Cho High Court Decision 2011Do0424 ( October 27, 2011)
The pro rata local income tax is the tax base of income tax, and it shall be deemed that the tax base of such income tax is legally imposed until the revocation or decision of correction is made by the competent authority.
Article 34 of the Framework Act on Local Taxes / [Time when the liability for tax payment is established in Article 85 of the Local Tax Act] Article 34 of the Framework Act on Local Taxes / [Time when the liability for tax payment is established in Article 85 of the Local Tax Act]
The early 2008do0401
The early appellate court 2012ter0341 / the early appellate court 2012 0499/ the early appellate court 2012 0490/ the early appellate court 2013 0278/ the early appellate court 2013 0498/ the early appellate court 2014 0971
The appeal is dismissed.
1. Summary of disposition;
A. On January 31, 2007, the claimant transferred 102.4 square meters of OO land and 507.25 square meters of the above ground buildings (hereinafter “this real estate”) to OO, and voluntarily reported and paid capital gains tax to OO.
B. After that, the OO determined the transfer income tax that the claimant has underreportedd and paid the capital gains tax at KRW 132,476,490, and imposed and notified the claimant on March 2, 2011, the OO also notified the local income tax of KRW 13,247,640, pursuant to Articles 89(1) and 93(2) of the Local Tax Act (amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) when imposing and notifying the claimant on March 2, 2011.
C. The claimant appealed and filed an appeal on April 19, 201.
2. Opinions of the claimant and disposition agency;
A. The claimant's assertion
Although the claimant has sold this real estate to 1,750,00,000, building 1,000,000,000,000 won separately, the claimant shall determine the tax base based on the land amounting to 1,262,187,237, building 448,506,490 won, which is the real income amount of 1,710,693,725 won, out of the purchase price of real estate sold to 1,750,00,00 won, which is the real income amount of 1,710,693,725 won.
(b) Opinions of disposition agencies;
The local income tax is imposed based on the amount of income tax decided by the head of a tax office as the tax base, and shall be presumed legitimate until the disposition of imposition of national tax that serves as the tax base is revoked or corrected by the competent authority, so long as the disposition of imposition of capital gains tax imposed on the applicant is not revoked or corrected, even if the procedure of tax appeal is in progress with respect to the above capital gains tax, it cannot be said
3. Hearing and determination
(a) Points in dispute;
Since the imposition of capital gains tax is improper, the propriety of the claim that local income tax calculated based on the tax base of capital gains tax should be revoked.
B. Relevant statutes
(1) The Framework Act on Local Taxes
Article 34 (Establishment Date of Tax Liability) ① The obligation to pay local taxes shall come into existence at the following time:
7. Local income tax;
(a) Portions: When a liability to pay income tax or corporate tax which serves as the tax base thereof accrues;
(2) Local Tax Act
Article 85 Definition of Terms used in Local Income Tax shall be as follows:
3. The term "pro rata income tax portion" means a local income tax, the tax base of which is the income tax amount payable under the Income Tax Act (excluding an additional tax for unfaithful payment for failure to pay all or part of the relevant returned tax amount, as a person who has made a preliminary return or final return
Article 89 (Tax Rate ① Standard Tax Rate for Income shall be as follows:
10/100 of the corporate tax of the corporate tax of 10/100 of the amount of the pro rata income tax of the Gu;
(2) Where the head of a tax office collects income tax (including penalty tax under Articles 81 and 115 of the Framework Act on National Taxes and Articles 47, 47-2 through 47-5, 48 and 49 of the Framework Act on National Taxes) by means of a decision, rectification, etc. under the Framework Act on National Taxes or the Income Tax Act, the pro rata income tax portion shall be imposed and notified together with income tax in the form prescribed by Ordinance of the Ministry of Public Administration and Security in the same manner as income tax is imposed, notwithstanding Article 90.
C. Facts and determination
(1) We examine the facts.
According to the review materials submitted by the claimant and the disposition agency, the following facts are revealed.
A) On January 31, 2007, the claimant transferred the real estate in KRW 1,750,000,000 to OO Co., Ltd., and voluntarily reported and paid KRW 198,788,949 to OO on March 31, 2007.
B) After the claimant transferred this real estate, the OO notified the claimant of the imposition of capital gains tax of KRW 132,476,490 as well as the local income tax of KRW 13,247,640 as a result thereof.
(2) We examine the issues.
A) Article 34(1)7(a) of the Framework Act on Local Taxes (amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) provides that the pro rata income portion among local income tax under Article 34(1)7(a) of the same Act is liable to pay when a liability to pay income tax and corporate tax, which is the tax base thereof, is established. Article 85 Subparag. 3 of the Local Tax Act provides that “pro rata income tax portion” refers to local income tax, the tax base of which is the amount of income tax payable under the Income Tax Act, and Article 93(2) of the same Act provides that where the head of a tax
B) On the other hand, the pro rata local income tax under Article 85 subparagraph 3 of the Local Tax Act is the tax base of income tax, and the imposition of income tax, which serves as the tax base, shall be deemed as legally imposed until the revocation or correction is made by the competent authority. Since the local income tax pro rata is revoked or reduced depending on the case where the income tax is determined after the revocation or correction by the competent authority, it shall be revoked or reduced accordingly, it shall be deemed that the imposition of local income tax is unlawful or unjust as long as the OO’s imposition disposition of capital gains tax requested by the applicant is lawfully maintained until the date of a request for a trial.
This case shall be decided with the order pursuant to Article 123(4) of the Framework Act on Local Taxes and Articles 81 and 65(1)2 of the Framework Act on National Taxes because the petition for a trial has no merit as a result of the review.