Cho Jae-2017-China1004 (Law No. 24, 2017)

Special exclusion Period may not be applied if there is a difference between the tax items and the taxable period.

When the items of taxation and taxable periods cancelled by the preceding judgment are different from the items of taxation and taxable periods when they are disposed of later, the special exclusion period may not be applied.

The exclusion period for national tax assessment under Article 26-2 of the Framework Act on National Taxes

Incheon District Court-2017-Gu Group-50918 ( October 23, 2018)

O

OO Head of the tax office

3, 201.23

1. It is confirmed that the Defendant’s imposition of KRW 225,121,350 (including additional tax) for the Plaintiff on February 1, 2017 is null and void.

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

1. Details of the disposition;

A. From June 12, 2003 to February 23, 2004, the Plaintiff paid KRW 160 million under the name of investment to the non-party Kim ○○, who has reproduced property through a court auction. The Kim ○, on April 30, 2004, agreed to the Plaintiff on April 15, 1509/100 of the shares of KRW 160 million among the 15,000 square meters of Incheon ○○○○-dong 15,009 square meters (hereinafter referred to as the “instant land”).

B. On Nov. 14, 2007, the Plaintiff filed a civil lawsuit against Kim ○○, and on Nov. 14, 2007, Seoul High Court 2007Na○○○○○○ case sentenced the Plaintiff to the judgment that “The Plaintiff shall implement the procedure for the registration of ownership transfer based on a payment and satisfaction agreement on Apr. 30, 2004.” The above judgment became final and conclusive as it is by the Supreme Court Decision 2007Da○○○○○○○○○○○○ on Mar. 13, 2008.

C. On the other hand, on October 25, 2007, the above ○○○○○○-○○ orchard 15,009 square meters was incorporated into the Incheon Free Economic Zone Development Project site, and on December 12, 2007, the expropriation compensation amounting to KRW 6,43,858,000 was deposited with the court No. 10190 in 2007 against Kim○○ on December 12, 2007, and the Plaintiff received KRW 708,542,031 (hereinafter referred to as “the expropriation compensation of this case”) of the above expropriation compensation on January 23, 2009, following a lawsuit claiming the assignment of claims for payment of deposit payment.

D. When the Plaintiff did not submit a tax base return within the statutory return deadline, on October 15, 2009, the Defendant notified the Plaintiff of the pre-assessment of capital gains tax of KRW 225,250,583 on the instant compensation for expropriation in 2007, and the Plaintiff filed a request for pre-assessment review on this issue. On November 26, 2009, the Defendant rendered a pre-assessment review that revoked the notice of pre-assessment of capital gains tax while deeming the instant compensation for expropriation to be an interest income, not capital gains, as an interest income. On August 1, 2011, the Defendant deemed the instant compensation for expropriation as a non-business interest and notified the Plaintiff of the correction and notification of the global income tax of KRW 225,121,350 (hereinafter “the instant global income tax”).

E. On August 31, 2012, the Plaintiff filed an administrative litigation against the instant global income tax, and the Defendant lost the instant expropriation compensation on the ground that it was not the interest income but the investment profit. As such, the Seoul High Court Decision 2012Nu200○○○○○○○○○, which was sentenced to the dismissal of the claim on September 13, 2013, changed the grounds for disposition to constitute the dividend income in the instant case. However, the Supreme Court Decision 2013Du200○○○○○○○○○○○, which was the higher court, was reversed and remanded on December 23, 2015, and finally became final and conclusive by the Seoul High Court 2016Nu○○○○○ on April 6, 2016.

F. On February 1, 2017, according to the purport stated in the reasoning of the Seoul High Court Decision 2016Nu 2016Nu○○○○, the Defendant considered the instant confinement compensation again as capital gains and imposed capital gains tax of KRW 225,121,350 (including additional tax) (hereinafter “instant disposition”).

