Daejeon District Court 2016Gudan174 (No. 25, 2016)

any false registration different from the actual transaction shall be deemed to constitute fraud or other unlawful act.

The act constitutes fraud or other improper act if there is active concealment intention, such as preparing a false contract, without simply failing to report under the tax law or making a false report.

Period for exclusion of imposition of national taxes under Article 26-2 of the Framework Act on National Taxes

Daejeon High Court 2016Nu12323

Economic Zone

XX Head of tax office

Daejeon District Court 2016Gudan174

November 17, 2016

December 15, 2016

1. Details of the disposition;

The following facts may be recognized by adding up the whole purport of the pleadings to the statements of Gap evidence Nos. 1, 2, and Eul evidence Nos. 1, 3, and 6:

A. The Plaintiff, along with AA and BB on February 17, 2004, acquired an O-dong O-dong O-type O-type O-type building and its ground (hereinafter “instant real estate”) through public sale, and completed the registration of ownership transfer on March 16, 2004 each of 1/3 shares.

B. On May 25, 2004, the Plaintiff, AAA, and BB obtained a loan of KRW 00 million from the National Agricultural Cooperative Federation (hereinafter “CF”) in the name of the Plaintiff, and on June 3, 2004, completed the registration of creation of a new mortgage on the instant real estate to Nonghyup, the maximum amount of KRW 00,000,000,000,000,000,000 from the Plaintiff.

C. After that, on August 5, 2005, the registration of ownership transfer was completed with respect to each share of the instant real estate in the medical corporation CCC (hereinafter “CCC”) on the grounds of the sale on the same date. On September 1, 2005, the above registration of ownership transfer was cancelled on the grounds of the cancellation of agreement on August 5, 2005, and at the same time the medical corporation completed the registration of ownership transfer due to CCCD (hereinafter “DD”) on the gift made on August 5, 2005 (hereinafter “the donation”).

D. On December 31, 2005, EEE, a tax agent, filed a transfer income tax return with the transfer value under the name of the plaintiff on the ground that DDR’s donation of this case constitutes a non-paid donation under the condition that DDR takes over the obligation of collateral security on the part of the plaintiff. B. The transfer income tax of the agricultural loans listed in the above paragraph (b) was reported in the name of the plaintiff (hereinafter “the instant report”).

E. After conducting a tax investigation on the instant report from August 21, 2014 to September 21, 201 of the same year, the Defendant: (a) sold 1/3 shares of the instant real estate (hereinafter “Plaintiff shares”) to AA on September 24, 2004, which was prior to the instant donation, at KRW 00 million (hereinafter “sale”); and (b) on October 5, 2004, where the Plaintiff and AAA agreed to convert KRW 100 million out of the said O billion into a loan for consumption, the time of the instant sale; and (c) since the instant donation was false, the period of exclusion from the imposition of capital gains tax on the instant sale was ten years, the Plaintiff determined and notified OO of capital gains tax for the year 2004 (hereinafter “instant disposition”).

F. On April 27, 2015, the Defendant filed a petition with the Tax Tribunal for an adjudication seeking the revocation of the instant disposition, but was dismissed on December 3, 2015.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

On July 2005, the Plaintiff issued to AA a seal imprint and a certificate of personal seal impression necessary for the transfer registration, etc. of the Plaintiff’s share. On August 5, 2005, the Plaintiff sold the instant real estate, including the Plaintiff’s share, to CCC on August 31, 2005. On the same day, at the same time, the Plaintiff rescinded the sales contract with CCC, and made the instant donation to DDR, and made the instant report under the Plaintiff’s name through EE, a tax agent. Since the instant donation and the instant report were only made independently without the Plaintiff’s intent or action, the Plaintiff constitutes a case where AA did not report capital gains tax on the instant sale. Accordingly, the exclusion period for the imposition of capital gains tax on the instant sale is the last day of May 31, 2005, which is the date following the expiration of the deadline for filing the transfer income tax on the instant sale, and thus, the disposition was unlawful as it was revoked on March 2, 2015.

B. Determination

(1) According to Article 26-2(1)1, 2, and 3 of the Framework Act on National Taxes, national taxes may not be imposed after the expiration of five years from the date on which the pertinent national tax is assessable. However, if a taxpayer fails to submit a return within the statutory due date of return, national taxes may be imposed for seven years, and if a taxpayer evades national taxes by fraud or other unlawful means, national taxes may be imposed for ten years (see, e.g., Supreme Court Decision 2012Du1315, Oct. 11, 2012). The legislative intent of Article 26-2(1) of the Framework Act on National Taxes, in principle, requires the exclusion period of the right to impose national taxes, but it is difficult to find that there is an omission report or fraudulent act, such as 10 years from the date on which the pertinent national tax is assessable, and thus, it is difficult to expect that the tax authority is an agent to evade or exempt from taxes under Article 26-2(1)1 of the Framework Act on National Taxes.

(2) The following facts are acknowledged in light of the purport of the entire pleadings in each entry of Gap evidence Nos. 1, 2, and Eul evidence Nos. 1 through 10.

