Whether the provisions of Article 9(1) and (2) of the Inheritance Tax Act and Article 5 of the Enforcement Decree thereof concerning the method of evaluating inherited property violate the provisions of the Framework Act on National Taxes and the Constitution.

Article 21(1) of the Framework Act on National Taxes only prescribes the abstract time of establishment of tax liability by each item of national tax, but it does not include provisions on the method of assessment of property. Specific tax liability is determined according to the procedure under the pertinent tax law (Article 22(1) and (2) of the Inheritance Tax Act and Article 5 of the Enforcement Decree thereof. Since Article 9(1) and (2) of the Inheritance Tax Act and Article 5 of the Enforcement Decree thereof provide for the method and time of assessment of property which serves as the tax base, both are different subject to regulation, so there is no possibility of conflict and conflict between them. Furthermore, Article 9(2) of the Inheritance Tax Act provides for the purpose of inducing the faithful report of inheritance tax and the rational assessment of property omitted from the report, so it cannot be said that it violates the Framework Act on National Taxes or goes against the constitutional spirit that guarantees the property right of the people.

Articles 21(1) and 22(1) of the Framework Act on National Taxes, Articles 9(1) and 9(2) of the Inheritance Tax Act, Article 5 of the Enforcement Decree of the same Act

Supreme Court Decision 86Nu238 delivered on September 9, 1986 (dong) 86Nu238 delivered on September 9, 1986 (dong)

[Judgment of the court below]

Head of Namyang District Tax Office

Seoul High Court Decision 85Gu854 delivered on February 24, 1986

The appeal is dismissed.

The costs of appeal shall be borne by the plaintiff.

The grounds of appeal by the Plaintiff’s attorney are examined.

In conclusion, the issue is that the assessment of donated property at the time of the imposition of gift tax is illegal, not based on the value at the time of donation. According to Article 21 (1) 3 of the Framework Act on National Taxes, the time when the liability to pay national taxes is established for the acquisition of property by donation. As to the determination of specific liability to pay taxes, Article 22 (1) of the Framework Act on National Taxes provides that the amount of national taxes shall be determined in accordance with the procedure under the pertinent tax law. In the case of the gift tax as in this case under Article 10-2 subparagraph 3 of the Enforcement Decree of the same Act, the government shall determine the tax base and tax amount at the time of the determination of the gift tax according to the procedure under the pertinent tax law. According to Article 9 which applies mutatis mutandis to the Inheritance Tax Act, the method and time of assessment of donated property at the time of the imposition of gift tax shall be determined by the market price at the time of donation, the value of donated property at the time of the imposition of gift tax at the time of taxation shall be determined by the market price at the time of gift tax (Article 20).

Article 21(1) of the Framework Act on National Taxes only provides for the abstract time of establishment of tax liability by each item of national tax, but also provides for the method of assessment of property. Specific tax liability is finalized according to the procedure under the pertinent tax law (Article 22(1) of the Framework Act on National Taxes) In this case, the provisions of Article 9(1) and (2) of the Inheritance Tax Act and Article 5 of the Enforcement Decree thereof are related to the method and time of assessment of property which are the tax base, so there is no conflict between the two because they are different subject of regulation. Furthermore, Article 9(2) of the Inheritance Tax Act provides for the purpose of inducing the sincere report of inheritance (donation) and the rational assessment of property which has not been reported or omitted from the report, so it cannot be said that the provisions are invalid in violation of the Framework Act on National Taxes or in violation of the Constitution guaranteeing the property rights of the people.

Therefore, in this case where a voluntary report on gift tax under Articles 20 and 34-5 of the Inheritance Tax Act has not been made, the court below's decision that the defendant, who is the tax authority, assessed and imposed the gift tax at the price at the time when the gift tax was imposed, not based on the value at the time of donation when the gift tax was imposed (the defendant assessed the price at the time when the first imposition was made by the rate method, and subsequently assessed the market price at that time after the assessment was made by the rate method), was just and the decision of the court below is not justified and there is no violation of the legal principles as to the Inheritance Tax Act, the Framework Act on National Taxes, or the retroactive taxation

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Yoon Il-young (Presiding Justice)