Tax Tribunal (Tax Tribunal 2013.04.17)

If a return was filed after the deadline for the transfer income tax, it is reasonable to apply the exclusion period for national tax to seven years.

Article 26-2(1)2 of the former Framework Act on National Taxes shall apply where no report is filed within the statutory due date of return. As such, the Plaintiff’s assertion that the exclusion period of imposition is five years on the premise that the Plaintiff’s report after the due date is under-reported as falling under Article 26-2(1)3 of the Framework

The exclusion period of the imposition of national taxes under Article 26-2 of the Framework Act on National Taxes

2013Gudan953 Revocation of Disposition of Imposing capital gains tax

Park AA

Deputy Director of the Tax Office

December 10, 2013

January 7, 2014

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax OOOO on October 15, 2012 is revoked.

1. Details of the disposition;

A. On June 17, 2005, the Plaintiff respectively transferred the land Nos. 1, 2, and 3 in the annexed sheet, the land No. 4, 5, and 6 in the annexed sheet on August 22, 2005, the land No. 7 in the annexed sheet on September 5, 2005, and the land No. 8 through 23 in the annexed sheet on November 14, 2005.

B. On October 15, 2012, the Defendant issued a disposition imposing OOO(s) for the transfer income tax of 2005 (hereinafter “instant disposition”) on the Plaintiff, including OOO(s) for failing to report, and OO(s) for failing to pay penalty taxes.

[Reasons for Recognition] Unsatisfy, entry B in the evidence of Nos. 1 to 4

2. Whether the disposition is lawful;

A. The plaintiff's assertion

Since the Plaintiff’s transfer of each land indicated in the attached list is 2005, the Defendant should impose capital gains tax on the Plaintiff within five years, the exclusion period for imposition, and the Defendant issued the instant disposition in 2012.

Therefore, the defendant's disposition of this case is illegal since it is a disposition after the exclusion period expires.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) The fact that the Plaintiff transferred each parcel of land listed in the separate sheet from June 17, 2005 to November 14, 2005 is as seen earlier. Thus, according to the relevant Acts and subordinate statutes, the Plaintiff should report the transfer income tax from May 1, 2006 to May 31, 2006.

However, comprehensively taking account of the overall purport of the arguments, evidence Nos. 2, 5, 7, and 8, the Plaintiff’s report on the OOOO on September 12, 2006, when the statutory due date of return expires. According to the relevant Acts and subordinate statutes, if a taxpayer fails to file a tax base return within the statutory due date of return, it is apparent that the national tax exclusion period was seven years, and that there was the instant disposition within seven years from June 1, 2006. Thus, the instant disposition is legitimate before the expiration of the statutory due date of return.

On the other hand, Article 26-2(1) of the former Framework Act on National Taxes, which provides for the exclusion period for the imposition of national taxes, is understood to differently treat without filing a report and underreporting, and Article 26-2(1)2 of the former Framework Act on National Taxes, which provides for the exclusion period for imposition of national taxes, applies to a report without filing a final return on tax base even though a duty to file a final return on tax base exists, and in cases of underreporting, the exclusion period for imposition of five years is applicable in accordance with Article 26-2(1)3 of the former Framework Act on National Taxes (Supreme Court Decision 2013Du555 Decided July 11, 201

However, since Article 26-2(1)2 of the former Framework Act on National Taxes applies because the Plaintiff did not report at all within the statutory due date of return, the Plaintiff’s assertion that the exclusion period of imposition is five years on the premise that the Plaintiff’s report after the due date constitutes underreporting falling under Article 26-2(1)3 of the Framework Act

(2) The Plaintiff asserts to the effect that, if the Defendant determined and notified the amount of tax reported by the Plaintiff, the exclusion period of five years is applied pursuant to Article 26-2(1)3 of the former Framework Act on National Taxes, claiming a exclusion period of seven years without the Defendant’s notification is unreasonable.

However, it is difficult to deem that the exclusion period is changed from seven to five years depending on the defendant's determination of the tax amount, and according to the attached statutes, if a person who did not file a tax base return within the statutory due date of return files a tax base return after the deadline and pays the relevant tax amount, the head of the competent tax office shall determine the tax base and amount of the relevant national tax under the tax law. The fact that the plaintiff did not pay the tax amount is not a dispute

Therefore, the disposition of this case is legitimate, and the plaintiff's above assertion is without merit without further review.

3. Conclusion

Thus, the plaintiff's claim of this case is dismissed as it is without merit.