In a case where the original taxpayer files an additional return on the global income tax base and tax amount due to a change in the amount of income due to the disposal of income after the final due date of final return on global income tax base, whether the original taxpayer may exercise the right to claim a correction on the whole tax base and tax amount subject to the additional return (affirmative)

In a case where the amount of income is changed due to the disposal of income after the final due date of final tax base of global income expires, and the additional tax base and tax amount are returned, voluntary payment is made pursuant to Article 134(1) of the Enforcement Decree of the Income Tax Act, the period for filing a request for correction pursuant to Article 45-2(1)1 of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014; hereinafter the same shall apply) shall be calculated from the day following the due date of additional tax return and voluntary payment under Article 134(1)1 of the Enforcement Decree of the Income Tax Act. The subject of additional tax return pursuant to Article 134(1)1 of the Enforcement Decree of the Income Tax Act, regardless of whether the corporation that received the notice of change in the amount of income has paid the amount of income, shall not be required to pay the amount of tax corresponding to the requirements for filing a request for correction, and Article 45-2(1)5 of the former Framework Act on National Taxes, to the extent of global income tax amount actually paid within 14.

However, in cases where a corporate withholding agent receives a notice of change of income and pays the income tax accordingly, the person claiming the refund of the tax amount paid under the name of the corporate withholding agent is the person directly related to the legal relationship with the tax authority formed by the notice of change of income amount. Thus, the person claiming the refund of the tax amount paid under the name of the corporate withholding agent is the person claiming the refund of the tax amount, even in cases where the right to claim the refund takes place as a result of exercising the right to claim the correction under Article 45-2 (1) 1 of the former Framework Act on National Taxes with respect to all the tax base and tax amount to be additionally reported after the additional return of the tax amount pursuant to Article 134

Article 45-2 (1) 1 of the former Framework Act on National Taxes (Amended by Act No. 12848, Dec. 23, 2014); Article 134 (1) of the Enforcement Decree of the Income Tax Act

Supreme Court Decision 2009Du20274 Decided November 24, 2011 (Gong2012Sang, 71)

Plaintiff (Law Firm LLC, Attorneys So-young et al., Counsel for the plaintiff-appellant)

The Head of the District Tax Office (Law Firm Sejong, Attorneys Kim Hong-chul et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2014Nu43143 decided October 29, 2014

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

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

1. Regarding ground of appeal No. 1

A. Article 45-2(1) main text and subparagraph 1 of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014; hereinafter the same) stipulate that “a person who has filed a tax base return by the statutory deadline for return” may file a claim with the head of the competent tax office within three years after the statutory deadline for return expires, where the tax base and amount of tax recorded in the tax base return (referring to the tax base and amount of tax after the relevant decision or correction, if any, is determined or corrected under the tax-related Acts) exceed those to be reported under the tax-related Acts.

Meanwhile, Article 134(1) of the Enforcement Decree of the Income Tax Act provides that “When a corporation files a return on the tax base of corporate tax pursuant to the Corporate Tax Act after the deadline for filing the final return of global income, or the amount included in its gross income after determination or correction of the corporate tax base pursuant to the Corporate Tax Act is disposed of as dividends, dividends, or other income, and the income tax is to be additionally paid by a person who has no liability for filing the final return of global income, a person who is not required to file the final return of tax base pursuant to the tax-related Acts, or a person who has filed the final return of tax base, and a person who has filed the final return of tax base is required to pay the income tax additionally, the relevant corporation (referring to the resident where he/she is notified by the resident pursuant to the proviso to the part other than each subparagraph of Article 192(1)) by the last day of the month following the month in which the change in income

Article 134(1)1 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 2009Du20274, Nov. 24, 201) provides that the period for filing a request for correction pursuant to Article 45-2(1)1 of the former Framework Act on National Taxes shall begin from the day following the due date for filing an additional return and advance payment pursuant to Article 134(1) of the Enforcement Decree of the Income Tax Act (see Supreme Court Decision 2009Du20274, Nov. 24, 201). The subject of the additional return pursuant to Article 134(1) of the Enforcement Decree of the Income Tax Act, regardless of whether the corporation that received the notice of change in the amount of income paid the amount of income, shall be the whole tax base and tax amount of global income increase due to the change in the amount of income by disposal of income, and Article 45-2(1)1 of the former Framework Act on National Taxes does not require the corporation that received the notice of change in the amount of income tax to be paid within the scope of global income.

