Whether to impose additional tax where interim prepayment of corporate tax has been made without payment

Since the corporate tax subject to interim prepayment is paid upon the expiration of the prepayment period, the imposition of additional tax in this case is legitimate.

Article 21 of the Framework Act on National Taxes comes into existence

2013 old and 56522 Revocation of the imposition of additional tax

AA Examination, Inc.

AA Head of the Tax Office

April 11, 2014

May 27, 2014

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

1. Details of the disposition;

A. On August 31, 2012, when the Plaintiff made an interim prepayment of corporate tax for the business year 2012, the Plaintiff paid an amount equivalent to approximately 50% of the interim prepayment tax amount, and the remainder of the OOOO members decided to pay in installments by October 31, 2012, which is within two months after the payment deadline, but did not pay in installments.

B. Accordingly, the Defendant, on January 3, 2013, notified the Plaintiff of the interim prepayment tax amount for the business year 2012, including the additional tax for unfaithful payment, as OOOO won (hereinafter “instant disposition”). C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Director of the Tax Tribunal on May 9, 2013 after filing an objection on February 18, 2013, but the said claim was dismissed on July 4, 2013.

Facts that there is no dispute over recognition, Gap evidence 1 and 2, Gap evidence 1 and 1, and the purport of the whole pleading

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the corporate tax system under Article 63 of the former Corporate Tax Act (amended by Act No. 12166, Apr. 1, 2014; hereinafter referred to as the "Corporate Tax Act") is unconstitutional as it infringes on property rights under the Constitution, the disposition of this case which imposes an additional tax by failing to pay it is unlawful. Furthermore, under the main sentence of Article 47-4(1) of the Framework Act on National Taxes, which requires the imposition of an additional tax by failing to pay it shall include an interim tax, preliminary tax payment, interim tax payment, etc. under the overall title (hereinafter referred to as the "legal provision of this case") is unconstitutional for the following reasons, the disposition of this case is also unlawful. In other words, Article 21(1)1 of the former Framework Act on National Taxes (amended by Act No. 11604, Jan. 1, 2013; hereinafter referred to as the "Corporate Tax Act") is established at the same time as the tax claim of this case is established for the pertinent business year.

○ Infringement of Property Right

Since corporate tax prepayment pays part of corporate tax before the establishment of corporate tax liability as seen earlier, it cannot be an appropriate means to guarantee the implementation of interim tax prepayment to enforce the imposition of additional tax even though it should be operated based on the voluntary cooperation of taxpayers.

Furthermore, the penalty tax should be proportional to the degree of breach of duty. However, if interim prepayment is not performed, it cannot be deemed that it is a breach of duty equivalent to the case of breach of corporate tax liability. Therefore, it also violates the minimum principle of infringement.

In addition, Article 27-4 of the Enforcement Decree of the Framework Act on National Taxes, which has been delegated by the statutory provisions of this case, provides for 3/10,000 per day as additional tax rate (0.03% x 365%) and imposes an additional tax on 10.95% per annum (i.e., 0., 0.03% x 365%). If a taxpayer fails to pay the amount of interim tax for liquor tax by the lapse of 5 years from the date when the limit on the amount of the additional tax is not set, the amount of the additional tax is 545% (=10.95% x 5%) of the unpaid amount of tax (i.e., 10., 10.95%) and this is also an excessive sanction.

○ Violation of the principle of equality

The interim prepayment of corporate tax is merely a voluntary cooperation obligation of the tax payer who pays corporate tax in advance one (1) prior to the establishment of corporate tax liability. It is in essence different from that of the legal provision of this case that treats the same as the case of breach of corporate tax liability, and imposes penalty tax calculated by applying the same standard without reasonable grounds, thereby violating the principle of equality.

○ Violation of the right to pursue happiness

The legal provision of this case, which provides that an interim prepayment, which is a voluntary cooperation system, shall be imposed a high-rate additional tax by failing to perform interim prepayment, violates the taxpayer's right to pursue happiness by compelling interim prepayment of corporate tax against the taxpayer's voluntary will through monetary sanctions.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

First of all, in light of the fact that the interim prepayment system under Article 63 of the Corporate Tax Act is unconstitutional or unconstitutional, and the income of the corporation is generated by the continuous flow during the business year, and Article 63(5) of the Corporate Tax Act permits the interim prepayment of the provisional settlement method for the interim prepayment period, it is nothing more than paying the tax amount equivalent to the income accrued during the interim prepayment period, not the taxation on unrealized profits, but the tax amount equivalent to the income accrued during the interim prepayment period. Accordingly, the plaintiff's assertion that the interim prepayment system infringes on

Furthermore, both the Plaintiff’s infringement of property rights, the right to pursue happiness, and the principle of equality are deemed to have accrued income yet to be finalized before the establishment of the corporate tax liability so that the corporate tax claim can be realized at an early stage. In light of this, unlike corporate tax liability, the corporate tax interim prepayment obligation should not be enforced as an additional tax, but should be operated based on the voluntary cooperation of the taxpayer.

However, according to Article 21 (2) 3 of the Framework Act on National Taxes, the corporate tax subject to interim prepayment is established when the prepayment period expires, notwithstanding the provisions of paragraph (1) that the corporate tax becomes liable for corporate tax when the taxable period expires. Thus, the corporate tax interim prepayment is not paid prior to the time when the general corporate tax liability comes into existence, but it is paid after the principal tax liability comes into existence.

In addition, the interim prepayment system is not a taxation on unrealized gain as seen earlier, and there is no ground to deem that Article 63(1) of the Corporate Tax Act provides that the person liable for tax payment is a system that can secure tax claims in advance, and that it infringes on property rights on the basis that Article 63(1) of the Corporate Tax Act provides interim prepayment as a premise for imposing additional tax." Therefore, the Plaintiff’s assertion that the legal provision of this case is unconstitutional on a different premise is without merit.

On the other hand, with respect to the assertion that the rate of additional tax is too high (this is not the legal provision of this case, but the argument against Article 27-4 of the Enforcement Decree of the Framework Act on National Taxes), it is unreasonable to set the rate of 10.95% per annum as it collects an amount equivalent to the interest during the period of unpaid payment.

Furthermore, a statement that the limit of penalty tax is not determined is not related to the illegality of the disposition of this case.

Ultimately, the instant disposition is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.