Seoul Administrative Court 2007Guhap25060 ( November 21, 2007)

National High Court 2007west0316 (2007.05.01)

Whether the initial date in reckoning the additional dues on revaluation tax refund is any

Where the revaluation difference is included in the calculation of the difference according to stock listing, it falls under the national tax refund due to correction or cancellation of a return or imposition that serves as the basis of the payment after the payment, and the initial date of additional dues on refund shall be deemed the following day

The contents of the decision shall be the same as attached.

Article 51 (Appropriation and Refund of National Tax Refund)

Article 52 (Additional Payment of National Taxes)

1. Revocation of a judgment of the first instance;

2. The Defendant’s disposition of imposition of revaluation tax of KRW 575,354,50 against the Plaintiff on September 14, 2006 shall be revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. The Regulation of Tax Reduction and Exemption Act provides that when a corporation opens an enterprise to support the sound development of the capital market through the expansion of supply of superior stocks, it may conduct revaluation under the Assets Revaluation Act even if it fails to meet the requirements for revaluation under the same Act, and Article 56-2 is newly established as of November 28, 1987 by Act No. 3939, and Paragraph (1) of the same Article intends to list stocks for the first time at the Korea Stock Exchange under Article 88 (1) of the Securities and Exchange Act, it may conduct revaluation under the Assets Revaluation Act by specifying the first day of every month as the revaluation date notwithstanding Articles 4 and 38 of the Assets Revaluation Act: Provided, That where a corporation which conducts revaluation fails to list stocks at the Korea Stock Exchange within 2 years from the revaluation date, it shall not be deemed revaluation under the Assets Revaluation Act. Meanwhile, according to Article 15 (1) 5 of the Corporate Tax Act (amended by Act No. 4803, Dec. 22, 1994; hereinafter the same), it shall not be calculated the amount of revaluation profits from each business year.

B. The Plaintiff, a non-listed corporation established on June 27, 1984 and operated shipping leaves, etc. on July 1, 1989, conducted a revaluation of assets on the premise that stocks are listed pursuant to Article 56-2 of the Regulation of Tax Reduction and Exemption Act (amended by Act No. 4285, Dec. 31, 1990; hereinafter the same shall apply) which provides for special cases of revaluation at the time of public disclosure, and did not report revaluation of assets for 14,724,629,134 won as a revaluation tax of assets for 214,23,100 won on November 27, 1989; 29,430 won on January 8, 199; 214,262,530 won on August 29, 190; hereinafter the same shall apply) and did not report revaluation of assets for 14,724,525,060 won (hereinafter referred to as “the pertinent revaluation tax”).

C. After that, with the amendment of the Regulation of Tax Reduction and Exemption Act and the related Acts and subordinate statutes such as the Enforcement Decree thereof, the listing period of stocks was finally extended by December 31, 2003, the Plaintiff did not list stocks until December 31, 2003. Accordingly, the Defendant calculated the amount of refund tax under Article 23(1) of the Addenda to the Regulation of Tax Reduction and Exemption Act (No. 4285, Dec. 31, 1990) and Article 138 of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 17458, Dec. 31, 2001); and on January 16, 2004, the above revaluation rate should be deemed as a voluntary evaluation marginal profit under the Corporate Tax Act, and the corporate tax and defense tax (including additional tax) shall be included in the Plaintiff’s gross income for the business year of 1989, and the amount of refund shall be 305 won and 4505 won from the date of refund.

D. On March 5, 2004, the Plaintiff filed an appeal with the National Tax Tribunal on the grounds that the Defendant’s corporate tax, defense tax and its additional tax were dissatisfied with the disposition of imposition, and the National Tax Tribunal rendered a decision to revoke only the disposition of imposition of underreporting additional tax and unpaid additional tax on March 28, 2005. The Plaintiff filed a lawsuit seeking revocation of the disposition of imposition of underreporting additional tax and unpaid additional tax on March 28, 2005 by the Seoul Administrative Court Decision 2005Guhap18594, and on April 21, 2006, the Plaintiff filed an appeal with the court 2006Nu1097, when the Plaintiff’s claim was dismissed, and on January 23, 2009, the appeal is pending under Supreme Court Decision 2009Du3842.

