Plaintiff

Head of Gangnam District Tax Office and 2

September 25, 2009

Seoul Administrative Court Decision 2008Gudan15261 Decided March 27, 2009

1.The judgment of the first instance shall be modified as follows:

A. We dismiss the part of the Plaintiff’s lawsuit against Defendant Gangnam-gu director of the tax office seeking the revocation of taxation disposition.

B. The plaintiff's remaining claims against the defendant Gangnamnam Tax Office are dismissed.

2. The plaintiff's claim against the defendant Republic of Korea and Seoul Special Metropolitan City is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. On June 8, 2008, the decision of the first instance against the head of Gangnam Tax Office is revoked. The disposition of tax payment notice imposed by the head of Gangnam Tax Office on the Plaintiff on June 8, 2008 by designating the capital gains tax amounting to KRW 112,572,00 as well as additional dues and increased additional dues as of June 30, 2008 shall be revoked.

2. The defendant Republic of Korea and Seoul Special Metropolitan City shall pay to the plaintiff, the defendant Republic of Korea shall be 123,130,590 won, the defendant Seoul Special Metropolitan City shall be 13,192,780 won, and each of them shall be 20% interest per annum from the day after the delivery of the copy of the complaint to the day of complete payment.

1. Details of the disposition;

A. On January 22, 2008, the Plaintiff transferred golf membership owned by the Plaintiff at KRW 385 million to the head of Gangnam District Tax Office on January 31, 2008, and reported the tax base of KRW 345,20,000, calculated tax amount of KRW 112,572,00, calculated tax amount of KRW 112,572,00, the tax amount of KRW 11,257,200, the amount of tax to be paid voluntarily, and the amount of tax to be paid voluntarily, but did not pay the said scheduled tax amount.

B. On June 8, 2008, the head of Gangnam District Tax Office issued a payment notice to the Plaintiff on June 30, 2008 to the effect that the Plaintiff should additionally pay KRW 112,572,00,00,00,000, which was excluded from the tax credit for preliminary return under the above preliminary return amount, within the period of June 30, 2008, the additional dues of KRW 3,377,160, and the increased additional dues of KRW 1,350,860 until August 31, 2008 (hereinafter “the instant payment notice”). On July 10, 2008, the Plaintiff urged the Plaintiff to pay the said capital gains tax and additional dues by July 20, 2008, but did not pay the said amount until then, the Plaintiff filed a petition for the attachment of KRW 3,377,160,00 to the Plaintiff on August 31, 2008.

C. Meanwhile, the Defendant notified the Plaintiff of the payment of KRW 11,257,200 of the resident tax to be imposed pursuant to Article 177-4(2) of the Local Tax Act while giving the instant notice of payment. The head of Gangnam-gu Seoul Metropolitan Government, who did not pay the Plaintiff, notified the Plaintiff of the payment of the total sum of the penalty tax to the Plaintiff on December 2008.

D. On September 30, 2008, the Plaintiff filed a petition with the Tax Tribunal for a trial seeking cancellation of the instant payment notice, and filed the instant lawsuit on September 30, 2008, respectively. On June 11, 2009, the Plaintiff paid KRW 123,130,590 including capital gains tax, additional dues, and increased additional dues in accordance with the instant payment notice, and on June 5, 2009, paid KRW 13,192,780 including additional tax, etc. on the resident tax to be imposed on the said income tax.

E. However, on May 28, 2009, the Plaintiff filed a final return on the transfer income tax base with the same content as the above preliminary return with the head of Gangnam District Tax Office, and paid KRW 56,56,170 in installments of the transfer income tax on June 17, 2009, and KRW 11,257,200 in the resident tax to be imposed on June 1, 2009, respectively.

【In the absence of dispute over the grounds for recognition, Gap’s evidence 1, Eul’s evidence 3-1, 2, and 7-1, 2, 3, Gap’s evidence 8, 9, Gap’s evidence 10-1, 2, 3, Eul’s evidence 1, Eul’s evidence 2-1 through 3, Eul’s evidence 2-3, and the purport of the whole pleadings

2. Determination on the legitimacy of the lawsuit against the defendant Gangnam-gu director of the tax office

A. The plaintiff's assertion

(1) The Plaintiff’s payment of capital gains tax for the year 2008 pursuant to the provisions of Articles 110 and 111 of the Income Tax Act is a final return and payment of capital gains tax from May 1, 2009 to May 31, 2009. Thus, the instant payment notice, which was issued by the Plaintiff on June 30, 2008 and the additional dues and increased additional dues, was unlawful as a taxation made before the payment deadline.

(2) Even if the instant notice of payment constitutes a collection disposition, the preliminary return of tax base of transfer income, which served as the basis of the instant notice of payment, was invalidated by the final return filed thereafter, and even if not, there was a defect that caused the instant notice of payment to disrupt the “goods subject to taxation,” and thus, the instant notice of payment was deemed as unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Character of the instant notice of payment

According to the provisions of Article 22 of the Framework Act on National Taxes, Article 10-2 of the Enforcement Decree of the same Act, and Articles 105, 106, and 116 of the Income Tax Act, capital gains tax, which is a tax by filing a return method, is interpreted as having an obligation to pay the tax amount determined and paid together with a return when the taxpayer files a preliminary return of the tax base and tax amount. It is merely a collection disposition for the collection of the final tax, and it cannot be viewed as a taxation subject to a revocation lawsuit (see, e.g., Supreme Court Decision 2003Du8180, Sept. 3, 2004).

