Seoul Administrative Court-2014-Gu Partnership-2101 (O16.29)

Whether the business income tax originally reported and paid can be deducted as the already paid tax amount of the capital gains tax.

Since the reported global income tax (business income tax) for the year 2007, 2008, 2010, and 2011 and the imposed period of capital gains tax for the year 2007 are different, it is not reasonable to deduct the business income tax paid by the Plaintiff as the already paid tax amount of capital gains tax.

Article 51 (Appropriation and Refund of National Tax Refund)

2016Nu37135 Revocation of Disposition of Imposing capital gains tax

○ ○

○ Head of tax office

December 1, 2016

December 22, 2016

1. The plaintiff's appeal is dismissed.

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

Cheong-gu Office

The judgment of the first instance shall be revoked. The imposition of capital gains tax of KRW 1,979,983,060 (including additional tax) that the Defendant rendered to the Plaintiff on January 2, 2014 shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning of the judgment of this court is as follows, and it is identical to the reasoning of the judgment of the court of first instance except for the addition of the judgment of the plaintiff's appellate court in Paragraph (2). Thus, it is accepted in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

○ The 4th page 16 page "Agreement" is regarded as "Agreement".

Then, the 12th page 16 of the 12th page "(the same shall apply even if the plaintiff added each description of Gap evidence 18 to 22 which was additionally submitted by the appellate court)."

2. Judgment on the plaintiff's assertion of appeal

A. The plaintiff's assertion

1) Claim on tax credit already paid

Before the instant disposition, the Plaintiff already reported and paid KRW 657,80,201, and the total amount of global income tax (business income tax) for the year 2007, 201 and 2011. ① The Defendant appears to have treated the amount of business income tax as the already paid tax amount of the instant capital gains tax, and ② it is reasonable to deduct the said amount of business income tax as the already paid tax amount of the instant capital gains tax when the Plaintiff paid business income tax as above. As such, in the instant disposition, it is reasonable to deduct the said amount of business income tax as the already paid tax amount of the instant capital gains tax, the said amount of business income tax should be calculated by deducting the amount

2) Claim for appropriation of national tax refund

Even if the national tax refund is appropriated for domestic income tax, the Plaintiff submitted to the Defendant a request for appropriation of refund money of KRW 657,829,010 to the Defendant on December 2, 2013, which was before the date of the instant disposition. Pursuant to Article 51(4) of the Framework Act on National Taxes, the refund money of the business income tax should be deemed to be appropriated to the principal income tax of this case on or after the end of December 2013, which is the date of the Plaintiff’s request for appropriation. As such, the amount equivalent to the refund money of the business income tax of this case should be deemed to be appropriated to the principal income tax of this case. Thus, the instant disposition does not reflect all the amount of refund money of the business income tax of this case as the tax amount paid, so the penalty tax in bad faith should be calculated again, and there is no ground that the Defendant transferred the amount of refund money of the business income tax of

(b) Fact of recognition;

1) Before the date of the instant disposition, the Plaintiff reported and paid KRW 657,829,010, total amount of global income tax for the year 2007, 2008, 2010, and 201.

2) In relation to the Seoul Regional Tax Office’s investigation3 and 7996 ( December 24, 2013), the Plaintiff submitted two copies of a written claim for appropriation of national tax refund (Evidence A23) stating that “The Plaintiff shall appropriate refund of KRW 657,829,010 for KRW 1,97,829,010 of the transfer income tax of this case to KRW 1,979,983,062 of the transfer income tax of this case.”

3) On December 30, 2013, the director of the Seoul Regional Tax Office attached two copies of the above request for appropriation of the national tax refund to the defendant on December 30, 2013, "the plaintiff was corrected as follows: 'the plaintiff was a newly built house seller* and joint business proprietor of the house* and the tenant of state**'; 'the amount appropriated for appropriation of the request for delivery (26,102,350 won on March 11, 201) from the amount notified in 2008 as follows; * the actual business manager's room* and week* * 157,290,580 won out of the amount refunded in 208 as the actual business operator* and week* the plaintiff's request for appropriation of the amount of global income tax reverted to the tax payer's global income tax refund as the transfer of 213/100 respectively.

