the Bank of Korea

According to Article 7-46 and 7-44 of Foreign Exchange Transaction Regulation(FETR), when a resident of Korea gifts a real property, which is even located abroad, to any non-resident, the resident(devisor) should report the transaction in advance to the Bank of Korea.

The nationality of the parties doesn’t matter here. What does matter is the place of residence of each party.  The Korean Tax authority (National Tax Service) has an internal rule to apply when Continue reading


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Is Defaulting Korean Supplier Liable for the Foreign Distributor’s Damages and Loss of Profits Resulting from the Failure of 3rd Party Reseller Deal?

그림 2A distributor from the U.S. entered into a distributorship contract with Korean supplier (exporter) for certain goods.  Of course, the U.S. distributor was thinking to resell the goods in U.S. market for a markup. But the problem broke up after the contract was duly singed and executed.  With no reason, Korean supplier suddenly refused to sell the goods and rescinded the contract.  Due to this unexpected turmoil by the foreign supplier, the U.S. distributor could not properly perform the reselling deals with the local warehouse stores, which the distributor had thought very lucrative. There would be no doubt that the act of Korean distributor constitutes a breach of distributorship agreement. But, the U.S. distributor did not pay anything, yet.  The only loss they encountered was they lost a good deal with 3rd party by reason of the Korean supplier’s breach of contract.  Now, the U.S. distributor tries to recover damages and loss of profits from the supplier in Korea which they suffered from the failure of the reselling deal with the local warehouse stores.  In this case, can the U.S. distributor prevail in Korean court and under Korean law?

The key legal issue would be whether the Korean supplier knew of the fact that the distributor had completed their negotiation with 3rd party for the resale agreement.  According to the ruling from the Supreme Court of South Korea, if the supplier knew of the fact, the supplier is liable for the distributor’s loss relating to failure or non-performance of the resale agreement with 3rd party.  By contrast, Continue reading