Exclusion period of imposition on secondary tax liability of national taxes

Article 12-3 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 19893 of Feb. 28, 2007) under the delegation of Article 26-2(4) of the former Framework Act on National Taxes (amended by Presidential Decree No. 19893 of Feb. 28, 2007) does not stipulate any provision concerning "the date on which national taxes can be imposed" for the secondary tax liability, but in general, "the date on which national taxes can be imposed" means the date on which taxes can be imposed, except for the cases where the tax base and deadline for filing the tax base of the relevant national tax are prescribed for the second tax liability and the date on which the secondary tax liability can be established. In addition, considering that the period of exclusion of the second tax liability is the date on which the second tax liability is established, the period from the date on which the second tax liability can be imposed, unless there are special circumstances to the contrary.

Article 26-2 (4) of the former Framework Act on National Taxes (amended by Act No. 7930 of Apr. 28, 2006) (see current Article 26-2 (5) of the Framework Act on National Taxes), Article 12-3 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 19893 of Feb. 28, 2007)

Supreme Court Decision 98Du4535 delivered on October 27, 1998 (Gong1998Ha, 2802) Supreme Court Decision 98Du11250 Delivered on April 9, 199 (Gong199Sang, 921) Supreme Court Decision 2003Du13083 Delivered on April 15, 2005 (Gong2005Sang, 760)

Plaintiff church (Attorney Jeong-won et al., Counsel for plaintiff-appellant)

Head of the Do Tax Office

Seoul High Court Decision 2005Nu24591 Delivered on June 16, 2006

All appeals are dismissed. The costs of appeal are assessed against each party.

The grounds of appeal are examined.

1. Judgment on the Plaintiff’s grounds of appeal

A. As to whether the Plaintiff is an oligopolistic stockholder of the non-party corporation and the scope of the secondary tax liability

The court below acknowledged the facts as stated in its decision after comprehensively taking account of the adopted evidence, and found the defendant's disposition of this case on the premise that the plaintiff is an oligopolistic shareholder of 100% of the non-party corporation as lawful. In light of the relevant statutes and the records, the judgment of the court below is just and there is no error of law such as misunderstanding of legal principles as to the scope of oligopolistic shareholder under Article 39 of the former Framework Act on National Taxes (amended by Act No. 7930, Apr. 28, 2006

B. As to the method of market price assessment

The court below acknowledged the facts as stated in its reasoning after comprehensively taking account of the adopted evidence. The court below determined that the disposition of this case was legitimate by applying Article 5 (2) of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 15093 of Jun. 29, 1996) mutatis mutandis to Article 16-2 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15093 of Jun. 29, 1996) on the ground that it is difficult to view that the transaction price of the plaintiff's assertion is not an appropriate reflect of the objective exchange value of the land of this case. In light of the relevant Acts and subordinate statutes and records, the judgment of the court below is just, and there is no error of misapprehending the legal principles as to the method of market price calculation under Article 46 (2) 4 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 198).

C. As to whether the instant disposition was made after the expiration of the exclusion period of imposition

(1) Whether the exclusion period for imposition against the non-party corporation has expired

The court below acknowledged the facts as stated in its decision after comprehensively taking account of the adopted evidence, and found that the non-party corporation filed a report on the tax base and amount of corporate tax and special surtax for the business year 1996 and special surtax for the business year 1996 and the exclusion period for imposition of corporate tax and special surtax for the non-party corporation was seven years since the disposition of imposition against the non-party corporation was made on December 2, 2003 within seven years from the exclusion period for imposition. In light of the relevant Acts and subordinate statutes and records, the judgment of the court below is just and there is no error in the misapprehension of legal principles as to the exclusion period for imposition under Article 26-2 (1) of

(2) Whether the instant disposition was issued after the expiration of the exclusion period of imposition

Article 26-2 of the former Framework Act on National Taxes provides that the exclusion period for national taxes, other than inheritance tax and gift tax, shall, in principle, be five years from the date on which national taxes may be imposed.

Article 12-3 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 19893, Feb. 28, 2007) does not provide for "the date on which it can be imposed," which is the starting date for the second tax liability, and Article 12-3 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 19893, Feb. 28, 2007) does not provide for "the date on which the second tax liability can be imposed," which is the starting date for the second tax liability, and since the date on which the second tax liability can be established must meet the requirements, such as the default of the principal taxpayer, the starting date for the second tax liability, the effective date on which the second tax liability can be established shall be at least after the expiration of the payment period (see Supreme Court Decision 2003Du13083, Apr. 15, 2005).

According to the facts duly established by the court below, the disposition of this case against the plaintiff, who is the secondary taxpayer, was made five years after the date on which the secondary tax liability of this case was established. Thus, the court below rejected the plaintiff's assertion that the disposition of this case was made after the expiration of the exclusion period for imposition of the secondary tax liability of this case, on the ground that the provision on the exclusion period for imposition of the secondary tax liability of this case does not apply in principle, and even if it is applied, it cannot be seen that the exclusion period for imposition of the secondary tax liability of this case cannot be applied at the same time as that for the main tax liability of this case.

2. Judgment on the Defendant’s grounds of appeal

Under the tax law, where a taxpayer violates various obligations, such as a tax return and tax payment, without justifiable grounds, in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, an additional tax is an administrative sanction imposed as prescribed by the law, and where there are extenuating circumstances where it is unreasonable to expect the taxpayer to fulfill the obligation, and thus, it is not possible to impose an additional tax if there is a justifiable reason to do so (see Supreme Court Decisions 95Nu14602, May 16, 1997; 2004Du930, Nov. 25, 2005, etc.).

In light of the above legal principles and records, the court below revoked the original disposition ex officio on the ground that there was a defect in the procedure for notifying the non-party corporation, the main taxpayer, even though the plaintiff paid the full amount of the tax in accordance with the first disposition of the court below as stated in the judgment of the court below, and determined that there is a justifiable ground which could not be caused by the plaintiff's failure to pay the additional tax after the date of notice of the initial disposition, since the first disposition of the court below was revoked and the principal tax was imposed on the non-party corporation, the main taxpayer, and the additional tax was imposed on the non-party corporation (hereinafter referred to as "the initial disposition"), but the increased amount of the tax amount due to the cancellation of the initial disposition was appropriated for a part of the amount of the tax payable. In light of the above legal principles and records, the judgment of the court below is just, and there is no error of law in the misapprehension of legal principles as to the imposition of the additional tax.

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Si-hwan (Presiding Justice)