The validity of Article 50 (6) of the Inheritance Tax and Gift Tax Act, which provides for the assessment of the value of the relevant property by applying the officially assessed individual land price of the previous year which has already been publicly announced, where the officially assessed individual land price of the relevant year is not yet publicly announced

With the amendment of the Inheritance Tax and Gift Tax Act on December 30, 1996, there was no delegation provision on the officially assessed individual land price applied as a supplementary assessment method for the value of inherited or donated property, unlike the previous one, unlike the previous one, in the current law. In addition, in order for the appraisal value to be recognized as the market price of inherited or donated property upon the amendment on December 31, 1998, the strict requirements for the appraisal period should be satisfied. However, Article 50(6) of the Inheritance Tax and Gift Tax Act, which provides for the application of the officially assessed individual land price of the previous year to the case where the officially assessed individual land price of the previous year is not publicly notified as of the commencement date of inheritance or donation, does not have any delegation provision on the Inheritance Tax and Gift Tax Act, and it is also null and void in that there is no basis for delegation under the current law, unlike the previous one, the current situation where retroactive appraisal is no longer permitted, and that there is a significant result that would violate the market price principle explicitly adopted under the current law.

[1] Article 9(2) of the former Inheritance Tax Act (amended by Act No. 5193, Dec. 30, 1996; see Article 60(1)3 of the current Inheritance Tax and Gift Tax Act); Article 5(8) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 15193, Dec. 31, 1996; see Article 50(6) of the current Inheritance Tax and Gift Tax Act); Articles 60(2) and 61(1)1 of the Inheritance Tax and Gift Tax Act; Articles 1, 2, 3, 4, 10, and 10-2 of the Public Notice of Values and Appraisal of Lands, etc. Act; Article 5 of the Enforcement Decree of the Public Notice of Values and Appraisal of Lands, etc. Act

Supreme Court Decision 96Nu4411 delivered on August 23, 1996 (Gong1996Ha, 2917), Supreme Court Decision 98Du16774 delivered on February 11, 2000 (Gong2000Sang, 727), Supreme Court Decision 99Du2277 delivered on January 19, 2001 (Gong2001Sang, 564)

Sewage refunded (Law Firm Rate, Attorneys Yoon Don-tae, Counsel for the plaintiff-appellant)

Head of Yeongdeungpo Tax Office

Seoul High Court Decision 2001Nu5936 delivered on November 9, 2001

1. On July 8, 200, the part exceeding KRW 717,230,60,609 of the disposition of imposition of inheritance tax of KRW 923,628,947 against the plaintiff shall be revoked.

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

In addition, the plaintiff's claim stated "7,230,60,940 won" in the disposition of "914,628,940 won" as stated in the complaint's claim appears to be invalid within the limit of "923,628,947 won" as stated in the plaintiff's disposition of "914,628,940 won", but the amount of the defendant's disposition of 965,60,810 won was the first "9,418,863 won" as stated in the defendant's disposition of 923,628,947 won, "963,9639,9482", "296,9639,979,9482", "296,9639,9639,979,940 won" as stated in the complaint's claim of the complaint. In addition, the plaintiff's claim stated in the defendant's disposition of the above case as stated "9239,29639,29639,489,2" as stated.

1. Details of the disposition;

(adopted Evidence: Evidence No. 1, Evidence No. 3, Evidence No. 1-7, Evidence No. 2-1 through 13, whole purport of oral argument)

(a) Commencement of inheritance and reporting and payment of inheritance taxes;

In accordance with the deceased on March 15, 1999, six persons, including the plaintiff, who is the son of the deceased, including the plaintiff,, who died on March 15, 1999, include the value of each of the instant lands as KRW 3,637,79,739,739,99, and the value of each of the instant lands as of June 30, 1999, based on the officially assessed individual land price in the year of 1999, which was announced on June 30, 1999.

B. Defendant’s imposition and correction of reduction

After evaluating the value of each land of this case based on the officially assessed individual land price of 1998, which was publicly announced at the time of commencing the inheritance, 212,386,113 won, and 791,637,304 won, which correspond to the difference between the value of each land of this case and the reported value based on the officially assessed individual land price of 1999, and the value of the inherited property omitted, and 212,386,113 won, and 791,637,304 won, which are the value of the inherited property to be added to inherited property, shall be included in the taxable value of inherited property; and on July 8, 200, the amount increased due to including the Plaintiff’s tax amount of 404,035,950 won, which is the amount equivalent to the difference between the reported amount, in calculating the taxable value of inherited property, shall be notified to pay 206,398,338 won) within the limit of October 13, 20013, 20000.

