Cho High Court Decision 2010west0780 (2010.05.04)

Whether there was any justifiable reason to mislead him/her as a dividend income related to additional tax

Even if dividend income was mistaken for the dividend income subject to Gros-up, the Plaintiff is at fault without sufficiently checking and examining whether the instant dividend income was subject to Gros-up dividend income already taxed at the corporate stage and without examining whether it was the dividend income subject to Gros-up dividend income. Therefore, the penalty tax in bad faith is justified.

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of global income tax of KRW 54,161,290 on December 1, 2009 against the Plaintiff on December 1, 2009 that exceeds KRW 36,381,601 shall be revoked.

1. Details of the disposition;

A. On December 1, 2009, the Defendant reported the global income tax for 2004 by adding the total income amount of 299,188,298 won (hereinafter “instant dividend income”) received from △△ Securities Co., Ltd. (hereinafter “instant dividend income”) to the global income tax amount of 299,18,298 won (amended by Act No. 7319, Dec. 31, 2004; hereinafter “former Income Tax Act”) subject to Article 17(3) proviso and Article 56 of the former Income Tax Act (amended by Act No. 7319, Dec. 31, 2004; hereinafter “Gros-up; hereinafter “Fros-up for convenience”) to the total income amount of 3 years of 2004 to the global income amount of 19,188,75,7976 won, and the amount of the additional tax calculated by adding the total income amount of 29,57060 won after adding it to the global income tax amount of 16.

B. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on February 25, 2010, but the Tax Tribunal dismissed the Plaintiff’s appeal on May 4, 2010.

[Ground for Recognition: Facts without dispute, Gap 1, 2 (including paper numbers), Eul 1, and the purport of the body before oral argument]

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Republic of Korea does not provide an institutional device that enables the general public to ascertain what dividend income is dividend income, and the Republic of Korea does not provide for the following facts: (a) only from the method of preparing a statement of payment of interest and dividend income in attached Form 30 (1) related to attached Form 32-2 of the former Enforcement Rule of the Income Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 554 of Apr. 17, 2007); (b) only from the date of preparing a statement of payment of dividend income in attached Form 32-2 of the former Enforcement Decree of the Income Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 32-2 of the Ministry of Finance and Economy of Apr. 17, 207), the Defendant’s disposition on the premise that the Plaintiff is liable for the wrong dividend income in light of the proviso to Article 133(1) of the Income Tax Act and the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 1980, Feb. 28, 2007). 3).

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

Under the tax law, in order to facilitate the exercise of the right to impose taxes and the realization of tax claims, the taxpayer’s intentional and negligent acts are not considered as administrative sanctions imposed in accordance with the law if the taxpayer violates the duty to report and pay taxes, etc. under the law without justifiable grounds (see, e.g., Supreme Court Decision 2001Du7886, Jan. 10, 2003).

In full view of the following circumstances, it cannot be deemed that there is a justifiable reason for the Plaintiff to mislead the instant dividend income as dividend income subject to Gros-up, and thus, the Plaintiff’s assertion cannot be accepted. In full view of the following circumstances, the Plaintiff’s assertion cannot be accepted.

① Global income tax is a tax item in which a taxpayer should calculate his/her tax base and tax amount on his/her own and make a return and pay, and the taxpayer is liable for the appropriateness of such return and tax amount on a primary basis.

② Whether it is a dividend income subject to Gros-up is determined in accordance with the provisions on dividend income under Article 17(1) and (3) of the former Income Tax Act, and the Plaintiff, who made the comprehensive income tax through a tax agent (Korean accounting corporation), seems to have sufficiently known the circumstances that the instant dividend income does not constitute a dividend income subject to Gros-up under the above provisions. As alleged by the Plaintiff, “* (213, 223, 2238, 239, 240, 241, 241, 212, 222, 244, 245, 246, and 247)” in the method of preparing interest and dividend payment statement form as alleged by the Plaintiff, “The instant dividend income subject to Gros-up’s dividend income does not constitute a dividend income subject to Gros-up.” Moreover, it is not possible to find out the circumstances that the instant dividend income does not constitute a justifiable ground for the Plaintiff’s determination of the dividend income subject to Gro-up form.

③ The proviso of Article 133(1) of the former Income Tax Act and Article 193(3) of the former Enforcement Decree of the Income Tax Act provide that a financial institution shall issue a withholding tax receipt if it notifies a dividend income recipient of the annual aggregate of dividend income, details of withholding tax, and financial transaction statement stating the business registration number of the withholding agent and his/her trade name or corporate name, to the dividend income recipient. As alleged by the Plaintiff, the said provision cannot be interpreted to mean that even if a financial institution notifies the dividend income recipient of the financial transaction statement stating the details of the securities transaction statement in lieu of the withholding

④ Since the Plaintiff’s statement on the financial income and the details of withholding in 2004 that △△ Securities Co., Ltd. received from △△△ Securities Co., Ltd stated that “other inquiries were made at the opening point,” it was possible for the Plaintiff to confirm whether the instant dividend income is subject to Gros-up dividend income through the securities account opening point.

⑤ While it was difficult for the Plaintiff to find out whether the instant dividend income is subject to Gros-up dividend income, the Plaintiff filed a global income tax return on the premise that all the instant dividend income is subject to Gros-up dividend income, and the Plaintiff or his agent knew the global income tax return system and the dividend income deduction system at the time of filing the global income tax return. Therefore, even if the Plaintiff misunderstood that the instant dividend income is subject to Gros-up dividend income, the Plaintiff was negligent in determining the instant dividend income as subject to Gros-up dividend income without sufficiently checking and examining whether the instant dividend income is subject to global income already taxed at the corporate level (the instant case, unlike the case where the Plaintiff caused mistake as to whether the said dividend income is subject to taxation, was actively entitled to a dividend tax deduction by the Plaintiff and then deducted the amount equivalent to 19/100 after adding the dividend income to 10/100).

3. Conclusion

The plaintiff's claim is dismissed on the ground that it is without merit.