[2] The meaning of "re-audit for the processing of various taxation data" under the former part of Article 63-2 subparagraph 2 of the former Enforcement Decree of the Framework Act on National Taxes, and whether such data includes taxation data prepared or acquired by the tax authority in the previous tax investigation (negative)

[3] The case holding that the judgment below erred by misapprehending legal principles, in a case where a regional tax office deemed that the Gap company’s shareholder registry was not falsified as a result of conducting a tax investigation against Gap company, and that the tax authority did not impose gift tax on Eul company’s major shareholder and Eul’s son’s son’s son, etc. on the ground that the taxation authority expired the exclusion period for imposition of gift tax on Gap company’s son. After which the regional tax office conducted a tax investigation again according to the Board of Audit and Inspection’s “request for disposition as a result of audit,” and the tax authority imposed gift tax (including additional tax) on Byung et al. on Byung, the subsequent tax investigation cannot be deemed as a separate gift tax investigation conducted after the previous tax investigation, and the "request for disposition as a result of audit" cannot be deemed as falling under “all kinds of taxation data” as one of the grounds for re-audit under Article 63-2 subparag. 2 of the former Enforcement Decree of the Framework Act on National Taxes.

[2] Various taxation data under the former part of Article 63-2 subparagraph 2 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 26946, Feb. 5, 2016) mean data for the imposition, collection and management of national taxes, which are either prepared by an institution, other than a tax authority, which is not likely to abuse or arbitrarily exercise the right to tax investigation, or acquired and provided to the tax authority for the purpose of performing its official duties, and such data does not include taxation data

[3] In a case where a regional tax office deemed that the shareholder list of Gap company was not falsified as a result of conducting a tax investigation against Gap company, and the tax office did not impose gift tax on Eul company's major shareholder Eul and Eul Eul's son's son's son's son's son's son's son's son's son's son's son. After that, as a result of conducting a tax investigation again with the Board of Audit and Inspection's "request for disposition as a result of audit, the above shareholder list was prepared falsely, and the tax office imposed gift tax (including additional tax) on Byung's son, the case holding that the subsequent tax investigation can not be deemed as a tax investigation on a separate gift made after the previous tax investigation only on the ground of the name or form of the subsequent tax investigation, and further, the "request for disposition result of audit" does not constitute a new statement or new data, but constitutes an unlawful re-audit under Article 26-2 of the former Enforcement Decree of the Framework Act on National Taxes, which provides for various reasons for further review (amended by Presidential Decree No. 2636. 26.

1. According to Article 81-4(2) of the former Framework Act on National Taxes (amended by Act No. 11604, Jan. 1, 2013; hereinafter the same), a tax official may not, in principle, conduct a reinvestigation on the same tax item and the same taxable period. Inasmuch as there are special circumstances, barring special circumstances, such as that the imposition of a tax by a reinvestigation prohibited is merely a case where the error of initial taxation is corrected (see, e.g., Supreme Court Decision 2016Du55421, Dec. 13, 2017).

However, “Re-audit to process various taxation data” is exceptionally permitted pursuant to Article 81-4(2)5 of the former Framework Act on National Taxes and the former part of Article 63-2 subparag. 2 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 26946, Feb. 5, 2016; hereinafter the same).

2. Review of the lower judgment and the record reveals the following facts.

A. The Seoul Regional Tax Office conducted a tax investigation with respect to the Barun Tourism Development Co., Ltd. (hereinafter “instant company”). During that process, Nonparty 1, a major shareholder of the instant company, and Nonparty 1, the president of the instant company, submitted the pertinent company’s list of shareholders and the stock certificates issued by the instant company, which were prepared and kept by himself.

B. The register of shareholders of this case stated that part of the shares of this case was transferred to Plaintiff 2, who is Nonparty 1’s son on March 1, 1991, and the remainder was transferred to Plaintiff 1, who is another son on March 9, 1994.

