Cho-2017-China-84 (Law No. 24, 2017)

Whether the taxation disposition based on the enforcement rule invalid by the Supreme Court ruling is illegal or not.

The Plaintiff did not go through legitimate procedures for the previous imposition, and in the case of an increase or decrease disposition, the Plaintiff cannot seek revocation of the amount of tax which cannot be contested against the objection period or the attempt of the request period for correction, and can seek revocation only within the scope of increased amount of tax pursuant to the increase or decrease disposition. As such, the Plaintiff’s claim for revocation of the amount of tax pursuant to the previous imposition in 2014 and 2015 is unlawful as there is no benefit of lawsuit

Article 13 of the Gross Real Estate Tax Act

2017Guhap51103 Revocation of the imposition of comprehensive real estate holding tax and return of overpaid or erroneously paid amount

AAAA Corporation

a) the Director of the Tax Office

on October 29, 2018

on 17 July 2018

1. All of the instant lawsuits are dismissed.

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

Cheong-gu Office

In calculating the amount of property tax deducted from the amount of comprehensive real estate holding tax in the attached Table 1 among the dispositions of imposition of comprehensive real estate holding tax (including additional special rural development tax) in 2014 and 2015 on November 10, 2016 against the Plaintiff, and the amount of property tax deducted from the amount of comprehensive real estate holding tax among the dispositions of imposition of comprehensive real estate holding tax (including additional special rural development tax) in 2014 and the disposition of refund of comprehensive real estate holding tax in 2011, 2012 and 2013, the "amount equivalent to the property tax calculated by the standard tax rate of property tax, which is the comprehensive and separate aggregate taxation, on the tax base of land subject to comprehensive or separate aggregate taxation," the amount exceeding the amount of comprehensive real estate holding tax and special rural development tax, shall be revoked.

1. Details of the disposition;

A. The Plaintiff is a company that operates and provides comprehensive leisure and training facilities, sports facilities, social welfare facilities, etc.

B. The Defendant imposed comprehensive real estate tax and special rural development tax on the Plaintiff from 2011 to 2015 as indicated in the following table (hereinafter “previous taxation”), and the Plaintiff paid the relevant comprehensive real estate tax and special rural development tax in full.

C. On November 10, 2016, the Defendant issued a correction and notification of the increase in comprehensive real estate holding tax and special rural development tax for the Plaintiff in 2014 and 2015 as indicated in the following table (hereinafter “instant adjustment disposition”).

D. On November 10, 2016, the Defendant issued a decision to revise the previous imposition disposition in 2011, 2012, and 2013 (hereinafter referred to as the “decision to revise the instant reduction”), as indicated in the following table, and decided to refund the portion that was reduced due to the correction of reduction (hereinafter referred to as the “amount of refund” in the following table) to the Plaintiff (hereinafter referred to as the “decision to refund the national tax refund of this case”).

E. On February 6, 2017, the Plaintiff filed a request for a trial with the Tax Tribunal on the grounds that it was dissatisfied with the instant disposition to rectify and correct the amount of reduction (decision of national tax refund), but the request for a trial was dismissed on April 24, 2017.

Facts that there is no dispute over the basis of recognition, Gap evidence 1, 2, and 3 (including branch numbers for those with additional numbers; hereinafter the same shall apply), Eul evidence 1, 4, and 5, and the purport of the whole pleadings.

2. Determination as to the defendant's main defense (whether the lawsuit of this case is legitimate)

A. The defendant's assertion

1) A refund decision or a reduction and correction disposition that the Plaintiff seeks revocation cannot be a subject of an appeal litigation. Furthermore, even if the Plaintiff’s assertion is understood as seeking revocation of the previous disposition that remains without revocation by a reduction and correction, the Plaintiff did not undergo legitimate appellate proceedings against the previous disposition. Therefore, the part on the comprehensive real estate tax and special tax for rural development in 2011, 2012, and 2013 among the instant lawsuit is unlawful.

(ii) in the case of an increase or revision disposition, the appeal period or the appeal period cannot be contested;

Inasmuch as the Plaintiff cannot seek cancellation of the amount of taxes, and may seek cancellation only within the scope of the amount of taxes increased according to the disposition of increase or decrease, the part seeking cancellation of the amount of taxes pursuant to the previous disposition of tax in 2014 and 2015 is unlawful as there is no benefit of lawsuit. Moreover, as the Defendant ex officio cancelled and refunded the increased portion pursuant to the disposition of increase or decrease, this part of the lawsuit is unlawful as there is no benefit of lawsuit. Accordingly, the part concerning the comprehensive real estate tax and special rural development tax in 2014 and 2015

(b) Indication of the relevant regulations;

Attached Form 2 shall be as shown in attached Table 2.

