Whether the provisions of capital gains tax credit are unconstitutional

There is no distinction between the cases where both preliminary return and voluntary payment are not performed and the case where one of them is voluntarily paid, which is determined at a discretion by the National Assembly among various legislative means selected by the National Assembly, and is not in violation of the Constitution.

Article 108 of the Income Tax Act (Deduction of Tax paid by Preliminary Return)

Article 106 of the Income Tax Act [Voluntary Return]

The applicant's request for adjudication on the constitutionality of the case is dismissed.

Purport of application

It is recommended to make a decision on the constitutionality of Article 108(1) of the Income Tax Act (amended by Act No. 6292 of Dec. 29, 200).

1. The details of the motion for adjudication on the unconstitutionality of the case

According to the records, the following facts are recognized.

A. On June 25, 1987, the applicant invested the total amount of KRW 100 million in capital of 20,000 (5,000 per share) and established a stock company of 0,000 won in its own name. 6,400 shares out of 20,000 shares (the total amount of KRW 5,00 per share) and the remainder of 13,60 shares were each nominal trust with 3,200 shares for 4,00 shares for Kim Ho-ho, 4,000 shares for Yellow-ho, 3,200 shares for ○, 1,200 shares for ○, and 1,200 shares for Yellow-do.

B. On November 21, 2003, the applicant transferred all 20,000 shares of the ○○○ Port Co., Ltd. (hereinafter referred to as “the shares of this case”) to Henkel KGA, and on February 29, 2004, reported and paid the capital gains tax on the share transfer in the name of the applicant as shareholders on the shareholder registry and the title truster, respectively.

C. As a result of the Seoul Regional Tax Office’s tax investigation on the applicant, the applicant’s above title trust was revealed, and the head of Seodaemun District Tax Office excluded the amount of 257,595,000 won from the amount of tax deductible for the preliminary return filed under the name of the title trustee. The transfer margin reported under the name of the title trustee shall be deemed as a non-reported return, and the remaining 585,581,960 won was deducted from the amount of tax calculated by applying the additional tax on negligent tax returns and the additional tax on negligent tax returns under the name of the title trustee, which was 585,581,960 won deducted from the amount of tax to be paid by the applicant under the name of the title trustee. On November 9, 2006, the Seoul District Tax Office issued the instant disposition

D. As to the instant disposition, the applicant sought the revocation of the instant disposition by the Seoul Administrative Court No. 2007Gudan9597, but the said court rendered a judgment against the applicant on the ground that “The person liable to pay the capital gains tax of this case is the applicant who is the subject of the transfer and is also the applicant who is required to make a preliminary return and payment of the capital gains tax of this case, so even if the applicant reported and paid the capital gains tax in the name of the above Kim-ho et al., it cannot be deemed a legitimate report of the taxpayer.” Accordingly, the applicant appealed as the court No. 2008Nu16577, and filed an application for legal review such as the purport of the application pending

2. Acts, etc. subject to request for adjudication on constitutionality of statutes;

Article 108 (Deduction of Tax Amount paid by Preliminary Return)

3. Summary of reasons for the application;

A. The legal provision of this case deals equally with each other without distinguishing between the case where both preliminary return and voluntary payment are not performed, and the case where one of them is voluntarily paid, which is contrary to the principle of proportionality and equality under the Constitution.

B. Comprehensively taking account of the substance over form principle under the Framework Act on National Taxes, and the equality and property rights provisions under the Constitution, determination of whether to grant a preliminary tax credit depending on whether a preliminary return or a voluntary return has been performed in the name of the title trustee, notwithstanding the title or form of the act of making a preliminary return or a voluntary return, so even if a title truster, who is the actual taxpayer, has made a preliminary return or a voluntary return under the name of the title trustee, the tax credit for the preliminary return should be recognized. However, if a title truster has made a preliminary return or a voluntary return under the name of the title trustee, there is room to interpret

4. Determination

A. Determination on the first argument

Article 106 (1) of the Income Tax Act provides that "when a resident makes a preliminary return, he/she shall pay the tax amount reduced or exempted under the Restriction of Special Taxation Act and other Acts and the tax amount reduced or exempted under Article 108 and the tax amount deducted under Article 108, to the district tax office having jurisdiction over the place of tax payment, the Bank of Korea, or the postal service agency, as prescribed by Presidential Decree." According to the above provision, for a legitimate preliminary return to be made, the tax amount deducted from the tax amount shall be voluntarily paid along with the preliminary return, and the preliminary return and voluntary payment shall not be separated, and the preliminary return and voluntary payment shall not be performed independently. Accordingly, the tax credit for the person who made the preliminary return and voluntary payment shall be recognized as a tax credit where the preliminary return and voluntary payment are fully performed, and the tax credit for the person who made the preliminary return have the nature of interest on the compensatory meaning to induce a bona fide return and tax payment, and shall not be imposed any new tax, even if the National Assembly does not distinguish the case where the preliminary return and voluntary payment obligation is performed.

B. Judgment on the second argument

(1) Interpretation of the legal provisions of this case

명의신탁자가 명의수탁자 명의로 양도솓그세의 신고납부를 실제로 하였다고 하더라도 위 신고납부를 명의신탁자의 것으로는 볼 수 없고, 자산을 양도하여 그 양도로 인한 소득이 명의신탁자에게 귀속되었다면, 실질과세의 원칙상 당해 양도소득세의 납세의무자는 양도의 주체인 명의신탁자이지 명의수탁자가 그 납세의무자가 되는 것은 아니라 할 것이며, 명의신탁된 자산의 양도로 인한 자산양도차익예정신고ㆍ납부를 해야 하는 자는 납세의무자인 명의신탁자라고 할 것이므로 명의신탁자가 명의수탁자의 명의로 자산양도차익예정신고ㆍ납부하였다고 하더라도 이로써 납세의무자의 적법한 신고ㆍ납부가 있었다고 볼 수는 없다 할 것이다(대법원 1997. 10. 10. 선고 96누6387 판결 참조).

(2) Even if the legal provision of this case is interpreted as above (1), the legal provision of this case has the meaning of compensation to induce a taxpayer's bona fide return and tax payment, and the character of interest rate for advance payment of the tax amount, and the transfer income is excluded from global income, but the transfer income tax is determined by applying the long-term holding special deduction and the transfer income tax base deduction for each transfer income issued during the pertinent taxable period, and the transfer income tax is imposed by applying the progressive tax rate to each transfer income tax base. Even if the preliminary return on transfer of the same asset is made, if the taxpayer files a return differently from the actual return, the tax base and tax rate vary; whether the transfer income belongs to the title truster; whether the transfer income belongs to the title trustee; and whether the imposition and amount of global income tax are different from the subsequent income arising from the disposition on transfer income such as interest income, etc. depending on the difference in income accrued from the disposition on transfer income, etc., such interpretation cannot be deemed to violate the principle of property rights, equal rights, and equity in taxation

5. Conclusion

Therefore, the applicant's application for adjudication on the unconstitutionality of the Act is dismissed as it is without merit. It is so decided as per Disposition.