Cho Jae-2018-China-0489 (Law No. 12, 2018)

The rejection disposition is legitimate with respect to the application for payment in kind not made within the deadline specified in statutes.

The defendant's rejection disposition is legitimate since the plaintiff's application for payment in kind does not meet the requirements for payment in kind within the deadline.

Article 73 of the Inheritance Tax and Gift Tax Act

2018Guhap72254 Demanding revocation of revocation of payment in kind.

OO

O Head of tax office

April 30, 2019

May 28, 2019

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The defendant's refusal to pay in kind against the plaintiff shall be revoked.

1. Details of the disposition;

(a) Return and payment of inheritance tax by the plaintiff, etc.;

1) AAAA, its father, died on 2008O.O.O.O., and inheritance commenced. The Plaintiff, BB, CCC, and DD, co-inheritors, respectively, owned the land listed in [Attachment 1] Nos. 1 through 10, an inherited property (hereinafter referred to as “each land of this case”) solely by the Plaintiff, and BB, CCC, and DD agreed on the division of inherited property with the content of waiver of inherited property.

2) The Plaintiff evaluated each of the instant land as an OOO and reported and paid inheritance tax. This is limited to the reason that the sales contract was concluded to sell each of the instant land to OO-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-O-the-counter-the-counter-the-counter as the price for the death of AA. The above sales contract was terminated.

B. Defendant’s notice of correction of inheritance tax and Plaintiff’s appeal

1) On the basis of the market price of each of the above lands, the Defendant deemed that the purchase price pursuant to the sales contract revoked does not correspond to the market price of each of the above lands, and assessed the market price of each of the above lands as the OO on the basis of the officially assessed individual land price, and notified co-inheritors, including the Plaintiff, of the correction of the inheritance tax OO as the due date for payment 2010O.O.O.O. (hereinafter referred to as the “instant disposition”).

2) The co-inheritors were dissatisfied with the instant disposition, and filed an objection, 201O.O.O.O.O.O., but they received a decision of dismissal on 201O.O.O.O.O., and filed an appeal with the Tax Tribunal on 2011.O.O.O.O., but they received a decision of dismissal on 2011.O.O.O.O., the co-inheritors filed a lawsuit against the Defendant on 2012.O., but the said lawsuit was ruled against the Defendant (O.O. 20O.), and the said judgment was rendered against the lower court (O district court 20OOOOOOO head), and the final appeal (Supreme Court 200OOOOO headOO headO) and the final appeal (Supreme Court 200O2OOO headOO headO).

(c) Plaintiff’s revised return of inheritance tax and application for payment in kind, or rejection of Defendant’s payment.

1) When filing an inheritance tax return, the Plaintiff submitted to the Defendant a report on modification of the inheritance tax, which added paintings equivalent to the value of OOO's won in the omitted market value to inherited property while evaluating the value of OO-O's forest of the instant land as OO-O's won based on the officially announced land price as in the instant disposition (hereinafter referred to as "application for payment in kind"), as in the instant disposition, the Plaintiff filed an application for payment in kind (hereinafter referred to as "application for payment in kind of the said land"), "the revised report of this case," and "application for payment in kind" of this case).

2) The Defendant notified the Plaintiff of the refusal of the instant application for payment in kind on the ground of the 2017O.O.O.’s failure to meet the requirements for statutory application period (hereinafter “instant refusal disposition”).

3) The Plaintiff filed a petition with the Tax Tribunal for an adjudication seeking the revocation of the instant refusal disposition, but the Tax Tribunal rendered a decision to dismiss the petition.

[Reasons for Recognition] Unsatisfy, Gap's statements (including each number), Gap's statements (including each number), Gap's entire arguments

2. The plaintiff's assertion

For the following reasons, the defendant shall permit the application for payment in kind, so the rejection disposition of this case shall be revoked in an unlawful manner.

A. According to Article 73(1) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 15224, Dec. 19, 2017; hereinafter referred to as "Inheritance Tax and Gift Tax Act") and Articles 70(1) and 67(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 21641, Jul. 27, 2009; hereinafter the same shall apply), payment in kind shall be filed with a return of tax base along with a return of tax base, or after the head of a tax office receives a notice of tax base and amount of tax in kind. However, in light of the purpose of the system of payment in kind for the convenience of taxpayers and smooth securing of tax amount, an application for revised return of tax base and amount of tax in kind shall be interpreted when it is possible to guarantee that the application for revised return of tax base and amount of tax can be made within the period of exclusion or rectification stipulated in Article 45(1) of the Framework Act on National Taxes and the pertinent tax base or revised return of tax amount.

