Whether the initial date for calculating refund when filing a request for correction can be the date of payment

It is difficult to deem that the application of the provision of this case to the effect that the Plaintiff’s claim for correction was made after the entry into force of the provision of this case does not constitute an unlawful act contrary to the prohibition of retroactive legislation.

Article 52 (Additional Payment of National Taxes)

Article 43-3 of the Enforcement Decree of the Framework Act on National Taxes

2018Guhap80124 Additional Payment on Additional Payment and Compensation for Delay Damages

a

Korea

July 19, 2019

September 6, 2019

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

From March 31, 2017 to the Plaintiff; from May 3, 2017 to the date on which a copy of the complaint in this case is served; from July 28, 2017 to the date on which a copy of the complaint in this case is served; from August 12, 2017 to the date on which a copy of the complaint in this case is served; from August 12, 2017 to the date on which a copy of the complaint in this case is served; and from the next day to the date on which a part is fully paid, the Defendant shall pay the Plaintiff the amount of money by each rate of 15% per annum.

1. Details of the disposition;

A. Status of the Plaintiff and B

1) The Plaintiff is a legal entity established on September 21, 1998 for the purpose of manufacturing and selling clothes, importing and exporting clothes, and selling subsidiary materials for clothing.

2) On February 1, 2005, BB Co., Ltd. (hereinafter referred to as “BB”) was established on February 1, 2005 and was engaged in the business of manufacturing and selling women’s clothes at the same place as the Plaintiff’s head office. On November 2, 2015, the Plaintiff and B merged with the Plaintiff as a surviving company, and on the same day, B was dissolved.

B. Payment and refund of corporate tax by the Plaintiff

1) On November 28, 2016, the Plaintiff filed a claim against the Defendant for the reduction of x members of the corporate tax payable from 2011 to 2014 on the grounds that research and human resources development expenses, tax credits, and errors in the period of reversion of profits and losses were corrected.

2) The Defendant decided to correct part of the Plaintiff’s claim amount. Accordingly, the Plaintiff paid the Plaintiff the following tax refundx members of the corporate tax refund amount of the details as follows, and additional duesx members for refund.

C. Payment and refund of value-added tax by the Plaintiff

1) On June 13, 2017, the Plaintiff filed a request for correction of reduction of the output tax amount of value-added tax from February 2, 2012 to February 2, 2016 on the ground that the Plaintiff filed an excessive return and payment of the x won of the output tax amount of value-added tax, based on the customer’s purchase of goods and services or the points accumulated by participation in the event, including the value-added tax supply amount.

2) On July 27, 2017, the Defendant issued a decision of correction on the part of July 27, 2017, and accordingly, the Plaintiff paid the following tax amount refundable of value-added tax, xx members of additional dues, and xx members of additional dues.

D. Plaintiff b. Refund of reported and paid corporate tax and value-added tax

(i)payment and refund of the corporate tax;

On March 6, 2017, the Plaintiff filed a claim against the Defendant for the reduction of the xx members of the corporate tax amount from 2012 to 2014 due to the error in the timing of attribution of B B prior to the merger. On May 2, 2017, the Plaintiff received a refund of the xx members and the xx members of the following details as the following was corrected.

2) Payment and refund of value-added tax

On June 13, 2017, the Plaintiff filed a request for correction of reduction due to the following reasons: (a) the Plaintiff reported and paid excessive tax amount of the output tax of the value-added tax on the following details from February 2, 2012 to February 2, 2015, as the Plaintiff filed a request for correction of reduction due to the fact that (b) prior to the merger against the Defendant purchases goods and services, or uses the points (e.g., points) accumulated by the customers by participating in the events as a settlement method in the value-added tax; and (b) the Plaintiff received a refund of the following tax amount of the value-added tax xxxx and additional tax xxxxxx for them, as a result of the decision of correction on some of the above details.

(e) Calculation of additional dues on refund;

B. In calculating additional dues to be paid to the Plaintiff pursuant to paragraphs (d) through (d), the Defendant calculated additional dues on the basis of the initial date of the correction request pursuant to Article 52 of the former Framework Act on National Taxes (amended by Act No. 15220, Dec. 19, 2017; hereinafter the same shall apply) and Article 43-3(1)5 of the Enforcement Decree of the Framework Act on National Taxes (hereinafter “instant provision”).

[Ground of recognition] Facts without dispute, entry of Gap 1 to 8 evidence, purport of the whole pleadings

2. The plaintiff's assertion

A. The provision of this case provides that the additional dues on refund shall be calculated from the date of a request for correction in cases where the amount of tax already paid is refunded due to the correction of the amount of tax paid or refunded upon a taxpayer’s request for correction. This is unconstitutional and unlawful for the following reasons.

