Seoul Administrative Court 2016Guhap2359 ( October 12, 2017)

Appellate Court 2015No2034 ( December 30, 2015)

In an appeal litigation seeking revocation of a disposition of increase or decrease, the tax amount on the original reported portion shall be reduced due to the possible difference in arguments, together with the grounds for the initial report.

(As in the judgment of the first instance court), the disposition of imposition according to the decision of the trial violates the principle of prohibition of disadvantageous change, and thus is null and void. The taxpayer can contest not only the grounds for tax authority’s increase and correction, but also the excessive reasons for the initial report in the appeal litigation seeking revocation of the disposition of increase and correction.

Article 44(4) of the Enforcement Decree of the Corporate Tax Act

2017Nu35129 Revocation of revocation of a disposition of refusal to refund or correct global income tax

IsaA

BB Director of the Tax Office

January 12, 2017

August 23, 2017

September 27, 2017

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

3. Paragraph 1-b of the order of the court of first instance was modified as follows in accordance with the reduction of claims by this court:

The Defendant’s disposition of imposition of global income tax of KRW 000,000,000 (including additional tax) on September 6, 2011 against the Plaintiff on September 6, 2013 is revoked in excess of KRW 00,000 (including additional tax).

1. Purport of claim

A. On September 6, 2013, the Defendant’s imposition of KRW 000,00,000 (including additional taxes) of global income tax in 2009, the amount exceeding KRW 000,000 (including additional taxes), the amount exceeding KRW 000,000 (including additional taxes) of the imposition of global income tax in 201, and the amount exceeding KRW 000,000 (including additional taxes) of the imposition of global income tax in 2011, and the amount exceeding KRW 00,000,000 (including additional taxes) of the imposition of global income tax in 200,000 (including additional taxes) shall be revoked (the Plaintiff’s claim for the imposition of global income tax in 2011 shall be reduced as above by this court).

B. On January 13, 2016, the Defendant’s disposition imposing global income tax of KRW 000,000,000 (including additional taxes) on the Plaintiff for the imposition of global income tax of KRW 000,000 (including additional taxes) shall be revoked.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Quotation of judgment of the first instance;

The reasoning for this Court’s explanation is as follows, since the reasoning for this case is the same as that for the judgment of the first instance except for the dismissal or addition of part of the judgment of the first instance as follows. Thus, this Court shall accept it as it is in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act

2. Parts used or added;

○ The following shall be added below the sixth table:

(6) However, the shares of KimA and KimB, etc. in △ Building and ○○ Building were changed as follows.

○ The following shall be added subsequent to the last day of the 7th page 11:

[Defendant asserted that in the case of global income tax in 2010, there was no disposition subject to appeal, and the decision of the Tax Tribunal cannot be seen as a decision disadvantageous to the Plaintiff because it decided the beneficial owner of the income. However, on September 6, 2013, the Defendant issued a notice of additional correction and notification of the amount of global income tax 00,000,000 to the Plaintiff on September 6, 2013, and the Plaintiff filed an appeal with the Tax Tribunal via objection. Meanwhile, whether it violates the principle of prohibition of disadvantageous change under Article 79(2) of the Framework Act on National Taxes should be determined on the basis of each annual tax disposition (see Supreme Court Decision 2003Du278, Dec. 9, 2004). As long as global income tax is increased in 2010 as a result of correction of the tax base and tax amount pursuant to the decision of the Tax Tribunal, the reason cannot be viewed differently because it is based on the determination of the beneficial owner of the income.

○ The following shall be added subsequent to the last 4th day of the 9th page:

[Inasmuch as a correction disposition was rendered on September 6, 201, which was September 201, 201, prior to the expiration of the respective period for filing a request for correction of global income tax for the year 2011 and 2012, the Plaintiff may seek revocation by asserting that not only the increased tax amount due to the correction disposition, but also the tax amount initially returned and paid, as well as the tax amount initially returned and paid (see Supreme Court Decisions 2010Du20843, Jun. 30, 201; 2012Du12822, Jun. 26, 2014)]

○ Of the 9th table, the term “reasonable amount of tax in 201” means “00,000,000 won (However, the Plaintiff only seeks revocation of the amount of tax exceeding KRW 00,000,000)” as “0,000”.

3. Conclusion

Therefore, the judgment of the first instance court is legitimate, and the defendant's appeal is dismissed as it is without merit. However, Article 1-b of the judgment of the first instance was modified as ordered in accordance with the reduction of the plaintiff's claim in this court.