Plaintiff (Law Firm LLC, Attorneys Kang Han-hun et al., Counsel for the plaintiff-appellant)

Head of Ansan Tax Office

March 28, 2012

Suwon District Court Decision 2010Guhap15750 Decided May 18, 2011

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The imposition of capital gains tax of KRW 3,267,922,78 and additional tax of KRW 268,623,252 on March 2, 2010 against the Plaintiff on March 2, 2010 shall be revoked.

2. Purport of appeal

The same shall apply to the order.

1. The part citing the judgment of the court of first instance

(1) The court’s reasoning concerning the instant case is as follows up to the Plaintiff’s assertion on the legality of the instant disposition. (2) The Plaintiff’s assertion on the relevant Acts and subordinate statutes. (1) Determination on whether the instant real estate is subject to carry-over taxation as to the instant real estate is as follows. The relevant part of the judgment of the court of first instance is cited pursuant to Article 8(2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

○ The second judgment of the first instance court is based on the phrase “........ on December 4, 2008” to read “ around December 12, 2008.”

The judgment of the first instance court, 3rd, " March 11, 2010," which reads " March 2, 2010" as " March 2, 2010," which erases "the third (hereinafter "instant disposition")," and reduces "the second (6) correction was made" as "the remaining part of the disposition of imposition as of March 2, 2010, which was reduced (hereinafter "the instant disposition of imposition")."

6th below the 6th day of the judgment of the first instance court, “In addition, the “corporation’s capital” under Article 32(2) of the Restriction of Special Taxation Act is deemed to be “the capital on the balance sheet according to corporate accounting standards”. Furthermore, in addition to the legislative intent introduced to support the corporate conversion of an individual small and medium enterprise in order to induce the largeization of small and medium enterprises, Article 29 of the Enforcement Decree of the Restriction of Special Taxation Act is excluded from the application of carried-over taxation by interpreting Article 29 of the Enforcement Decree of the Restriction of Special Taxation Act as above, even if it is deemed to go beyond the scope of delegation under Article 32 of the Restriction of Special Taxation Act as it goes beyond the scope of delegation under Article 32 of the Restriction of Special Taxation Act as its parent

2. Determination as to whether the principle of protection of trust has been violated

In general, in administrative legal relations, in order to apply the principle of the protection of trust to an act of an administrative agency, the first administrative agency must express a public opinion that is the subject of trust to an individual, second, the administrative agency should have a reason attributable to the individual when the expression of opinion is justifiable and trusted. Third, the administrative agency should have conducted any act corresponding thereto. Fourth, the administrative agency should have made a disposition contrary to the above expression of opinion, thereby infringing the interests of the individual who has trusted the expression of opinion. Lastly, when taking an administrative disposition following the above expression of opinion, it should not be likely to seriously undermine the public interest or legitimate interests of a third party (see Supreme Court Decisions 200Du8684, Sep. 28, 2001; 2004Du13592, Feb. 24, 2006, etc.).

In light of such legal principles, whether the instant disposition violates the principle of trust protection. In full view of Gap evidence 6, Eul evidence 7 through 12 (including serial numbers), witness of the first instance trial, and witness of non-party 1 and witness of non-party 2 and 3, the non-party 1 worked for a long time as a tax official and has been engaged in the tax accountant business from around 1998. On June 2007, upon request of the plaintiff for advice on converting the above medical corporation into the medical corporation of this case, the non-party 1 could be carried forward taxation at the time of converting the above legal entity. During that process, the non-party 2 asked the medical corporation of this case to the effect that "the non-party 1 could be carried forward taxation" was transferred to the non-party 2, who was a tax official with Ansan tax at the time of carrying forward taxation, and the non-party 2 did not individually ask the medical corporation of this case to seek advice from the plaintiff 1 and his opinion in writing."

According to the above facts, it is merely a fact that the non-party 2 received an inquiry as to whether it is possible to carry forward taxation from the non-party 1 tax accountant who was in a usual-friendly relationship with the non-party 1 to deliver his personal opinion orally. It is difficult to view such personal opinion delivery as a public opinion statement on the defendant side. The evidence submitted by the plaintiff alone is insufficient to recognize that there is a public opinion statement as alleged, and there is no other evidence to recognize it (In addition, even though the plaintiff requested the non-party 4 tax accounting corporation to make an official document about the application of carry-over taxation through the counter-party 4 tax accounting corporation, the captain representative, the non-party 4, without sufficiently reviewing it, it seems that the non-party 2 would have carried forward the medical corporation conversion to the medical corporation by focusing on the non-official advice, etc., and thus, it seems that the plaintiff's previous decision of taxation disposition was reasonable and reasonable in light of the circumstances leading up to the disposition of taxation in this case, etc., which led to the plaintiff's 20.

Therefore, considering all the circumstances alleged by the Plaintiff, the instant disposition cannot be deemed to violate the principle of trust protection. This part of the Plaintiff’s assertion cannot be accepted.

3. Determination as to additional tax

Under the tax law, penalty taxes are administrative sanctions imposed in accordance with the law in order to facilitate the exercise of the right to impose taxes and the realization of tax claims in cases where a taxpayer violates a duty to report and pay taxes, etc. as prescribed by the law without justifiable grounds, and the taxpayer’s intent or negligence is not considered as a justifiable reason. Moreover, even if a taxpayer has believed a tax official’s wrong explanation and failed to perform his/her duty to report and pay taxes, if it is evident that the taxpayer’s failure to report and pay taxes is contrary to the relevant law, such reason alone does not constitute a justifiable reason (see Supreme Court Decision 200Du5944, Apr. 12, 2002).

In the case of this case, even though the plaintiff was given a reply that it is possible to carry forward taxation as a result of an unofficial consultation with non-party 2, etc., and the tax authorities also held that it is possible to carry forward taxation prior to the audit results by the Board of Audit and Inspection, in light of the provisions of the relevant Acts and subordinate statutes, the application for carry-over taxation and the details of the disposition of this case, and the situation before and after the disposition of this case, etc., such circumstances and the evidence submitted by the plaintiff alone cannot be deemed as having any provision that can be mistaken for the relevant Acts and subordinate statutes themselves, or there is a conflict of opinion surrounding its interpretation. Thus, it cannot be deemed that there is a justifiable ground that it is difficult to find the plaintiff as it constitutes a case where there is a doubt about the interpretation of tax law as argued by the plaintiff.

4. Conclusion

The instant disposition is lawful. Unlike this, the judgment of the first instance is improper. The Defendant accepted the appeal filed by the Defendant and revoked the judgment of the first instance, and the Plaintiff dismissed the Plaintiff’s claim.

Justices Kim Jong-ho (Presiding Justice)