Harter Co., Ltd. (Attorneys Choi Jong-soo et al., Counsel for the plaintiff-appellant)

Head of Yeongdeungpo Tax Office

September 3, 2002

1. The plaintiff's claim is dismissed.

2. Litigation costs shall be borne by the plaintiff.

The defendant's decision that the disposition of imposition of corporate tax of KRW 148,115,550 and KRW 1,638,647,560 against the plaintiff on June 16, 2001 is revoked.

1. Details of the disposition;

【Ground of recognition】 Evidence 1-1, 2, Evidence 2, Evidence 1-1 through 4, evidence 2-1 through 6, evidence 3-1 through 3, evidence 4-7, and whole purport of pleading

A. The Plaintiff sold 18 land, other than the land located in Geumjin-dong 708-3, Geumjin-gu, Geumjin-gu, 1998 to 199, and the Plaintiff did not issue a tax invoice (hereinafter “tax invoice”) for the sale of 14 of the total amount (164,07,829,598 total amount). For the sale of 4 of the land (2,594,820,000 won total amount) by January 31, 1999, the details of each transfer are as shown in the attached transfer land list (hereinafter “unwritten invoice issuance, etc.”).

B. As to this, the Defendant: (a) applied Articles 41(14), 66(1) and (2) of the former Corporate Tax Act (wholly amended by Act No. 5581, Dec. 28, 1998; hereinafter “the Corporate Tax Act of 1998”); (b) Article 76(9) and Article 121(1) and (3) of the former Corporate Tax Act (amended by Act No. 6558, Dec. 31, 2001; hereinafter “Corporate Tax Act of 1999”); (c) each of the above provisions of the Corporate Tax Act applies to the issuance of invoices for the business year 1998; (d) Article 41(1) and (2); (e) Article 66(1) of the former Corporate Tax Act (wholly amended by Act No. 5581, Dec. 16, 201; (e) Article 196(1) of the Corporate Tax Act (amended by Act No. 10000, Mar. 15, 1985, 196, 198

C. Meanwhile, among corporate tax attributed to the year 198, the Plaintiff included KRW 36,212,760 as to the portion for which the Plaintiff did not submit a list of individual invoices issued by the head of customs office. Accordingly, pursuant to the established rules of the finance department (the re-corporation 46012-175, October 10, 2001), the Defendant issued ex officio reduction disposition as of November 15, 2001, and the corporate tax attributed to the year 1998 became KRW 111,90,790 as to the corporate tax attributed to the year 198.

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

(1) There is a justifiable reason for not imposing additional tax on the Plaintiff. In other words, the Plaintiff prepared and delivered the documents constituting evidence of the transaction of the instant land, such as a real estate sales contract, and filed an application for registration of real estate ownership transfer, and submitted all taxation data to be included in the aggregate invoice list related to the instant land transaction by submitting the tax base and tax amount statement. In addition, in the practice of tax administration, it was implicitly understood between a taxpayer and a tax authority that there is no need to issue, issue, or submit an invoice list. As such, the Plaintiff actually performed the taxpayer’s duty of cooperation under the provisions of the Corporate Tax Act, and thus failed to separately perform such duty as issuing an invoice and submitting an invoice list, etc., which are merely a form of duty, despite the Plaintiff’s neglect of duty, is unlawful.

(2) In the case of real estate transactions, even though it is possible to realize the underlying taxation without issuing and issuing an invoice or submitting an invoice list, the pertinent provision of the Corporate Tax Act imposing penalty tax equivalent to 1/100 of the supply value in the event of nonperformance is unconstitutional as it violates the principle of excessive prohibition of property rights of the people, i.e., the purpose suitability of the means, the minimum damage, and the balance of legal interests, thereby infringing on the property rights of the people. Thus, the instant disposition that was conducted based

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

(1) Whether there is a justifiable reason for not being able to impose the penalty tax

Under the tax law, where a taxpayer violates various obligations, such as a return and tax payment, without justifiable grounds, in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, an additional tax is an administrative sanction imposed as prescribed by the individual tax law. If there is a justifiable reason that the taxpayer is not aware of such obligations or it is unreasonable for the taxpayer to expect the fulfillment of such obligations, etc. (see, e.g., Supreme Court Decision 95Nu14602, May 16, 1997).

However, the Plaintiff cannot be deemed to have been unaware of the obligation to issue invoices and submit invoices under the provisions of the Corporate Tax Act, and as seen thereafter, it is difficult for the Plaintiff to recognize the practice of the tax payer’s cooperative duty under the provisions of the Corporate Tax Act, i.e., the practice of tax operation, i., the Plaintiff’s expectation of performing the obligation under the provisions of the Corporate Tax Act, and the practice of issuing invoices, etc., in real estate transaction. Thus, it is unreasonable to expect the Plaintiff to perform its duty under the provisions of the Corporate Tax Act, and there is no other reason to neglect the Plaintiff’s duty. The Plaintiff’s assertion is without merit.

