Whether the initial date of the commencement of the refund on revaluation tax of assets falls

If corporate tax is levied as corporate tax is not listed because stocks were not listed after having been reduced or exempted on the basis of stock listing, additional dues for refund from the date of payment to the date of determination of refund should be paid since the asset revaluation tax already paid falls under the excess payment

Article 51 (Appropriation and Refund of National Tax Refund)

Article 52 Additional Payment of National Tax Act

1. The Defendant’s disposition of imposing additional dues of KRW 111,538,00 against the Plaintiff on June 9, 2006 is revoked.

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

As set forth in the text.

1. Details of the disposition;

A. On October 1, 1990, the Plaintiff, a company engaged in fiber clock processing business, etc., conducted a revaluation of assets on the premise that stocks were listed for the first time pursuant to Article 56-2 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4285, Dec. 31, 1990; hereinafter the same) and reported assets revaluation tax for 3,043,63,212 won as 91,308,996 won.

B. Accordingly, on December 8, 1990, the Defendant decided and imposed the asset revaluation tax (hereinafter “property revaluation tax of this case”) at the above amount on the Plaintiff, and the Plaintiff paid the above tax amount around that time. Meanwhile, the Plaintiff reported and paid corporate tax for 190 business years without including the above revaluation spread in the gross income pursuant to Article 15(1)5 of the Corporate Tax Act.

C. As the Act on the Regulation of Tax Reduction and Exemption and its Enforcement Decree were amended several times as shown in the annexed Form, the listing time of stocks was finally extended until December 31, 2003. The Defendant, on the ground that the Plaintiff did not list stocks by December 31, 2003, within the listing period, pursuant to Article 23(1) of the Addenda of the former Tax Reduction and Exemption Control Act (amended by Presidential Decree No. 4285, Dec. 31, 1990), Article 138 of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 17458, Dec. 31, 2001); on the ground that the said revaluation rate was invalidated by including the pertinent revaluation rate in the gross income of the Plaintiff for the business year 1990; on the other hand, on the ground that the Plaintiff did not list the stocks by December 31, 2003, the date of stock revaluation was 204,41,432430,295 and 2945.

D. On January 17, 2004, the Plaintiff filed a request for revocation trial with the National Tax Tribunal. On May 4, 2005, the National Tax Tribunal rendered a decision to revoke only the imposition of under-reported additional taxes and non-paid additional taxes.

E. Meanwhile, on June 9, 2006, the Defendant issued a disposition to recover KRW 111,538,000, which is the amount equivalent to additional dues on the refund of property revaluation tax already refunded to the Plaintiff (hereinafter “instant disposition”).

(In fact that there is no dispute, Gap 1, 3, 4, Eul 1 through 5, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The defendant's assertion

For the following reasons, the Defendant asserts that the instant disposition is lawful in accordance with the relevant statutes.

(A) The revaluation tax of the instant asset is a tax paid lawfully pursuant to Article 56-2 of the former Regulation of Tax Reduction and Exemption Act, and does not constitute a case where the imposition is revoked after erroneous payment, double payment, or payment.

(B) The corporate tax and revaluation tax are closely related to each other in the event that the corporate tax and revaluation tax already paid are refunded at the same time when the corporate tax, etc. abated or exempted on the revaluation marginal profit is imposed. Therefore, no additional refund shall be granted for the period during which the corporate tax is not collected.

(2) The plaintiff's assertion

For the following reasons, the Plaintiff asserts that the instant disposition was unlawful since it violated Article 52 subparag. 1 of the Framework Act on National Taxes without any legal basis.

(A) In the case of revaluation tax of the assets in this case, although there were legal grounds in the first place, but the legal causes have been terminated thereafter, and the defendant revoked ex officio a disposition imposing revaluation tax of assets on January 17, 2004. Since revaluation tax of the assets in this case shall be the amount of excess payment, the refund on the refund on the refund of national taxes shall be paid from the day following the date of payment pursuant to Article

(B) Under the corporate tax of this case, additional taxes and additional dues on revaluation of assets are different from the legal nature and purpose of the system. Therefore, there is no legal basis or justification to pay for additional dues on revaluation of assets as to whether to pay additional taxes on corporate tax.

