Busan High Court-2013-Nu-2013 ( October 10, 2014)

The omission of the basis of calculation at the time of the notice of dividend income tax payment constitutes a serious defect.

The original disposition omitted from the entry of the basis for calculation when a dividend income tax payment notice was issued by a corporation without source tax payment is illegal.

Article 9 (Notification, etc. of Tax Payment)

Supreme Court Decision 2014Du3891 Decided dividend income and revocation of disposition

㈜대▲▲▲

Head of Suwon Tax Office

Judgment of the court below

Busan High Court Decision 2013Nu2013 decided January 10, 2014

July 24, 2014

Among them, the parts related to the principal tax shall be reversed, and the case shall be remanded to Busan High Court. The remaining appeals shall be dismissed.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 2

A. Whether a sale of stocks constitutes a transfer of stocks which are assets transaction, or a retirement of stocks which are capital transaction or a refund of capital is determined based on the content of the transaction and the intent of the party. However, in light of the substance over form principle, it is not simply dependent on the content or form of the transaction, but should be determined based on the overall process of the transaction, such as the parties’ intent and the process of concluding the contract, the method of determining the price, and the progress of the transaction (see, e.g., Supreme Court Decision 2012Du27091, May 9, 2013).

B. The court below, after compiling evidence, found facts as stated in its reasoning. ① The minutes of the general meeting of shareholders issued on April 16, 2007 stated that "the purchase of the shares of this case is approved with respect to the acquisition of the shares of this case" and "the purchase or retirement of the shares of this case is approved with respect to the notarial minutes of the general meeting of shareholders authenticated on July 10, 2007." The minutes of the general meeting of shareholders authenticated on July 10, 2007 are not inconsistent with the contents of the notarial minutes of the general meeting of shareholders authenticated on April 16, 207, but rather are rather deemed to have been prepared with concrete contents. ② The court below's determination that the plaintiff and its large shareholder need to acquire the shares of this case which amount to 11.35% of the total shares issued in order to secure the management right, and it is reasonable to find that the plaintiff violated the logical and empirical rules and the legal principles as to the return of shares of this case from the beginning."

2. Regarding ground of appeal No. 1

A. Article 9(1) of the former National Tax Collection Act (amended by Act No. 11605, Jan. 1, 2013; hereinafter the same) provides that “the head of a tax office shall issue a taxpayer with a tax payment notice stating the taxable year, tax item, tax amount, calculation basis, and payment period and place of payment of the national tax to the taxpayer when he/she intends to collect a national tax. The provisions pertaining to the tax payment notice of international tax collection law accept the principles of due process under the Constitution and the basic principles of the Administrative Procedures Act in the area of the collection disposition, as they are, in the area of the collection disposition. The provisions pertaining to the tax payment notice of international tax collection law also accept the principles of due process under the Constitution and the basic principles of the Administrative Procedures Act, which exclude the borrower from the tax office, thereby achieving fairness in tax administration, and allowing the taxpayer to decide on whether to object to the collection and to file an objection. Therefore, this provision ought to be deemed a mandatory provision, barring special circumstances where the tax base and amount of the principal tax are not properly stated in the tax payment notice (see Supreme Court en banc Decision 2018Du.

B. However, even according to the reasoning of the judgment below, the tax notice of this case includes only the principal tax amount of dividend income tax, but does not include the tax rate.

Examining these facts in light of the above legal principles, the notice of tax payment in this case does not properly state the grounds for calculation of the tax amount under Article 9(1) of the former National Tax Collection Act, and there is no reason to see that the defect was supplemented or cured, and the main tax collection disposition in this case is unlawful.

C. Nevertheless, the lower court, while the instant tax payment notice requires Article 9(1) of the former National Tax Collection Act.

On the grounds that all the matters are described, and the degree of the entry is very important to determine whether the plaintiff is dissatisfied, and that the notice of tax collection of the principal tax is not illegal during the disposition in this case. In so doing, the judgment of the court below is erroneous in matters of law that affected the conclusion of the judgment by misunderstanding the legal principles on defects in the duty payment notice.

3. Conclusion

Therefore, the part of the judgment of the court below regarding the principal tax is reversed, and that part of the case is remanded to the court below for a new trial and determination. The remaining appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.