Seoul Administrative Court-2017-Gu Partnership-62686 ( August 23, 2018)

Cho-2017-west-1203, 1204 (Law No. 19, 2017)

Article 31(6) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, amended on February 2, 2014, also goes against the purport of Article 41 of the Act, and is null and void beyond the scope of delegation.

After the revision in 2014, Article 31 (6) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act was partially amended to deduct corporate tax borne by a specific corporation. However, it is still invalid because it is contrary to the purport of Article 41 of the Inheritance Tax and Gift Tax Act and goes beyond the scope of delegation. Even if 98 years were not deducted within the due date, the time when the loss occurred is not limited.

Article 41 of the Inheritance Tax and Gift Tax Act: Donation of Benefits through Transactions with Specified Corporation

2018Nu64766 Revocation of Disposition of Imposition of Gift Tax

ChoiA et al. 1

○ Head of tax office et al.

September 18, 2018

December 18, 2018

1.The judgment of the first instance shall be modified as follows:

2. On December 1, 2016, the Defendants’ imposition of gift tax (including additional tax) as stated in the attached Table [Attachment] against the Plaintiffs shall be revoked.

3. All costs of the lawsuit are borne by the Defendants.

1. Purport of claim

Paragraph (2) shall apply.

2. Purport of appeal

[Judgment of the court below]

[Defendant] The part against the Defendants in the judgment of the first instance is revoked. The plaintiffs' claims against the Defendants corresponding to the revoked part are dismissed in entirety.

1. Quotation, etc. of judgment in the first instance;

The reasons for this court's decision are as follows 2. The relevant part of the judgment of the first instance shall be revised as follows, and the reasons for the judgment of the first instance ("3. Conclusion") shall not be corrected or added as follows 3.

except as otherwise provided in the Act, Article 8(2) of the Administrative Litigation Act, civil law

It is quoted in accordance with the main sentence of Article 420 of the Litigation Act.

2. Revised parts

○ 20 up to 23 pages 5 up to 23 pages as follows:

The principle of no taxation without the law is in violation of the principle of no taxation without the law (see, e.g., Supreme Court en banc Decision 2006Du8648, May 17, 2007). Meanwhile, in the case of an order of a law effective by delegation of a law, even if the ground for delegation of a law becomes null and void on the ground of delegation of a law, it can be seen as a valid law order from the time when the order of a law was issued later (see, e.g., Supreme Court en banc Decision 93Do83, Jun. 30, 1995). However, if the order of law is amended without the delegation of a law, the provision on taxation requirements, etc. is an administrative legislation, such as an order or rule, and the provision on interpretation without the delegation of a law is invalid or expanded without the delegation of a law (see, e.g., Supreme Court en banc Decision 2005Du4575, Apr. 27, 2017).

Article 32 subparagraph 2 of the Inheritance Tax and Gift Tax Act (amended by Act No. 1357, Dec. 15, 2015); Article 32 Subparag. 2 of the same Act (amended by Presidential Decree No. 31 of the General Principles of Calculation of Value of Gift Tax and Gift Tax Act shall be calculated by any of the following methods; 1. Where property is transferred without compensation: The amount equivalent to the market price of the donated property (referring to the value appraised under Articles 60 through 66; hereinafter in this Article the same shall apply) 33 through 39, 39-2, 40, 41-3 through 42 of the Inheritance Tax and Gift Tax Act; where shares increase falls under or is similar to those of a corporation under Article 14 of the same Act, the value of the donated property of the specific corporation shall be determined by Presidential Decree, whichever is less than the value of the donated property acquired by the specific corporation under Article 41 of the same Act.

Therefore, the imposition of gift tax for the year 2015 among each of the instant dispositions is null and void after the revision of 2014, and thus, the disposition is based on Article 31(6) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, and thus,

5) Sub-decisions

After all, each of the dispositions of the Defendants in this case shall be revoked as it is unlawful.

○ 24 Attached Form 24 shall be substituted by the Attached Form of this Judgment.

3. Supplement and addition of judgments;

A. The Defendants asserted that it is unreasonable to regard BB housing as a deficit corporation due to the remaining deficits of approximately KRW 13 million after the occurrence of 1998, which was 18 years prior to the date of taxation disposition, which were 18 years prior to the date of taxation disposition, and that the carried-over deficits of B housing should be deemed as having been fully appropriated and extinguished.

In light of the fact that Article 41(1) of the Inheritance Tax and Gift Tax Act does not impose restrictions on the timing of the occurrence of deficit as stated in the judgment of the first instance court cited by this court, it is reasonable to view that the BB house constitutes a corporation with losses under Article 41(1) of the Inheritance Tax and Gift Tax Act as of January 1, 2014 and January 1, 2015. The Defendants’ assertion on a different premise is without merit.

B. The Defendants also asserted that the Defendants’ disposition on the donated portion in 2014 was not unlawful disposition contrary to the retroactive taxation principle, since they applied the Enforcement Decree of the Inheritance Tax and Gift Tax Act after the amendment in 2014 and calculated the value of donated property (the amount equivalent to the corporation’s corporate tax is deducted from the premium amount) favorable to the Plaintiffs.

On the other hand, as the judgment of the first instance court cited by this court, the Enforcement Decree of the Inheritance Tax and Gift Tax Act was enforced after the amendment in 2014 only on February 21, 2014, and Article 2 of the Addenda to the Enforcement Decree of the Inheritance Tax and Gift Tax Act after the amendment in 2014 only stipulates that the above Enforcement Decree shall apply from the commencement of inheritance or the donation after the enforcement thereof. Since Article 31(6) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act after the amendment in 2014 also goes against the purport of Article 41 of the Inheritance Tax and Gift Tax Act as the mother corporation, and it is reasonable to view that the above Enforcement Decree of the Inheritance Tax and Gift Tax Act is null and void as it goes beyond the scope of delegation. Thus, the Defendants’ disposition on the donation in 2014, which was made by the amendment in 2014

4. Conclusion

If so, the plaintiffs' claims are justified and all of them are accepted. The judgment of the court of first instance which partially different conclusions is unfair, and it is modified as stated in Paragraph 2 of this Article.