[1] Whether the donation of the property added to the value of the inherited property by the decedent before the commencement of the inheritance is included in the "heir" who is liable to pay the inheritance tax under Article 18(1) of the former Inheritance Tax Act by the person who renounced the inheritance (negative)

[2] The method of calculating the amount of inheritance tax to be paid by the heir who has not renounced the inheritance in case where some of the first-class co-inheritors received the property included in the taxable value of inherited property from the decedent before the commencement of inheritance, and renounced the inheritance

[3] Whether a court is bound by a statutory interpretation in order to determine whether the Constitutional Court is unconstitutional (negative)

[1] It is difficult to view that a person who received a donation of property added to the value of inherited property from the decedent before the commencement of the inheritance and renounced the inheritance as constituting a “he inheritor” under Article 18(1) of the former Inheritance Tax Act (amended by Act No. 4662 of Dec. 31, 1993). Therefore, insofar as he does not fall under a testamentary donee, etc., he does not have the obligation to pay inheritance tax.

[2] In a case where some of the first-class co-inheritors among themselves calculates the amount of inheritance tax to be borne by the remaining inheritors as a result of a donation of the property included in the taxable amount of inheritance taxes from the decedent before the commencement of inheritance and the renunciation of inheritance, it is reasonable to interpret that the term “property received by the heir” in a comprehensive title stipulated in Article 18(1) of the former Inheritance Tax Act (amended by Act No. 4662 of Dec. 31, 1993) is identical to the concept of “property received by the heir or testamentary donee” added to inherited property pursuant to Article 4(1) of the same Act, and it is reasonable to interpret that “property received by the person who renounced the inheritance” also includes “property received by the heir,” among inherited property acquired by the heir or to be received by the heir, including donated property of the person who renounced the inheritance, etc.

[3] In the trial of a specific dispute case, the authority to determine the meaning, contents, and scope of application of the law or the provision of the law, and the authority to interpret and apply the law directly constitutes an essential substance of the judicial authority, and to interpret the law in harmony with the constitutional norm is a major principle of interpretation and application of the law. Therefore, the authority to interpret and apply the law, including constitutional statutory interpretation, shall be exclusively applied to the court that has the highest court, and even if the Constitutional Court inevitably interpret or determines the scope of application before the final interpretation of the law in order to determine the constitutionality of the law, it shall not be bound by the Supreme Court or each court.

[1] Articles 4(1) (see Articles 13 and 14 of the current Inheritance Tax and Gift Tax Act), 18(1) (see Article 3(1) of the current Inheritance Tax and Gift Tax Act) of the former Inheritance Tax Act (amended by Act No. 4662 of December 31, 1993) / [2] Articles 4(1) (see Articles 13, 14 of the current Inheritance Tax and Gift Tax Act), 18(1) (see Article 3(1) of the current Inheritance Tax and Gift Tax Act) of the former Inheritance Tax Act (amended by Act No. 4662 of December 31, 1993) / [3] Articles 101, 103, and 111 of the Constitution, Articles 45, and 47(1) and (2) of the Constitutional Court Act

[1] Supreme Court Decision 95Da27769 delivered on September 26, 1995 (Gong1995Ha, 3530) Supreme Court Decision 97Nu502 delivered on June 23, 1998 (Gong1998Ha, 2020) / [3] Supreme Court Decision 2006Da66272 delivered on October 23, 2008 (Gong2008Ha, 1579 delivered on October 28, 2004) 99Hun-Ba91 Delivered on October 28, 2004 (Hun-Ba98, 1146)

Plaintiff (Law Firm CEL, Attorneys Choi Byung-mo et al., Counsel for the plaintiff-appellant)

Head of Seogju Tax Office

Gwangju High Court Decision 2003Nu284 decided August 19, 2004

The judgment below is reversed, and the case is remanded to the Gwangju High Court.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. Article 4(1) of the former Inheritance Tax Act (amended by Act No. 4662 of Dec. 31, 1993; hereinafter “the Act”) provides that “The value of inherited property to be imposed upon an heir shall be calculated by deducting public charges, funeral expenses and debts from the amount calculated by adding the value of the property donated by the ancestor to a person other than the heir within five years before the commencement of the inheritance, and the value of the property donated by the ancestor to a person other than the heir within three years before the commencement of the inheritance, shall be calculated as the taxable amount for inheritance.” Article 18(1) of the Act provides that “he heir or testamentary donee (including the testamentary donee of donations becoming effective upon the death of the ancestor) shall be jointly and severally liable to pay inheritance taxes according to the ratio of possession of the property each heir has received or is to receive from among inherited property (including donated property added to the inherited property pursuant to the provisions of Article 4).”