- - The following:

(unit: source)

Taxpayers

Items of Taxation

Reversion

Amount of tax

Income tax

2011

19,664,425

2010

△△△△,031,691

208

△△△512,722,358

2007

△△6,700,000

Sub-committees

△△△588,118,474

4) On December 24, 2013, the Defendant corrected the transfer income tax of this case as KRW 1,979,983,063, and issued the instant disposition on January 2, 2014.

5) Thereafter, the Defendant is deemed to have no global income tax (business income tax) on the Plaintiff on January 7, 2014.

At the same time, 657,829,010 won and additional dues 83,187,680 won and additional dues 741,05,051,310 won (i.e., 157,290,580 won + 17,760,730 won for additional dues) were transferred to * and * the transferee of the refund *, and the remaining 565,965,380 won were appropriated for 1,979,983,060 won for the transfer income tax of this case.

[Reasons for Recognition] Evidence No. 23, Evidence No. 16, Evidence No. 23 through 25, and the purport of the whole pleadings

C. Determination

1) As to the assertion of tax credit already paid

A) According to the records, the Defendant stated in the Defendant’s reply dated March 30, 2015 as follows: “The Disposition Office shall be the global income tax of KRW 588,118,474 paid by the Plaintiff as the business income.” However, through the preparatory document dated August 24, 2016, “The Disposition Office shall refund the comprehensive income tax paid by the Plaintiff as the business income.” The Defendant corrected the following: “The transfer income tax of KRW 340,117,951, which reverts to the transfer of land other than the instant land owned by the Plaintiff shall be the total income tax of KRW 340,117,951, which reverts to the transfer of land other than the instant land in 207, 2007, 2008, 2010, and 2011, which was initially reported and paid by the Plaintiff as the global income tax (business income tax) and the period for which the Plaintiff reported and notified the transfer income tax for 2007.”

B) It is not reasonable to deduct the business income tax paid by the Plaintiff as the already paid tax amount of the transfer income tax accrued in the year 2007, 2008, 2010, and 657,829,010 won for global income tax (business income tax) accrued in the year 201 prior to the instant disposition, on the ground that the Plaintiff reported and paid the total amount of KRW 657,829,010.

C) Therefore, the Plaintiff’s assertion on this part is without merit.

2) As to the assertion that national tax refund was appropriated

A) The national tax refund refers to the amount paid by a taxpayer in error or in excess of the amount paid by the taxpayer as a national tax, additional dues, or disposition fee for arrears, or the amount of refund to be refunded under the tax-related Acts (Article 51(1) of the Framework Act on National Taxes). In the case of refund of business income tax claimed by the Plaintiff, it constitutes an excessive amount arising from the event that the tax liability corresponding to the tax liability exists at the time of tax payment, but the tax authority’s revocation is extinguished on the ground that the tax authority’s revocation, etc. later, the taxpayer may claim the refund only when the tax authority’s revocation is made. Accordingly, the refund of business income tax should only be made on January 7, 2014

Article 51(4) of the Framework Act on National Taxes provides that "where a taxpayer is entitled to tax refund under tax-related Acts, the taxpayer shall be deemed to have paid national taxes on the date when he/she claims the appropriation of the amount of national taxes appropriated. In such cases, it shall be deemed that the relevant national taxes have been paid on the date when he/she claims such appropriation of the amount of national taxes." Since the Defendant submitted a written claim for appropriation of national tax refund on the end of December 2013, the Plaintiff’s business income tax refund did not occur before the reduction or correction of global income tax (business income tax) against the Plaintiff, it cannot be deemed that the Plaintiff submitted a written claim for appropriation of national

B) Furthermore, even if there is an error of law as alleged by the Plaintiff in the transfer of a refund amount of KRW 175,051,310, the sum of the refund amount and additional refund amount of the business income tax that the Defendant originally reported and paid by the Plaintiff, which is the transferee of refund* and State**, this is merely an issue of unjust enrichment, and there is no relation to the instant disposition.

C) Therefore, the Plaintiff’s assertion on this part is without merit.

3. Conclusion

Since the judgment of the first instance is justifiable, the plaintiff's appeal is dismissed as it is groundless.