(2) Whether the provision of the Corporate Tax Act is unconstitutional

The provisions of the Corporate Tax Act were enacted to establish the basis taxation based on the data and to foster the tax base, that is, where a corporation fails to prepare and deliver tax invoices under the Value-Added Tax Act and submit sales and purchase tax invoices (see Articles 66(3) and 121(4) of the Corporate Tax Act of 1998) in cases where the corporation supplies goods or services, in principle, it shall prepare and deliver invoices to the person receiving the supply of the goods or services, and where the head of the competent tax office shall require the corporation to submit a list of invoices issued or received by the corporation to prepare and deliver objective data that can confirm the transaction at the time of the transaction by using them as taxation data of the transaction, thereby promoting normalization of the transaction and stabilizing the tax base by using them as taxation data of the transaction, and thereby, creating a tax climate and realizing the base taxation in good faith through the prevention of tax evasion. In particular, in cases where a corporation transfers land, etc., it is meaningful to pay corporate tax as well as special surtax by including the profits on disposal of fixed assets in each business year.

However, according to Article 59-2 and Article 99 of the Corporate Tax Act of 1998 at the time of taxation of this case, the transfer value of land, etc. as the tax base of special surtax shall be the amount calculated by deducting the acquisition value, etc. from the transfer value at the time of transfer. However, only when the transfer value is unclear, the standard market price at the time of transfer (acquisition) shall be the transfer value. Thus, the taxation data to be collected through the obligation to deliver an invoice and submit an invoice under the provisions of the Corporate Tax Act are related to the actual transfer value or the standard market price. Furthermore, the tax base of local taxes, such as the acquisition tax and registration tax, etc., collected through the real estate registration procedure shall be based on the real estate registration procedure by the acquirer, the registrant, etc., and if there is no indication of the reported value or reported value falls short of the standard market price of local tax (see, e.g., Articles 11 and 130 of the Local Tax Act), and as a result, the so-called "tax base price" and special surtax cannot be different from the actual market price.

In addition, according to the provisions of Article 59-2 (6) and Article 99 (6) of the Corporate Tax Act of 1998 and Article 59-2 (6) of the Corporate Tax Act of 1999, when calculating gains on transfer of land, etc. which is the tax base of special surtax, the time of acquisition and transfer are not the date when the price is settled in principle (in calculating the business income amount of a corporation, the date when the gain on transfer of fixed assets is reverted to the price settlement in principle), and even if the ownership transfer registration has not been made yet, if the balance is settled, the transfer has already been made in relation to the special surtax

In addition, even if a corporation bears the duty to submit the tax base and the amount of special surtax, the purpose of this duty is to investigate and confirm whether the corporate taxpayer meets the taxation requirements of special surtax and to report the tax base and the amount of the special surtax by applying the relevant tax law, and to impose the duty to submit the tax base and the amount of the special surtax, contrary to the fact that the tax base and the amount of the special surtax per se do not constitute the transaction basis, it is not necessarily consistent with the entries of the special surtax tax base and the amount of the special surtax. The purpose of this duty is to prepare and deliver the invoice, which is the materials that can serve as the basis for taxation at the time of the transaction, and to keep the basis for the transaction subject to taxation by requiring the submission of the list of the total amount of the invoice and the amount of the special surtax, and the contents thereof are different from

In light of these points, the provisions of the Corporate Tax Act of this case, which impose the duty to issue invoices and submit an aggregate invoice table even at the time of corporate land transactions, are recognized as appropriate in relation to the legislative purpose of realizing based taxation and training tax bases.

Furthermore, it cannot be readily concluded that the amount equivalent to 1/100 of the value of supply for breach of duty is higher than that of other additional tax regulations on the ground that it is imposed as an additional tax, and it does not have any inevitable reason to set an additional tax rate differently from the case of other goods only in the case of real estate, such as land. In full view of the legislative intent, etc. of the provisions of the Corporate Tax Act as seen earlier, the provisions of the Corporate Tax Act of this case cannot be said to violate the minimum

Meanwhile, the Plaintiff asserts that the Corporate Tax Act was amended by Act No. 6558 of Dec. 31, 2001, and newly established a provision that exempt the Plaintiff from the obligation to submit an invoice and a list of invoices with respect to real estate, etc. under Article 121(4) should be based on the reasonableness of the provisions of the Corporate Tax Act. However, such conclusion cannot be readily concluded, and rather, the special surtax system for the transfer of land, etc. does not appear to have been abolished.

Ultimately, the provision of the Corporate Tax Act cannot be deemed to violate the principle of excessive prohibition under the Constitution, and this part of the Plaintiff’s assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case seeking the revocation of the disposition of this case is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment Transfer Land Details]

Judges Mag-Jon (Presiding Judge)