Whether a creditor who received the entire claim for refund of a national tax refund may directly exercise the right to demand rectification under Article 45-2(1) of the Framework Act on National Taxes (negative) / Whether a person who only claims against a taxpayer can exercise the right to demand rectification by subrogation of the taxpayer’s right to demand rectification (negative in principle)

Article 45-2(1) of the Framework Act on National Taxes explicitly states that only the “person who has filed a tax base return by the statutory due date of return” can file an application for rectification. In light of the fact that all creditors who have filed the tax base return by the statutory due date of return succeed to their status as monetary claims and do not succeed to the status of “person who has filed the tax base return by the statutory due date of return,” and that the claim for return of national tax refund in the future, which is the entire claim, may be extinguished by the increase or decrease of the tax authority, the right to request rectification under Article 45-2(1) of the Framework Act on National Taxes, can only

In addition, in light of the nature of the right of claim for rectification, a person who only monetary claims against a taxpayer cannot exercise the right of claim for rectification in subrogation of the taxpayer, unless there are special circumstances.

Article 45-2 (1) of the Framework Act on National Taxes

Hyundai Industrial Development Co., Ltd. (Bae & Yang LLC, Attorneys Lee Dong-jin et al., Counsel for the plaintiff-appellant)

Samsung Head of Samsung Tax Office

Seoul High Court Decision 2012Nu13636 decided October 31, 2012

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

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

1. A. Article 45-2(1) of the Framework Act on National Taxes provides that “Any person who has filed a tax base return by statutory deadline may request the head of the competent tax office to determine or correct the tax base and amount of the national tax which have been initially filed or revised return, in cases where the tax base and amount of the tax on the tax base return exceed those to be reported under the tax-related Acts ( subparagraph 1), or the deficiencies or amount of the tax which are recorded in the tax base return is short of the deficit or amount of the tax to be reported under the tax-related Acts ( subparagraph 2), within three years after the statutory deadline for return expires: Provided, That with respect to an increased tax base and amount of tax resulting from the determination or revision, a request for

B. In a case where the right to request for correction is not recognized, even if the tax authority made a reply against the rejection of the request for correction, it cannot be viewed as a rejection disposition subject to appeal litigation (see Supreme Court Decision 98Du9608 delivered on July 23, 199).

Article 45-2(1) of the Framework Act on National Taxes explicitly states that only the “person who has filed a tax base return by the statutory due date of return” can file an application for correction. In light of the fact that all creditors who have filed the tax base return by the statutory due date of return succeed to their status as monetary claims and do not succeed to the status of “person who has filed the tax base return by the statutory due date of return,” and that the claim for return of national tax refund in the future, which is the entire claim, may be extinguished by the increase or decrease of the tax authority, the right to request correction under Article 45-2(1) of the Framework Act on National Taxes can only be exercised by the tax

In addition, in light of the nature of the right of claim for correction, a person who only monetary claims against a taxpayer cannot exercise the right of claim for correction by subrogation, unless there are special circumstances.

2. In the same purport, the lower court determined that the instant lawsuit is unlawful on the grounds that, on the grounds that the Plaintiff’s exercise of the right to demand rectification under Article 45-2(1) of the Framework Act on National Taxes is not an administrative disposition that is subject to appeal litigation, the instant refusal disposition rejecting the Plaintiff’s claim is not an administrative disposition that is subject to appeal litigation, on the ground that the Plaintiff’s exercise of the right to demand rectification under Article 45-2(1) of the Framework Act

Upon examining the above provisions and legal principles in light of the records, the judgment of the court below is just, and there is no error of law by misapprehending the legal principles as to the exercise subject of the right to request correction.

3. Therefore, the appeal is 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.

Justices Min Il-young (Presiding Justice)