The Plaintiff appealed against the instant disposition and filed an appeal with the Tax Tribunal, but was dismissed on May 24, 2017.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 8, Eul evidence Nos. 1 through 5, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

The Plaintiff asserts that the disposition of this case is unlawful for the following reasons, and thus, the Plaintiff primarily sought confirmation of invalidity of the disposition of this case and revocation of the disposition of this case.

1) As long as the defendant adopted the plaintiff's request for pre-assessment review of capital gains tax as of October 15, 2009 and rendered a decision to revoke it, the disposition of this case which re-converts the same matters as the receipt of compensation for expropriation of this case and re-exploded the previous disposition is unlawful against the binding force of the pre-assessment review decision.

2) The defendant adopted the plaintiff's request for pre-assessment review of capital gains tax as of October 15, 2009 and revoked the plaintiff's request for pre-assessment review, and expressed the public opinion that it will not impose capital gains tax later to the plaintiff. The plaintiff trusted this, and made a legal dispute as to the global income tax in this case without going through a separate tax declaration or other processing procedure. It is unlawful for the defendant to reverse this and again impose capital gains tax in violation of the principle of trust protection or good faith.

3) Article 26-2(2)1 of the Framework Act on National Taxes provides for special cases for the exclusion period of national taxes by stipulating that “where there is a judgment on a lawsuit in accordance with the Administrative Litigation Act, a decision of correction or other necessary disposition may be made within one year from the date on which the judgment becomes final and conclusive.” However, in this case, the special cases for exclusion period of national taxes shall not apply to the instant disposition, since there is any difference between the global income tax of this case and the taxation unit, such as the year to which the transfer income tax of this case belongs and the items of taxation, etc. are entirely different. Therefore, the instant disposition is unlawful since seven years have passed from June 1, 2008

(b) Related statutes;

Article 26-2 (Period for Excluding Assessment of National Taxes)

(1) No national tax may be levied after the following periods expires: Provided, That Article 25 of the Adjustment of International Taxes Act shall apply where mutual agreement procedures are in progress in accordance with the treaty concluded to prevent double taxation (hereinafter referred to as "tax treaty"):

2. Where a taxpayer fails to file a tax base return by the statutory due date of return, for seven years from the date on which the national tax is assessable;

(2) Notwithstanding paragraph (1), a decision of correction or other necessary disposition may be made before the expiration of the period classified in the following subparagraphs:

1. Where a decision or judgment becomes final and conclusive on an objection, request for examination or adjudgment under Chapter VII, request for examination under the Board of Audit and Inspection Act, or litigation under the Administrative Litigation Act: One year from the date such decision or judgment becomes final and conclusive;

C. Determination

1) Determination as to the argument regarding the pre-assessment review

Even if a decision on the claim for pre-assessment review has de facto binding force on the tax authority, it is a system that seeks to prevent the tax authority from filing an objection to the tax notified prior to the determination of the amount of tax in the pre-assessment stage, and thus, it is not a legally binding act, since it is an act of the tax authority at the pre-assessment stage. Accordingly, the Plaintiff’s assertion on a different premise is groundless.

2) Determination on the assertion regarding the protection of trust or the principle of good faith

In general, the requirement to apply the principle of trust and good faith to the acts of tax authorities in tax and legal relations is that the tax authorities should give taxpayers a public opinion that is the subject of trust, and that is, the tax authorities should not cause taxpayers to believe that the expression of opinion of the tax authorities is justifiable, and that there is no reason attributable to the taxpayer. Sixth, the taxpayer must act in trust and what is in accordance with the name of the opinion, and the tax authorities should take four measures against the above opinion list, thereby infringing the taxpayer's interest (see, e.g., Supreme Court Decision 84Nu593, Apr. 23, 1985). On the other hand, it is reasonable to deem that the taxpayer has the burden of proof (see, e.g., Supreme Court Decision 91Nu9824, Mar. 31, 1992).