C. A public official in charge of tax investigation of the Seoul Regional Tax Office conducted an intensive investigation as to whether the instant shares were donated in accordance with their entries because the shareholder registry and shares are true. The results of the investigation conducted through Nonparty 1, Nonparty 2, Nonparty 3, the nominal owner of the instant shares, and the investigation, such as inquiries and data review, conducted with respect to the relevant persons, including Nonparty 2, and Nonparty 3, who are the nominal owners of the instant shares, constituted a shareholder registry, not

D. Accordingly, the Seoul Regional Tax Office notified Nonparty 1 of the result of the tax investigation on July 8, 2008 by deeming that Nonparty 1 donated part of the instant shares to Plaintiff 2 on March 1, 1991, and the remainder to Plaintiff 1 on March 9, 1994. According to the result of the investigation above, the tax authority notified Nonparty 1 of the result of the tax investigation on July 8, 2008, instead of imposing gift tax on the instant shares on the ground that the period for exclusion of imposition has already expired, the gift tax on the instant shares was not imposed on the ground that Nonparty 1 donated to the Plaintiffs the price for the instant shares issued as of December 19, 196 and July 30, 204. In addition, the tax authority notified Nonparty 3 and Nonparty 2 that gift tax should be imposed on the price for the instant shares issued as a gift under a title trust donation on the same premise.

E. On July 9, 2008, the date of receipt of the notice of the result of the tax investigation in 2008, the Plaintiffs submitted a “report on the change of shareholder’s name under the statement of accounts,” which revises the name of shareholder from Nonparty 2 and Nonparty 3 as the beneficial shareholder. On the same day, the Financial Services Commission and the Korea Securities and Futures Exchange; Nonparty 1 reported the number of shares held by the Plaintiffs changed due to the change of the real name of the instant shares; Nonparty 2 and Nonparty 3 submitted a “report on the change of ownership of shares, etc.,” which reported that their shares were no longer owned due to the change of the real name of the instant shares; and the Plaintiffs submitted a “report on the change of ownership of shares, etc.,” which reports the increase of shares held by them due to the conversion of the real name of the instant shares (hereinafter collectively referred to as “the act of correcting the real name”).

F. However, around October 2010, the Board of Audit and Inspection conducted a regular audit of the Seoul Regional Tax Office, and conducted a tax investigation of the company of this case in 2008 on the tax investigation of the company of this case, “The actual owners of this case recognized the actual owners of the stocks of this case as the plaintiffs on the ground of the list of shareholders prepared at will, even though they could easily be aware that Nonparty 1 was Nonparty 1, thereby causing unfair results in transfer of the stocks of this case without the burden of gift tax. As such, Nonparty 1 made an occasional investigation of changes in the names of the plaintiffs in the name of the executives, and notified the Seoul Regional Tax Office of the decision to the effect that “the method of collecting additional gift tax, etc. collected due to shortage.” The above notification was made through the document stating “written request for disposition of the audit result”. It was based on the statements and data secured at the time of the tax investigation in 20

G. Accordingly, the Seoul Regional Tax Office conducted a tax investigation with respect to the instant company from April 18, 201 to July 1, 2011. The investigator’s certificate contains a statement that “part on the disposition order as to the audit result by the Board of Audit and Inspection,” and “part on the actual owner of the instant company’s stocks held in title in the name of an officer” in the column for the purpose of investigation, and includes a statement that “the actual owner of the instant company’s stocks held in title in the name of an officer,” and also includes

H. At the time of the investigation in 2011, a public official in charge of tax investigation of the Seoul Regional Tax Office conducted an inquiry into relevant persons, including Nonparty 1, Plaintiffs, Nonparty 2, and Nonparty 3, etc., and as a whole, the contents and subjects of such inquiry and examination were mainly recorded on the shareholder registry and share certificates of this case as to whether Nonparty 1 donated the instant shares to the Plaintiffs on March 1991 and around March 194, which were conducted at the time of the investigation in 2008.

