Kim Young-young (Attorney Kim Young-sung et al., Counsel for the defendant-appellant)

Head of Mapo Tax Office

April 21, 2005

Seoul Administrative Court Decision 2003Guhap38976 delivered on April 22, 2004

1. The defendant's appeal is dismissed.

2. The costs of appeal are assessed against the defendant.

1. Purport of claim

The defendant's rejection disposition against the plaintiff on August 3, 2003 against "the rejection disposition against a request for correction of the imposition of global income tax for the year 1996" is revoked.

2. Purport of appeal

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

1. The reasoning of the court's explanation concerning this case is as follows, in addition to the written application of the part of Part IV through Part IV (2) of Part IV of the judgment of the court of first instance, the reasoning of the court's explanation is as stated in the reasoning of the judgment of the court of first instance. Thus, it is accepted as it is in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

(2) (A) In principle, when the exclusion period for the imposition of national taxes under Article 26-2(1) of the Framework Act on National Taxes (hereinafter “the exclusion period”) expires once, the taxation authority cannot make any disposition, such as a new decision or decision of correction of increase, as well as a decision of correction of reduction.

However, as a result, in order to prevent an unreasonable case in which a decision or judgment is rendered after the lapse of the period of exclusion from taxation due to delay in the procedure of administrative appeal, request, administrative litigation, etc. regarding the pertinent taxation for a long period of time, and where a decision or judgment is rendered after the lapse of the period of exclusion from taxation, Article 2(2) of the same Act provides that where a decision or administrative litigation is rendered based on an administrative appeal against the pertinent taxation, a decision or decision may be made within one year from the date when the decision or judgment becomes final and conclusive (see Supreme Court Decision 94Da3667 delivered on August 26, 1994). In light of the purport of the above provision, in a case where a taxpayer raises an objection to the initial taxation through the procedure of objection, such as an appeal, in which the tax authority accepted all or part of the objection of the taxpayer, and corrected or cancelled the initial taxation disposition at any time during the period of exclusion from taxation due to the expiration of the period of exclusion from taxation, it shall be deemed that such disposition is impossible or unlawful.

(B) Meanwhile, Article 45-2(1) of the Act provides that a person who has filed a tax base return within the statutory due date of return may file a request with the head of a tax office for rectification of the tax base and amount of national tax originally reported at “within two years after the statutory due date of return expires.” As an exception, Article 45-2(2)1 of the Act provides that a person may file a request for rectification of “within two months from the date on which he/she becomes aware of the occurrence of the cause,” notwithstanding the above-mentioned period (within two years after the statutory due date of return) stipulated in Article 45-2(1) of the Act.

As above, Article 45-2 (1) of the Act provides that a request for correction shall be made only within two years after the statutory due date of return expires. The purport of our tax law structure is that in response to the right to determine a tax obligation of a tax obligor, a tax obligor is the basic framework of the tax return system granting the tax obligor the right to determine a tax obligation by filing a tax base and filing a tax return. This is based on the premise that the taxpayer is accurately aware of the taxation obligation. Under the premise that the identification of a taxable object is made by the taxpayer, the taxpayer himself/herself must confirm and calculate the tax base that exists first objectively objectively, and require the tax authority to file a return. Thus, if the taxpayer files a return excessively excessive amount than the objectively true tax amount due to mistake, etc., a procedure to correct the true tax amount should be prepared. Provided, That if the taxpayer permits for correction of errors, etc. in the tax base return, it is extremely unstable in the tax administration so it is necessary to restrict the period of correction so that it is difficult to smoothly operate the tax administration and to protect the interests of the taxpayer, such as the need for stability of the public interest.

However, Article 45-2 (2) 1 of the Act provides that when a transaction or act, etc. which is the basis of calculating the tax base and the amount of tax in the first tax base return of a taxpayer becomes final and conclusive differently by a judgment in the lawsuit related thereto, a taxpayer may file a request for correction within 2 months from the date on which he/she becomes aware of the occurrence of the cause, regardless of the period stipulated in paragraph (1). This is a special provision that protects the taxpayer by correcting the tax base when the cause for correction arises due to an external contingency, such as a judgment, regardless of his/her own intent. Article 45-2 (2) of the Act does not explicitly stipulate that the request for correction shall be limited within the exclusion period of taxation. In light of the purport of the exceptional provision of the tax exclusion period stipulated in Article 26-2 (2) of the Act as seen above, in order to protect the taxpayer, a taxpayer may file a request for correction, without being subject to the limitation of the exclusion period of taxation, even after the exclusion period of taxation, and the defendant shall make a decision on the appropriateness of reduction.

2. If so, the plaintiff's claim seeking the revocation of the disposition of this case is justified, and the judgment of the court of first instance is just, and the defendant's appeal is dismissed as it is without merit. It is so decided as per Disposition.

Judges Kim Jong-soo (Presiding Judge)