(C) In applying Article 52 Subparag. 1 of the Framework Act on National Taxes, Article 52 Subparag. 1 of the Framework Act on National Taxes applies to the case where: (a) whether there exists an illegal cause at the time of payment; and (b) whether the taxation disposition was revoked due to a subsequent cause that occurred after payment; and (c) not so, the pertinent asset revaluation tax in question constitutes a case where the payment itself becomes unlawful retroactively

(D) Article 52 Subparag. 5 of the Framework Act on National Taxes, where a national tax refund is to be paid due to the amendment of a law after lawful payment, is a provision on refund property where the government voluntarily revised the legislation to return the amount of tax already paid due to reflective consideration that the existing legislation was unfair, and thus, the asset revaluation tax of this case cannot be applied.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Legal nature of refund of revaluation tax of the instant assets

(A) Article 51(1) of the Framework Act on National Taxes provides that the head of a tax office shall immediately determine the erroneously paid amount, overpaid amount, or refundable amount to be refunded under the tax-related Acts, among the amount paid by the taxpayer as a national tax, additional dues, or disposition fee for arrears, if there is any erroneous payment or amount of refundable amount to be refunded under the tax-related Acts. Such erroneous payment or refundable amount is a kind of unjust enrichment as gains to be returned because there is no justifiable reason to hold the State under the substantive law. Such refund of national tax is a kind of gains to be returned because of the absence of a return or disposition for arrears, which serves as the basis of payment or collection, or the deferred amount of paid or collected tax, has already become final and conclusive at the time of payment or collection, because there is no legal ground from the beginning of the return or disposition for arrears, and it becomes final and conclusive at the time of payment or collection.

In case where the disposition of revaluation tax imposed on revaluation marginal profits is revoked as the corporate tax was imposed on the revaluation marginal profits that were not included in the gross income due to the revaluation marginal profits under the premise that stocks were listed for the first time pursuant to the provisions of Article 56-2 of the former Regulation of Tax Reduction and Exemption Act, the property revaluation tax to be refunded by the tax authority is extinguished due to the cancellation of the disposition of imposition that served as the basis of the payment after the payment, and the nature of the excess payment of national tax refund under Article 51(1) of the Framework Act on National Taxes is expired.

(B) In the instant case, on December 8, 190, the Defendant imposed a revaluation tax on the assets revaluation marginal profits on the premise that the stocks should be listed on the Plaintiff, and the Plaintiff reported and paid corporate tax without including the above revaluation marginal profits in the gross income instead of paying the revaluation tax. However, the Plaintiff failed to list the stocks by December 31, 2003, and the Defendant imposed corporate tax, etc. by including the above revaluation marginal profits in the gross income for 1990 business year, while the Defendant ex officio cancelled the revaluation tax of the instant assets. Thus, the Defendant should refund the revaluation tax of the instant assets corresponding to the excess payment to the Plaintiff.

(2) As to the nature and the initial date of the additional payment on refund

(A) The additional payment on the refund of national taxes under Article 52 of the Framework Act on National Taxes, with the nature of legal interest on the refund of national taxes having the character of unjust enrichment, constitutes a special provision on the scope of return of unjust enrichment under the Civil Act, and thus, the refund becomes final and conclusive, depending on the initial date stipulated in Article 52 of the Framework Act on National Taxes.

On the other hand, in order to facilitate the exercise of taxation right and the realization of tax claims, additional tax under the tax law reflects the nature of administrative sanctions imposed in cases where a taxpayer violates various obligations, such as a tax return, tax payment, etc. under the tax law without justifiable grounds (see, e.g., Supreme Court Decision 2003Du4089, Apr. 15, 2005) in order to facilitate the realization of tax claims, such as a tax return, tax payment, etc., under the tax law. Additional tax under the tax law deals with additional tax and equity under the tax law as a matter of course, regardless of the party’s subjective circumstances or causes attributable to the national tax refund, and it is far more than the corporate tax, etc., which is newly imposed than the canceled asset revaluation tax, in light of the following: (a) the taxpayer has the nature of statutory interest in the national tax refund; and (b) the taxpayer has the nature of statutory interest in the national tax refund; and (c) the corporate tax and defense tax imposed more than the canceled asset revaluation tax (see, 1,148,684,005 won.

