Early High Court Decision 2016JE 1947 (Law No. 19, 2016)

Appropriateness of the disposition imposing tax by deeming the key workplace as subject to the individual consumption tax.

In light of the fact that entertainment drinking and eating at the key place of business seems to have existed, and that there is no fact that the promotion plan for the taxation of entertainment tavern was made public by internal guidelines of the National Tax Service, it is difficult to accept the claim purporting that the imposition of individual consumption tax violates the principle of good faith

Article 1 of the Individual Consumption Tax Act

Suwon District Court 2016Guhap63287 ( November 11, 2016)

Gangwon*

○ Head of tax office

oly 21, 2016

November 11, 2016

1. The plaintiff's claim is dismissed.

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

The imposition of individual consumption tax and education tax imposed on the Plaintiff on February 5, 2016 by the former Defendant of the Gu office on February 5, 2016 shall be revoked.

1. Details of the disposition;

A. From July 29, 2003, the Plaintiff operates an entertainment drinking club (hereinafter referred to as “the instant entertainment drinking club”) under the trade name, “Manam-si Bbro 101-ro 29 (Senam-dong)”.

B. On February 5, 2016, the Defendant imposed individual consumption tax and education tax from January 2014 to December 2014 on the Plaintiff (hereinafter “instant disposition”).

C. On May 2, 2016, the Defendant appealed and requested a trial to the Tax Tribunal, but was dismissed on August 19, 2016.

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 to 5, purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

1) The National Tax Service imposed individual consumption tax only when the workplace size is not less than 40 square meters in a Si area in the first-stage entertainment tavern promotion plan on February 3, 1997. In the second-stage entertainment tavern promotion plan on April 9, 199, the Seoul metropolitan area is not less than 35 square meters in Seoul metropolitan area, and not less than 40 square meters in other Si areas, and non-taxation practices that do not impose individual consumption tax, etc. on entertainment taverns less than a certain area are the basis for the interpretation of tax-related Acts by general taxpayers. The area of the instant entertainment tavern is not less than 83.62 square meters (p. 25 square meters) and does not constitute an object of taxation under the above promotion plan.

Therefore, the instant disposition is a disposition in violation of the principle of administrative self-regulation and the principle of protection of trust, which disregards non-taxation practices and is retroactively imposed.

2) Although there are multiple entertainment taverns around the Plaintiff’s place of business, there was no disposition identical to this case in the case of other entertainment taverns than the Plaintiff’s place of business.

Therefore, the instant disposition is in violation of the principle of tax equality.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Determination on the assertion of violation of the principle of self-detention and the principle of trust protection

A) The so-called administrative rules or internal guidelines issued by a superior administrative agency regarding work process guidelines or the interpretation and application of Acts and subordinate statutes with respect to subordinate administrative agencies are generally effective only within the administrative organization and do not have external binding force, and such administrative disposition is not immediately unlawful merely because it has violated such guidelines. However, if administrative rules, which are the rules governing the exercise of discretionary power, have been enforced and administrative practices take place as prescribed therein, an administrative agency is under self-detained in relation to the other party in accordance with the principle of equality or the principle of protection of trust. Thus, barring any special circumstance, any disposition violating such rules is unlawful disposition that deviates from or abused from its discretionary authority as it violates the principle of equality or the principle of protection of trust (see, e.g., Supreme Court Decision 2009Du7967, Dec. 24, 2009). Furthermore, the principle of no retroactive taxation provided by Article 18(3) of the Framework Act on National Taxes, which is a taxpayer’s duty of interpretation or practice without any justifiable reason, should be accepted as a taxpayer’s duty of interpretation or practice.

There is a legal obligation to report and pay the consumption tax and the individual consumption tax on their own.

C) On the other hand, the National Tax Service’s first and second stages promotion plan cited by the Plaintiff is an internal guidelines established by the National Tax Service to promote the taxation and simplification of the special consumption tax and the individual consumption tax on entertainment taverns, with respect to entertainment taverns less than a certain size under the internal guidelines drawn up by the National Tax Service and directed it

Not imposing the consumption tax and the individual consumption tax, but it is merely a grace period for a small-scale entrepreneur who is less than a certain scale expected to have a high shock, such as difficulty in living, prior to the imposition of the special consumption tax and the individual consumption tax on entertainment taverns, as a provisional measure. If so, it cannot be deemed that there was a compelling non-taxation practice as argued by the Plaintiff due to the first and second stage implementation plan, which is mere internal guidelines, or that the National Tax Service granted trust by ordering the public opinion of the non-taxation.

D) Therefore, this part of the Plaintiff’s assertion is without merit on the premise that the instant entertainment tavern did not constitute a taxable entertainment place or that an unconditional non-taxable practice was formed as a result of the first and second stages promotion plan.

2) Determination on the assertion of violation of the principle of tax equality

There is no evidence to acknowledge that the Defendant, while making a non-taxation on the subject of taxation such as the entertainment tavern in the instant case, has made a arbitrary different disposition against the Plaintiff only.

Therefore, the plaintiff's assertion on this part is without merit.

3. Conclusion

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

presiding judge**

Judges Gangnam*

Judges Cho*