① Failure to pay additional dues equivalent to the interest accrued between the payment date of national taxes and the payment date of the Plaintiff’s request for correction on the ground that the provision of this case was amended and implemented, is in violation of the Constitution, since it infringes on the property rights of taxpayers under retroactive legislation.

② The provision of this case provides that additional dues shall be calculated from the date of application for correction. This is to change the additional dues on the refund of national taxes into a civil system, which limits the rights of taxpayers to receive additional dues on the refund of national taxes, so it excessively limits their rights beyond the scope of delegation

③ According to the instant provisions, even if a taxpayer erroneously paid taxes, the State is likely to delay refund without ex officio rectification for the reduction of additional dues on refund, and until a taxpayer files a request for correction, which contradicts the purport of the mother law that provides that the State shall return the interest that the taxpayer holds in a superior position.

④ Article 43-3(1)1 of the Enforcement Decree of the Framework Act on National Taxes stipulates that national tax refund due to ex officio correction by a tax authority shall be calculated on the basis of “the date of national tax payment”. The instant provision provides that national tax refund due to a taxpayer’s request for correction shall be added to additional dues on the basis of “the date of request for correction”. In both cases, even if a taxpayer is refunded a tax amount higher than the legitimate tax amount, the initial date of calculation is inherently different and different, and thus, it goes against the principle of equality.

B. Therefore, in calculating a refund on national tax, it is reasonable to regard the initial date as the national tax payment date pursuant to Article 43-3(1)1 of the Enforcement Decree of the Framework Act on National Taxes.

C. Nevertheless, the Defendant calculated the date of filing a request for correction on the basis of the instant provision and made payment of only thex members of the corporate tax and the value-added tax on the sum of thex members that the Plaintiff paid as the initial date of filing the request for correction on the basis of the instant provision, thereby gaining profits from holding only thex members, which are the difference, without any legal grounds. In addition, the Defendant suffered losses equivalent to the said amount by making the Defendant paid the sum of thex members of the corporate tax and the value-added tax on the aggregate of thex members of the sum of thex members of the corporate tax that was paid excessively, and the value-added tax on the sum of thex members, which were the difference, to obtain profits from holding thexx members without any legal grounds, and the bB suffered losses equivalent to the said sum.

D. Therefore, the Defendant is obligated to pay the Plaintiff, who succeeded to the status of B B, additional dues on refund and delay damages from the day following the date of each refund.

3. Relevant statutes;

former Framework Act on National Taxes (Amended by Act No. 15220, Dec. 19, 2017)

Article 52 (Additional Payment on Refund of Taxes)

Where the head of a tax office appropriates or pays a national tax refund pursuant to Article 51, he/she shall add the amount calculated according to the interest rate prescribed by Presidential Decree (hereinafter referred to as "additional refund on refund of national taxes") to the national tax refund, taking into account the period from the date the refund of national taxes prescribed by Presidential Decree begins to the

Enforcement Decree of the Framework Act

Article 43-3 (Additional Payment on Refund of Taxes)

(1) The initial date in reckoning the national tax refund and additional dues prescribed by Presidential Decree in Article 52 of the Act shall be the day following the following dates:

1. National tax refund due to erroneous or double payment, or cancellation or correction (excluding cases falling under subparagraph 5) of a return or assessment that forms the basis of the relevant payment: The date of payment of national taxes: Provided, That if the national taxes are paid in two or more installments, it shall be the date of last payment, but if the national tax refund exceeds the amount of last payment, it shall be the due date of each national tax computed retroactively in the order of due dates until it reaches such due amount. The amount of tax paid for interim tax prepayment or by tax withholding pursuant to tax-related Acts shall be deemed to have been paid on the expiration date

2. National tax refund accrued by reduction of or exemption from national taxes paid lawfully: The date of determination of reduction or exemption;

3. National tax refund created by the amendment of a tax-related Act after lawful payment: The enforcement date of the tax-related Act;

4. Refund due to filing of refundable tax, rectification (excluding cases falling under subparagraph 5) or determination under the Income Tax Act, the Corporate Tax Act, the Value-Added Tax Act, the Individual Consumption Tax Act, the Liquor Tax Act or the Traffic, Energy and Environment Tax Act: The day after 30 days from the date of such filing (where the date of such filing is prior to the statutory due date for return, the relevant statutory due date for return): Provided, That where the refund is made due to determination because the amount of refundable tax is not filed, the day after 30 days from the date of relevant determination;

4. Determination

In full view of the following legal nature of the additional payment on the refund of national taxes and the purport that Article 52 of the former Framework Act on National Taxes delegates the initial date of the additional payment on the refund of national taxes to the Presidential Decree, the provision of this case, which stipulates that the initial date of the refund shall be calculated from the date when the taxpayer files a request for correction, shall not be deemed to excessively limit the taxpayer's rights beyond the delegation scope under Article 52 of the former Framework Act on National Taxes or to be unconstitutional and unlawful. Accordingly,

