Young Life Insurance Co., Ltd. (Law Firm Rate, Attorneys So-young et al., Counsel for the plaintiff-appellant)

Sejong District Court Decision 201Hun-Ga144 delivered on September 1, 201

January 21, 2009

Seoul Administrative Court Decision 2007Guhap35777 Decided August 12, 2008

1.The judgment of the first instance shall be modified as follows:

The defendant's disposition of imposition of additional dues of KRW 19,73,65,600 as stated in attached Table 1 against the plaintiff on May 19, 2006 and June 12, 2006 shall be revoked.

2. All costs of the lawsuit shall be borne by the defendant.

1. Purport of claim

The same shall apply to the order.

2. Purport of appeal

The decision of the first instance court shall be revoked. The defendant's disposition of KRW 19,543,98,680 among the disposition of additional dues of KRW 19,773,65,600 against the plaintiff on May 19, 2006 and June 12, 2006 against the plaintiff shall be revoked.

1. Details of the disposition;

A. The Regulation of Tax Reduction and Exemption Act provides that, in case where an enterprise is disclosed to support the sound development of the capital market through the expansion of supply of superior stocks, the revaluated under the Assets Revaluation Act may be conducted even if it does not meet the requirements for revaluation under the same Act, and Article 56-2 is newly established as of November 28, 1987 and Article 56-1 of the former Corporate Tax Act provides, “any corporation that intends to list stocks for the first time at the Korea Stock Exchange under the provisions of Article 88(1) of the Securities and Exchange Act may conduct revaluation under the Assets Revaluation Act as of the first day of each month, notwithstanding the provisions of Articles 4 and 38 of the Assets Revaluation Act: Provided, That where a corporation which conducted revaluation does not list stocks at the Korea Stock Exchange within 2 years from the revaluation date, the revaluated already conducted shall not be deemed revaluation under the Assets Revaluation Act, and the amount of revaluation profits of each corporation shall not be calculated based on the assets revaluation margin after the revaluation date under the provisions of Article 15(1)5 of the former Corporate Tax Act (amended by Act No. 4803, Dec. 222, 19, 195).

B. The Plaintiff, a non-listed corporation established on June 30, 1958 and engaged in the insurance business prescribed by the Insurance Business Act, and filed a revaluation report on April 1, 1989 on the premise that the stocks are listed in accordance with the provisions of Article 56-2 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4285, Dec. 31, 1990; hereinafter the same) that provides for special cases of revaluation at the time of disclosure of the company (hereinafter the “reassessment in this case”), and on June 29, 1989, the Plaintiff filed a revaluation report by calculating the revaluation spread and the revaluated amount.

C. In applying Articles 9 and 12 of the Assets Revaluation Act (amended by Act No. 5531, Apr. 10, 198) on November 1, 1989, the Defendant imposed revaluation tax of KRW 6,795,748,574 on revaluation rate of KRW 226,524,952,489 (hereinafter “instant revaluation rate”) (hereinafter “instant imposition disposition of revaluation tax”), and the Plaintiff paid the revaluation tax of this case on June 29, 1989 and May 30, 1990, while the revaluation rate under the Assets Revaluation Act was not included in gross income, the Plaintiff did not pay the instant revaluation rate to the contractor under Article 15(1)5 of the former Corporate Tax Act, and the Plaintiff did not pay the instant revaluation rate of KRW 30,194 through 30,199.

D. After that, the former Act on the Regulation of Tax Reduction and Exemption and its Enforcement Decree, which stipulate special cases concerning revaluation when a company is open to the public, were amended several times as shown in attached Table 2, and the listing period of shares was finally extended by December 31, 2003, but the Plaintiff did not list shares by December 31, 2003 (hereinafter “unlisted shares”).

E. On January 19, 2004, the Defendant, upon ex officio revocation of the disposition imposing revaluation tax of this case, paid KRW 9,416,482,490 in addition to the national tax refund of this case, which was paid by the Plaintiff under the provisions of Article 23(1) of the Addenda of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 17458, Dec. 31, 1990; hereinafter the same shall apply) and Article 138 of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 17458, Dec. 31, 2001; hereinafter the same shall apply) on the ground that the revaluated cannot be seen as revaluated under the Assets Revaluation Act, after adding the revaluation tax refund corresponding to the national tax refund of this case paid by the Plaintiff and the refund of KRW 9,416,482,490 calculated from the day following the date of payment of revaluation tax of this case to the Plaintiff’s gross income for the following business year.

