Plaintiff 1 and six others

Plaintiff 8 and one other (Attorneys Kim Jong-hwan et al., Counsel for the plaintiff-appellant)

Head of Seongbuk District Tax Office and two others

The director of the tax office of distribution (Attorney Lee In-bok, Counsel for defendant)

April 22, 2015

Seoul Administrative Court Decision 2013Guhap58993 decided August 7, 2014

1. Of the judgment of the court of first instance, the part against the director of the tax office on the plaintiffs 8 and 9 shall be revoked, and the above plaintiffs' claims corresponding to the revoked part shall be dismissed.

2. All appeals filed by the plaintiffs are dismissed.

3. The plaintiffs except the total litigation cost incurred between the plaintiffs 8, 9 and the director of the tax office of distribution and the above plaintiffs' appeal cost shall be borne by the plaintiffs.

1. Purport of claim

The Defendants’ imposition of gift tax stated in attached Form 4 against each of the relevant Plaintiffs on the date stated in attached Form 3 shall be revoked.

2. Purport of appeal

A. The plaintiff

In the judgment of the first instance court, the part against plaintiffs 8 and 9 and the part against the plaintiffs other than the above plaintiffs shall be revoked. The part against the plaintiffs other than plaintiffs 8 and 9 shall be revoked as of the date stated in attached Form 3 as to the disposition of imposition of gift tax as stated in attached Form 4 that the defendants against the plaintiffs other than plaintiffs 8 and 9 and as to the plaintiff 8 and 9.

B. Defendant

The text of paragraph (1) is as follows.

1. Quotation of judgment of the first instance;

The reasoning of this Court’s explanation concerning this case is as follows: (a) partially changing the reasoning of the judgment of the first instance as prescribed in paragraph (2); and (b) except for adding the determination of the newly asserted in the appellate court as prescribed in paragraph (3), the reasoning of the first instance judgment is identical to that of the first instance judgment; and (c) thereby citing it by Article 8(2)

2. The modified part;

○ In accordance with Article 10(11) of the Judgment of the first instance court, “in the case of “in the case of” shall be deemed “in the case of “in the case of”; and “in the case of “in the case of failure to report” to “in the case of failure to report

○ Decision 11: Each share 1)

[1,184,665,00 (calculated Amount) - 737,155,500 won (i.e., already paid tax amount of KRW 712,626,50 + Tax credit of KRW 24,528,950)] 】 948,380,00 (unreported Tax Return Amount) / 3,289,330,000 (tax base) 】 10% (“

[1,184,665,00 (calculated Amount) - 737,155,500 won (per 491,866,00 won (per 220,760,550 won (per 24,528,950 won) paid for non-party 1 donation + Tax credit of non-party 1 donation + 948,380,380 (in short return amount) / 3,289,30,000 (tax base) 】 10%.

○ From the 7th day of the 11th judgment of the first instance court to the 5th day below, the parts shall be deleted and the following shall be added thereto:

Articles 47(2), 58(1), and 68(1) of the Inheritance and Gift Tax Act provide that in cases where the total amount of donated property received from the same person (in cases where the donor is a lineal ascendant, including his/her spouse) within ten years prior to the relevant donation date is at least KRW 10,00,00, the total value of donated property shall be the taxable value of donated property; and in such cases, a person liable to pay gift tax shall file a tax base return on the basis thereof; in such cases, the amount calculated by applying Articles 56 and 26 of the same Act, less the amount paid or to be paid for the value of the previous donated property, shall be the taxable value of donated

The purport of the above provision is to prevent the act of gifting property by dividing the progressive tax rate by one time without making a single gift, because the original gift tax constitutes a separate taxation requirement for each individual gift act, so the imposition of tax should be separately imposed in the event of multiple donations different in time. However, by imposing a total sum of the two or more donations received from the same person.

With respect to this case, since the sum of the value of shares donated to each of the non-party 3 and the non-party 1 whose spouse is the father and the non-party 8, and the non-party 9 are above 10,000 won, the above plaintiffs are obligated to report the taxable value and tax base of the second donated property plus the first donated property when they report the second donated property. This also applies to the non-party 2's 4,000 shares, which were deemed to have been donated by the non-party 3 through the reorganization of transaction. Nevertheless, the above plaintiffs' act is deemed to constitute "where the reported tax base falls short of the tax base to be reported under the tax law" under Article 47-3 (1) of the former Framework Act on National Taxes.

