Seoul High Court 2012Nu43 (2012.08.30)

early 2010west2996 ( December 02, 2010)

Interpretation to include one shareholder and a person with a special relationship within a certain scope does not violate the Constitution.

Although the Presidential Decree delegates the scope of large shareholders to the Presidential Decree, it is necessary to cope with it with it with with the change in the scale of the economy, and considering the legislative intent, circumstances, and contents of the provisions of the Act, it can be predicted that the majority of the contents and scope can be predicted. Thus, it cannot be viewed as a violation of the principle of no taxation without law

Article 157 of the Enforcement Decree of Income Tax Act

2012Du20694 Revocation of Disposition of Imposing capital gains tax

Max 3 others

Head of tax office and two others

2. Determination of the original Board

Seoul High Court Decision 2012Nu43 Decided 30, 2012

on October 26, 2016

All appeals are dismissed.

The costs of appeal are assessed against the plaintiffs.

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

1. With respect to "large shareholders as prescribed by the Presidential Decree" under Article 94 (1) 3 (a) of the former Income Tax Act (amended by Act No. 9270 of Dec. 26, 2008), the income accruing from "those transfer by the large shareholders as prescribed by the Presidential Decree in consideration of the ratio of stocks held by stock-listed corporations under the Securities and Exchange Act, total market price of such stocks, etc. shall be subject to the taxation of capital gains tax." Article 157 (4) of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 21301 of Feb. 4, 2009) by delegation of the same Act (hereinafter "Enforcement Decree of this case") provides for 1/10 or more of stocks or equity shares of the corporation (including preemptive rights, and hereinafter "stocks, etc.") and 3/10 or more of stocks of the corporation as of the date of acquisition, etc. and 10/10 or more of stocks, etc. of the relevant 3/100 or more of the relevant fiscal year immediately preceding business year.

2. After finding facts based on the evidence adopted, the court below determined that the legal provision of this case does not constitute a violation of the principle of no taxation without representation or the principle of prohibition of comprehensive delegation of legislation, and the provision of this case cannot be deemed null and void as it is legitimate within the delegation scope in order to achieve the legislative purpose of the legal provision of this case. Since the legal provision of this case was delegated to the Presidential Decree with regard to the scope of major shareholders, and thus, it is necessary to determine the scope thereof with flexible response according to economic scale changes, etc., and in light of the legislative purpose of the legal provision of this case, it cannot be deemed that the legal provision of this case violates the principle of no taxation without representation or the principle of prohibition of comprehensive delegation of legislation, and that the provision of the Enforcement Decree of this case cannot be deemed null and void because it was not known that the transfer income of this case becomes subject to taxation of transfer income tax under the legal provision of this case and the provisions of the Enforcement Decree of this case, or there is no reason to expect to pay the transfer income tax. Accordingly, each of the provision of this case is legitimate.

In light of the above provisions and relevant legal principles and records, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the effect of the legal provisions of this case and the Enforcement Decree of this case or additional tax as otherwise alleged in the ground of

3. Therefore, all appeals are 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 on the bench.