(B) Article 52 of the Framework Act on National Taxes concerning the initial date of calculating the additional payment on the refund of national taxes, and Article 51 of the same Act provides that when the head of a tax office appropriates or pays the refund of national taxes pursuant to the provisions of Article 51, he/she shall add the amount calculated according to the interest rate prescribed by the Presidential Decree, taking into account the period from the day following the date specified in the following subparagraphs to the date of appropriation or decision of payment, and the deposit interest rate of financial institutions, etc., to the refund of national taxes.

As seen earlier, the additional payment on the refund of national taxes should be returned to the legal interest equivalent to the amount of statutory interest due to the tax possession that the tax authority overpaid or erroneously paid. Considering that Article 52 of the Framework Act on National Taxes is a special provision on the scope of return of unjust enrichment under the Civil Act, the initial date of the additional payment on the refund of national taxes should be the next day of the "payment date" stipulated in Article 52 subparagraph 1 of the Framework Act on National Taxes, regardless of whether there is good faith as to the tax holding authority over the tax overpaid or erroneously paid.

(B) Since the legal nature of the refund amount of the asset revaluation tax of this case is as seen earlier, its additional dues should be added from December 9, 1990, which is the day following the payment date, and even if there were no grounds for a refund of the revaluation tax of this case before December 31, 2003, the Defendant’s revocation of the disposition for the imposition of the revaluation tax of this case and its refund shall not be deemed to be different.

(3) Therefore, since the initial date of the additional dues for the national tax refund refund refund to the Plaintiff upon cancelling the disposition of imposition of revaluation tax of the assets in this case is from December 9, 1990, which was the day after the date of payment of revaluation tax of the assets in this case, the disposition of imposition in this case on the premise that the initial date of the additional dues was January 1, 200

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is so decided as per Disposition.

public official law, order of law,

Framework Act on National Taxes (amended by Act No. 8139 of Dec. 30, 2006)

Article 51 (Appropriation and Refund of National Tax Refund)

(1) If there is any amount paid in error or tax amount to be refunded under the tax-related Acts (where there is any amount of tax to be deducted from the amount of tax refundable under the tax-related Acts, referring to the remaining amount after deduction), among those paid by a taxpayer as national taxes, additional dues or disposition fees for arrears, the head of a tax office shall immediately determine such excess amount paid in error or tax amount to be refunded. In such cases, any claim for

Article 52 (Additional Payment on Refund of Taxes)

In case where the chief of a tax office appropriates or pays the national tax refund pursuant to the provisions of Article 51, he shall add to the national tax refund the amount calculated according to the interest rate as determined by the Presidential Decree in consideration of the period from the day following the day specified in the following subparagraphs to the day when appropriation or decision on payment is made, and the deposit interest rate of financial institutions. In this case, in the application of the provisions of subparagraph 1, the amount of tax paid in advance or by withholding pursuant to the tax-related Acts shall be considered

1. For a national tax refund due to rectification or cancellation of the return or imposition forming the basis of the relevant payment after an erroneous or double payment, or a payment, the day of relevant payment: Provided, That if the national tax refund was paid in two or more installments, it shall be the last day of payment, but if the national refund exceeds the final payment, it shall be each due date of national tax refund computed retroactively in the order of due dates until it reaches such amount;

The Regulation of Tax Reduction and Exemption Act (amended by Act No. 4285 of Dec. 31, 1990)

Article 56-2 (Special Cases of Revaluation in Case of Disclosure of Company)

(1) A corporation which intends to list stocks for the first time at the Korea Stock Exchange under the provisions of Article 88 (1) of the Securities and Exchange Act may, notwithstanding the provisions of Articles 4 and 38 of the Assets Revaluation Act, conduct the revaluation of stocks by treating the first day of each month as the revaluated date: Provided, That where the corporation which conducts the revaluation fails to list stocks at the Korea Stock Exchange within 2 years from the revaluation date, the revaluated already conducted shall

Tax Reduction and Exemption Control Act (amended by Act No. 4285, Dec. 31, 1990)

Article 56-2 Deleted.