2. Whether the disposition is lawful;

A. The issues of the instant case

The issue of this case is whether Article 50 (6) of the Inheritance Tax and Gift Tax Act (hereinafter referred to as "the provision of this case") is null and void, which applies the officially announced individual land price as of the commencement date of inheritance or the donation date (hereinafter referred to as the "assessment date").

(b) Markets:

The instant provision is null and void for the following reasons.

(1) Failure of delegation provisions

(A) History of the provision of this case

(1) As the Enforcement Decree of the Inheritance Tax Act was amended by Presidential Decree No. 12993 on May 1, 1990, the same provision as the provision of this case is newly established under Article 5(8) (the preceding standard market price shall apply where inheritance commences before a new standard market price is publicly notified in the application of paragraph (2) 1).

(2) Deleted.

(3) On February 29, 1992, the provision of this case was newly established under General Rule 60-49 of the Inheritance Tax Act (the content of the provision shall be determined by the officially assessed individual land price publicly announced as of the date of commencing the inheritance, in assessing the land based on the publicly assessed individual land price).

④1995. 12. 30. 상속세법시행령이 대통령령 제14862호로 개정되면서 이 사건 조항과 같은 내용의 조항이 제5조 제8항 으로 다시 신설(규정 내용：" 제2항 제1호 (가)목 을 적용함에 있어서 새로운 개별공시지가가 공시되기 전에 상속이 개시되는 경우에는 직전의 개별공시지가를 적용한다."；이 사건 조항과는 문구가 다소 다르나 전반적인 내용은 동일하므로, 아래에서 이 사건 조항이라고 할 때에는 위 조항도 포함되는 것으로 본다)

(5) In accordance with the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 15193, Dec. 31, 1996; the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 15193, Dec. 31, 1996); “In applying the provisions of Article 61(1)1 of the Act, the officially assessed individual land price

(B) Details of changes to the regulations on the basis of applying the officially assessed individual land price (Finland after the amendment of the Inheritance Tax Act on December 22, 1994)

① Article 9(2) of the Inheritance Tax Act amended by Act No. 4805 on December 22, 1994 provides that “The value of inherited property according to the current status at the time of the commencement of inheritance under paragraph (1) shall be based on the current market price at that time, and when it is difficult to calculate the market price, it shall be based on the method prescribed by the Presidential Decree in consideration of the type, scale, transaction conditions, etc.

Article 5(1) of the Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 14469 of Dec. 31, 1994) provides that "the method prescribed by Presidential Decree" under Article 9(2) of the Act refers to the assessment of inherited property pursuant to the provisions of paragraphs (2) through (7)" and Article 5(2)1 Item (a) of the Enforcement Decree of the Inheritance Tax Act provides that "the land shall be based on the officially assessed individual land price in principle." However, as the Enforcement Decree of the Inheritance Tax Act was amended on December 30, 1995, Article 5(1) of the same Act was newly established as Article 5(8) of the same Act.

② On December 30, 1996, the former Inheritance Tax Act was amended by Act No. 5193 under the Inheritance Tax and Gift Tax Act. Article 60(1) main text and Article 60(3) provides that the value of the property on which the inheritance tax or gift tax is levied shall be based on the market price as of the base date for appraisal. If it is difficult to calculate the market price, it shall be based on the value assessed by the method prescribed in Articles 61 through 65, taking into account the type, size, transaction circumstances, etc. of the property in question. Article 61(1)1 main text of the same Act provides that the value of the property shall be assessed by the publicly announced individual land price under the Public Notice of Values and Appraisal of Lands, etc. (hereinafter “Public Notice of Values and Appraisal of Lands, etc.”) in the case of the land. However, any provision delegated to the Presidential Decree on the publicly announced individual land price to be applied

(c)The nature and effects of the officially assessed individual land price;

In full view of Articles 1 through 4, 10, and 10-2 of the Public Notice of the Land Price Act, and Article 5 of the Enforcement Decree of the Public Notice of the Land Price Act, the officially assessed land price determined and publicly announced for the purpose of calculating the land price of the land subject to imposition of taxes or charges, etc., shall be determined on the basis of the officially assessed land price of the reference land deemed to have similar usefulness to the relevant land. The officially assessed land price of the reference land as of January 1 of each year, which is the basis for calculating the officially assessed land price, is the price that is deemed to have the highest possibility of being established if normal transactions take place in the ordinary market on the relevant reference land. The officially assessed land price of the reference land, which is naturally based on the officially assessed land price of the reference land, becomes effective as of January 1 of each year, which is the basic date, by comparing it with the officially assessed land price of the reference land, has the relevant land price as of January 1 of each year, which is the basic date.

