The result of processing civil petitions for grievances shall not be subject to objection;

The processing result of a civil petition for grievance is not an object to be seen, and a petition filed after 90 days from the date of the disposition cannot be deemed to have fulfilled a legitimate pre-trial procedure.

Article 55 of the Framework Act on National Taxes

Ulsan District Court 2014Guhap5013

Section AA

Head of Ulsan District Office

oly 16, 2015

208.20

1. All of the instant lawsuits are dismissed.

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

Cheong-gu Office

The imposition of capital gains tax of KRW 144,199,338 against the Plaintiff on January 13, 2014 and the imposition of capital gains tax of KRW 6,107,140 on March 3, 2014 against the Plaintiff by the head of Ulsan-gu Seoul Metropolitan City (hereinafter referred to as the “head of the Nam-gu Seoul Metropolitan City”) shall be revoked on March 3, 2014, respectively.

1. Details of the disposition;

(a) Particulars of reporting and paying capital gains tax;

1) On October 6, 2004, the Plaintiff purchased 1324/1626 shares of the entire land of this case (hereinafter referred to as “instant land”) from the GuA to ○○○○○○○○○○○○○○-○○○○, 16,26 square meters (hereinafter referred to as “the entire land of this case”). On the same day, KimB purchased the remaining shares of the entire land of this case, and on July 14, 2005, the Plaintiff and KimB sold the entire land of this case to rightCC and KimD (hereinafter referred to as “rightCC, etc.”).

2) After selling the instant land to the competentCC, the Plaintiff reported and paid the transfer income tax with the transfer value of KRW 14,633,714, and the acquisition value of KRW 11,040,000.

B. On September 10, 2008, the competentCC, etc. sold the entire land of this case to ○○ Industry Development Co., Ltd., and reported the acquisition value of KRW 442,80,000. The head of Ulsan District Tax Office determined that KRW 14,633,714, the transfer value of the instant land reported by the Plaintiff was not the actual transaction value, and conducted a tax investigation with the Plaintiff from April 25, 201 to May 9, 2011.

2) As a result of the tax investigation, the head of Ulsan District Tax Office notified the Plaintiff of May 11, 201, that the actual transfer value of the instant land should be KRW 359,989,376, and that the acquisition value should be KRW 277,325,148, which is the conversion value.

3) Thereafter, on June 1, 201, the head of Ulsan District Tax Office imposed capital gains tax of KRW 65,226,710 on the Plaintiff in 205, and the Plaintiff paid capital gains tax of KRW 65,226,710.

C. On August 1, 2013, the head of Ulsan District Tax Office, who issued a disposition of correction, applied the actual transaction value, not the conversion value, rather than the conversion value. On the premise that the actual transaction value is KRW 11,040,00, the transfer income tax was calculated on the premise that the actual transaction value was KRW 11,000, and on August 1, 2013, imposed an additional amount of KRW 234,861,16,116 of local income tax on the Plaintiff on August 1, 2013 (hereinafter “the initial disposition”).

(d) Reduction of capital gains tax, etc.;

1) On December 3, 2013, the Plaintiff filed a civil petition for grievance by asserting that the actual acquisition value of the instant land was KRW 140,000,000, and the actual transfer value was KRW 243,000,000. The head of Ulsan District Tax Office recognized the acquisition value of the instant land as KRW 12,00,000, and issued a revised disposition to reduce capital gains tax amounting to KRW 90,661,820 to the Plaintiff on January 13, 2014 (hereinafter “instant revised disposition”), and that it is limited to KRW 14,19,340 that remains thereafter).

2) In addition, on January 3, 2014, the head of Ulsan District Tax Office calculated local income tax according to the capital gains tax for which the correction of the instant reduction was defective, and on March 3, 2014, notified the Plaintiff of the payment of total of KRW 6,107,140, and additional 622,890, and additional 6,739,030, which remains remaining after the reduction was reduced (the sum of the correction of each of the above reduction is referred to as “the correction of the instant reduction”).

