more frequentlybencing Co., Ltd. (Law Firm Nomination, Attorney Lee Dong-sik, Counsel for defendant-appellant)

The head of Yeongdeungpo-gu Seoul Metropolitan Government

April 19, 2017

Cheongju District Court Decision 2016Guhap10140 Decided August 18, 2016

1. Revocation of a judgment of the first instance;

2. On May 25, 2016, the Defendant’s disposition of imposition of KRW 84,400,000 for general non-declaration of acquisition tax against the Plaintiff and KRW 253,200 for unfaithful payment of local education tax, and KRW 25,320 for unfaithful payment of local education tax, and KRW 12,660 for unfaithful payment related to special rural development tax is revoked.

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

Article 35 of the Enforcement Decree of the Local Tax Act violates the Constitution.

The same shall apply to the order.

1. Details of the disposition;

The court's explanation on this part is the same as the corresponding part of the reasoning of the judgment of the court of first instance. Thus, this part of the reasoning is cited by Article 8 (2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The court's explanation on this part is the same as the corresponding part of the reasoning of the judgment of the court of first instance. Thus, this part of the reasoning is cited by Article 8 (2) of the Administrative Litigation Act and the main text of Article 420 of the Civil Procedure Act.

B. Relevant statutes

▣ 구 지방세법

Article 20 (Return and Payment)

(1) A person who acquires an object of taxation of acquisition tax shall file a return on, and pay, an amount of tax calculated by applying the tax rates under Articles 11 through 15 to the tax base within 60 days (referring to the last day of the month in which the date of commencing the inheritance falls, in cases of inheritance, and nine months (nine months, in cases where the taxpayer has his/her domicile in a foreign country) from the last day of the month in which the date of commencing the inheritance falls, and from the last day of the month in which the date of adjudication of disappearance falls, in cases of disappearance, within six months (nine months, in cases where the taxpayer has his/her domicile in a foreign country), as prescribed by Presidential Decree, from the date of acquisition (referring to the date of cancelling or reducing the designation

(4) Where a person intends to register or register (including registration; hereinafter the same shall apply) matters concerning the acquisition or transfer of property rights and other rights in the public register, he/she shall file a return on and pay acquisition tax before such registration or record is made.

▣ 지방세법 시행령

Article 35 (Deadline for Payment of Acquisition Tax at Time of Registration or Record)

Until a registration or record is made under Article 20 (4) of the Act, an application for registration or record shall be filed by the date on which an application for registration or record is received by the registry office.

C. Determination

1) Whether Article 35 of the Enforcement Decree of the Local Tax Act is invalid

A) Article 38 of the Constitution provides that “All citizens shall have the duty to pay taxes under the conditions as prescribed by Act,” and Article 59 provides that “types and rates of taxes shall be determined by Act.” The principle of no taxation without the law adopts the principle of no taxation without the law. Such principle means that taxation requirements, etc. shall be prescribed by the law enacted by the National Assembly, which is a representative body of the people, and strict interpretation and application shall be made in the enforcement of the law, and the extension or analogical application of administrative convenience shall not be allowed. Therefore, without the delegation of the law, prescribing matters concerning taxation requirements by administrative legislation, such as orders and rules, or providing an interpretation provision that makes it possible or expanded without the permission of the law, it violates the principle of no taxation without the law (see Supreme Court en banc Decision 2006Du8648, May 17, 2007, etc.).

In addition, according to Articles 40 and 75 of the Constitution of the Republic of Korea, legislative power belongs to the National Assembly. The President may issue Presidential Decree with regard to the matters delegated with the specific scope of the Act and matters necessary for the enforcement of the Act. Thus, the Enforcement Decree of the Act can only provide for the matters delegated by the Acts of the parent corporation or detailed matters necessary for the real enforcement of the Act within the scope prescribed by the Acts, and shall not modify or supplement the contents of the rights and obligations of individuals provided by the Act or provide new matters not provided by the Acts unless otherwise delegated by the Acts (see Supreme Court en banc Decision 93Da37342 delivered on January 24, 1995, etc.).On the other hand, the Enforcement Decree of the Act or the Enforcement Rule of the Act can not be deemed as going beyond the scope of the parent law if it is merely possible to interpret the legislative purport of the parent law in an organic and systematic manner, or if it is intended to embody it based on the purport of the provisions of the parent law, it cannot be deemed as invalid even if it is not directly delegated by the parent law (see Supreme Court Decision 63601.