(D) the board:

(1) On December 30, 196, the Inheritance Tax Act, which had been amended by Act No. 504, 1996, provides that if it is difficult to calculate the market value of the inherited property, the method of calculating the value of the inherited property would be complementaryly delegated to the Presidential Decree, without any special provision. Only when the Enforcement Decree entrusted with it, the amount of the inherited property would be calculated by applying the officially assessed individual land price. Thus, in calculating the value of the inherited property, all of the provisions of this case or issue under the Enforcement Decree, which had the application of the officially assessed individual land price, shall be the same as each of the provisions prescribed under the Enforcement Decree, with the delegation by Act

If so, in light of the nature and validity of the publicly assessed individual land price as seen earlier, even if the provisions governing the application of the publicly assessed individual land price and the provisions of this case are somewhat inconsistent with their contents, they shall take a position of norm-making interpretation, and in calculating the value of inherited property, the publicly assessed individual land price shall be applied, but if the publicly assessed individual land price of the corresponding year has not yet been publicly notified at the time of commencement of inheritance, it shall be based on the previous year, and if the publicly assessed individual land price of the corresponding year has not yet been publicly notified, it shall not take effect retroactively to the basic date, so it shall be possible

(2) However, with the amendment of the Inheritance Tax and Gift Tax Act on December 30, 196, if it is difficult to calculate the market price of the inherited property, the method of calculating the market price of the inherited property is clearly applied under the Land Price Disclosure Act, unlike the previous one, in the case where it is difficult to calculate the market price of the inherited property, and there is no provision to delegate the officially assessed individual land price to the Presidential Decree for the purpose of assessing the value of the property on which the inheritance tax or gift tax is levied, under the current law where there is no provision to delegate it to the Presidential Decree, the normative compatibility interpretation

In other words, as seen earlier, the general nature of the individual land price under the Public Notice of Values Act, the time of its effect, the legislative purport of the current law that explicitly adopts the "market price principle" in calculating the value of inherited property, and the legislative purport of the current law that explicitly adopts the "market price principle" in the above law, and as long as there is no provision expressly delegated to the Presidential Decree in the case of the individual land price to be applied while there is no provision that delegation is made to the current law, in interpreting the current law, the parties' predictability should be protected by complying with the general interpretation on the time when the individual land price under the Public Notice of Values Act takes effect, even if the individual land price in the corresponding year was not publicly notified at the time of commencing the inheritance, it shall be interpreted to the effect that the value of the pertinent inherited property should be calculated based on the individual land price in the corresponding year

Thus, in order for the provision of this case to be effective as a legitimate and effective interpretation of the mother law, the legitimacy of the provision of this case must be basically based on the delegation of law, regardless of all the other parts. As seen earlier, there is no provision that can be a ground for delegation of the provision of this case under the current law, and therefore, the provision of this case is in violation of the principle of no taxation without law.

(2) Occurrence of violation of marketism

(A) Adoption of market values in respect of inheritance tax and gift tax

The inheritance tax and gift tax adopt the "market price principle" (see Article 60 (1) of the Inheritance Tax and Gift Tax Act), and if it is difficult to calculate the market price, the provision that the price shall be calculated by applying the officially assessed individual land price, if it is difficult to calculate the market price, is to apply the publicly assessed individual land price which is the most adjacent to the market price as the next one.

As above, in principle, inheritance tax and gift tax are based on the standard market price such as the officially assessed individual land price: Provided, That in certain cases, transfer income tax calculated based on the actual market price (see Articles 96(1), 97(1), and 99(1) of the Income Tax Act), if the reported value falls short of the standard market price calculated based on the publicly assessed individual land price, it is clearly distinguishable from other taxes, such as acquisition tax (see Article 111(2) of the Local Tax Act) and registration tax (see Article 130(2) of the Local Tax Act) based on the publicly assessed individual land price, and aggregate land tax (see Article 234-15(5) of the Local Tax Act) determined based on the publicly assessed individual land price.