The purpose of Article 4(1) of the Act is to prevent the act of unfairly reducing the burden of inheritance by transferring property to the form of donation prior to the commencement of inheritance tax, and in particular, in light of the purport of regulating the donation to the inheritor more strictly than the donation to a person other than the inheritor, the term “heir” under Article 4(1) of the Act refers only to a person who was the inheritor at the time of commencement of inheritance, namely, a person who was the first heir of the inheritee at the time of commencement of inheritance, and the person who renounced inheritance after commencement of inheritance falls under “heir” under the above provision (see Supreme Court Decision 93Nu8092 delivered on September 28, 1993).

Meanwhile, according to the above provisions, where a person, who has waived inheritance after the commencement of inheritance, received property from an ancestor within five years prior to the commencement of inheritance, the value of the donated property is included in the taxable amount of inheritance tax, which is subject to the imposition of inheritance tax. Based on this, the inheritance tax calculated on this basis only includes “he heir or testamentary donee (including the testamentary donee of gift upon death)” under Article 18(1) of the Act. However, Article 18(1) of the Act only provides for the subject of inheritance tax liability and the scope of the burden, and does not explicitly stipulate the scope of “he heir” under Article 4(1) of the Act, so there is a problem as to whether a person who has renounced inheritance (hereinafter “the person who renounced inheritance”) receives property added to the value of inherited property from an ancestor before the commencement of inheritance includes “he heir” under Article 18(1) of the Act.

The requirements for taxation under the principle of no taxation without law shall be clearly defined by law, and the interpretation of tax laws shall be interpreted in accordance with the law, unless there are special circumstances, and it shall not be extensively interpreted or analogically interpreted without reasonable grounds. However, in cases where it is necessary to clarify the meaning through mutual interpretation of laws and regulations, it shall be possible to interpret it with the purpose of exceptional, taking into account legislative intent and purpose into account. In this case, it shall be permitted only to the extent that it does not undermine the legal stability and predictability oriented by the principle of no taxation without law (see Supreme Court Decision 2007Du4438, Feb. 15, 2008).

(1) Article 18(2) of the former Inheritance Tax Act (amended by Act No. 3474, Dec. 31, 1981) provides that one of the persons jointly and severally liable for inheritance tax shall be included in a joint and several obligor of inheritance tax. ② Following the amendment to Article 18(1) and (2) of the Act, there is no legal basis for imposing liability for inheritance tax on the renouncer of inheritance (see, e.g., Article 100, Article 101, Article 103 and Article 104 of the former Inheritance Tax and Gift Tax Act, which are amended by Act No. 1582, Dec. 28, 1998; Article 18(2) of the former Inheritance Tax Act (amended by Act No. 1981, Dec. 29, 198; 2007; 3.01, supra, the former Inheritance Tax Act, which was amended by Act No. 1960, Dec. 1, 2019>

In addition, in light of the aforementioned legal principles, even if the person who renounced inheritance receives property from the inheritee within five years before the commencement of inheritance and the value thereof is added to the value of inherited property pursuant to the provisions of Article 4(1) of the Act, the provision of Article 4(1) of the Act, which is merely a provision on the method of calculating the taxable amount of inheritance taxes, shall not be deemed to be the basis for the liability to pay inheritance tax on the property donated to the person who renounced inheritance

Article 18(1) of the Act provides that where part of the first-order co-inheritors waives their inheritance and succeed to the remaining property, it shall include the following circumstances, i.e., where the heir gives up the inheritance, the heir may bear the whole amount of inheritance tax increased by applying the progressive tax rate due to the fact that the value of the property donated by the decedent before the inheritance was included in the taxable amount of inheritance tax pursuant to Article 4(1) of the Act (hereinafter referred to as the “increased tax amount”), as well as the other heir who does not give up the inheritance, depending on whether the heir gives up the inheritance donated by the decedent before the inheritance, unreasonable results, which include the amount of inheritance tax to be borne by the heir who did not give up the inheritance, would infringe on the heir’s property right, or would be contrary to tax policy, and where it is possible to interpret within the scope of the meaning of Article 18(1) of the Act, i.e., the inheritance tax amount calculated by adding the inheritance tax amount to the heir who received by the heir before the inheritance inheritance inheritance, and the heir would be entitled to 14.

Therefore, in interpreting Article 18(1) of the Act on the Obligations for Inheritance Tax Payment as above, the waiver of inheritance does not include the “heir” who bears the duty to pay inheritance tax under Article 18(1) of the Act, and cannot be deemed as infringing on the property rights and equal rights guaranteed by the Constitution of the inheritor who does not waive inheritance.