(e) Procedure of the previous trial;

On April 11, 2014, the Plaintiff filed a tax appeal with the Tax Tribunal on the grounds that there was an error in calculating the acquisition value and transfer value of the instant land against the Defendants. However, the Tax Tribunal rendered a tax appeal against the Defendants on the grounds that the instant disposition was merely an effect of partially revoking the original disposition, and thus cannot be seen as an independent disposition, and only the instant initial disposition was revoked. The Plaintiff filed an appeal after the lapse of 90 days from the date the initial disposition was notified. As such, the Plaintiff filed an appeal against the Defendants on June 23, 2014, deeming that the period of appeal was excessive, and thus, the appeal against the Defendants against the Head of Ulsan District Office rendered a decision of rejection on September 2, 2014.

[Based on Recognition] Facts without dispute, Gap evidence 1 through 4, 9 through 12, Eul evidence 1 to 4, Eul's evidence 1 to 6, Eul's evidence 1 to 6, and the purport of the whole pleadings

2. The parties' assertion

A. The plaintiff's assertion

The remainder of the original disposition of this case, excluding the portion revoked as a result of the instant reduction and correction, shall be deemed as the transfer value of the land of this case, on the basis of a sales contract prepared falsely by the Plaintiff, 243,000,000 won, not the actual transfer value of the land of this case. The acquisition value shall also be deemed as the transfer value of the land of this case, and only 12,000,000 won, not the actual acquisition value, shall be deemed as 14,00,000,000 won, and it shall be against the substance over form principle as calculating capital gains tax and local income tax based on the difference, and even if the Plaintiff’s transfer of the land of this case based on both the acquisition value and transfer value on the basis of the officially announced land price in the process of new acquisition of capital gains tax after the Plaintiff’s transfer, it shall not be deemed as fraud or other unlawful act, and thus the above disposition shall be made after the lapse of the exclusion period, even if the national tax claim of this case is completed for five years after the expiration date.

In addition, even though a tax investigation was conducted once prior to the disposition of correction on June 1, 2011, it was unlawful to conduct the initial disposition of this case through re-investigation in a state where there was no change in special circumstances.

B. The defendants' assertion

After the initial disposition of this case, in a case where the Defendants made a correction disposition of the amount of reduction in this case, the subject of appeal is not the initial disposition of this case and the reduction disposition of the amount of reduction in this case is not the disposition of this case, and as a result, the Defendants conducted a correction disposition of the amount of reduction in this case, the subject of revocation should not be the correction disposition of the amount of reduction in this case, but the original disposition of this case should be the disposition of this case.

In addition, even if the Plaintiff’s lawsuit against the Defendants is deemed to have been sought for the revocation of the initial disposition of this case, it cannot be deemed that the Plaintiff had gone through legitimate pre-trial procedure in the case of the lawsuit filed against the head of Ulsan Tax Office, and the lawsuit filed against the Defendants by the remaining head of the Gu has been filed with the intent

Even if the lawsuit of this case is lawful, the disposition on the remaining part of the original disposition of this case, other than the part revoked as a corrective disposition of this case, is legally calculated through the acquisition value and transfer value confirmed through a tax investigation.

3. Determination on this safety defense

First of all, we examine the defendants' defenses.

A. A corrective disposition that reduces the tax base and amount of tax is not the initial and separate taxation disposition, but the substance of which is not the initial and separate taxation disposition, and thereby brings a favorable effect to taxpayers as to partial revocation of tax amount. Thus, in a case where the part of the disposition of rectification remains illegal, the object of an appeal litigation is not yet revoked by the initial disposition of rectification, and the remaining part of the disposition of rectification is not subject to an appeal litigation, and in such a case, whether the disposition of rectification was lawful prior to trial should be determined on the basis of the initial disposition (see, e.g., Supreme Court Decision 2012Du2370, Mar. 31, 2014). Moreover, the Civil Petitions Handling System provides for the National Tax Service Directive (No. 1799, Oct. 23, 2009) that recommends correction of a disposition after exceptionally examining the problems of a specific taxpayer who did not have an opportunity to file an appeal, etc. due to special circumstances, and Article 50 of the Framework Act on National Taxes provides that the disposition of grievance is not subject to the above provision.