(A) On February 2, 2004, the Plaintiff, AA, and BB made an investment of KRW 1/3 of each O billion in the opening of a convalescent hospital (200 million out of the Plaintiff’s investment funds, the Plaintiff decided to borrow KRW 100 million each from AA and BB), and on February 17, 2004, acquired the instant real estate by public sale and completed the registration of ownership transfer on March 16, 2004, and obtained permission to establish a DD medical institution in the name of FF, a doctor on July 2, 2004.

(B) On September 24, 2004, the Plaintiff, AA, and BB entered into a sales contract with the effect that the value of the instant real estate is KRW O0 million (i.e., KRW 00 million by each share x KRW 3) and that the Plaintiff shall be liable for the repayment of principal and interest for KRW 00 million by the agricultural loans listed in the Plaintiff’s name, and that the Plaintiff shall be liable for the repayment of principal and interest for KRW 00 million by the agricultural loans listed in the Plaintiff’s Section 1-B. The Plaintiff shall be liable for the value of the Plaintiff’s shares - KRW 00 million - KRW 1/3 (i.e., KRW 1/3) - KRW 100 million by the loans listed in the said Section, KRW 2B shall be sold to A.

(C) On September 30, 2004, the Plaintiff agreed with AA to convert the amount of KRW 00 million out of the KRW 00 million out of the above KRW 00 million out of the above KRW 000 million out of the above KRW 000 on October 5, 2004 (i.e., KRW 00 billion - KRW 15% per annum when the Plaintiff retired from D), and entered into a employment contract with DD on October 5, 2004, and worked as the head of the D administrative office from April 2005, the Plaintiff received KRW 00,000 from AA to December 11, 2006, either directly or through credit transfer, as O and salary for the above KRW 15%.

(D) With respect to the sale of this case, the Plaintiff did not report the transfer income tax from May 1, 2005 to May 31, 2005, which was its filing deadline. Meanwhile, the Plaintiff’s seal is identical to the Plaintiff’s seal affixed on the sales contract at the time of the sale of this case.

(E) On November 16, 2005, the Plaintiff and AAA had been prosecuted on November 16, 2005 on the charge that the latter committed a violation of the Medical Service Act, such as the establishment of DD in collusion with FF, who is a doctor, even though the latter is neither a doctor nor a medical institution, and was sentenced to a suspended sentence of KRW 0,000,000,000,000,000,000,000,000,000,0000,000,000,000,000,000,000, and00, was sentenced to a fine of KRW 1,000,00,000,00,000,000,000,000,000,000,000, and the judgment was finalized.

(F) On July 26, 2012, the National Health Insurance Corporation: (a) filed a lawsuit claiming damages, etc. against the above medical care benefit cost on the ground that: (b) O204.7.2 through August 10, 2005, O204, O205, and O205, paid the aggregate amount of the medical care benefit cost to the National Health Insurance Corporation; (c) on the ground that the prescription period for claiming damages against AA and FF has expired; (d) on the ground that the National Health Insurance Corporation received unjust enrichment from the above amount of the medical care benefit cost, O200 and O20.30% of the total amount from January 9, 2006 to August 35, 2006, O200 to O20% of the total amount of the cost of health care benefit; and (e) on the ground that O25% of the total amount of the cost of care benefit was paid to the National Health Insurance Corporation; and (e) on the ground that O201 or 25% judgment was rendered.

(G) On May 22, 2015, AA filed a lawsuit seeking reimbursement of KRW 1/3, an amount equivalent to the above Paragraph (f) that the Plaintiff and BB paid to the National Health Insurance Corporation. The Plaintiff asserted on September 24, 2004 that the Plaintiff retired completely from DD’s partnership business relationship by selling the instant case to AA on the same date. The Plaintiff’s assertion was accepted on February 17, 2016, among the above OOO branch of DD branch of O branch of O branch of O branch of O branch of O branch of O branch of O branch of O branch of O branch of O branch of O branch of 2015, from around July 2004 to September 2004, 2004, that part of the Plaintiff’s medical expenses paid to D branch of O branch of O branch of O branch of O branch of O branch of O branch of O branch of O branch of this case and the damages for delay corresponding to D branch of O branch of 200 and 130O branch of the first instance judgment.

(3) In addition to the following circumstances, the Plaintiff’s sales of this case to AA on September 24, 2004, although it was the actual transaction, it did not simply report capital gains tax from the sale of this case, but on August 5, 2005, the Plaintiff made a false donation contract and made a registration of transfer of ownership following it under the condition that DoD takes over the obligation of collateral security payment on August 5, 2005, under the condition that DoD made a false donation under the Plaintiff’s name, the Plaintiff made a false donation contract and made a registration of transfer of ownership on the premise of the donation of this case through EE, a tax agent, around December 2005, on the premise of the donation of this case. The Plaintiff’s act appears to have reported the transfer amount of 1.B. The Plaintiff’s act constitutes “Fraud or other unlawful act that significantly makes it difficult for the Defendant, which is the tax authority, to impose and collect taxes,” and it is not reasonable to conclude that the Plaintiff’s act constitutes evidence No. 13.