B. Meanwhile, in the trial of a specific dispute case, the authority to determine the meaning, contents, and scope of application of the law or the provision of the law, and the authority to interpret and apply the law directly constitutes an essential substance of the judicial power, and to interpret the law in harmony with the constitutional norm is a major principle of interpretation and application of the law. Thus, the authority to interpret and apply the law, including constitutional interpretation, shall be exclusively attached to the court that has the highest court, and even if the Constitutional Court inevitably interpreted the law or judged the scope of application before the final interpretation of the law in order to determine the constitutionality of the law, it shall not be bound by the Supreme Court or each court in the interpretation of the law of the Constitutional Court (see, e.g., Supreme Court Decisions 2006Da66272, Oct. 23, 2008; 99Hun-Ba91, Oct. 28, 2004).

In 203Hun-Ba10 Decided October 30, 2008, the Constitutional Court decided to the effect that "he heir" in the main text of Article 18 (1) of the Act means "he heir" in relation to Article 18 (1) of the Act shall not include "a person who received property added to the value of inherited property from an ancestor before the commencement of inheritance and gives up inheritance." However, in order to determine the unconstitutionality of a law, it cannot be deemed that the court is bound by the law because it inevitably interpreted the law or decided the scope of its application before the final interpretation of the law by the court. In addition, it cannot be deemed that the interpretation of Article 18 (1) of the Act violates the Constitution on the ground that it is interpreted as above.

C. In light of the above legal principles and records, it is justifiable that the court below determined that even if the person who has renounced inheritance does not include the person who has renounced inheritance in the "heir" under Article 18 (1) of the Act, it cannot be deemed to infringe on the property rights and the right to equality guaranteed by the Constitution of the inheritor who has not renounced inheritance. However, in calculating the plaintiff's inheritance tax amount, the court below determined that the disposition of this case, which calculated the share of the donated property of the non-party 1, 2, and 3, which was the first priority co-inheritors who received the donated property included in the taxable amount of inheritance tax from the decedent before the commencement of inheritance and waived the inheritance, is legitimate without including the donated property in the "property" under Article 18 (1) of the Act. The ground for appeal containing this purport is with merit

2. Regarding ground of appeal No. 2

Under the tax law, where a taxpayer violates various obligations, such as a return and tax payment, without any justifiable reason, in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, the taxpayer’s intention and negligence are not considered as administrative sanctions imposed as prescribed by the individual tax-related Acts. On the other hand, where a taxpayer is not aware of his/her obligation, and there is a circumstance where it is unreasonable for him/her to make it unreasonable for him/her to do so, or where it is unreasonable for him/her to expect the fulfillment of his/her obligation to do so, or where there is a justifiable reason to do so (see Supreme Court Decisions 96Nu15404, Aug. 22, 1997; 2001Du7886, Jan. 10, 2003, etc.).

In light of the above legal principles and records, the court below is just in holding that the plaintiff was not aware of the existence of the land in this case as inherited property at the time of the death of the deceased, and there is no justifiable ground to believe that the plaintiff was not liable to perform his duties. There is no error of law such as misunderstanding of legal principles as to legitimate grounds for exemption from additional

3. As to the third ground for appeal

Article 7-2(1) of the Act and Article 3(1) of the Enforcement Decree of the Act (amended by Presidential Decree No. 14082, Dec. 31, 1993); the purport of Article 7-2(1) of the Act and Article 3(1) of the Enforcement Decree of the Act is that when the tax authority proves that there is an amount objectively unclear in its use among them, it may be included in the taxable amount of inheritance unless the taxpayer proves that the amount has been donated in cash, unless it proves the use of the disposal price, in order to prevent the return of the disposal price of inherited property to the heir in cash, for which it is not easy to capture the taxation data, and thereby to reduce inheritance tax unfairly (see, e.g., Supreme Court Decisions 92Nu4413, Sept. 25, 1992; 9Du4993, Sept. 3,

In light of the above legal principles and records, since the court below may recognize the fact that the plaintiff made a statement to the tax official belonging to the defendant that he did not know about the use of KRW 700 million, which is the disposal price of the land of this case, the defendant shall bear the burden of proving that the use of the land of this case is not objectively clear, and unless there is no evidence proving the use of the above KRW 700 million, the disposition of this case, which was included in the taxable amount of inheritance tax, is legitimate, and there is no violation of law

4. As to the fourth ground for appeal

The gist of this part of the grounds of appeal is that the deceased donated KRW 700 million to the non-party, his/her father, and therefore, the non-party is subject to the gift tax and the additional tax for unfaithful report and payment due to the above donation. However, the imposition of the additional tax for the above KRW 700 million added to the value of the inherited property of this case again constitutes double taxation, but the court below erred by omitting its judgment. However, it is based on the premise that the price of the land of this case was donated to the non-party, and as seen above, the court below determined that the above amount was inherited because the plaintiff had no proof of the use of the above KRW 700 million, as long as the court below determined that the above amount was inherited, it contains the purport of rejecting the above assertion, and therefore there is no error of omission of judgment that affected the conclusion of the judgment, as otherwise alleged in the grounds of appeal.

5. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Si-hwan (Presiding Justice)