However, in case where a corporate withholding agent receives a notice of change of income and pays the income tax accordingly, the person claiming the refund of the tax amount paid under the name of the corporate withholding agent shall be the person directly related to the legal relationship with the tax authority formed by the notice of change of income amount. Thus, in case where the person claiming the refund occurs as a result of exercising the right to claim the correction under Article 45-2 (1) 1 of the former Framework Act on National Taxes concerning all the tax base and tax amount subject to the additional return after the person claiming the refund of global income pursuant to Article 134 (1) of the Enforcement Decree of the Income Tax Act, the person claiming the refund of the tax amount paid under the name of the corporate withholding agent can only be the person claiming the refund

B. Comprehensively taking account of the evidence adopted, the lower court found that (i) the Plaintiff established Dae Food Co., Ltd. (the trade name was changed to Maner Co., Ltd.; hereinafter “the instant corporation”) around September 198, 200; (ii) conducted a tax investigation on the instant corporation; and (iii) the director of the Regional Tax Office confirmed that the instant corporation raised funds by means of excessive appropriation of the construction cost and return of the difference from the company; and (iv) on May 30, 2012, the Plaintiff included the total amount of 6,431,847 and 396 won (hereinafter “the instant income”) that were derived from the process of raising funds in the instant corporation’s gross income for 20 years after filing a revised tax return for 190 to 200 won; and (v) the Plaintiff received a revised tax return for 20 years from 200 to 2000 won; and (v) the amount of income accrued to the Plaintiff on July 1, 201208.

Then, the lower court determined that: (a) the instant corporation, after receiving the notice of change in income amount on July 1, 2012 and July 2, 2012, the Plaintiff submitted an additional tax return for global income tax for the period from September 28, 2012 to 2010, which was within the deadline for filing the additional tax return under Article 134(1) of the Enforcement Decree of the Income Tax Act; (b) the Plaintiff may file a claim for correction based on Article 45-2(1)1 of the former Framework Act on National Taxes; and (c) the withholding agent does not restrict the right to file a claim for correction on the sole ground that it is possible to dispute the notice of change in income

C. Examining the reasoning of the judgment below in light of the aforementioned legal provisions, legal principles, and records, the judgment of the court below is just and acceptable. Contrary to the allegations in the grounds of appeal, the court below did not err by misapprehending the legal principles on the grounds for additional return and payment under Article 134(1) of the Enforcement Decree of the Income Tax Act and the scope of the right

2. Regarding ground of appeal No. 2

After compiling the adopted evidence, the court below acknowledged the facts as stated in its holding. ① It is only a part of the amount imposed by the defendant, which can be deemed to have been accrued to the plaintiff out of the amount imposed by deeming the corporation as having been out of the company after excessive appropriation of the construction cost, and ② since the loan irrelevant to the business cannot be deemed to have accrued to the plaintiff by using the full amount individually by embezzlement, etc. by the plaintiff, the pertinent recognized person cannot be deemed to have accrued to the plaintiff. Thus, the part of the disposition in this case, which was based on the premise that the part belonging to the year 200

The ground of appeal on this part is that the above judgment of the court below is erroneous, but it is merely an error of the selection of evidence or fact-finding which belongs to the exclusive jurisdiction of the court below and thus cannot be a legitimate ground of appeal. Furthermore, the reasoning of the court below is examined in light of the records, and there is no error of law by mistake of facts due to a violation of

3. Conclusion

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 Jo Hee-de (Presiding Justice)