B) In light of the following circumstances, Article 35(1) of the Enforcement Decree of the Local Tax Act (hereinafter “Enforcement Decree of the Local Tax Act”) limits the payment deadline of acquisition tax to the date of receipt of an application for registration or enrollment without delegation under the former Local Tax Act, which is the mother corporation, to change the citizen’s duty, and to expand the statutory provisions on additional tax to the taxpayer’s disadvantage without permission, and thus violates the principle of no taxation without permission and the principle of statutory reservation.

① Article 20(4) of the former Local Tax Act provides that a person who intends to acquire a property right shall file a tax return and pay acquisition tax before the date of registration or enrollment in the public register. The above provision constitutes an indivant provision imposing a tax liability on the person who intends to acquire the property right. Meanwhile, inasmuch as a taxpayer fails to comply with the due date for tax return under the above provision, the tax authority imposed penalty pursuant to Article 21(1) of the former Local Tax Act; thus, the provision on the due date for tax payment under the above provision provides that a person who acquired an object of taxation of acquisition tax under Article 20(1) of the former Local Tax Act shall pay acquisition tax within 60 days from the date of acquisition. On the contrary, Article 20(4) of the former Local Tax Act provides that a person who acquired the object of taxation of acquisition tax under Article 20(1) of the former Local Tax Act shall pay acquisition tax within 60 days from the date of registration or enrollment, contrary to paragraph (1) of the above Article, the payment deadline for acquisition tax may be deemed an exception provision unfavorable to a person who is given prior

Therefore, the provisions of Article 20(4) of the former Local Tax Act concerning the deadline for the return and payment should be strictly interpreted in accordance with the principle of no taxation without law, and the interpretation provisions that provide unfavorable or unfavorable interpretation to taxpayers without any explicit delegation of the law cannot be provided as subordinate laws.

② Article 20(4) of the former Local Tax Act does not delegate the specific meaning of “before registration or enrollment” to the Presidential Decree. Moreover, even if the former Local Tax Act is all applicable, there is no special provision that allows the understanding of the meaning of “before registration or enrollment as provided in the Enforcement Decree of the instant case.”

③ The registration or record means recording matters concerning the change of rights in the public register. As such, prior to the completion of the registration or record, the interpretation of the registration or record as “before the recording of changes in rights is recorded in the public register and before the completion of the registration or record is consistent with the prior meaning.”

④ According to the current registration practice, in cases where a person who acquired a taxable object filed an application for registration without filing a return on or paying the acquisition tax, but withdrawal of the application for registration or rejection of the application for registration has been made, if 60 days have not yet passed from the date of the payment of the remainder, the tax authority seems not to impose penalty

However, Article 20(4) of the former Local Tax Act provides that “Where a person intends to register or register property rights, etc. in the public book” as the requirement for acquisition tax payment. The person in receipt of an application for registration shall be included in “where he/she intends to register” under the above provision. According to the provision of the Enforcement Decree of the instant case, the person who received an application for registration without paying acquisition tax in advance and received the application for registration, thereby causing a cause for imposing additional tax in violation of Article 20(4) of the former Local Tax Act, which is embodied by the Enforcement Decree of the instant case. Furthermore, even if the application for registration was withdrawn or dismissed after the receipt of the application for registration, there is no logical and inevitable reason to deem that the cause for imposing additional tax is retroactively extinguished.

In the end, it is difficult to say that the above practical practice is the result of logical interpretation of the law, and it is reasonable to view that it reflects the active consideration that imposing additional tax is excessive even in the case where the application for registration is withdrawn or the application for registration is rejected.

However, such practical practice, compared with the non-taxation of a person who has withdrawn an application for registration or whose application for registration has been rejected, does not withdraw an application for registration on the following day and voluntarily pay the acquisition tax on the following day, or the person who corrected the application by the next day in response to the correction order of a registrar, without reasonable grounds, discriminates against him/her, and thus, it cannot be deemed unfair.

(5) Article 29 of the Registration of Real Estate Act provides that "Where any error in an application falls under any of the following subparagraphs, the registrar shall reject the application by decision stating the reasons therefor: Provided, That this shall not apply where the error in the application can be corrected and the applicant correctss such error by the following day from the date of ordering the applicant to correct the application, and subparagraph 10 of the same Article provides that "Acquisition Tax.... are not made or. are not made.."" As to this, it is desirable for a registrar to review the documents for application for registration and to encourage the applicant to correct any defect. However, it is desirable for him/her to make an order for correction or to make an explanation (Supreme Court Order 67Ma243 dated November 6, 1969). If an application for registration is received without paying acquisition tax, it is possible for the registrar to make an order for correction to pay acquisition tax and submit a "paid" by the next day. It is desirable to do so.

