Plaintiff 1 and one other (Law Firm Yoon, Attorneys Lee In-seok et al., Counsel for the plaintiff-appellant)

Head of the tax office;

September 28, 2016

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The Defendant’s rejection of correction of KRW 59,447,070, respectively, for each of the Plaintiffs on July 28, 2015, shall be revoked.

1. Details of the disposition;

A. On November 5, 2008, the Plaintiffs transferred the land site and ground building (hereinafter “instant real estate”) in Eunpyeong-gu Seoul Special Metropolitan City ( Address omitted) in which they own one-half equity shares, to the Korea Federation (hereinafter “KB”) and reported and paid the transfer income tax to the Defendant with each transfer value of KRW 1.750 million (total transfer value of the instant real estate) as the transfer value of KRW 1.5 billion (3.5 billion).

B. The director of the Seoul Regional Tax Office, upon transferring the instant real estate to the Korea Federation, transferred the said real estate to the Plaintiffs, including KRW 330 million, but by omitting it at the time of the transfer income tax, notified the Plaintiffs of taxation data on the premise that the Plaintiffs filed a return of less than KRW 165 million each (i.e., KRW 30 million x 1/2). Accordingly, on January 2, 2012, the Defendant issued a revised and notified the Plaintiffs of the tax data to additionally pay KRW 59,447,070 for the transfer income tax corresponding to the year 2008 (hereinafter referred to as the “first disposition”).

C. The head of Pyeongtaek-gu and Seoul imposed an administrative fine on the grounds that the Plaintiff violated the Business Affairs of Licensed Real Estate Agents and Report of Real Estate Transactions Act by reporting the transaction price of KRW 3.5 billion by falsely reporting the transaction price of the instant real estate at KRW 3.5 billion. On the other hand, the Plaintiff filed an objection (in the case of the Plaintiff, the Jung-gu Government District Court 2013 and 322, and in the case of the Plaintiffs, the Seoul Central District Court 3013 and 1034, Sept. 6, 2013). However, on September 17, 2013, the Plaintiff was determined not to be subject to an administrative fine by the Jung-gu District Court, Seoul Central District Court, which was sentenced to an administrative fine of KRW 20 million,000,000,000,000, and the Plaintiffs were dismissed on Nov. 4, 2014, but the appeal period was also dismissed on the ground that the Plaintiffs filed an immediate appeal against the said decision of the administrative fine.

D. On the other hand, on December 1, 2014, in the sale and purchase contract for the instant real estate against the Plaintiffs, the Korea Development Bank determined the purchase price as KRW 3.5 billion and paid all the purchase price, however, asserted that there exists a risk that the Plaintiffs would be entitled to the payment of additional purchase price equivalent to KRW 3.3 billion in the event they seek a payment of the purchase price on the premise that the purchase price was KRW 3.83 billion, and filed a lawsuit for confirmation of the existence of liability with the Seoul Central District Court 2014Gahap58420, Seoul Central District Court. On April 23, 2015, the Seoul Central District Court rendered a judgment to the effect that “The Seoul Central District Court confirmed that there is no obligation to pay the purchase price of the instant real estate concluded between the Korea Development Bank and the Plaintiffs as of October 28, 2008” (hereinafter “instant civil judgment”). The instant civil judgment became final and conclusive on May 16, 2015.

E. As the instant civil judgment became final and conclusive, the Plaintiffs asserted that the sales price of the instant real estate was KRW 3.5 billion, and that the cause for the follow-up rectification under Article 45-2(2) of the Framework Act on National Taxes occurred, and on May 22, 2015, the Defendant filed an application for rectification of capital gains tax against the Defendant. However, on July 28, 2015, the Defendant submitted a written confirmation that the Plaintiffs underreported the transfer price to the Plaintiffs, and the instant civil judgment was not a content to confirm whether the actual transfer price was a long time, but merely a mere confirmation that the Plaintiffs were not liable to the purchaser at the time (hereinafter “instant disposition”).