바. 한편, 피고는 2004. 6. 22. 이 사건 재평가차액 중 계약자에게 지급한 재평가특별배당금을 손비로 인정하여 직권으로 1991∽1994사업연도 법인세 부과처분을 일부 취소하여 취소된 부분을 국세환급금으로 지급하면서, 납부일 다음날부터 기산한 법인세 관련 환급가산금 10,357,173,110원을 국세환급금에 가산하였다{이하 위 환급가산금 합계액 19,773,655,600원(= 9,416,482,490원 + 10,357,173,110원)을 ‘이 사건 환급가산금’이라 하고, 이 사건 재평가세 부과처분의 취소로 인한 국세환급금과 1991~1994사업연도 법인세의 일부 취소로 인한 국세환급금을 합하여 ‘이 사건 국세환급금’이라 한다}.

G. On March 23, 2004, the Plaintiff filed a national tax inquiry with the National Tax Tribunal seeking revocation of the Defendant’s disposition of rectification of corporate tax and defense tax on March 20, 2004, and the National Tax Tribunal decided to revoke the portion of the penalty tax of this case on January 31, 2005.

H. However, the Ministry of Finance and Economy, on March 22, 2006, expressed its view that the amount of the instant additional dues should be recovered in full as the tax policy-363 of the Regulations on the Ministry of Finance and Economy established on March 22, 2006. Accordingly, on May 19, 2006 and June 12, 2006, the Defendant issued the instant disposition as shown in attached Table 1 to collect the additional dues from the Plaintiff.

[Ground of recognition] Facts without dispute, Gap evidence 1 and 4 evidence 1, 2, Gap evidence 2, Gap evidence 3-1 to 7, Gap evidence 5-1 to 3, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The parties' assertion

(1) Plaintiff

For the following reasons, the initial date of the additional refund in this case shall be deemed to be the day following the date of payment of revaluation tax in this case under Article 52 Subparag. 1 of the Framework Act on National Taxes, and such other defendant’s disposition of this case

㈎ 조세법상의 엄격해석의 원칙상 국세기본법 제52조 제1호 의 “……납부 후 그 납부의 기초가 된 신고 또는 부과를 경정하거나 ‘취소’함으로 인하여…”에서 규정된 ‘취소’의 의미는 쟁송에 의한 취소인지 직권취소인지 여부를 불문하고, 납부 당시 위법사유가 존재하는지 아니면 납부 이후에 발생한 후발적인 사유에 의한 취소인지 여부나 납부자에게 귀책사유가 있었는지 여부를 불문하고 적용된다. 그런데 이 사건 환급가산금은 이 사건 재평가세를 납부한 이후에 발생한 주식미상장이라는 후발적인 경정사유에 의하여 이 사건 재평가세 부과처분을 직권취소함으로 인하여 발생한 것이므로, 이 사건 환급가산금의 기산일은 국세기본법 제52조 제1호 에 따라 ‘그 납부일 다음날’이 되어야 한다.

㈏ 설령 아래의 피고 주장과 같이 국세기본법 제52조 제1호 의 규정이 위법한 납부에 대한 취소의 경우에만 적용된다고 하더라도, 이 사건은 원고의 주식미상장으로 인하여 이미 행한 재평가를 자산재평가법에 의한 재평가로 보지 아니하게 되는 주3) 결과 당초 자산재평가세의 납부 자체가 소급적으로 위법하게 되는 후발적인 경정사유가 발생한 것이므로, 여전히 국세기본법 제52조 제1호 가 적용된다(이 사건 자산재평가세의 납부는 주식미상장이라는 해제조건의 성취에 따라 그 효력이 좌우될 수 있었으므로 확정적으로 적법한 납부라고 볼 수 없다).

㈐ 자산재평가세 환급가산금과 법인세 가산세는 법적인 성격과 부과근거가 전혀 다른 것이므로 법인세 가산세를 징수하지 못하였다는 이유로 환급가산금의 기산일을 납부일 다음날부터 기산하지 아니하는 것은 부당하다.

(2) Defendant

The disposition of this case to correct the payment of additional dues on the ground that the first day following the date of payment of revaluation tax of this case was erroneous for the following reasons.