As the Framework Act on National Taxes was amended by Act No. 10405 on December 27, 2010, Article 47-2(8) was newly established and Article 47-3(3) of the same Act shall apply mutatis mutandis. In light of the legislative intent of the above amended provisions, it is reasonable to deem that the provision on under-reported additional tax under the former Framework Act on National Taxes is not applicable to the donated property for which the aggregate report has not been filed, and it is reasonable to deem that the provision on under-reported additional tax under the former Framework Act on National Taxes is not applicable to the donated property for which the sum report has not been filed, although the penalty tax has already been imposed due to the failure to report the donated property at the time of the first donation, it is argued that imposing additional tax on the failure

However, even according to the above revised provision, the value of donated property for which a return was already made and for which a duty to aggregate return was not performed shall not be construed to be excluded from the “amount equivalent to underreported tax base” under Article 47-3(1) of the above revised Framework Act on National Taxes. In addition, the newly established provision of the above revised Framework Act on National Taxes requires the imposition of additional tax for non-reported or under-reported return on the basis of the balance calculated by deducting the calculated amount of the previous gift tax from the calculated amount of the gift tax at the second donation, in cases where there is a first donation to remove the duplication of the penalty tax due to a second donation.

Accordingly, when the head of the tax office imposes penalty tax on the above plaintiffs on the second donation, he/she shall calculate and impose the tax amount on the basis of the amount obtained by subtracting the amount of gift tax deducted pursuant to Article 58 (1) of the Inheritance and Gift Tax Act from the calculated tax amount pursuant to Article 47-2 (8) 2 of the Framework Act on National Taxes, and thus, it shall not be deemed that the additional tax for insincere return is double imposed.

Therefore, we cannot accept the above plaintiffs' assertion that the head of the tax office of defendant distribution imposes additional tax on negligent tax returns under the pretext of additional tax on default, and there is no legal basis for imposing it, or that it is illegal to impose double tax on the plaintiffs who are taxpayers.

D. Sub-committee

In conclusion, all of the plaintiffs' arguments are not acceptable, and each of the dispositions of this case made by the defendants against the plaintiffs is legitimate.

3. Additional determination

The plaintiffs asserts that the failure to report satisfies the requirements for exemption from additional tax under Article 48 (1) of the Framework Act on National Taxes due to justifiable grounds.

However, in order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under tax law is an administrative sanction imposed in accordance with the individual tax law in cases where a taxpayer violates various obligations, such as a tax return and tax payment, without justifiable grounds, and the taxpayer’s intentional intent or negligence is not considered. On the other hand, such a sanction is not imposed in cases where a taxpayer is deemed to have failed to know his/her obligations, and there is a circumstance where it is unreasonable to expect the taxpayer to fulfill his/her obligations or where it is unreasonable to expect the party to fulfill his/her obligations (see, e.g., Supreme Court Decisions 93Nu15939, Nov. 23, 1993; 96Nu18076, Jul. 24, 1998).

However, in the instant case, the Plaintiffs recognized that the cross-donation was made solely in a way to avoid short margin, and the cross-donation made by the Plaintiffs goes beyond the simple dispersion donation given at intervals of time by means of tax saving. In substance, the form of donation received from a lineal ascendant and constitutes more active means of tax avoidance by taking the form of donation received from a third party. It is difficult to deem that justifiable grounds are not attributable to the Plaintiffs’ failure to report and pay to the Plaintiffs, which constituted and implemented such means of tax avoidance. Moreover, there is no reason to deem that it is unreasonable to expect the Plaintiffs to report and pay gift tax of the same content as that of the substance. Therefore, this part of the

4. Conclusion

Therefore, the plaintiffs' claims against the defendants shall be dismissed as it is without merit. Since the part of revocation of imposition of additional tax against plaintiffs 8 and 9 by the director of the tax office of distribution of the defendant among the judgment of the court of first instance is unfair, the above defendant's appeal is accepted and the above part of the judgment of the court of first instance against the defendant is revoked, and the above part of the judgment of the court of first instance is dismissed, and the remaining part of the judgment of the court of first instance is justified, and the plaintiffs' appeal is dismissed as it is so decided as per Disposition.

[Attachment]

Judges Ansan-chul (Presiding Justice)