early 2010 Heavy3269 ( December 06, 2010)

The imposition of gift tax on negligent tax returns shall be illegal.

The "amount equivalent to under-reported tax base that serves as the basis for calculation of the additional tax on gift tax" shall exclude the value of donated property already reported and paid, and the additional tax on negligent tax on the value of donated property already reported and paid shall not be imposed.

2011Guhap468 Revocation of Disposition of Imposing Additional Tax

XX Kim

O Head of tax office

May 4, 2011

June 1, 2011

1. The Defendant’s imposition disposition of gift tax of KRW 131,668,010 against the Plaintiff on June 8, 2010 exceeding KRW 43,582,368 shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3. 1/10 of the costs of lawsuit shall be borne by the defendant respectively by the plaintiff.

The Defendant’s imposition of gift tax of KRW 131,668,010 against the Plaintiff on June 8, 2010 exceeds KRW 42,936,098, shall be revoked.

1. Details of the disposition;

A. On April 11, 2008, the Plaintiff received KRW 2,608,670,781 from KimA, his father (hereinafter “instant primary donated property”). On November 10, 2008, the Plaintiff reported the type and value of the instant primary donated property, and paid gift tax.

B. However, despite the Plaintiff already received from KimA on April 11, 2008, KRW 11,000,000 (hereinafter “the second donated property of this case”) and KRW 83,333,330 on November 28, 2008 (hereinafter “the third donated property of this case”) from the tax authorities, the Plaintiff did not report the type, value, etc. of the second and third donated property of this case to the tax authorities.

C. Meanwhile, as KimA died on April 30, 2009, the Plaintiff reported to the Defendant the type and value of the inherited property, and the Plaintiff reported the type and value of the inherited property to include the primary donated property of this case in the value of the inherited property in the value of the inherited property, a donation of defined donation under Article 13(1)1 of the Inheritance Tax and Gift Tax

D. On June 8, 2010, the Defendant imposed a total of KRW 131,668,010 on the Plaintiff (hereinafter “instant disposition”). Among them, the details of the principal tax of the gift tax, the additional tax on negligent return, and the additional tax for unfaithful payment are as follows.

(1) Principal tax on donation = 3,333,332 won

2,703,004,111 won (83,330 won for the third donated property of this case + the final tax amount calculated based on 2,619,670,781 won for the second donated property of this case + the amount obtained by deducting 784,321,481 won already reported and paid by the Plaintiff from 817,654,813 won for the second donated property of this case.

(2) Additional tax on non-declaration of return = 93,754,683

① Non-declarationable additional tax on the third donated property of this case: 5,669,037 won

0

② Additional tax for underreporting for the primary donated property of this case: 88,085,646 won

0

(3) Additional tax on default = 4,579,99

E. The Plaintiff filed an appeal with the Tax Tribunal on September 10, 2010, but the said appeal was dismissed on December 6, 2010.

[Reasons for Recognition] Facts without dispute Gap's evidence Nos. 1.2 (including additional number), Eul's statement No. 1 and the purport of the whole legal theory

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In addition, the Plaintiff’s imposition of additional tax due to failure to file a report on aggregate at the time of re-donations violates the principle of no taxation without law and the principle of prohibition of double taxation.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) If the additional tax is imposed on the same donated property due to the failure to report the gift tax, and the additional tax is imposed on the same donated property due to the failure to report the inheritance tax at the time of the return of the inheritance tax, it would result in double burden on the taxpayer, and if the additional tax is imposed on the additional tax due to the failure to report the gift tax, it shall not be included in the “amount which is not reported or short of the tax base to report” under Article 26(1) of the former Inheritance Tax Act (amended by Act No. 4662 of Dec. 31, 1993), which serves as the basis for calculating the additional tax on the inheritance tax, (see, e.g., Supreme Court Decision 96Nu15862, Jun. 27, 1997). Therefore, even if the additional tax is not imposed on the taxpayer due to a failure to report the gift tax, it shall not be included in the “amount equivalent to the pertinent additional tax on the gift tax under the return to impose double burden on the taxpayer.”

Meanwhile, even if the donee has already reported and paid the gift tax on the existing donated property, but did not report the addition of the existing donated property to be added to the taxable amount of gift tax at the time of the second donation, it cannot be deemed that double additional tax is imposed on the existing donated property. However, even if the donee did not report the addition of the existing donated property at the time of the second donation, even though the donee did not report the addition of the existing donated property at the time of the second donation, there is no problem in securing the taxation right. ② Even if the donee reported and paid the first gift tax at the time of the second donation, if the donee did not report the addition of the existing donated property at the time of the second donation, and did not report the addition of the existing donated property at the time of the second donation, it would be too harsh to the taxpayer, and ③ not include not only "the value of donated property which was not reported" in the concept of calculation basis under Article 47-3(1) of the Framework Act, but also also "the amount equivalent to the previous donated property under the principle of no taxation without the law."

As seen earlier, the instant disposition includes the additional tax on negligent tax returns on KRW 2,608,670,781 of the primary donated property of this case. As such, the said disposition of imposition of additional tax on negligent tax returns in the instant disposition is unlawful as it violates the principle of no taxation without law.

(2) Furthermore, the amount of tax to be paid by the Plaintiff is KRW 43,582,368,00 in total, KRW 33,332, and KRW 5,69,037 in addition to the additional tax on negligent tax on negligent tax on negligent tax on the third donated property of this case, and KRW 43,582,368 in total, including KRW 43,582,368 in total.

(3) Therefore, the portion exceeding KRW 43,582,368 of the instant disposition should be revoked.

3. Conclusion

Therefore, the plaintiff's claim of this case is justified within the scope of the above recognition, and the remaining claim is dismissed as it is without merit. It is so decided as per Disposition.