Seoul Administrative Court-2017-Gu Partnership-859 ( July 12, 2018)

Cho Jae-2017-west-1346 ( September 18, 2017)

Stock options shall generate income as of the time of exercise.

(As in the first instance judgment), since economic benefits equivalent to the difference between the market price and the exercising price of the stock are determined or realized due to exercising the stock option, income shall accrue as of the time of exercising the stock option.

Article 21 of the Income Tax Act

Seoul High Court-2018-Nu-58020 global income and revocation thereof.

KimA

s. Head of the tax office

July 12, 2018

November 30, 2018

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The imposition of global income tax of KRW 58,022,280 (including additional tax) on the Plaintiff on December 7, 2016 by the Defendant shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning of this judgment is as follows, except for the addition of the judgment of the court of first instance as to the matters alleged by the plaintiff in the court of first instance among the reasons for the judgment, and as to the matters alleged by the plaintiff in the court of first instance, Article 8(2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

○ 7 pages 20, “The fact that withholding was made” means that “the fact that withholding was made, Article 21(1)22 of the Income Tax Act, Article 163(13) of the Enforcement Decree of the Income Tax Act does not apply to the stock-listed corporation identical to the company in this case.”

○ 8, 10 pages 10 are as follows: “The 10th page 8 is being exercised.”

2. Additional matters to be determined;

A. The plaintiff's assertion

If the Plaintiff’s global income tax return was wrong, the Defendant imposed additional tax at any time due to business delay even though it was possible to impose a disposition to correct it at any time. Therefore, it is unreasonable for the Plaintiff to be liable for the amount of additional tax.

B. Determination

Under the tax law, in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, where a taxpayer violates various obligations, such as a return and tax payment, without justifiable grounds, a taxpayer’s intentional or negligent act is not considered, and the site, error, etc. of statutes do not constitute justifiable grounds that do not constitute a breach of duty (see Supreme Court Decision 2002Du10780, Jun. 24, 2004).

With respect to the instant case, it appears that the Plaintiff’s filing of the global income tax for 2012 by recognizing the profits accrued from the exercise of appraisal rights as at the time of sale of the instant shares was due to the site and error in the relevant statutes. Even if the Defendant rendered the instant disposition after the lapse of the reasonable period after the Plaintiff’s filing of the global income tax return, it cannot be deemed that the Plaintiff’s filing of the instant disposition was justifiable and not attributable to the Plaintiff’s breach of duty.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit, and it is so decided as per Disposition.