A. A. The refund of national tax is a “illegal enrichment” that is received or held by the State without any legal cause despite the existence of a tax obligation from the beginning or the lapse thereof (see, e.g., Supreme Court Decision 88Nu6436, Jun. 15, 1989). The refund amount calculated by multiplying the refund amount by a prescribed rate under Article 52 of the Framework Act on National Taxes is an interest on unjust enrichment. Thus, additional refund amount is not independent of refund amount, but has the nature of legal interest on claims and obligations of refund (see, e.g., Supreme Court Decision 2001Da60767, Jan. 11, 2002). In this case, the provisions of the tax law on the contents of additional refund of national tax have the nature of special provisions under Article 748 of the Civil Act on the scope of return of unjust enrichment, so the additional refund of national tax becomes final and conclusive in accordance with the starting date and proportion prescribed in the provisions on additional dues, regardless of good faith or bad faith in the country (see, etc.).

B. Article 52 of the former Framework Act on National Taxes (amended by Act No. 11124, Dec. 31, 201) directly provides that the initial date of calculation of the additional refund on national taxes shall be calculated from the day after the date of payment of national taxes from the day after the date of payment of national taxes. However, as the Framework Act on National Taxes was amended on December 31, 201, it delegated the initial date of calculation of national

Article 52 of the Framework Act on National Taxes amended on December 31, 201 is amended to delegate to the Presidential Decree the initial date of calculation on the refund of national taxes, in consideration of the following various circumstances: (a) the provision on the return of the national tax refund needs to properly cope with changes in the tax environment, such as the establishment, modification, and abolition of the items of tax, the method of taxation, and the change in payment procedures. The initial date of calculation on the refund of national taxes is to recognize the need to flexibly regulate the interests between the State and the taxpayer surrounding the return of the national tax refund in order to rationally coordinate interests; and (b) to the same purport

C. Article 52 of the former Framework Act on National Taxes does not directly stipulate the criteria for the determination of the initial date and the scope of the initial date of the refund of national taxes to be determined by the Presidential Decree, but comprehensively taking account of the nature of legal interest as to unjust enrichment of the refund of national taxes and the provisions on additional dues such as the Framework Act on Local Taxes, etc., it can be sufficiently predicted that the specific starting date of the refund of national taxes will be determined within the scope of the initial date in consideration of the nature of the national tax, taxation method and payment procedure, the cause of the refund of national taxes, the necessity of early confirmation of legal relations surrounding the refund of national taxes, etc. (see, e.g., Constitutional Court Order 2016Hun-Ba391, Mar. 29, 2018).

D. As to the instant case, the health class, and the provision of this case set the initial date of the additional refund as the date of claiming correction. This is because the tax authority cannot find out the fact that the refund amount constitutes unjust enrichment until the taxpayer makes a request for correction. Thus, the date of filing a request for correction, which is when the country, who is the duty payer, becomes aware of the grounds for refund of national tax subjectively, is set as the specific starting date of the additional payment of national taxes. Accordingly, it conforms to the essence of the national tax refund tax refund and the additional payment of national taxes as unjust enrichment

E. Although the provision of this case was amended and enforced between the date of national tax payment and the date of the plaintiff's request for correction, the principle of non-sufficiency in the tax and charges means that the pertinent law cannot be applied to the facts completed before the entry into force of the pertinent law, unless there are special circumstances (see, e.g., Supreme Court Decision 2005Du2612, Jul. 26, 2007). As seen above, the additional payment on the refund of national taxes determined according to the initial date and proportion stipulated in the provision on the additional dues. Thus, the additional payment on the refund of national taxes that occurred upon the plaintiff's request for correction was finalized only at the time of filing a request for correction, which is the initial date stipulated in the provision of this case. Accordingly, the application of the provision of this case on the ground that the plaintiff's request for correction was made after the entry into force of the provisions of this case, cannot be deemed unlawful because it violates the prohibition

F. Article 43-3(1) of the Enforcement Decree of the Framework Act on National Taxes provides that a refund of national tax due to ex officio correction shall be calculated on the basis of “the date of national tax payment”, while a taxpayer requests correction, a refund of national tax due to a taxpayer’s request for correction shall be added on the basis of “the date of request for correction.” However, in the case of a national tax refund due to a taxpayer’s request for correction, the additional dues shall be calculated from the time of request for correction, considering that the State becomes aware of the grounds for refund of national tax only due to a taxpayer’s request for correction and constitutes a malicious beneficiary from the time of request for correction, so the erroneous payment of national tax is completely different from the case where the State voluntarily revises ex officio correction, and whether the cause of occurrence and the beneficiary are good and bad. Therefore, it is difficult to deem that the provision of this case differs from the beginning date

5. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.