(A) With respect to the instant donation and the instant report, the Plaintiff: (a) drafted a gift contract under agreement with AA and BB at the tax appeal stage; and (b) claimed that the instant report was filed with the assistance of EE, a tax agent, as the entire share of the instant real estate, including the Plaintiff’s share, was transferred to DD; (c) during the instant lawsuit, the Plaintiff asserted that the Plaintiff’s receipt of the Plaintiff’s seal impression certificate and the instant certificate was made arbitrarily, and that the Plaintiff had received the Plaintiff’s seal impression certificate and the instant certificate and the instant report were made. (iii) At around the end of July of 2005 and around August of the same year, the Plaintiff issued the Plaintiff’s seal impression certificate and the Plaintiff’s seal impression certificate, and then received them immediately after being returned from the Plaintiff’s place of residence.

(B) According to the Plaintiff’s assertion in the instant lawsuit, AA made the instant donation in the name of the Plaintiff using the Plaintiff’s seal imprint certificate and the certificate of personal seal impression without authority, and further filed the instant report via EE, a tax agent. Since around July 2009, the Plaintiff received a revised report, etc. from the head of the Military Tax Office on and around August 2009, and directly received an instruction of the revised report, etc. concerning the instant report from the head of the Military Tax Office on and around August 2009, the Plaintiff was aware of the instant tort, at least around that time, AA had been aware of such tort. However, in relation thereto, it does not appear that the Plaintiff filed a criminal complaint or civil lawsuit against AA due to the crime of forging private documents and the

(C) In light of the fact that the Plaintiff, AA, and BB invested each O billion won for the purpose of opening a convalescent hospital, and acquired each share of the instant real estate in 1/3, the Plaintiff’s sale of the instant real estate and the Plaintiff’s appointment of a deputy executive director of DDR operated by AA from October 5, 2004 to April 2005, which was the period before and after the instant donation, and the judgment of conviction was finalized on April 26, 2006 due to the violation of the Medical Service Act, and the investigation thereof was commenced from March 2005, it cannot be readily accepted even if the Plaintiff had known that there was a change in the registry or the report of this case after the instant sale.

(D) From May 2, 2005 to December 11, 2006, the Plaintiff received OE directly or through account transfer from AA during the period from May 2, 2005 to December 11, 2006. The donation of this case was made on August 5, 2005 when the Plaintiff was paid part of the above amount by AAA, and the donation of this case was made on August 5, 2005 under the name of the Plaintiff. The donation of this case was made only on the condition that DD takes over the obligation of collateral security as stated in paragraph 1-B of this case under the name of the Plaintiff. Accordingly, there was no money to be paid by the Plaintiff, the Plaintiff rescinded the sales contract for the sale of this case, or there was no evidence that the Plaintiff returned the above amount to AA., the above amount would clearly constitute the Plaintiff’s loan for consumption and its interest.

(E) The time when the Plaintiff purchased the Plaintiff’s shares on February 17, 2004. The time when the Plaintiff purchased the Plaintiff’s shares. The time of the instant donation was September 24, 2004. The time of the instant donation was August 5, 2005. The transfer value of the instant donation was KRW 00 million, and the transfer value of the instant donation was KRW 1.B., the Plaintiff reported and paid the transfer income tax on the instant donation, instead of reporting and paying the transfer income tax, the tax rate (50% of the tax base if the period is less than one year, 40% of the tax base if the period is less than one year, and 1.2 years and less than two years, and the economic difference between the Plaintiff and the Plaintiff’s sales value of the instant donation and the Plaintiff’s sales amount of the instant donation was between KRW O00,000,0000 and KRW O00,0000,0000,0000,000.

(4) Ultimately, the exclusion period of capital gains tax under Article 26-2 (1) 1 of the Framework Act on National Taxes is ten years from the date on which the Plaintiff evades capital gains tax by 'Fraud or other unlawful acts.' Meanwhile, Article 12-3 (1) 1 of the Enforcement Decree of the Framework Act on National Taxes provides that the date on which the tax base and tax amount of the national tax may be imposed may be the day following the due date for filing a return or the due date for filing a return. Article 110 (1) of the Income Tax Act provides that a resident with capital gains tax shall report the tax base to the head of the tax office having jurisdiction over the place for tax payment from May 1 to 31 of the year following the relevant taxable period. Article 98 of the Income Tax Act provides that the date of acquisition and transfer of capital gains tax shall be 05 billion won until the due date for filing a loan for consumption of 200 billion won, excluding the cases where the date of liquidation of the price is unclear.

(5) Meanwhile, the plaintiff asserts that the report of this case is only a report after the deadline for the transfer income tax on the sale of this case. However, the plaintiff did not file the report of this case after the statutory deadline for return on the premise of the sale of this case, but the sale of this case to AA on September 24, 2004 was actually a transaction, and as seen earlier, the sale of this case was made to DD on August 5, 2005, by preparing a false donation contract as if it was made on the gift of this case, and making the registration of ownership transfer accordingly on the premise of the donation of this case. Thus, the plaintiff's above assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed due to the lack of reason, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.