I. Unlike the result of the tax investigation conducted in 2008, the Seoul Regional Tax Office found that the shareholder registry of this case was falsely prepared after December 2004, and that the instant share certificate was manufactured and printed in order to comply with the shareholder registry of this case as at the time of 2008. Accordingly, the Seoul Regional Tax Office filed a complaint against Nonparty 1 to the prosecution that evaded gift tax due to false evidence and false statement.

(j) On July 9, 2008, the Defendants reported that the Plaintiffs received the instant shares from Nonparty 1, and accordingly, rendered the instant disposition imposing gift tax (including additional tax) on the Plaintiffs on August 10, 201.

3. The lower court determined as follows based on such factual basis.

A. A tax investigation in 2008 pertains to whether there was a gift of the instant shares in the name of Nonparty 3 and Nonparty 2 around 2006. On the other hand, the tax investigation in 2011 pertaining to the change of the name of the instant shares from Nonparty 3 and Nonparty 2 in the name of the Plaintiffs on July 9, 2008 constitutes a separate gift act. Each tax investigation in 2011 differs from the subject period and the subject act of investigation. As such, the tax investigation in 201 does not constitute a reinvestigation under Article 81-4(2) of the former Framework Act on National Taxes.

B. The Board of Audit and Inspection conducted a tax investigation in 201 by finding wrongs in the process of tax investigation in 2008 at regular audits of the Seoul Regional Tax Office and notifying the Seoul Regional Tax Office to correct changes in stocks from time to time. As such, such notification by the Board of Audit and Inspection constitutes “re-audit for the handling of various taxation data” under the former part of Article 63-2 subparag. 2 of the former Enforcement Decree of the Framework Act on National Taxes, which provides for exceptions that re-audit is permissible.

4. However, we cannot accept the above determination by the court below for the following reasons.

A. In light of the nature and effect of a tax investigation, the purport of prohibiting double tax investigations in principle, and the subject of a gift tax, if a subsequent tax investigation on a gift tax is limited to the fact of taxation identical to that of the previous tax investigation in light of the purpose and details of the investigation, the subject, method and contents of the investigation, and the data obtained through the investigation, it shall be deemed that the subsequent tax investigation constitutes a reinvestigation prohibited under Article 81-4(2) of the former Framework

In addition, various taxation data under the former part of Article 63-2 subparag. 2 of the former Enforcement Decree of the Framework Act on National Taxes refer to data prepared or acquired by an institution other than a tax authority, which is not likely to abuse or arbitrarily exercise tax investigation rights, and provided to the tax authority for the purposes of its duties, which are necessary for the imposition and collection of national taxes and the management of tax payment. Such data does not include taxation data prepared or acquired by the tax authority in the previous tax investigation (see Supreme Court Decision 2014Du43257, May 2

B. Examining the following circumstances in light of the legal principles as seen earlier, it is reasonable to view that the tax investigation conducted in 201 was about the same gift in substance as the tax investigation in 2008 in light of the purpose and details of the investigation, the object and method of the investigation, and the materials acquired through the investigation. Therefore, it cannot be deemed that the tax investigation conducted after the tax investigation in 2008 solely on the ground of the name or form of the tax investigation in 201.

(1) There is no room for doubt as to whether the act of correcting the name, etc. was a gift after the tax investigation in 2008, under the form or nominal name stated in the notice of the result of the tax investigation in 2011, or in the investigator’s certificate presented at the time of the tax investigation.

(2) However, in the result of the tax investigation conducted in 2008, Nonparty 1 recognized that Nonparty 1 donated the instant shares to the Plaintiffs in 1991 and 194, and on July 9, 2008, the act of correcting the name, etc. was merely based on the intent of the result of the tax investigation conducted in 2008. In order to recognize Nonparty 1 as a donation of the instant shares to the Plaintiffs with the intent of the request for disposition as a result of the audit conducted by the Board of Audit and Inspection in 2008, it was inconsistent with the purport of the request for disposition by the Board of Audit and Inspection.