㈎ 피고가 이 사건 재평가세 부과처분을 직권취소하게 된 근본원인은 기업공개시 재평가특례를 규정한 조세감면규제법 등 관계법령의 개정에 기인한 것이고, 이와 같은 관계법령의 개정으로 인하여 자산재평가세는 과세근거가 없어진 것이므로 위 국세환급금은 국세기본법 제52조 제5호 에서 정한 ‘적법하게 납부된 후 이루어진 법률의 개정에 의한 국세환급금’에 해당하거나 적어도 위 규정이 준용되어야 한다.

㈏ 당초 이 사건 재평가세 부과처분은 아무런 흠이 없는 적법한 것이었고, 원고의 주식미상장이라는 사실이 발생할 때까지 피고가 납부된 재평가세액을 보유하는 것은 법률상 원인이 있었기 때문에 국세환급금을 지급함에 있어 이 사건 재평가세의 납부일 다음날부터 기산한 환급가산금을 가산하여 지급할 이유가 없다.

㈐ 동일한 자산재평가차액에 대하여 감면된 법인세 등을 부과하면서 납부한 재평가세액을 환급하는 경우 법인세 등과 재평가세는 서로 밀접한 관련이 있으므로, 2003. 12. 31.까지 미납부 가산세 등을 징수할 수 없다면, 동일한 자산재평가차액에 대하여 이미 납부한 재평가세액을 환급함에 있어서도 법인세 등 가산세를 징수하지 아니하는 기간에 대해서는 환급가산금을 가산하지 않는 것이 당연하다.

(b) Related statutes;

Attached Form 2 shall be as listed in attached Table 2.

C. Determination

(1) According to the provisions of Articles 51(1) and 52 of the Framework Act on National Taxes and Article 30 of the Enforcement Decree of the same Act, the head of a tax office shall immediately determine the amount of national tax refund among the amount paid by a taxpayer as a national tax, additional dues, or disposition fee for arrears, if there is an erroneous payment, excess payment, or refund, as well as the additional amount at the time when a refund of national tax is determined in accordance with the legal regular calculation day and interest rate, and when a refund of national tax is appropriated or refunded. Here, the term “additional payment” refers to the amount of tax paid or collected, regardless of the absence of a return (in the case of a tax return) or a disposition for imposition (in the case of a tax imposition) which serves as the basis of the payment or collection or the statutory invalidation, and the amount of excess payment means the amount of tax reduced wholly or partially by revocation or correction, but the amount of tax refund becomes final and conclusive at the time of tax return or other tax refund becomes final and conclusive at the same time as the tax refund becomes final and conclusive at the same time.

(2) However, Article 52 of the Framework Act on National Taxes provides that the initial date of calculating the additional tax refund shall be the date following the date of payment, ① in cases of a national tax refund due to erroneous payment, double payment, or correction or cancellation of the return or imposition forming the basis of the relevant payment, ② in cases of a national tax refund due to the reduction or exemption of national taxes lawfully paid, the day following the date of determination (Article 3); ③ in cases of a national tax refund due to the amendment of a law after lawful payment, the day following the effective date of the law (Article 5); ④ in cases of a refund due to a erroneous return or correction due to a return of the amount of tax refund under the Income Tax Act, the Corporate Tax Act, the Value-Added Tax Act, the Individual Consumption Tax Act, the Liquor Tax Act, the Liquor Tax Act, or the Traffic, Energy and Environment Tax Act, the day following the date on which 30 days have elapsed since the date of such report (where the date of report is prior to the statutory filing date, the statutory filing date of tax refund);

(3) Therefore, the initial date of calculating additional dues due to the revocation of the disposition of revaluation tax in this case shall be determined by any of the subparagraphs of Article 52 of the Framework Act on National Taxes, and it is reasonable to determine additional dues pursuant to Article 52 subparagraph 1 of the same Act for the following reasons.