Therefore, even if the instant reduction correction disposition was issued after the initial disposition was rendered, it is merely a modification of the instant reduction disposition, and thus, the instant reduction correction itself is not subject to appeal litigation. Even if the Defendants were to make the instant reduction correction disposition based on the result of civil petition for grievance, it is not subject to appeal litigation as prescribed by the Regulations on the Management of Taxpayer Protection. Therefore, the Plaintiff’s lawsuit seeking revocation of the instant reduction correction disposition is unlawful in entirety.

B. Even if the Plaintiff’s lawsuit of this case is decided to seek the revocation of the original disposition of this case, the Plaintiff’s lawsuit against the Defendants is unlawful as delineated below.

1) According to the Framework Act on National Taxes, an administrative litigation against a disposition imposing tax may not be filed without undergoing a request for evaluation or adjudgment under the Framework Act on National Taxes and a decision thereon, or without undergoing a request for evaluation under the Board of Audit and Inspection Act (Article 56(2) and (4). Where an objection is filed prior to a request for evaluation or adjudgment, an objection shall be filed within 90 days from the date (where a notice of disposition is received, the date on which the notice of disposition is received) on which the relevant disposition is known (Article 66(1), (6), and Article 61(1)). In such a case, a request for evaluation or adjudgment shall be filed within 90 days from the date on which the decision on the objection is notified (Article 61(2)). In addition, under the Framework Act on Local Taxes, a lawsuit shall be filed within 90 days from the date on which the relevant disposition is known in order to seek the revocation thereof as an objection, request for evaluation or adjudgment prior to such a request for evaluation or adjudgment (Article 1118(3).

2) On the other hand, even if the Plaintiff filed a civil petition for grievance with the head of Ulsan District Tax Office on the initial disposition of this case and filed a reinvestigation on the transfer process of the land of this case, the subject of appeal litigation is limited to the remaining part of the original disposition of this case, which has not yet been revoked by the rectification of reduction.

Therefore, in order for the Plaintiff to file a lawsuit seeking cancellation of the capital gains tax portion among the initial dispositions of this case, the Plaintiff filed a petition for review or a petition for trial before the elapse of 90 days from the date of receiving the notice of the initial disposition of this case, and even if so, the Plaintiff filed an objection before the lapse of 90 days from the date of the initial disposition of this case. However, even though the Plaintiff received the notice of the initial disposition of this case on August 14, 2013, the Plaintiff filed an administrative appeal on April 14, 2014, which was far more than 90 days from the date of receiving the notice of the initial disposition of this case, and thus, cannot be deemed to have gone through legitimate pre-trial proceedings. Even if the Plaintiff intended to file a civil petition for grievance with the head of Ulsan District Tax Office, the Plaintiff cannot be deemed to have filed a civil petition for grievance on December 3, 2013 after the date of becoming aware of the initial disposition of this case.

In addition, in order to be lawful in a lawsuit against the portion of local income tax of the instant initial disposition, the Plaintiff should have filed an administrative lawsuit against the said portion within 90 days from the date of receiving the notice of the initial disposition, or filed a request for examination or adjudgment within 90 days from the date of receiving the said notice. However, as seen above, the Plaintiff filed a request for adjudication with the Tax Tribunal on April 14, 2014 after the lapse of 90 days from August 14, 2013 to the date of receiving the notice of the initial disposition of the instant case. The instant lawsuit was also filed on September 22, 2014, and there is no evidence to prove otherwise that the Plaintiff filed an objection or request for re-determination before the lapse of 90 days.

3. Conclusion

Therefore, all of the lawsuit of this case shall be dismissed, and it is so decided as per Disposition.