Requirements for establishing non-taxable practices

The fact that there was a omission of taxation for a certain period alone cannot be deemed as a practice of national tax accepted by taxpayers as a general rule under Article 18(2) of the Framework Act on National Taxes, and only when there are circumstances where, even though the tax authority knew of the fact that it could be taxed, there was a speech and behavior suggesting the imposing tax on the taxpayer, and there is no reason to recognize that it is unreasonable for the taxpayer to trust it for a considerable period of time.

Article 18 (2) of the Framework Act on National Taxes

Supreme Court Decision 80Nu6 delivered on June 10, 1980, 80Nu601 delivered on September 22, 1981, 80Nu601 delivered on April 26, 1983, 81Nu153 delivered on April 26, 1983

Attorney Cho Jae-chul, et al., Counsel for the defendant-appellant

Head of the Gu of Busan Metropolitan City;

Daegu High Court Decision 82Gu34 delivered on December 15, 1983

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

The grounds of appeal by the defendant litigant are examined.

The court below held that the plaintiff, a company operating a vessel and a boat bottom fishing, obtained a license for temporary use of harbor facilities as stated in the holding of 1,449 from January 1, 1977 to December 30, 1978 (the competent authority), but such license for temporary use of harbor facilities under Article 161 of the Local Tax Act and Article 124 (1) of the Enforcement Decree of the Local Tax Act (the Presidential Decree No. 7532 of December 31, 1974) and Article 124 (1) 5 and 39 of the Enforcement Decree of the Local Tax Act (the Presidential Decree No. 7532 of December 31, 1974) were newly established, and the defendant was also aware that the license tax was imposed on the plaintiff for four years from the date of repeal of the Enforcement Decree of the Local Tax Act, and the disposition of temporary use of harbor facilities under Article 124 (1) 5 and 39 of the Enforcement Decree of the Local Tax Act was made retroactively by the taxpayer's use of the license tax.

The fact that there was an omission of taxation for a certain period of time alone cannot be deemed to have been a practice of national tax accepted by taxpayers under Article 18(2) of the Framework Act on National Taxes, and there is room to acknowledge that the practice of non-taxation has been established when, despite the knowledge of the fact that the tax authority could impose the license tax for a certain period of time, there was a speech or behavior suggesting the non-taxation on the taxpayer, and there was a circumstance that it is not unreasonable for the taxpayer to trust because it was not imposed for a considerable period of time in the public interest needs (see, e.g., Supreme Court Decision 80Nu66, Jun. 10, 1980; Supreme Court Decision 80Nu601, Sept. 22, 1981; 81Nu153,82Nu531, Apr. 26, 1983).

Therefore, the judgment below is reversed, and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kang Jong-young (Presiding Justice)