First, the revaluation of this case does not constitute a revaluation under the Assets Revaluation Act retroactively to the time of revaluation, even though it was not the act itself due to the Plaintiff’s stock listing, and as a result, the imposition of the revaluation tax of this case was deemed to be unlawful from the beginning. Since the Defendant revoked ex officio for the same reason, the national tax refund of this case constitutes a refund of national taxes due to correction or cancellation of the return or imposition, which served as the basis of the payment after the payment, under Article 52 subparag. 1 of the Framework Act on National Taxes, i.e., “national tax refund due to correction or cancellation of the return or imposition, which served as the basis of the payment after the payment.” This is clear that the Defendant, after the Plaintiff’s stock listing, deemed the revaluation of this case as the gross income for the 1989 business year where the revaluation of this case was invalidated, not for the 2004 business

Second, as seen above, Article 52 of the Framework Act on National Taxes classifys the initial date of additional dues as five points. Among them, Article 52 of the Framework Act on National Taxes is premised on special circumstances. Thus, the basic date of additional dues for refund should be determined pursuant to the provisions of subparagraph 1 or 6, unless this falls under the above. The national tax refund of this case is due to the occurrence of the Plaintiff’s non-listed of stocks within the time limit prescribed by the relevant Acts and subordinate statutes, not due to the amendment of the relevant Acts and subordinate statutes, and does not constitute subparagraph 5 (Article 56-2(1) of the former Regulation of Tax Reduction and Exemption Act and the Enforcement Decree thereof, even if the Plaintiff did not list stocks within two years from the revaluation date prescribed by the proviso of Article 56-2(1) of the former Regulation of Tax Reduction and Exemption Act, it does not necessarily mean that the Plaintiff does not list the stocks within two years from the revaluation date, and thus, the revocation of the disposition of imposition of the revaluation tax of this case and the disposition of corporate tax for this case may partially be revoked.

Third, as seen below, additional dues are corresponding to additional dues imposed on taxpayers in arrears as a system for compensating for the legal interest and amount equivalent to the national tax refund by the State. On the other hand, in order to facilitate the exercise of the right to impose taxes and the realization of tax claims, additional taxes under tax law are administrative sanctions imposed as prescribed by the Act, in principle, if a taxpayer violates all kinds of obligations, such as a return and tax payment, without justifiable reasons, it can be imposed if only the requirements for imposing additional taxes are satisfied, and no taxpayer’s intentional act or negligence shall be considered separately: Provided, That Article 48(1) of the Framework Act on National Taxes amended by Act No. 8139, Dec. 30, 2006, which provides that “if there are justifiable grounds for the taxpayer’s failure to perform his/her obligations, the relevant additional taxes shall not be imposed” under the latter part of Article 50 of the Framework Act on National Taxes, which provides that “If it is unreasonable to expect the taxpayer to fulfill his/her obligations, it shall be deemed that there is no justifiable reason to impose additional taxes on the taxpayer 20.”

Fourth, the national tax refund constitutes a “illegal enrichment” which is received or held by the State without any legal cause despite the absence of any tax liability from the beginning or the lapse of such tax liability, and additional dues on refund claims and obligations have the nature of legal interest rate (see, e.g., Supreme Court Decision 2001Da60767, Jan. 11, 2002). Therefore, according to the legislative theory, the initial date of national tax refund is determined differently depending on whether the State is a beneficiary’s good faith or bad faith in accordance with the legal principles of unjust enrichment under the Civil Act, or where the tax authority is deemed to have a cause attributable to the taxpayer, such as foreign legislation cases, and it is deemed that there is a cause attributable to the taxpayer. In the latter case, it is desirable that the tax authority should add additional dues on refund from the date after the date when the existence of the national tax refund was known to the expiration of the ordinary period of time. However, Article 52 subparag. 1 of the current Framework Act does not stipulate it separately. 52 of the Enforcement Decree of the National Tax Act.

(4) Ultimately, the instant disposition to the effect that is different is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be accepted on the grounds of its reasoning, and the judgment of the court of first instance is unfair on the grounds of its partial conclusion, so it is so decided as per Disposition by accepting the plaintiff's appeal and changing the judgment of the court of first instance.

[Attachment]

Judges Cho Byung-hee (Presiding Judge)

Note 1) Underpaid penalty tax amounting to KRW 22,422,93,05 and penalty tax amounting to KRW 116,443,113,103 and penalty tax amounting to KRW 3,729,717,904 on defense tax were included; hereinafter “instant penalty tax”).

2) Article 51(7) of the Framework Act on National Taxes provides that when the chief of a tax office claims the return of the amount already appropriated or paid as the determination of national tax refund (the determination of national tax refund is included in the determination of national tax refund) is revoked, the provisions of the National Tax Collection Act’s notification, demand and disposition on default shall apply mutatis mutandis. In light of the purport of the above provision, the instant disposition on imposition

Note 3) see Article 23(1) of the Addenda to the Regulation of Tax Reduction and Exemption Act