E. However, when the imposition disposition of additional tax on the above corporate tax, etc. was revoked, the Ministry of Finance and Economy established a rule that "if the corporate tax and additional tax on the corporate tax are levied on the same asset revaluation marginal profit, and the corporate tax already paid is closely related to the refund of additional tax on the corporate tax, the additional tax on the corporate tax and the additional tax on the refund of the property revaluation tax shall not be paid if the corporate tax is not imposed for the corresponding period." Based on this rule, the defendant notified the plaintiff on September 14, 2006 that he shall pay 575,354,500 won, which is the corresponding amount for the additional tax on the refund of this case (Article 51 (7) of the Framework Act on National Taxes shall be deemed to be included in the determination of the refund of national tax) of the national tax refund (Article 51 (7) of the Framework Act on National Taxes, the provisions of the National Tax Collection Act shall be applied mutatis mutandis to the request for the refund of the already paid amount."

F. On December 19, 2006, the Plaintiff dissatisfied with the instant disposition and filed a request for a trial with the National Tax Tribunal, but the National Tax Tribunal dismissed the said request on April 5, 2007.

[Ground of recognition] Facts without dispute, Gap evidence 1, Gap evidence 2-1, 2-2, Gap evidence 3-1, 2-2, Eul evidence 1 and 2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Under the interpretation of Article 52 of the Framework Act on National Taxes, the initial date of the additional dues in this case should be deemed to be the day following the date of payment of revaluation tax in this case pursuant to subparagraph 1. Thus, the disposition of this case that deemed the initial date to be April 1, 2004 was unlawful on the ground that the Plaintiff’s shares cannot be imposed additional tax by March 31, 2004, which is the deadline for filing corporate tax base and tax amount, belonging to December 31, 2003 when the Plaintiff’s shares were not finally

(2) The disposition of this case is illegal because it is not based on the Assets Revaluation Act.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) According to Articles 51(1) and 52 of the Framework Act on National Taxes and Article 30 of the Enforcement Decree of the same Act, the head of a tax office shall immediately determine the amount of national tax refund when there is an erroneous payment, excess payment, or tax refund out of the amount paid by a taxpayer as a national tax, additional dues, or disposition fee for arrears. In addition, the amount of erroneous payment is to be added when determining the amount of national tax refund according to the statutory regular calculation day and interest rate, and when the refund of national tax is appropriated or refunded. Here, the term “amount of erroneous payment” refers to the amount of tax paid or collected without filing a return (in the case of a tax return) or a disposition of imposition (in the case of a tax imposition), which is the basis of the payment or collection, or ex officio null and void. The amount of excess payment means the amount of tax reduced wholly or partially by revocation or correction, but the amount of tax refund becomes final and conclusive at the time of tax return or correction, which becomes final and conclusive at the same time as the tax refund becomes final and conclusive by 80.

(2) However, Article 52 of the Framework Act on National Taxes provides that the date following the date of initial return on the refund of national taxes, ① the date following the date of payment in cases of a national tax refund due to erroneous or double payment, or correction or cancellation of a return or imposition that forms the basis of the relevant payment after payment, ② the date following the date of determination in cases of a national tax refund due to the reduction or exemption of national taxes paid lawfully (subparagraph 1); ③ the date following the date of entry into force in cases of a national tax refund due to the amendment of Acts after lawful payment (subparagraph 5); and ④ in cases of a refund due to a erroneous return or correction of the amount of refund tax under the Income Tax Act, the Corporate Tax Act, the Value-Added Tax Act, the Individual Consumption Tax Act, the Liquor Tax Act, or the Traffic, Energy and Environment Tax Act, the date of filing the return (where the date of filing the return is before the statutory due date, the statutory due date of return); in cases of a refund of the amount of refund due to a decision made without filing a return on the amount of refund;

(3) Therefore, the initial date of the instant additional dues accrued due to the revocation of the disposition imposing revaluation tax of this case shall be determined by any of the subparagraphs of Article 52 of the Framework Act on National Taxes, and it is reasonable to determine the additional dues pursuant to Article 52 subparagraph 1 of the same Act for the following reasons.