Addenda

Article 23 (Transitional Measures, etc. regarding Special Cases of Revaluation in Case of Disclosure of Enterprises)

(1) With respect to a corporation which conducted revaluation before this Act enters into force under the provisions of the main sentence of Article 56-2 (1), notwithstanding the provisions of the former provisions of Article 56-2 (1), the revaluated already conducted shall not be regarded as revaluation under the Assets Revaluation Act, only when stocks are not listed at

Tax Reduction and Exemption Control Act (wholly amended by Act No. 4666 of December 31, 1993)

Addenda

Article 1 (Enforcement Date)

Article 2 (General Application Examples)

The amended provisions concerning income tax and corporate tax in this Act shall apply from the taxable year that commences for the first time after this Act enters into force.

Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 13202, Dec. 31, 1990)

Article 66 (Special Cases to Asset Revaluation for Public Offering)

"Period prescribed by Presidential Decree" in Article 23 (1) of the Addenda to the amended Regulation of Tax Reduction and Exemption Act (Act No. 4285) means five years.

Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 14084, Dec. 31, 1993)

Article 109 (Special Cases to Asset Revaluation for Public Offering)

"Period prescribed by Presidential Decree" in Article 23 (1) of the Addenda to the amended Regulation of Tax Reduction and Exemption Act (Act No. 4285) means eight years.

Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 15197, Dec. 31, 1996)

Article 109 (Special Cases to Asset Revaluation for Public Offering)

"Period prescribed by Presidential Decree" in Article 23 (1) of the Addenda to the amended Regulation of Tax Reduction and Exemption Act (Act No. 4285) means ten years.

Enforcement Decree of the Act on Special Taxation Regulation (wholly amended by Presidential Decree No. 15976, Dec. 31, 1998)

Article 138 (Special Cases to Asset Revaluation for Public Offering)

"Period prescribed by Presidential Decree" in Article 23 (1) of the Addenda to the amended Regulation of Tax Reduction and Exemption Act (Act No. 4285) means 11 years.

Enforcement Decree of the Act on Special Taxation Regulation (amended by Presidential Decree No. 16693, Jan. 10, 200)

Article 138 (Special Cases to Asset Revaluation for Public Offering)

"Period prescribed by Presidential Decree" in Article 23 (1) of the Addenda to the amended Regulation of Tax Reduction and Exemption Act (Act No. 4285) means 13 years.

Enforcement Decree of the Act on Special Taxation Regulation (amended by Presidential Decree No. 17458, Dec. 31, 2001)

Article 138 (Special Cases to Asset Revaluation for Public Offering)

"Period prescribed by Presidential Decree" in Article 23 (1) of the Addenda to the amended Regulation of Tax Reduction and Exemption Act (Act No. 4285) means the period until December 31, 2003.

Assets Revaluation Act

Article 8 (Re-Evaluation Marginal Profit)

(1) The balance obtained by deducting the appraised value per day before the revaluation date of assets calculated under the provisions of Article 7 shall be the revaluation spread.

(2) Where depreciation or book value reduction has been made prior to the date of revaluation for the assets under the provisions of Article 5 (1), the amount not included or included in the deductible expenses or necessary expenses in calculating the income amount under the provisions of the Corporate Tax Act or the Income Tax Act (hereinafter referred to as “approved depreciation amount”) from among the depreciation or reduced depreciation amount shall be added to the appraised amount under paragraph (1)

Article 9 (Taxpayer)

A person who has conducted revaluation shall pay the revaluation tax as provided in this Act.

Article 12 (Tax Base)

The amount serving as the tax base of revaluation tax shall be based on the amount obtained by deducting carried forward losses under the provisions of the Corporate Tax Act or the Income Tax Act from the revaluation spread under the provisions of Article 8 until the revaluation date (the starting date of the family business year in the case of a corporation and January 1 in the case of an individual).

May 28, 2008