The case affirming the judgment below holding that the exclusion period for global income tax is 7 years in case where a taxpayer provided a specially related person to use real estate free of charge and did not report the global income tax base and tax amount accordingly.

In a case where a taxpayer provided a specially related person with a free use of real estate and did not report the tax base of global income and the amount of tax accordingly, the case affirming the judgment below holding that the exclusion period of imposition of global income tax shall be seven years on the ground that Article 26-2 (1) 2 of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 201) applies where a tax base return is not filed within the statutory reporting period in the taxation due to the denial of wrongful calculation

Article 26-2(1)2 and 3 of the former Framework Act on National Taxes (Amended by Act No. 9911, Jan. 1, 2010); Article 41 of the former Income Tax Act (Amended by Act No. 8144, Dec. 30, 2006);

Plaintiff and the deceased non-party 1’s taking over the lawsuit (Attorney Park Jong-sik, Counsel for the plaintiff-appellant)

The director of the tax office

Seoul High Court Decision 2007Nu33179 decided June 13, 2008

All appeals are dismissed. The costs of appeal are assessed against the Plaintiffs. Of the party’s indication, the “2. the deceased Nonparty 2’s successor to the lawsuit” shall be corrected to “2. the deceased Nonparty 1’s successor to the lawsuit.”

The grounds of appeal are examined.

Article 26-2(1) of the former Framework Act on National Taxes (amended by Act No. 911, Jan. 1, 2010; hereinafter “Framework Act on National Taxes”) provides that, in principle, subparagraph 3 of Article 26-2(1) of the same Act provides that, for five years from the date on which the relevant national tax may be assessed, excluding inheritance and gift taxes, it shall be for five years from the date on which the relevant national tax may be assessed. If a taxpayer fails to file a tax base return by the statutory due date of return from

The court below acknowledged that the plaintiff 1 and the deceased, who were the deceased, did not report the tax base of global income and the tax amount at all even though they provided the non-party 3 corporation to use the real estate of this case free of charge from 1994 to 2004. The defendant applied the unfair act of providing the plaintiff 1 and the deceased's above free real estate under Article 41 of the former Income Tax Act (amended by Act No. 8144 of Dec. 30, 2006) with the unfair act rejection provision under Article 41 of the former Income Tax Act, the total income tax of May 22, 2006 and the income tax of this case imposed on the plaintiff 1 and the deceased on June 21, 2006, and the income tax of this case imposed on June 21, 2006, if the return of tax base was not filed within the statutory return period. The court below determined that the disposition of this case was legitimate since Article 26-2 (1) 2 of the Framework Act on National Taxes can be imposed within seven years.

In light of the above provisions and records, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the exclusion period of national tax as otherwise alleged in the ground of appeal

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench, because there is an obvious error in the indication of the party concerned.

Justices Ahn Dai-hee (Presiding Justice)