Therefore, in case of inheritance tax and gift tax, it should be noted that the law should be interpreted and applied so that the principle of "market price principle" can be achieved.

(B) Amendment of legislation relating to retroactive appraisal;

(1) Until the amendment of the Inheritance Tax and Gift Tax Act and its Enforcement Decree respectively, there was no express provision on the scope of the appraisal value which can be seen as the market price in calculating the value of inherited property. However, the express provision of Article 399(1)1 of the General Rules of the Inheritance Tax and Gift Tax Act [Article 399(1)1 of the General Rules of the Inheritance Tax and Gift Tax Act (see, e.g., Supreme Court Decision 92Nu19323, Jul. 27, 1993; Supreme Court Decision 9Nu194, Apr. 198, 199; Supreme Court Decision 9Nu194, Apr. 29, 199; Decision 2005Da31999, Apr. 29, 2009] was established.

(2) With the amendment of the Inheritance Tax and Gift Tax Act (hereinafter referred to as the "Act") on December 30, 1996, Article 60 (2) provides that "the market price under the provisions of paragraph (1) shall be the value which is generally recognized as being normal in the event of free trade between many and unspecified persons, and (3) shall include the appraisal price, etc. under the conditions as prescribed by the Presidential Decree," and Article 49 (1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act delegated by it (hereinafter referred to as the "Enforcement Decree") provided that "the taxable amount which is recognized as the market price under the conditions as prescribed by the Presidential Decree, such as the appraisal price, etc." under Article 60 (2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act (hereinafter referred to as the "Enforcement Decree of the Inheritance Tax and Gift Tax Act") shall be considered as follows.

(1) After the amendment by Presidential Decree No. 15193 on December 31, 1996

The term "those recognized as the market price, as prescribed by Presidential Decree, such as the expropriation or public sale price, appraisal price, etc." in Article 60 (2) of the Act shall include the amount confirmed by the provisions of the following subparagraphs during the period from six months (three months in the case of donated property) before the base date of appraisal to the period in which a report on the tax base of inheritance tax

2. In case where there exist the appraisal values which a reliable appraisal institution prescribed by Ordinance of the Prime Minister has appraised property for purposes other than payment of inheritance tax and gift tax, the average value of such appraisal values;

(b) (B) after the amendment by Presidential Decree No. 15971 on December 31, 1998

"The amount recognized as the market price, as prescribed by Presidential Decree, such as the price of expropriation, public auction, appraisal value, etc." in Article 60 (2) of the Act means the amount confirmed pursuant to the provisions of the following subparagraphs only where there is sale, appraisal, expropriation, auction or public sale from six months (three months in the case of donated property) before the base date of appraisal to the period of report on the tax base of inheritance tax or the return on the tax base

2. In case where there exist the appraisal values appraised by any reliable appraisal institution prescribed by the Ordinance of the Ministry of Finance and Economy with respect to the relevant property for purposes other than paying the inheritance tax and gift tax, the average value

(C) the board:

① In full view of the language and purport of Article 60(2) of the Act, which explicitly provides for the appraisal price which can be recognized as the market price, and the legislative purport thereof, and the provision which contains any provision similar to the provision which has been denied under the general provisions of the Inheritance Tax Act, which is provided for in the basic rules of the Inheritance Tax Act, during that period, includes the circumstances as prescribed in the Enforcement Decree, in particular the value confirmed under Article 49(1) of the Enforcement Decree, "(3)" shall refer to the value confirmed under Article 49(1) of the Enforcement Decree." The purpose of Article 60(2) of the Act and Article 49(1) of the Enforcement Decree of the Act (amended by Presidential Decree No. 15971, Dec. 31, 1998) is to determine that the appraisal price would compromise the stability of the tax relationship according to the ombudsman without restriction on retroactive appraisal, and that the appraisal price should be recognized as the market price. If it does not meet the requirements prescribed by Presidential Decree, the appraisal price should be determined as the objective appraisal price should be determined as 16.

