National Tax Service Review Donation 2010-0027 (2010.06.07)

Where the additional tax on negligent tax returns is imposed, the value of donated property shall not be included in the amount of calculation for additional tax on inheritance;

The evidence of the certificate prepared in the course of the tax investigation cannot be easily denied, and where the additional tax on negligent tax returns is imposed due to a failure to report the gift tax, the value of the property not included in the "amount not reported or falling short of the tax base to be reported".

2010Guhap35753 Revocation of Disposition of Imposition of Gift Tax

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〇〇세무서장

1. The Defendant’s imposition disposition of gift tax against the Plaintiff on December 1, 2009 shall be revoked in entirety.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

The following facts are not disputed between the parties, or can be acknowledged in full view of the purport of the whole pleadings in each entry in Gap evidence 1-15, Gap evidence 2, and Eul evidence 2-15.

A. On November 24, 2006, the Plaintiff reported the inheritance tax on May 23, 2007, as the presentA (hereinafter referred to as “the deceased”) who is his spouse died.

B. Around May 2008, the Seoul Regional Tax Office: (a) as a result of an inheritance tax investigation conducted on and after the deceased’s transfer from November 27, 2002 to July 15, 2005, deemed that total of KRW 417,000,000 (hereinafter “instant transfer amount”) deposited by the deceased to the Plaintiff as the donation to the deceased’s Plaintiff, and notified the Defendant that gift tax and inheritance tax should be imposed accordingly.

C. Accordingly, on August 8, 2008, the Defendant imposed gift tax including the sum of 26,698,433 won of the penalty tax without filing a return, as shown in attached Table 2, on the amount of the instant transfer of issues, and imposed inheritance tax by adding up the amount of the instant transfer of issues to the inherited property.

D. After that, in the application of the penalty tax on the imposition of the above gift tax, the defendant made a second donation more than 16 times in total on the date of advance donation, and thus, the plaintiff should have reported each addition of the gift tax within 10 years prior to the date of each donation, on the ground that the plaintiff failed to report each addition of the gift tax, the defendant additionally imposed 15 additional additional tax on the aggregate of 94,153,540 won on the plaintiff on December 1, 2009, as shown in paragraph (3) of the attached Table. (hereinafter "each of the instant dispositions").

2. Whether the disposition is lawful;

A. The plaintiff's assertion

1) The amount equivalent to the living expenses between husband and wife is not subject to gift tax as a source for consumption of the entire living community. The deceased and the plaintiff as a couple are community and consumption communities. The key transfer amount of this case is merely the amount equivalent to the living expenses that the deceased transferred to the plaintiff for his family life. Therefore, the transfer amount of this case, which the deceased transferred to the plaintiff by account, is not subject to gift tax. Nevertheless, each disposition of this case is unlawful.

2) In addition to the Defendant’s imposition of the additional additional tax on non-declaration of tax, imposing double additional tax on the same cause of tax, thereby imposing double burden on the Plaintiff, who is the taxpayer. Therefore, each of the instant dispositions is unlawful.

3) The imposition of additional additional additional tax on negligent tax returns is contrary to the language and text of Article 78(1) of the Inheritance Tax and Gift Tax Act, which applies to each of the dispositions of this case, and is in violation of the principle of ability to respond. Accordingly, each of the dispositions of this case is unlawful.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Determination on the Plaintiff’s first argument

Unless special circumstances exist, such as where a tax authority received a written confirmation from a taxpayer to a certain taxable fact in the course of conducting a tax investigation, it may not readily deny the value of the evidence of the written confirmation, barring special circumstances, such as where the written confirmation was signed and sealed as forced against the will of the originator, or it is difficult to use it as supporting materials for the specific facts due to insufficient details (see, e.g., Supreme Court Decisions 98Du2928, May 22, 1998; 2001Du2560, Dec. 6, 2002).

However, comprehensively taking account of the overall purport of the pleadings in the statement No. 3-1 and No. 2 of the evidence No. 3-2, it can be acknowledged that the plaintiff signed and sealed a written confirmation stating that "I will confirm that the financial assets deposited into the account as above are the assets donated before birth from the No. 3A," and that "I will confirm that the financial assets are the assets donated before birth from the No. 3A," which were the basis for each of the dispositions of this case, in the course of the tax investigation with respect to himself on August 8, 2008."

In light of the above legal principles, in this case where there is no assertion or proof that the above fact of recognition was signed and sealed by force against the plaintiff's will or that the contents of the certificate are incomplete, the value of the evidence of the above confirmation cannot be easily denied. The amount of the issue transfer of this case transferred by the deceased to the plaintiff is subject to gift tax.

Therefore, this part of the plaintiff's assertion is without merit.

2) Judgment on the second argument by the Plaintiff

In imposing additional tax on negligent tax returns when the taxpayer fails to report the addition at the time of re-donation, the same problem arises when the taxpayer fails to report the value of donated property at the time of the return of inheritance tax.

However, in cases where the additional tax is imposed on the same donated property due to the failure to report the gift tax at the time of the return of the inheritance tax, and the additional tax is imposed on the same donated property due to the failure to report the amount of the gift tax to be added to the taxable amount of the inheritance tax, it is a result of double burden on the taxpayer. In such cases, where the additional tax is imposed on the negligent tax return due to the failure to report the gift tax, the amount of the gift tax does not include the amount of the property (see Supreme Court Decisions 96Nu15862, Jun. 27, 1997; 96Nu1361, Jul. 25, 197). In light of the above legal principles, if the additional tax is imposed on the same donated property due to the failure to report the amount of the gift tax at the time of re-donation or to report the amount of the gift tax to be added to the taxable amount of the gift tax at the time of the next donation, it is reasonable to impose double burden on the taxpayer.

Therefore, without examining the remaining arguments of the Plaintiff, this part of the assertion is with merit, and each of the dispositions of this case is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition.