early 2010 Heavy0430 (29 April 29, 2010)

If capital gains tax is reduced or exempted, penalty tax shall not be included in the national tax reduced or exempted.

Since the additional tax on negligent tax returns is imposed on the basis of the calculated tax before the reduction or exemption of capital gains tax is applied, if the additional tax on negligent tax returns is not reported even if the main tax can be reduced or exempted.

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of capital gains tax of KRW 10,794,620 against the Plaintiff on December 2, 2009 is revoked.

1. Details of the disposition;

A. On May 31, 2007, the Plaintiff transferred to the Korea Rural Community & Agricultural Corporation the land of 4,212 square meters and 6 lots (hereinafter “each land of this case”) prior to 856 square meters in Cheongcheon-si, Cheongcheon-si, Cheongcheon-do and did not file a report on the tax base of transfer income.

B. Accordingly, on October 19, 2009, the Defendant rendered a prior notice of taxation amounting to KRW 10,794,620 for negligent tax returns under Article 47-2 of the Framework Act on National Taxes on the ground that each of the instant lands constitutes farmland with self-fluence for not less than eight years. However, on the ground that the Defendant did not report the tax base of capital gains by the statutory deadline for filing a return of capital gains, the Defendant notified the Plaintiff of the determination and notice of capital gains tax for the year 2007 (hereinafter “instant disposition”). On December 2, 2009, the Plaintiff issued the notice of the determination and notice of capital gains tax for the year 207 (hereinafter “instant disposition”).

[Reasons for Recognition] Unsatisfy, entry of Eul Nos. 1 and 2 (including additional numbers) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Before the amendment of the Income Tax Act and the Framework Act on National Taxes on December 30, 2006, there was a provision to exempt the Plaintiff from the additional tax in cases where there is no tax amount to be paid additionally under Article 115(3) of the Income Tax Act. However, the deletion of the above provision due to the amendment of the Act is due to the legal doctrine that the exemption from the additional tax on negligent tax returns is natural if there was no tax base return on capital gains even if there was no tax base return, and as a result, the Plaintiff asked the Defendant of the guidance that the Plaintiff would not be required to file a return on capital gains tax

(b) Related statutes;

Attached Form is as shown in the attached Form.

C. Determination

(1) The proviso of Article 47(2) of the Framework Act on National Taxes (amended by Act No. 911, Jan. 1, 2010) provides that when a national tax is reduced or exempted, an additional tax shall not be included in the national tax subject to such reduction or exemption. Accordingly, Article 3(2) of the Restriction of Special Taxation Act (amended by Act No. 9921, Jan. 1, 2010; hereinafter the same) provides that taxes subject to reduction or exemption under this Act shall not include additional tax, except as otherwise provided in the relevant Act, etc.

In addition, the amount to be reported under Article 110 (1) of the Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009; hereinafter the same) shall be the tax base for capital gains for the year concerned, and the reduction or exemption of capital gains tax pursuant to Article 93 of the same Act shall be applied to the tax base first calculated by applying the tax rate to the tax base, and the additional tax on negligent tax returns pursuant to Article 115 (1) of the same Act shall be imposed on the basis of the calculated tax amount before the reduction or exemption of capital gains tax is applied. Thus, even if the capital gains tax, which is the principal tax, can be reduced or exempted, the obligation to report the

(2) Meanwhile, in order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under tax law is an administrative sanction imposed under the conditions as prescribed by individual tax law in cases where a taxpayer violates various obligations, such as a tax return and tax payment, without justifiable grounds, and the taxpayer’s intentional intent or negligence is not considered. On the other hand, in cases where a taxpayer cannot be deemed to have any justifiable reason for failure to perform his/her duties, such as when there are circumstances where it is unreasonable for him/her to be unaware of his/her duty, or when it is unreasonable for him/her to expect the performance of his/her duty, etc., but the land or mistake of the law cannot be deemed to constitute a justifiable reason. Even if a taxpayer fails to perform his/her duty of return and payment with the belief of a tax official’s wrong explanation and it is obvious that it is against the relevant law, such reason alone cannot be deemed to have a justifiable reason (see, e.g., Supreme Court Decision 2006Du14995, Feb. 22, 2007).

(3) Therefore, the instant disposition is lawful, and the Plaintiff’s assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.