In light of the above legal principles, even if the defendant's public opinion that the capital gains tax will no longer be imposed on this case or there is no reason attributable to the plaintiff's trust, in order to apply the principle of trust protection, the plaintiff's "act of leaving after the plaintiff's reliance on the defendant's public opinion," and the "act of leaving after the plaintiff's reliance" refers to a juristic act or fact that is created as a representative requirement for taxation, and the plaintiff's legal response against the global income tax of this case does not constitute a case where the plaintiff's "act of leaving after the plaintiff's public opinion." Thus, the plaintiff's assertion on this different premise is without merit.

3) Determination on the assertion regarding special exception to the exclusion period of national taxes

A) The purport of the exclusion period under Article 26-2(1) of the Framework Act on National Taxes (hereinafter referred to as "ordinary exclusion period") is that a taxpayer subject to a disposition of imposition of tax after a long period of time is subject to so-called 'the 'influence' as to a matter that has been forgotten for the long time, and that it is difficult for the State to defend as it has already been destroyed by relevant data and make effective defense difficult. Since the State has a considerable human and material basis to support the exercise of the right to impose tax, including the right to impose tax, and has received legal assistance, it would be desirable to induce the State to exercise the right to impose tax as soon as possible by adding 'the 'the 'influence' as to a matter that has been forgotten for the long time.

However, even though there was a disposition imposing national tax prior to the expiration of the ordinary exclusion period, but the decision or judgment to cancel the disposition becomes final and conclusive after the lapse of the ordinary exclusion period due to the lapse of the procedure of litigation such as an administrative appeal or administrative litigation, etc. raised thereafter, the taxation authority may make a decision or other necessary disposition in accordance with the "the relevant decision or judgment" (hereinafter referred to as "special exclusion period") in order to guarantee it, since Article 26-2 (2) 2 of the Framework Act on National Taxes requires the re-disposition to realize the taxpayer's interest or tax justice even after the expiration of the ordinary exclusion period, it is necessary to do so according to the above decision or the result of the judgment, and thus, in order to ensure it, the objection, request for review or adjudgment as to the imposition of national tax, request for examination under the Board of Audit and Inspection Act, or litigation under the Administrative Litigation Act, notwithstanding the provisions of paragraph (1).

However, the legislative intent of the special exclusion period newly established is to prevent any unreasonable situation that makes it impossible for the tax authority to make a decision or make a disposition in accordance with the judgment when the procedure of litigation, such as an administrative appeal or administrative litigation, has expired for a long time after the imposition of national taxes, and when the decision or judgment becomes final after the exclusion period has expired, with respect to the taxpayer who made a favorable result in the litigation procedure, barring any special circumstance, the interpretation of the tax law requires more strict interpretation, and among them, the exceptional provision or special provision is interpreted as the legal text, and the scope of the final decision or the judgment's res judicata effect is limited to the taxation unit which became the object of the lawsuit, and even if the judgment related to the separate taxation unit has been made beyond it, it cannot be said that res judicata effect exists in such judgment. Accordingly, in full view of the fact that such judgment cannot be seen as "the corresponding decision or judgment under the above provision, which becomes the basis for the decision or other necessary disposition, as a matter of principle, with respect to a new taxation disposition that differs from the final decision or judgment (see Supreme Court Decision).

B) As to the instant disposition, the disposition of imposition of global income tax of this case, which was revoked by the public health department and the preceding judgment, was a legal assessment of the instant expropriation compensation as dividend income, while the instant disposition was imposed by deeming it as transfer income, and thus, there is no room to deem the relevant basic facts identical to the instant disposition. However, in light of all the circumstances, including the fact that the instant global income tax and the instant transfer income tax differ from the year to which they belong and the source of taxation, it is reasonable to deem that the instant disposition is not subject to the application of the special exclusion period according to the prior judgment on global

Therefore, the disposition in this case is null and void after the expiration of the exclusion period of imposition on May 31, 2015. Thus, the plaintiff's primary argument is with merit.

3. Conclusion

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

this decision is rendered.