C. Determination on the part regarding comprehensive real estate holding tax and special tax for rural development in 2011, 2012, and 2013 among the instant lawsuit

1) In a case where a correction disposition that reduces the tax base and amount of tax is not the initial and separate taxation disposition, but the substance of the disposition is not the initial and separate taxation disposition, and thereby, is a disposition that has the favorable effect to taxpayers, which leads to a partial revocation of the amount of tax, and thus, the determination of the amount of tax is not yet revoked, and the remaining part of the disposition that remains illegal, the subject of an appeal litigation is not revoked by the decision of correction in the initial disposition of tax amount, and the decision of correction is not the subject of an appeal litigation, and is not the subject of an appeal litigation. In this case, whether the decision of correction was lawful procedure should also be determined on the basis of the initial disposition (see, e.g.

2) The Plaintiff’s decision to revise the instant reduction (national tax refund) was combined with the two dispositions, namely, “new taxation and refund disposition on the remaining portion without revocation due to the reduction or correction.” As such, the instant lawsuit is asserted to the purport of seeking revocation of the part exceeding the calculated tax amount calculated by the formula alleged by the Plaintiff among the aforementioned new taxation dispositions (application for revision of lawsuit). Therefore, the part seeking revocation by the Plaintiff is understood to be the remaining portion of the previous disposition that is not revoked by the decision to revise

According to Articles 2 subparag. 1 and 56(2) of the Framework Act on National Taxes, tax litigation related to national taxes are subject to the requisite transfer principle, and comprehensive real estate holding tax and special tax for rural development fall under the national taxes, and in order to bring a lawsuit on the previous disposition of imposition in 2011, 2012, and 2013, the Plaintiff must undergo a prior trial procedure (e.g., objection, request for examination, or request for adjudgment) prescribed in the Framework Act on National Taxes. Meanwhile, according to Articles 61(1), 66(6), and 68(1) of the Framework Act on National Taxes, an objection, request for examination, or request for adjudgment against a disposition of national taxes should be filed within 90 days from the date (the

However, the Plaintiff was dissatisfied with the instant decision on February 6, 2017 and received a request for trial on February 24, 2017, and only followed the procedure of the previous trial on the instant decision of reduction (decision of national tax refund) by obtaining a dismissal decision around April 24, 2017, and there is no other evidence to deem that the Plaintiff had undergone legitimate procedure of the previous decision of imposition in 201, 2012, and 2013. Even if the instant request for trial was about the previous disposition of imposition in 201, 2012, and 2013, the Plaintiff did not lawfully dismiss the said request for a trial during the period of 10 years (see, e.g., Supreme Court Decision 201Do1798, Nov. 16, 201; 2012: 11: 16, 2013; 200Do1679, Nov. 16, 2013). 207.

3) Even if the Plaintiff is understood to seek the determination of the instant reduction or the revocation of the determination of the national tax refund through the instant lawsuit, the disposition of the reduction or correction as seen earlier is a disposition that gives favorable effect to the taxpayer, which partially cancels the amount of tax, and thus there is no benefit in the lawsuit seeking revocation. ② The amount overpaid or erroneously paid under Article 51 of the Framework Act on National Taxes constitutes unjust enrichment received or held by the State without legal cause despite the existence of a tax liability from the beginning or the lapse of the tax liability. The provisions on the determination of the national tax refund merely stipulate internal procedures for refund of the national tax for which the tax payer’s claim for refund has already become final and conclusive, and it is not determined to claim a refund only by the national tax refund determination under the above provision. Thus, the determination of the national tax refund is not a disposition that specifically and directly affects the existence or scope of the tax payer’s claim for refund, and thus cannot be deemed a disposition subject to appeal litigation (see, e.g., Supreme Court en banc Decision 88Nu6436, Jun. 15, 198).

4) Ultimately, the part pertaining to the comprehensive real estate tax and special tax for rural development in 2011, 2012, and 2013 among the lawsuit in the instant case is deemed to be either mother or illegal, and the Defendant’s allegation pointing this out is with merit.