(2) If, as in this case, the officially assessed individual land price of the year concerned was not publicly announced at the time of the commencement of inheritance, and then the publicly announced individual land price of the year concerned was considerably low compared to the publicly announced individual land price of the previous year, the position that the provision of this case is valid shall not be subject to the officially assessed individual land price of the year concerned, and any disadvantage suffered by the taxpayer shall not be bound to take a method of retroactive assessment of the market price. To do so, it shall be interpreted that the validity of the above provisions, which are time-limited to the appraisal price recognized as the market price, is denied, or that the above provisions are not more meaningful than the mere example provision

However, it is unreasonable to view the above provisions of the law as mentioned above in light of its legislative purport, and in this case, even if the plaintiff who is subject to the enforcement decree amended by December 31, 1998, as mentioned above, assessed the market price retroactively, it cannot be allowed to recognize it as the market price under the provisions of the law. Thus, as long as the provision of this case is deemed effective, finding the way for remedy against the plaintiff in this case is difficult to interpret the provisions of the current law.

(3) In short, in order to relieve the taxpayer in the same case as the plaintiff, the validity of the provision of this case is denied so that the individual land price of the pertinent year can be applied (hereinafter referred to as "electronic choice") or, in addition, the provision of the Enforcement Decree which denies all of the validity of the provision of this case, which provides that the appraisal price recognized as the market price shall be determined by the Presidential Decree, and that the appraisal price recognized as the market price shall be recognized as the market price by delegation of the provision of this case, or one of two or more options shall be adopted so that the appraisal price by retroactive appraisal may be accepted as the market price (hereinafter referred to as "the latter's choice") by interpreting that the provision of this case is not more meaningful than the latter's choice in light of its legislative purport, etc. as seen above, it is more true in view of the following points.

In other words, according to the former choice, the appraisal price which can be recognized as the market price is recognized as the market price only if the appraisal price meets the requirements such as the subject and timing of the appraisal, and the appraisal price which can be recognized as the market price is recognized as the market price, and if so, the publicly notified individual land price shall be applied in the year concerned (the publicly notified individual land price in this case, even if it is publicly notified after the commencement of inheritance, shall be effective retroactively to the basic date, so long as it comes to the same effect after the commencement of inheritance), if the taxpayer raises an objection against the publicly notified individual land price itself, the taxpayer's rights and interests may also be protected and the right and interest may be protected as well as through the latter's selection. However, the result of the appraisal of the publicly notified individual land price in the previous year shall be determined differently from the sale price in the previous year, and the unreasonable appraisal price in the previous year shall be determined to the extent that the taxpayer's rights and interests may be recovered retroactively from the sale price at the time of the donation, even if it does not have any unreasonable results.

(3) Comprehensive determination

As a result, the provision of this case is not only prescribed without any delegation of the mother law, but it is highly likely to violate the "market price principle" principle, which is distinct from other taxes, to impose excessive burden on taxpayers to prove (related to small-sum appraisal) and to undermine the legal stability of tax relations, and even if inheritance or donation was made in the same year, it is reasonable to deem it null and void in light of the following: (a) the officially assessed individual land price to be applied depending on when the publicly announced individual land price is at any time, even if the inheritance or donation was made in the same year.

Of course, there are various problems such as confusion due to the absence of the officially assessed individual land price for the pertinent year at the time of inheritance or donation, and when the taxpayer reported and paid the tax by evaluating the value of the property under the officially assessed individual land price for the previous year, but thereafter, there may be many problems such as the taxation authority's refund of the tax. However, the current law takes the "market price principle", and the calculation of the value of the property by applying the officially assessed individual land price is a supplementary method in cases where it is difficult to calculate the market price. Considering the nature of the publicly assessed individual land price and the timing of its validity as seen above, the above problems are inevitable results from the application of the officially assessed individual land price based on the calculation of the value of the property, rather than damage caused by the above problems, and whether the taxpayer is the right to recover due to the invalidity of the provision of this case or the right to achieve the complete implementation of the "market price principle".

Therefore, by applying the instant provision, the Defendant’s inclusion of KRW 404,035,950, which is an amount equivalent to the difference in the amount reported by the Plaintiff, in the taxable value of inherited property, and the increase in the amount of KRW 206,398,338 is illegal.

3. Conclusion

Therefore, the plaintiff's claim of this case seeking the revocation of the part of 206,398,338, which is recognized as illegal amount among the amount imposed by the defendant as above, shall be accepted on the ground of its reasoning and it is so decided as per Disposition.

Judges Cho Jong-hee (Presiding Judge)