Where a taxpayer deemed to have been donated under the statutes fails to file a report on gift tax by the filing deadline, the exclusion period for imposition of the gift tax (10 years) shall be the exclusion period

Since not only a person who received a donation by agreement between the parties but also a person who is deemed to have received a donation under the statutes shall be deemed to have a duty to report as a taxpayer of the gift tax, it is reasonable to deem that the exclusion period for imposition of the gift tax is 10 years, unless the person liable for such duty to report files a

Article 26-2(1)1 of the former Framework Act on National Taxes (amended by Act No. 4672 of Dec. 31, 1993) Article 26-2(1)3 of the former Inheritance Tax Act (amended by Act No. 5193 of Dec. 30, 1996) Article 20 (see current Article 68 of the Inheritance Tax and Gift Tax Act) Article 29-2(1) (see current Article 4 of the Inheritance Tax and Gift Tax Act) Article 34-7(1) of the former Inheritance Tax and Gift Tax Act (see current Article 44(1) of the Inheritance Tax and Gift Tax Act)

Plaintiff (Law Firm Shinyang, Attorneys Park Dong-op et al., Counsel for plaintiff-appellant)

The head of the tax office of Dobong-gu (Attorney Process-at-Law)

Seoul High Court Decision 2000Nu16618 delivered on February 1, 2002

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

According to the reasoning of the judgment below, the court below acknowledged facts as stated in its holding, and determined that the exclusion period of imposition of gift tax under Article 26-2 (1) 1 of the former Framework Act on National Taxes (amended by Act No. 4672 of Dec. 31, 1993) is five years from the date on which it can be imposed: Provided, That in the case of failure to submit a gift tax return, it shall be ten years from the date on which it can be imposed, but the gift tax is a tax imposed by the tax authority on which the tax base return duty of the donee becomes final and conclusive, and it is not effective for the tax authority to use the donee as reference material when it conducts a investigation and determination, but it is difficult to recognize the duty to report the gift tax to the person who is deemed a donee or presumed to be a donee in the case of statutory donation or presumed donation, unlike the general donation made by an agreement between the parties. However, in this case, the plaintiff's mother was deemed to have completed the registration of ownership transfer due to title trust as well as the plaintiff's obligation to report.

However, according to Article 29-2 (1) of the former Inheritance Tax Act (amended by Act No. 5193 of Dec. 30, 1996), a taxpayer of gift tax is a person who receives a gift from others, i.e., a donee, and Article 34 (1) of the same Act provides that the value of the property transferred to the spouse or a lineal ascendant or descendant shall be deemed to have been donated to the transferee at the time of transfer thereof. Meanwhile, according to each provision of Articles 20 and 34-7 of the same Act, the donee must submit a gift tax return to the Government within six months from the date of donation. In full view of each of the above provisions, it shall be deemed that not only the person who received the gift by an agreement between the parties, but also the person who is deemed to have received the donation under the Acts and subordinate statutes, so long as the Plaintiff liable to report fails to submit a gift tax return on the instant land share within the reporting deadline, it shall be deemed that the exclusion period for imposition of gift tax is ten years.

Nevertheless, the court below erred in the misapprehension of legal principles as to the exclusion period of gift tax, which affected the conclusion of the judgment, by misapprehending the legal principles as to the exclusion period of gift tax.

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 Yoon Jae-chul (Presiding Justice)