Cho Jae-2015-4993 ( December 30, 2015)

Whether the amount of tax already confirmed by the preliminary return and disposition of correction by the final return is absorbed and extinguished;

It cannot be deemed that the tax amount already determined by a preliminary return and a disposition of correction by the defendant for the preliminary return is absorbed and extinguished.

Income Tax Act

2016Gudan801 Revocation of Disposition of Refusal of Correction of Transfer Income Tax

Article AAA

AA Head of the Tax Office

March 22, 2017

June 14, 2017

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The defendant's disposition rejecting capital gains tax correction against the plaintiff on October 16, 2015 shall be revoked.

1. Details of the disposition;

A. The Plaintiff is an owner of AAA, AA, Dong 358 large scale 328 square meters and its ground-based detached house 245.26 square meters. On April 16, 2014, the Plaintiff completed the registration of ownership transfer for the instant land on the grounds of an agreement on the acquisition of public land on April 9, 2014, and completed the registration of ownership transfer for the instant building on the grounds of sale on March 17, 2014 to AA on April 16, 2014. On June 30, 2014, the Plaintiff made a preliminary return on capital gains tax by applying the tax exemption for one household expensive house to the Defendant as AAA, and the transfer value of the instant land as the transfer value of the instant building as the AAAA, and applying the tax exemption for one household expensive house to the instant building.

B. In the course of the investigation into the transfer income tax with AA, the head of the AAA Tax Office confirmed that the Plaintiff was suspected of underreporting the transfer value of the instant building, and notified the Defendant of the exclusion of the application of the provisions on non-taxation on one house for one household based on the amount under filing a under-reported return and the preparation of false contract. On January 5, 2015, the Defendant issued a correction and notification of the transfer income tax for the Plaintiff for the year 2014. Accordingly, on May 7, 2015, the head of the AAAA, who filed an objection on May 3, 2015, decided that the Plaintiff calculated the acquisition value of the instant land and building as the conversion price for the value of individual house as the standard market price and dismissed the remainder of the claim. On August 3, 2015, the Defendant corrected the transfer income tax to the Plaintiff as the amount of AA. The Plaintiff filed a request for adjudication on October 8, 2015, but the Tax Tribunal rejected the decision on December 30, 2015.

C. On May 6, 2015, the Plaintiff filed a request for correction, stating that the transfer value of the instant land shall be KRW AAA, and that the transfer value of the instant building shall be determined by the Plaintiff: (a) KRW AAA won, which the Plaintiff received in return for the right to transfer from the Plaintiff; + (b) KRW AAA won received in return for the right to transfer; (c) the Plaintiff received in return for the acquisition of the instant building from the Plaintiff; and (d) the Plaintiff received in return for a final return on confirmation of the transfer income tax base for the acquisition of the land for public use; and (d) on August 10, 2015, the Defendant would be subject to non-taxation provisions of capital gains tax for one household. On October 16, 2015, the Defendant filed a request for correction on the ground that the Plaintiff filed a request for correction against the Plaintiff on the grounds that the Plaintiff was aware of the relevant disposition on the tax base and amount increased due to the determination or correction, and that the Plaintiff’s request for correction was rejected on the grounds that the Plaintiff’s request for correction was rejected.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Article 110 (1) of the Income Tax Act provides that any resident having capital gains in the relevant taxable period shall file a final return on the tax base of transfer income from May 1 to May 31 of the year following the relevant taxable period, notwithstanding paragraph (1), and Article 110 (4) of the same Act provides that any person who files a preliminary return may choose not to file a final return on the relevant income, but this provision does not deprive the person who files the preliminary return of his/her right to file the final return, and if he/she benefits from the final return even if he/she files the preliminary return, he/she may file a final return on the details different from the preliminary return. In cases where a final return is filed, the tax base and tax amount temporarily determined by the preliminary return shall be deemed to be integrated into the tax base and tax amount determined by the final return, and the person who files the final return may file a request for correction within three years after the date of the final return. Therefore, the defendant's disposition rejecting the final return on the grounds that 90 days have elapsed since the date of the final return on June 27, 2015.

B. Relevant statutes

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

C. Determination

First, the main text of Article 110(4) of the Income Tax Act provides that a person who has filed a preliminary return may, in principle, not file a final return on the income concerned, and does not find any statutory grounds to deem that the effect of the final return is lost by the final return. Moreover, the preliminary return on capital gains tax is practically obligated to impose a non-declaration penalty tax on 20/10 if the person fails to comply with the preliminary return under Article 47-2(6)2 of the Framework Act on National Taxes amended by Act No. 911, Jan. 1, 2010; Article 114 of the Income Tax Act provides that the head of a tax office may correct the tax base and tax amount in cases where there are omissions or errors in the details of the preliminary return as well as the final return; and Chapter VII of the Framework Act on National Taxes provides for the procedures for objection to the said disposition by the head of a tax office. However, if the effect of the preliminary return is extinguished by the final return, all the procedures for imposition of non-declaration penalty

Therefore, as alleged by the Plaintiff, the amount of tax already determined by the preliminary return and the Defendant’s corrective disposition regarding the preliminary return cannot be deemed to have been absorbed and extinguished. The judgment cited by the Plaintiff as the ground of the Plaintiff’s assertion (Supreme Court Decision 2006Du1609, 2008Da38820, 209Du5237, 201Du22143) is a judgment prior to the imposition of additional tax on the said preliminary return, and it is inappropriate to be invoked in the instant case.

3. Conclusion

Therefore, it cannot be deemed that there is any error in the disposition of the defendant's rejection of correction against the corrective disposition that the plaintiff filed after the final return, and thus, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as