D. Determination on the portion regarding comprehensive real estate holding tax and special tax for rural development in 2014 and 2015 among the instant lawsuit

1) Where a disposition of increase or correction is taken, the original report or decision loses its independent existence value by absorbing the disposition of increase or correction, in principle, regardless of whether the appeal period against the initial report or decision has elapsed, etc., only the disposition of increase or correction shall be subject to adjudication in an appeal litigation. A taxpayer may also assert illegal grounds for the initial report or decision in the appeal litigation (see Supreme Court Decision 2006Du17390, May 14, 2009).

However, Article 22-2(1) of the Framework Act on National Taxes provides that "an amendment made to increase the amount of tax initially determined under tax-related Acts shall not affect the rights and obligations under this Act or other tax-related Acts with respect to the amount of tax initially determined," and considering the language and content of the aforementioned provision and the purport of the main purpose thereof, even if a correction disposition is made, it is intended to restrict any objection against the amount of tax initially determined in the initial return or determination due to the lapse of the objection period, etc., it shall not be allowed to seek cancellation of the amount of tax in the initial return or determination, and it shall be interpreted that the revocation may be sought only within the limit of the amount of tax increased by the correction disposition (see Supreme Court Decision 2010Du

2) As indicated in the attached Table 1 in this case, the Plaintiff sought revocation of part of the amount of tax among the sum of the amount of tax imposed according to the previous imposition in 2014 and 2015 and the amount of tax increased due to the instant disposition for the adjustment of increase (the amount stated in the attached Table 1 “tax amount corrected by the Defendant”). Therefore, the Plaintiff divided the part seeking revocation of the amount of tax according to the previous disposition for the instant lawsuit and the part seeking revocation of the increased portion following the instant disposition for the adjustment of increase into the part

3) In light of the following circumstances acknowledged by comprehensively taking into account the relevant provisions of the Framework Act on National Taxes and the purport of the entire pleadings, it is reasonable to deem that the amount of duty pursuant to the previous disposition became final and conclusive upon the lapse of both the period for filing an objection and the period for filing an application for rectification. Therefore, the part seeking revocation of the amount

A) As seen earlier, an objection, a request for examination, or a request for adjudgment with respect to a disposition of national taxes shall be filed within 90 days from the date when the person becomes aware of the disposition (when a notice of disposition is received, the date of receipt), and the administrative litigation shall be filed within 90 days from the date when the decision on a request for examination or adjudgment is notified (Article 56(3) of

The Plaintiff was aware of the previous disposition on the date of notification of the previous disposition in 2014 and 2015 (the year 2014: November 16, 2014; November 16, 2015: : November 16, 2015). There is no evidence to deem that the Plaintiff filed the instant lawsuit within 90 days from the date of receipt of notification of the decision on the objection, request for examination, or adjudgment, or within 90 days from the date of receipt of notification of the decision on the request for examination or adjudgment.

B) Article 45-2 of the former Framework Act on National Taxes (amended by Act No. 10405, Dec. 27, 2010) provides that “The determination or correction of the tax base and amount of the national tax for which the initial return or revised return was filed may be filed with the head of the competent tax office within three years after the statutory due date of return elapses.” However, the former Framework Act on National Taxes (amended by Act No. 10405, Dec. 27, 2010; effective January 1, 2011) provided that “The person may file a request for correction with the head of the competent tax office within 90 days after he/she became aware of the relevant disposition (if he/she is notified of the disposition, the date of receipt) with respect to the increased tax base and amount due to the determination or revision.”

Therefore, in the case of the previous disposition of imposition in 2014 and 2015, an application for rectification may be filed within 90 days from the date (the date of receipt of a notice of disposition) on which the amended Framework Act on National Taxes becomes known pursuant to the proviso to Article 45-2 of the Framework Act on National Taxes. However, there is no evidence suggesting that the Plaintiff filed a request for rectification within 90 days from the date of notification of the previous disposition of imposition in

C) The instant disposition was rendered on November 10, 2016, after the lapse of 90 days from the date of notification of the previous disposition of imposition in 2014 and 2015.

4) In the case of seeking revocation of the increased portion arising from the instant disposition for rectification, according to the respective evidence Nos. 2, 3, and 6, it is found that the Defendant re-revisions to the effect that the increased portion arising from the instant disposition for rectification is revoked after the instant disposition for rectification was taken. As such, the part seeking revocation of the increased portion in the instant lawsuit is unlawful as there is no legal interest in the lawsuit.

5) Therefore, the part concerning the comprehensive real estate holding tax and special tax for rural development in 2014 and 2015 among the lawsuit in this case is also unlawful, and the defendant's assertion pointing this out is also justified.

3. Conclusion

Therefore, since the lawsuit of this case is unlawful, it is so decided as per Disposition by the assent of all.