First, the Plaintiff’s asset revaluation does not mean that there was no later listing of shares, but it would not be deemed revaluation under the Assets Revaluation Act retroactively to the time of revaluation. As a result, the imposition of the revaluation tax of this case was illegal from the beginning, and the Defendant revoked it ex officio for the same reason. Accordingly, the national tax refund constitutes the national tax refund due to correcting or cancelling a return or imposition, which served as the basis of the payment, of the national tax refund as stipulated in Article 52 subparag. 1 of the Framework Act on National Taxes, i.e., the excess amount of the national tax refund as above, namely, the refund of national tax due to correcting or cancelling the return or imposition after payment under Article 52 subparag. 1 of the Framework Act on National Taxes. This is apparent even if the Defendant, after the Plaintiff’s stock listing, deemed the revaluation spread as the gross income for 1989 business year, not for which

Second, as seen above, Article 52 of the Framework Act on National Taxes classifys the initial date of additional dues as five points. Among them, under the premise of special circumstances in subparagraphs 3, 5, and 7, the basic date of additional dues for refund should be determined pursuant to subparagraph 1 or 6 if the refund does not fall under this. However, it is clear that the refund following the cancellation of revaluation tax of this case does not constitute a refund due to the reduction of national tax under subparagraph 3 or a refund due to the correction of tax refund under the individual Acts and subordinate statutes under subparagraph 6. Furthermore, the above refund does not constitute subparagraph 5 because it is not due to the amendment of the related Acts and subordinate statutes, not due to the fact that the Plaintiff did not list the stocks within two years from the date of revaluation under the proviso of Article 56-2 (1) of the Regulation of Tax Reduction and Exemption Act and the Enforcement Decree thereof ( even if the related Acts and subordinate statutes such as the Act on the Regulation of Tax Reduction and Exemption for Corporate Revaluation were not amended, it cannot be deemed that the Plaintiff’s disposition of imposition of the revaluation tax of this case is partly cancelled.

Third, as seen below, additional dues are corresponding to the additional dues collection system for taxpayers in arrears, as a system for compensating for the legal interest and equivalent amount of national tax refund as well as the State. On the other hand, in order to facilitate the exercise of the right to impose taxes and the realization of tax claims, additional taxes under tax law are administrative sanctions imposed as prescribed by the Act, in principle, if a taxpayer violates all kinds of obligations, such as a return and tax payment, without justifiable grounds. It is possible to impose additional taxes if only the requirements for imposing additional taxes are satisfied, and the taxpayer’s intentional act or negligence is not considered separately. However, Article 48(1) of the Framework Act on National Taxes amended by Act No. 8139 of Dec. 30, 2006 provides that additional taxes shall not be imposed if there are justifiable grounds for the taxpayer’s failure to perform the obligations under the latter part of the same Article, and it is unreasonable to expect the taxpayer to fulfill the obligations under the Framework Act prior to the amendment of the Framework Act on National Taxes, and thus, it does not constitute an additional tax exemption under 10.

Fourth, a national tax refund constitutes a “illegal enrichment received or held by the State without any legal cause,” and additional dues on refund claims and obligations are characterized by legal interest rates (see, e.g., Supreme Court Decision 2001Da60767, Jan. 11, 2002). Therefore, under the legislative theory, it is desirable to separately determine whether the initial date of the national tax refund is a beneficiary’s good faith or bad faith according to the doctrine of unjust enrichment under the Civil Act, or to specifically distinguish cases where the tax authorities are deemed to have a cause attributable to the taxpayer, such as foreign legislation, from the date following the due date in the former case, and from the date when the tax authorities become aware of the existence of the national tax refund in the latter case, to add additional dues to the national tax refund from the date when the tax authorities became aware of the existence of the national tax refund. However, Article 52 of the current Framework Act does not stipulate it separately, in light of Article 52 subparag. 1 of the Enforcement Decree of the Framework Act on National Taxes, even if the initial date of the national tax refund return was filed or corrected, or corrected.

(4) Ultimately, the initial date of the instant additional refund is the following day after the revaluation tax of this case was paid. Thus, the instant disposition was unlawful on a different premise.

3. Conclusion

Therefore, the plaintiff's claim is justified, and the judgment of the court of first instance is unfair with different conclusions, so the judgment of the court of first instance is revoked and the disposition of this case is revoked and it is so decided as per Disposition.