However, where a registrar finds that no certificate of payment certificate of acquisition tax has been attached to an application for registration, issues an order to the applicant for correction, pays acquisition tax by the following day, and completes registration accordingly, the applicant did not pay acquisition tax by the date of receipt of the application for registration, and accordingly, the registration officer violates the above Enforcement Decree. Thus, the applicant should pay additional tax in accordance with Article 21(1) of the former Local Tax Act.

On the other hand, where a registrar rejects an application for registration without issuing an order of correction, the registrar rejects the application for registration because the applicant fails to comply with the order of correction, or the applicant withdraws the application for registration without complying with the order of correction, if 60 days have not yet passed from the date of payment of the remainder, the applicant for registration in the current registration practice is not subject to additional tax, and the applicant is not at any disadvantage if he/she applies for registration

This is the result that damage occurs to a petitioner who has faithfully complied with the order of correction, and is contrary to the good will of the registrar to encourage the applicant for registration to correct the petitioner and to the convenience of the petitioner, and it is not the supplementaryization of the legal order.

(6) In light of the history of amendment of the Local Tax Act, the Defendant asserts that the registration, which was made on the ground of acquisition tax, was excluded from the imposition of registration tax since 2011, was integrated into acquisition tax as the registration tax was abolished. Accordingly, the current acquisition tax was also characterized by the registration tax, and the registration tax was stipulated to pay the registration tax from the past to the time of receipt of an application for registration, and thus, it is reasonable to have the instant acquisition tax, which is also characterized by the nature of registration tax, paid before receipt of an application for registration or enrollment.

On March 31, 2010, the former Local Tax Act was wholly amended by Act No. 10221, and excluded from the concept of registration tax, which is subject to acquisition tax, under the proviso of Article 23. "The reason for amendment" in the above Act is as follows: "The object of taxation related to the acquisition of the current registration tax shall be integrated into acquisition tax, and the return and payment period shall be considerably extended from 30 days to 60 days from the date of the current acquisition, and the convenience for tax payment shall be increased." Thus, as alleged by the defendant, the registration related to the current acquisition tax shall not be deemed to have concurrently become the nature of registration tax.

Article 150-2(1) of the former Local Tax Act prior to the wholly amended Act (Act No. 10221, Mar. 31, 2010) provides that “A person who intends to make a registration shall make a report and pay before making a registration, as prescribed by the Presidential Decree.” Article 150-2(1) of the former Local Tax Act stipulates that “Before making a registration or enrollment under the conditions as prescribed by the Presidential Decree” shall be delegated to the Enforcement Decree, and accordingly, Article 104-2(1) of the former Enforcement Decree of the Local Tax Act (wholly amended by Presidential Decree No. 22395, Sept. 20, 2010) stipulates that “Before making a registration or enrollment under the conditions as prescribed by the Presidential Decree” means by the date on which an application for registration or enrollment is received by the registry or the registration authority.”

In light of the above registration tax provisions and Article 20-4 of the former Local Tax Act and the Enforcement Decree of this case, it can be seen that there is a big difference between the above registration tax provisions and the above registration tax provisions in terms of the fact that there was a provision delegated to the Presidential Decree

Therefore, the previous legal doctrine that registration tax shall be paid by the date of receipt of an application for registration cannot be applied as it is to the acquisition tax of this case, without any explicit delegation provision. Likewise, in a case where a person who intends to register or register fails to pay registration tax by the date of receipt of an application for registration with the registry office or the registration office, barring any special circumstance, the additional tax provided for in Article 151 of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998) shall be the subject of penalty tax provided for in Article 151 of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998), and the registration officer is allowed to correct registration tax, etc. by the day following the day of receipt of the application for registration (Supreme Court Decision 9

2) Sub-determination

Therefore, since the enforcement decree of this case is null and void because it violates the principle of no taxation without law and the principle of statutory reservation, the disposition of this case based on the provision of the Enforcement Decree of this case must be revoked as unlawful.

3. Conclusion

Therefore, the plaintiff's claim shall be accepted with due reasons. Since the judgment of the court of first instance is unfair with different conclusions, the plaintiff's appeal shall be accepted, and the judgment of the court of first instance shall be revoked, and the disposition of this case shall be revoked as per Disposition.

Judges Shin Jae-sop (Presiding Judge)