In a case where an inheritor erroneously filed a return on the tax base of inheritance by adding the donated property before the date of commencing the inheritance under Article 13 of the Inheritance Tax and Gift Tax Act to the taxable value of inherited property which should be added to the taxable value of inherited property pursuant to Article 15 of the same Act, as the disposed property before the date of commencing the inheritance, but the reported tax base itself does not change, whether the taxpayer shall deduct the amount equivalent to the donated property before the date included in the taxable value

In light of the contents, legislative purport, and history, etc. of the provisions of Article 69(1) of the Inheritance Tax and Gift Tax Act and Article 65-2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, the tax base for deduction of the returned amount of inheritance tax is, in principle, the tax base for deduction of the returned amount of inheritance tax is the tax base on which the taxpayer has filed a tax return. However, since the amount excessively declared is excluded due to the difference in the assessment of inherited property and the error in the application of various deductions, etc., in filing a return on the tax base of inheritance tax, even if the heir erroneously reported the donated amount to be added to the taxable value of inherited property under Article 13 of the same Act before the date of commencing the inheritance as the disposal property stipulated in Article 15 of the same Act, and the reported tax base is not different.

Articles 13, 15, and 69(1) of the Inheritance Tax and Gift Tax Act; Article 65-2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

Supreme Court Decision 99Du4860 delivered on October 30, 2001 (Gong2001Ha, 2610) Supreme Court Decision 2004Du3625 Delivered on August 24, 2006 (Gong2006Ha, 1628)

Plaintiff 1 and 5 others (Law Firm Samdeok, Attorneys Kim Ba-young et al., Counsel for the plaintiff-appellant)

Head of Donggsan Tax Office

Busan High Court Decision 2007Nu1064 decided August 31, 2007

The judgment below is reversed, and the case is remanded to Busan High Court.

The grounds of appeal are examined.

Article 69(1) of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Act”) provides that “where a report on the tax base of inheritance tax is made pursuant to the provisions of Article 67, the amount under each of the following subparagraphs, namely, the amount for which collection has been postponed pursuant to the provisions of Article 74 (Article 74) and the amount equivalent to 10/100 of the amount for which the amount of deduction or exemption from the calculated tax pursuant to the provisions of this Act or other Acts (subparagraph 2) has been deducted, shall be deducted from the calculated tax amount of inheritance tax.” Article 65-2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “The amount of inheritance tax calculated pursuant to the provisions of Article 69(1) other than each subparagraph of the Act refers to the calculated tax amount on the tax base reported within

In light of the contents, legislative purport, history, etc. of the above provisions, the tax base, which serves as the basis for deduction of the amount of inheritance tax, shall, in principle, be the tax base reported by the taxpayer. However, inasmuch as the amount excessively declared is excluded due to the difference in the assessment of inherited property and errors in the application of various deductions, etc. (see Supreme Court Decision 9Du4860, Oct. 30, 2001, etc.). Thus, even if the inheritor files a return on the tax base of inheritance tax, even if the inheritor erroneously reported the donated property before being added to the taxable value of inherited property pursuant to Article 13 of the Inheritance and Gift Tax Act, which is the disposal property before the commencement of inheritance as stipulated in Article 15 of the Inheritance and Gift Tax Act, and the reported tax base itself does not vary, so long as the inheritor erroneously reported the amount equivalent to the amount of the donated property before the commencement of inheritance tax, included in the

Nevertheless, the court below determined that the defendant's disposition of this case, which calculated the reported tax amount by deducting the amount of deduction from the "reported tax base", which is the basis for the deduction of the reported tax amount, which is the property subject to disposition prior to the commencement date of inheritance tax return under Article 15 of the Inheritance Tax and Gift Tax Act, from the "reported tax base" which is the basis for the deduction of the reported tax amount, is lawful, on the grounds that the tax base, which serves as the basis for deduction of the reported tax amount, is consistent with basic facts and should be recognized only for the portion which does not interfere with the application of the law, and is not affected by the application of the law. In so doing, the court below erred in the misapprehension of legal principles as to the deduction of the reported tax amount under Article 69 (1) of the Inheritance Tax and Gift Tax Act, and there is an error in the calculation of the reported tax amount by deducting the reported tax amount of amount of deduction from the calculated tax amount of inheritance tax, as long as it is included in the tax base reported in the above 2.

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Young-ran (Presiding Justice)