National Tax Service Review Donation 2010-0027 (2010.06.07)

The imposition of additional tax on aggregate of inheritance tax and gift tax shall be illegal.

In cases where the additional tax on negligent tax returns is imposed due to a failure to report the gift tax, it is reasonable to deem that the "amount failing to report or falling short of the tax base to report" does not include the value of the donated property. Therefore, the imposition of additional tax on negligent tax

2011. Revocation of the imposition of inheritance tax and gift tax

KimAA et al.

○ Head of Tax Office and four others

March 25, 2011

April 15, 201

1. The imposition of both the inheritance tax and gift tax recorded in the separate sheet of imposition of the inheritance tax and gift tax shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. On November 24, 2006, Plaintiff Kim A-A, the presentB, the presentCC, the presentDD, and the presentE (hereinafter “the Plaintiffs”) were the inheritors of the present FF (hereinafter “the deceased”) who died on November 24, 2006. The inheritance tax was reported on May 23, 2007, the Plaintiff Jeong Jong-G was the descendants of the deceased, and the Plaintiff Lee Ho-H was the fraudulent act.

B. The Seoul regional tax office conducted an inheritance tax investigation on May 2008, and confirmed the fact that the deceased had donated property to the plaintiffs, but did not report the fact that the plaintiffs did not report, and notified the defendants that they would levy gift tax and inheritance tax.

C. On August 8, 2008, the Defendants respectively decided and notified the Plaintiffs of the inheritance tax base of KRW 13,311,185,199, and KRW 2,958,715,650, including the additional tax without filing a return, KRW 5.96 billion, including the additional tax without filing a return.

D. After that, the Defendants issued a revised and notified each of the Plaintiffs of the total amount of KRW 211,948,040 in the aggregate of the gift tax on the ground that: (a) the Plaintiffs did not report the property received in advance at the time of filing the inheritance tax return; and (b) the re-donation was made on each date of donation; and (c) the re-donation was made on each date of donation; and (d) even if they should have reported the added-up of the gift tax within 10 years prior to each date of donation, the Defendants did not perform the increased aggregate of the gift tax on the ground that they did not perform it (hereinafter collectively referred to

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1 through 7 (including branch numbers, hereinafter the same shall apply), Eul evidence Nos. 1 through 8, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

In addition, it is illegal to impose double penalty taxes on the same cause of taxation, as well as double penalty taxes on the same cause of taxation, even though the Defendants already imposed non-reported penalty taxes on donated property in advance. In addition, it is illegal as it violates the language of Article 78(1) of the Inheritance Tax and Gift Tax Act and the principle of ability to respond.

(b) Related statutes;

The entries in the attached Table shall be as follows.

C. Determination

(1) In cases where the additional tax is imposed on the additional tax on negligent tax returns due to a failure to report the gift tax and the additional tax is not imposed on the same donated property at the time of the return of the inheritance tax, the imposition of the additional tax on the same donated property would be double burden on the taxpayer. In light of the fact that where the additional tax on negligent tax returns is imposed on the taxpayer due to a failure to report the gift tax, it is reasonable to deem that the donated property is not included in the “amount for which the additional tax on negligent tax on negligent tax on inheritance is not reported or which falls short of the tax base to be reported” (see, e.g., Supreme Court Decisions 96Nu15862, Jun. 27, 1997; 96Nu1361, Jul. 2

Likewise, in cases where the additional tax on negligent tax returns was already imposed due to a failure to report the gift tax, the imposition of additional tax on the same donated property by failing to report the addition to the taxable amount of gift tax to be added to the taxable amount of gift tax at the time of re-donation shall also be a result of imposing double burden on the taxpayer. Therefore, it is reasonable to exclude the pertinent donated property even if the return was not made or the amount which falls short of the tax base to be reported.

(2) Therefore, the instant disposition should be revoked as it is unlawful to impose double penalty tax on the same cause of taxation.

3. Conclusion

The plaintiffs' claim of this case is justified, and the costs of lawsuit are assessed against the losing Defendants.