Examining the above facts in light of the legal principles as seen earlier, the Plaintiff is liable to pay capital gains tax after making the above preliminary return, and the instant notice of payment constitutes a collection disposition for collecting the capital gains tax finalized as above, and it cannot be viewed as a taxation disposition.

(2) Whether the part of the instant lawsuit seeking revocation of taxation disposition is legitimate

As long as the instant notice of payment cannot be seen as taxation, the Plaintiff’s lawsuit against the Gangnam Tax Office is unlawful on the premise that it has the nature of taxation as a taxation disposition. As such, the Plaintiff’s claim for revocation is based on the premise that there is no taxation disposition.

(3) Whether the instant notice of payment as a collection disposition is valid and lawful

First, we examine whether the preliminary return of tax base of transfer income, which was the basis of the instant notice of payment, was invalidated by the final return made thereafter, and whether the instant notice of payment as a collection disposition was also invalidated.

On the other hand, in light of the following: (a) capital gains tax is governed by the principle of fixed-term taxation, and the specific tax liability becomes final by comprehensively reporting the tax base and tax amount by calculating the total amount of capital gains generated during the pertinent taxable period; (b) even if a preliminary return was made, if it falls under the proviso of Article 110 (4) of the Income Tax Act; (c) Article 173 (4) 1 through 3 of the Enforcement Decree of the Income Tax Act; and (d) other factors, such as the prepayment nature of the preliminary return and payment; and (c) no additional tax is imposed on the failure to pay taxes; (d) if a taxpayer makes a final return different from the preliminary return after filing a preliminary return, the tax base and tax amount temporarily determined by the preliminary return are integrated into the tax base and tax amount determined by the final return, and the collection disposition based on the preliminary return becomes void (see Supreme Court Decision 2006Du1609, May 29, 2008). Such legal principles apply to cases where a final return is different from the final return.

Next, according to the notice of this case's payment notice of this case's payment notice of this case's payment notice of this case's payment notice of this case's payment notice of this case's "The notice of this tax payment belongs to (2008) and is not the object of capital gains tax's transfer income tax." However, the tax items imposing capital gains tax for each taxable period such as transfer income tax are sufficient to be notified by clearly stating the tax base of the year to which the tax payment notice belongs and the basis for calculation of the tax amount's tax year to which the transfer income tax belongs, and there is no basis for requesting the tax payment notice to describe the substantial basis, route, circumstance, etc. of calculation of tax amount such as land subject to taxation (see Supreme Court Decision 96Nu5810, Jun. 27, 1997, etc.). Further, the payment notice of this case's payment notice of this case is consistent with the scheduled return of tax base and the scheduled return of tax amount because the plaintiff did not pay the tax base and tax amount. The above notice of this case's payment notice of this case's notice can be accepted.

(4) The theory of lawsuit

Ultimately, the part of the Plaintiff’s lawsuit against Defendant Gangnam-gu Tax Office seeking revocation of the instant notice of payment on the premise that the instant notice of payment is a taxation disposition is inappropriate, and the part of the claim seeking revocation of the collection disposition cannot be accepted as it has

3. Determination as to the claim against Defendant Republic of Korea and Seoul Special Metropolitan City

As seen earlier, the Plaintiff asserts that the instant notice of payment should be invalidated or cancelled on the ground as seen earlier, and accordingly, the disposition of imposing income tax on the Plaintiff premised on the validity of the instant notice of payment is also null and void. As such, Defendant Republic of Korea has a duty to return KRW 123,130,590 in total, including capital gains tax and additional dues paid by the Plaintiff according to the instant notice of payment, and Defendant Seoul Special Metropolitan City has a duty to return KRW 13,192,780 as unjust enrichment.

However, as seen earlier, since the payment notice of this case cannot be deemed null and void or illegal, the claim against the defendant Republic of Korea and the defendant Seoul Special Metropolitan City on such premise cannot be accepted without any further review (as a result, the plaintiff would have paid twice the capital gains tax and the resident tax to be imposed on the capital gains tax, but as long as the imposition and collection of capital gains tax and the resident tax pursuant to the payment notice of this case are legitimate, it shall be deemed that the plaintiff's filing of a final return and the double payment thereof constitutes erroneous payment, and thus, it may

4. Conclusion

Therefore, the part of the plaintiff's lawsuit against the defendant Gangnam-gu director of the tax office seeking the revocation of the tax disposition is unlawful, and the remaining claims against the defendant Gangnam-gu office are dismissed as it is without merit. Since the judgment of the court of first instance is unfair with different conclusions, it is so unfair as to revise the judgment of the court of first instance as stated in Paragraph 1, and the claims against the defendant, the Republic of Korea, and the Seoul Special Metropolitan City, added in the trial, are dismissed as it is without merit

[Attachment]

Judges Cho Jong-chul (Presiding Judge)