(3) In such a situation, the Seoul Regional Tax Office conducted a tax investigation in 201, and entered the subject and content of the tax investigation in July 9, 2008 into a logical premise to determine whether the act of changing the name of the instant shares constitutes a gift, such as a correction of the name, etc., was included in the process of changing the name of the instant shares and that part was the main purpose of this. Notwithstanding the previous results of the tax investigation in 2008, it is reasonable to deem that the said act was one of the main purposes of the tax investigation in 2011, and also stated that the documents prepared in the course of the tax investigation in 201 can achieve such purpose.

(4) Examining the subject matter, method, and content of the actual inquiry conducted in the tax investigation in 2011, and the data acquired through the investigation, Nonparty 1’s direct or indirect factual relations with respect to whether the stocks of this case were already donated to the Plaintiffs in 1991 and 1994, it appears that: (a) inquiries and investigation into relevant persons, including Nonparty 1, Plaintiffs, Nonparty 2, and Nonparty 3, and conducted relevant data; and (b) do not appear to be the subject of the tax investigation in 2008. While the investigation in 2011 was conducted with respect to those who did not inquire into in the process of the tax investigation in 2008, it was difficult to view the content of the investigation to be included in the name of Nonparty 1, the main or indirect facts as to whether the stocks of this case were donated to the Plaintiffs in July 9, 2008; and (c) it was not included in the name of Nonparty 1 and the content of the investigation for correction in the name of 208.

(5) In fact, the tax authority reversed the result of the tax investigation conducted in 2008 based on the result of the tax investigation conducted in 201, and determined that Nonparty 1 did not donate the instant shares to the Plaintiffs in 1991 and 194. Accordingly, at the time of the tax investigation conducted in 2008, Nonparty 1 did not donate the instant shares to the Plaintiffs. Based on the premise that at the time of the tax investigation conducted in 2008, Nonparty 1 did not donate the instant shares to the Plaintiffs, the tax authority imposed gift tax on the constructive gift of title trust related thereto, revoked the imposition of gift tax related to the previous shares issued on a different premise, and issued the instant disposition imposing gift tax on the said shares on the ground that the Plaintiffs received the instant shares from Nonparty 1 by correcting the name on July

C. Furthermore, the Board of Audit and Inspection’s “written request for disposition as a result of the audit and inspection” on the notice of disposition request by the Board of Audit and Inspection as seen earlier is based on the content of the tax investigation in 2008, and it is merely erroneous in its conclusion that the instant shares were already donated to the Plaintiffs in 1991 and 194. In other words, the audit and inspection’s request for disposition is based on the statements and various data secured at the time of the tax investigation in 2008, and only differs from the valuation or determination on whether to recognize individual donated facts based on the authenticity of the shareholder registry and the stock certificates of this case. In light of the aforementioned legal principles, the audit and inspection’s request for disposition is not based on new statements or data, but on the basis that the tax authority made a different determination on whether to recognize the facts while it was based on the materials already prepared or acquired in the previous tax investigation, it does not constitute “all kinds of taxation data” provided for in Article 63-2 subparag. 2 of the Enforcement Decree of the Framework Act on National Taxes

D. Nevertheless, the lower court rejected the Plaintiffs’ assertion that the instant disposition was unlawful against the principle of the prohibition of reinvestigation, on the erroneous premise that the audit conducted in 2011 does not constitute reinvestigations in relation to the tax investigation conducted in 2008 and that the request for disposition of audit conducted by the Board of Audit and Inspection constitutes “all kinds of taxation data” under Article 63-2 Subparag. 2 of the former Enforcement Decree of the Framework Act on National Taxes. In so doing, the lower court erred by misapprehending the legal doctrine on the prohibition of reinvestigation and the grounds for exception stipulated in the former Framework Act, thereby adversely affecting the conclusion of

5. Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jung-hwa (Presiding Justice)