In a case where a corporation has transferred its assets for the pertinent business year and the liability to pay special surtax was established, "0 of the tax base and tax amount of special surtax, etc." is stated in the "tax base and tax amount return of special surtax", and where all the relevant items related to the transfer of assets and the calculation of the amount of special surtax are left publically in the "tax base and tax amount return of special surtax submitted", whether the report of special surtax tax base and tax amount can be

According to the purport of Article 59-5 of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998), Article 124-13 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998), and Article 45 (6) of the Enforcement Rule of the same Act (amended by the Ordinance of the Ministry of Finance and Economy No. 86 of May 24, 1999), a corporation liable to pay special surtax shall submit a "tax base and calculation statement of special surtax" in a prescribed form as well as "tax base and tax amount of special surtax" if the corporation did not submit a "tax base and tax amount of special surtax" and "tax base and tax amount of special surtax" as "tax base and tax amount of special surtax for the pertinent business year," and if the corporation did not have any meaning of "special surtax or special surtax tax base and tax amount of assets subject to exemption" as "tax base and tax amount of assets for the pertinent business year."

Article 59-5 of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998), Article 124-13 of the former Enforcement Decree of Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 1998), Article 45 (6) of the former Enforcement Rule of Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 86 of May 24, 199) (current deleted) (current deleted)

B&S ethyl Co., Ltd. (Seng Law Firm, Attorneys Park Han-ho, Counsel for the defendant-appellant)

Samsung Head of Samsung Tax Office

Seoul High Court Decision 2002Nu2064 delivered on November 28, 2002

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

Article 59-5 of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998; hereinafter referred to as the "Act") provides that the provisions on reporting, payment, determination, correction, and collection of the corporate tax base on income for each business year to which the transfer date of land, etc. belongs shall apply mutatis mutandis to the return, payment, determination, correction, and collection of the corporate tax base on income for each business year to which the transfer date of land, etc. belongs; provided that the total amount of other corporate tax shall be reported, paid, determined, corrected, and collected; and Article 124-13 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15970 of Dec. 31, 198) provides that Article 59-5 of the former Enforcement Decree of the Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 86 of May 24, 199) provides that a corporation liable to pay special surtax shall submit the tax base and the amount of special surtax under its delegation.

According to the purport of each of the above provisions, a corporation liable for special surtax must submit a tax base return under Article 59-5 of the Act as well as a "tax base and tax amount calculation statement" in the prescribed form. If a corporation enters 0 "0" both the tax base and tax amount amount of the corporate tax and tax return, etc. of the "tax base and tax amount return" attached thereto, and submits all the relevant items related to the transfer of assets, and necessary items for the calculation of the tax base and tax amount of the "tax base and tax amount" attached thereto in the public column, it shall be deemed that the transfer of assets subject to special surtax falls under non-taxation or exemption, or there was no transfer of assets subject to special surtax, and it shall be deemed that there was no transaction of assets subject to special surtax in the pertinent business year, and therefore, it shall be deemed that the corporation did not report the fact that there was no transaction of assets subject to special surtax as 0 "tax base and tax amount return" and the "special surtax tax base and tax amount amount amount amount to be included in the "tax base and tax amount amount of the special surtax."

In the same purport, the judgment of the court below is justified in holding that even if all of the tax base and calculated tax amount of the special surtax were stated in the corresponding column of the "tax base and amount return of corporate tax" submitted by the plaintiff at the time of corporate tax return, since all of the pertinent items related to the transfer of assets and the calculation of the amount of tax are publically recorded in the "tax base and amount return of special surtax submitted", they cannot be deemed as having filed a report of the tax base and amount of the special surtax, and there is no error of law by misunderstanding the legal principles as to the requirements for imposing the tax base of the special surtax

Furthermore, even if the Defendant was aware that the assets subject to the special surtax of this case were transferred, the Plaintiff cannot be deemed to have reported the tax base and tax amount due to such subjective circumstances. Therefore, the Plaintiff’s ground of appeal on a different premise cannot be accepted as it is without merit.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Hong-hoon (Presiding Justice)