F. The Plaintiffs underwent the pre-trial procedure.

[Ground of recognition] Facts without dispute, Gap 1 to 7 evidence, Eul 1 to 4 evidence, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiffs' assertion

The Plaintiffs filed a tax base return on capital gains tax due to the transfer of the instant real estate by the statutory due date of return, and the Defendant’s tax base and tax amount after correcting the transfer value of the instant real estate as KRW 3.5 billion exceeds the tax base and tax amount based on KRW 3.5 billion, which is the actual transfer value, and the amount paid as compensation for the transfer of the instant real estate between the Plaintiffs and the Plaintiff, was confirmed to be only KRW 3.55 billion upon the confirmation of the instant civil judgment that confirmed that the transfer value was only KRW 3.5 billion, and thus, the initial disposition of this case was found to be unfair. Accordingly, the first disposition of this case is legitimate to recognize the grounds for filing a subsequent request for correction under Article 45-2(2)1 of the former Framework Act on National Taxes and to claim correction within two months from the date of the final determination of the civil judgment of this case, and thus, the Defendant’s disposition rejecting

B. Determination

1) Article 45-2(2) of the former Framework Act on National Taxes (amended by Act No. 13552, Dec. 15, 2015; hereinafter the same) provides that “Any person who has filed a return of tax base by the statutory deadline for filing a return, or who has received the determination of the tax base and amount of national taxes, may request the determination or correction within two months from the date on which he/she becomes aware of the occurrence of the cause, regardless of the period stipulated in paragraph (1).” Article 45-2(2) of the same Act provides that “Where any of the following grounds arises, a person who has filed the return of tax base by the statutory deadline for filing the return, or who has received the determination or correction of the tax base and amount of national taxes, which are the basis of calculating the tax base and amount of tax in the initial return, determination or correction (including reconciliation and other acts having the same effect as the judgment)” in subparagraph 1 of the same Article provides that “when he/she falls under any of the following subparagraphs, he/she may request the determination or correction of the tax base and amount within five years after filing the original return or correction:

The purpose of Article 45-2(2) of the former Framework Act on National Taxes is to expand the protection of taxpayers’ rights by allowing taxpayers to file a request for reduction when there is a change in the tax base and the basis for calculating the amount of taxes due to the occurrence of a certain subsequent cause after establishing tax liability (see, e.g., Supreme Court Decision 2009Du22379, Jul. 28, 201). Considering the legislative intent of Article 45-2(2)1 of the former Framework Act on National Taxes, a change in transaction or act is determined to be different by a judgment, etc. under Article 45-2(2)1 of the former Framework Act on National Taxes, which is not existing at the time of the initial return or taxation.

2) The plaintiffs asserted to the effect that the purchase price of the real estate sales contract of this case, which was the basis for calculating the tax base and tax amount, was determined as a different amount by the civil judgment of this case, i.e., KRW 3.., KRW 3.5 billion. However, even though the total purchase price of the real estate sales contract of this case was 3.5 billion and the court which rendered the civil judgment of this case recognized that the purchase price was 3.5 billion, since the tax base and tax amount of capital gains tax in the initial disposition of this case exceeded the tax base and tax amount to be reported under tax-related Acts from the beginning, the plaintiffs exceeded the tax base and tax amount to be reported under tax-related Acts. Thus, the plaintiffs did not request correction within the ordinary time limit for filing a request for correction, and did not request for correction within the ordinary time limit for filing a request for correction, and it seems that the subsequent request

However, even in cases where ordinary claims for correction are recognized for the reason that existed from the beginning, if the latter request for correction is allowed, it would be possible to make the latter request for correction even after the expiration of the exclusion period of ordinary requests for correction through litigation, and it would go against the legislative intent of limiting the ordinary period of request for correction and the litigation period. As seen earlier, the legislative purpose of the latter request for correction is also contrary to the legislative purpose of the system for expanding the protection of taxpayers' rights where the basic basis for calculating the tax base and the amount of tax is changed due to the occurrence of the following reasons. Thus, even if the original reason under Article 45-2 (1) 1 of the Framework Act on National Taxes later is deemed to fall under Article 45-2 (2) 1 of the former Framework Act on National Taxes, it shall not be deemed that the latter request for correction is a ground for filing

Therefore, the plaintiffs' assertion that the plaintiffs' claim is without merit without further review (the defendant's decision not to punish a fine for negligence against the plaintiff was confirmed, at least before November 20, 2014, and thus, the plaintiffs knew at least two months from the date on which they knew, and thus, the deadline for filing a request for correction expires. Thus, the plaintiffs' claim is asserted to the purport that the deadline for filing a request for correction is excessive. However, unless the confirmation of the civil judgment of this case does not fall under the grounds prescribed in Article 45-2 (2) 1 of the former Framework Act on National Taxes,

3. Conclusion

Thus, the plaintiffs' claim is dismissed as it is without merit.

Judges Lee Jin-ap

1) The Defendant deemed the transfer value of the instant real estate as KRW 3.83 billion and took the first disposition of this case, but stated the amount recorded in the briefs by the Plaintiffs.