On the premise of this, the Plaintiff filed a revised return before the expiration of the exclusion period of imposition and filed an application for payment in kind, and accordingly, complied with the above application period. Furthermore, the value of real estate of the Plaintiff’s inherited property exceeds 50%, and the inheritance tax amount exceeds 20 million won, and it does not fall under cases where the management and disposition of the property for which payment in kind is requested is inappropriate, and the other requirements for the permission of payment in kind under Article 73 of the former Inheritance Tax and Gift Tax Act are satisfied. If the requirements for the permission of payment in kind are met as a binding act, the tax authority must grant the payment in kind, and the Defendant must grant the payment in kind

B. Even if the land subject to the application for payment in kind is inappropriate, the instant refusal disposition is unlawful by abusing or abusing discretion. That is, the Plaintiff’s disposal of each of the instant land, including the property paid in kind, and reported and paid the inheritance tax as an assessment amount, but the Defendant assessed the value of each of the instant land as a approximately KRW OO on the basis of the officially announced land price, without considering the practical difficulty in disposing of each of the above land. However, the rejection of the application on the ground that it is inappropriate to manage and dispose of each of the above land, other than the payment in kind, is against good faith and equity, and unfairly infringes on the Plaintiff’s property right, as the instant disposition becomes final and conclusive as legitimate. Accordingly, the Plaintiff’s application for payment in kind is unlawful against Article 7 of the former Inheritance Tax and Gift Tax Act, since it does not unfairly infringe the Plaintiff’s property right, and thus, the Defendant’s application for payment in kind is against the deadline for ensuring the payment in kind, even if it does not deviate from the method of ensuring the payment in kind.

C. The instant refusal disposition is fundamentally inconsistent with the principle of good faith. That is, denying the application for payment in kind by co-inheritors, such as the Plaintiff, etc., who did not have any way to pay inheritance tax, in addition to the payment in kind of each land of this case, is an abuse of the right to impose taxes beyond the gratuitous transfer of inheritance through inheritance, and thus, it is unfair, as well as unjust, and it is deprived of the economic and social status of all the inheritors who do not have any error by extinguishing inheritance, and further, the Defendant should evaluate the land of this case as OO in accordance with the officially announced land price of the land where there is no restriction on the disposition of this case.

3. Determination on the legitimacy of the refusal disposition of this case

A. Relevant statutes

The entries in the attached statutes are as follows.

B. Whether the application for payment in kind was made within the deadline

Pursuant to Article 67(1) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act which is applied mutatis mutandis pursuant to Article 73(1) of the same Act, payment in kind shall be applied along with a return of tax base of inheritance tax or applied for by the head of the competent tax office after being notified of the tax base and amount of tax by the due date for payment

In addition, in the inheritance tax which is subject to the taxation method, the taxpayer's report is merely a cooperative obligation for the investigation and determination of the tax authority, and the tax obligation is determined by the determination and notification of the tax amount as provided by the Inheritance Tax and Gift Tax Act. Thus, the "return of the tax base of the inheritance tax" under Article 67 (1) of the Enforcement Decree is based on the premise that the tax authority

In this case, the Plaintiff already filed a return on the taxable value and tax base of inherited property within the statutory deadline under Article 67(1) of the former Inheritance Tax and Gift Tax Act, and accordingly, the Defendant determined the tax base and tax amount. Accordingly, the subsequent return on the modification cannot be deemed as the return on the tax base of inherited property under Article 67(1) of the Enforcement Decree, unless the Defendant determined the tax base and tax amount.

Therefore, since the Plaintiff cannot be deemed to have filed an application for payment in kind while filing a return on the tax base of inheritance tax, the above application for payment in kind is not made within the deadline under Article 67(1) of the Enforcement Decree of the above Act, and the application for payment in kind in this case failed to meet the requirements for permission

C. Whether the instant refusal disposition was a deviation or abuse of discretionary power

The Defendant’s refusal of the application for payment in kind does not mean that the management and disposition of the property applied for payment in kind is inappropriate, but does not have discretion to the Defendant in determining whether the period of application as prescribed by law is complied with. Therefore, the Defendant cannot be deemed to have discretion. Therefore, there is no room for the issue of deviation or abuse of discretionary power, such as the Plaintiff’s assertion regarding the legitimacy of the refusal disposition

D. Whether the instant refusal disposition violates the principle of good faith

1) If the head of the competent tax office rejected an application for payment in kind on the ground that the payment in kind is an exceptional method of performing tax liability only recognized by an Act as an exception to the principle of payment in kind, and it does not meet the requirements prescribed by an Act, it is difficult to deem it unlawful without permission

2) Separately from evaluating the value of an object of taxation of inheritance tax and granting permission for payment in kind, it is not directly related to determining the tax base of inheritance tax and granting permission for payment in kind. It is evident that even if the Defendant assessed the value of each land of this case in the amount of OO won and accordingly expressed the public opinion that it would allow an application for payment in kind based on the amount of inheritance tax thereafter, it cannot be said that the Defendant would not thereafter have given the public opinion that it would allow an application for payment in kind of inheritance tax. The Defendant’s refusal of an application for payment in kind after the payment in kind would not be subject to or contradictory to the criteria different from the inheritance tax imposition prior to the foregoing. This is more so because the Defendant’s refusal of payment in kind is not related to the value of the property subject to the application for payment in kind, it is more so true

4. Conclusion

The plaintiff's claim is dismissed on the ground that it is without merit.