2014du45703 Disposition of revocation of imposition of acquisition tax, etc.

Only a limited liability company specialized in the case-backed securitization.

Military Distribution Market

Seoul High Court Decision 2014Nu43655 Decided October 31, 2014

October 15, 2015

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. Articles 120(1)12 and 119(1)13 of the former Restriction of Special Taxation Act (amended by Act No. 10406, Dec. 27, 2010; hereinafter “former Special Provisions on Taxation”) provide that “Where a company specializing in asset-backed securitization acquires securitization assets from an asset holder or another special purpose company or manages, operates, or disposes of the acquired securitization assets by transfer, in accordance with an asset-backed securitization plan, 50/100 of acquisition tax shall be reduced or exempted for real estate acquired by December 31, 2012.” However, Article 120(1)9 of the Restriction of Special Taxation Act (amended by Act No. 10406, Jan. 1, 2011; hereinafter “Special Provisions on Acquisition Tax Exemption”) excluded from acquisition tax on real estate acquired by transfer from an asset-backed securitization company or from another special purpose company for asset-backed securitization, the acquisition tax on real estate acquired by transfer from the asset-backed securitization company for acquisition by transfer.”

In light of the language and structure of the aforementioned provision, and the amended special provisions on the special provisions on taxation to a special purpose company in order to reasonably coordinate the scope of special cases on taxation to the special purpose company and promote fair taxation with general creditors, real estate acquired by a special purpose company is excluded from acquisition tax reduction or exemption. In light of the fact that real estate acquired by a special purpose company is excluded from acquisition tax reduction or exemption, the secured real estate acquired by the special purpose company by directly filing an application for purchase at the auction procedure of secured real estate to recover the claim after the transfer of secured real estate bonds, which are securitized assets, shall not constitute acquisition tax reduction or exemption pursuant to the

B. The judgment below to the same purport is just, and contrary to the allegations in the grounds of appeal, the court below did not err by misapprehending the legal principles on the interpretation of the amended special provisions.

2. As to the grounds of appeal Nos. 2 and 3. Based on its stated reasoning, the lower court determined that it is difficult to see that the Defendant issued an official statement of opinion, which is the subject of trust to the Plaintiff, and that the Plaintiff was unable to cause the Plaintiff’s breach of duty due to failure to report and pay the acquisition tax of this case. Examining the relevant legal principles and records, the lower court’s aforementioned determination is justifiable, and contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on “justifiable cause” that may be exempted from the imposition of the principle

3. Regarding ground of appeal No. 4

A. According to Articles 2(1)15 and 55(1) of the Framework Act on Local Taxes and Article 36 of the Enforcement Decree of the Framework Act on Local Taxes, a tax payment notice shall be based on a tax payment notice stating the taxable year and items of the local tax to be paid, the Acts and ordinances of the relevant local government, the taxpayer’s address and name, tax base, tax rate, amount of tax, time limit for payment, place for payment, measures to be taken in the event that the local tax is not paid by the time limit for payment, and methods of remedy for illegality or mistake. The above provisions purport to ensure fairness in tax administration by having the tax authority take careful and reasonable disposition in accordance with the principle of no taxation without law, and to ensure convenience in filing an objection by clearly notifying the taxpayers of the details of the taxation, and, in principle, separate a tax payment notice from the principal tax amount to be imposed, a separate basis for calculation from the principal tax amount to be imposed, including the aggregate of the tax amount to be imposed, tax base rate, and additional tax amount to be imposed.

On the other hand, if it is evident that a taxpayer was not affected by the determination of whether he/she is dissatisfied with the disposition or by the notice of tax notice sent by the tax authority prior to the taxation disposition, the defect of the tax notice should be cured. However, the document that can supplement the defect of the tax notice should be delivered to the taxpayer prior to the tax notice in accordance with the statutes, etc., so that the document that can supplement the defect of the tax notice can be integrated with the tax notice because it can be delivered to the taxpayer prior to the tax notice, and the necessary matters to be stated should be properly (see, e.g., Supreme Court Decision 2005Du5505, Oct. 13, 2005).

B. The reasoning of the lower judgment and the evidence duly admitted by the lower court revealed the following: (a) Each principal tax of the instant tax payment notice includes only the total amount of tax by tax item, including acquisition tax, local education tax, and special rural development tax (hereinafter “acquisition tax, etc.”) and additional tax; (b) the tax amount of each principal tax including acquisition tax, and additional tax, are not separately stated, or the tax amount by type between additional taxes is not stated; and (c) only the tax base of acquisition tax and the calculation basis of each principal tax, including acquisition tax, are not clearly stated; and (b) the notice of tax payment sent by the Defendant to the Plaintiff prior to the instant tax payment notice includes the tax amount of each principal tax including acquisition tax, etc., the amount of additional tax for each principal tax including acquisition tax, the amount of additional tax for each principal tax such as acquisition tax, and the amount of additional tax for negligent tax and additional tax for unfaithful payment for each principal tax such as acquisition tax, etc., but the amount of additional tax for negligent tax and additional tax

Examining these facts in light of the legal principles as seen earlier, each principal tax of the acquisition tax of this case and the notice of tax payment of additional tax are defective, and the defect cannot be seen as having been supplemented or cured. Thus, the disposition of this case is unlawful.

Nevertheless, solely based on its stated reasoning, the lower court determined that the imposition of additional taxes, such as acquisition tax, was lawful, and did not state specific grounds for determination as to the Plaintiff’s assertion that each principal tax payment notice, including acquisition tax, was unlawful. In so determining, the lower court erred by misapprehending the legal doctrine on the tax payment notice, etc., which affected the conclusion of the judgment. The allegation contained in

4. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Young-young

Justices Kim Yong-deok

Justices Kim Jae-han

Chief Justice Kim Jong-il