Suwon District Court-2015-Gu Partnership-65019 ( October 12, 2016)

It is reasonable to determine whether a judicial claim under Article 168 subparag. 1 of the Civil Act is the cause for interruption of extinctive prescription.

Where special circumstances are acknowledged, such as where it is impossible to interrupt extinctive prescription in accordance with the method prescribed by the Framework Act on National Taxes, such as where the taxpayer is insolvent or his/her whereabouts is unknown, it is reasonable to determine a judicial claim under Article 168 subparag. 1 of the Civil Act as the grounds for interrupting extinctive prescription of a tax claim

Article 27 of the Framework Act on National Taxes

2016Nu72596 Confirmation of the existence of a taxation claim

Korea

○ Development Co., Ltd.

Suwon District Court Decision 2015Guhap65019 Decided October 12, 2016

2017.028

2017.03.28

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

1. Purport of claim

It is confirmed that the Plaintiff’s ○○○○○○○○○ (the corporate tax ○○○○○ and the additional charges as of May 26, 2015) against the Defendant and the additional charges as of May 27, 2015 against the said corporate tax exist.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Quotation of judgment of the first instance;

The court's reasoning concerning this case is as follows: "The existence of interest in confirmation" of Article 4(b) of the judgment of the court of first instance is as stated in the reasoning of the judgment of the court of first instance, except for the case as stated in the following paragraph(2). Thus, this Court shall accept it in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure

2. As to the existence of interest in confirmation

A. Whether a judicial claim can be acknowledged as the grounds for interrupting extinctive prescription

1) A general civil creditor shall apply for compulsory execution against a debtor’s property based on the final and conclusive judgment, which was rendered a final and conclusive judgment through a judicial claim, in order to enforce the pertinent claim by compulsory execution. However, a tax claimant may directly determine the details of the pertinent tax claim, and has the right of self-performance to seize and liquidate the delinquent’s property. Therefore, the benefit of a lawsuit that can determine a tax claim through a separate judicial claim cannot be acknowledged as a general and prior area.

Article 27 of the Framework Act on National Taxes provides for extinctive prescription of the right to collect national taxes, and Article 28(1) provides for "tax payment notice, demand notice or demand notice of payment, demand notice of delivery, request for delivery, and seizure" as grounds for interruption of extinctive prescription. As such, in principle, the Framework Act on National Taxes provides for the suspension of extinctive prescription of a tax claim by means of "tax payment notice, demand notice, or demand notice of payment ? demand for delivery ? request for delivery, or seizure," and thus, it is difficult to view that judicial

2) However, Article 27(2) of the Framework Act on National Taxes provides that extinctive prescription of the right to collect national taxes shall be governed by the Civil Act except as otherwise provided in the Framework Act on National Taxes or the tax-related Acts. Thus, whether a judicial claim, which is the cause of interruption of extinctive prescription under the Civil Act, can be recognized as the cause of interruption of extinctive prescription in certain cases, or whether a cause for interruption of extinctive prescription is not allowed as to a tax claim

3) In full view of the following circumstances, in cases where: (a) a taxpayer is insolvent or is missing and thus the enforcement of seizure is not possible, the extinctive prescription cannot be interrupted according to the method prescribed by the Framework Act on National Taxes, such as in cases where the taxpayer is unable to commence; (b) a taxpayer has not neglected to realize the tax claim by faithfully taking the measures to collect the tax claim; and (c) where special circumstances are acknowledged, such as where the period of extinctive prescription expires near the expiration date, a judicial claim under Article 168 subparag. 1 of the Civil Act shall be determined as the grounds for suspending the extinctive

A) If a literal interpretation of Article 27(2) of the Framework Act on National Taxes is made, there is no reason to exclude judicial claims, which are grounds for interruption of extinctive prescription under the Civil Act, from the grounds for interruption of the extinctive prescription period. If a tax claim is excluded from the exception of a right to self-performance, its essence does not differ from a general civil claim. However, the taxation claim is treated more disadvantageous than a general civil claim in the area where the problem is not resolved by such special exception, on the ground that a tax

B) Under Articles 168 and 170 through 174 of the Civil Act, the duty payment notice, demand notice or demand notice, demand for delivery, seizure, etc., which provide the grounds for interruption of extinctive prescription of a tax claim cannot be deemed as having a relation with a judicial claim or participation in bankruptcy proceedings, payment order, peremptory notice, etc., which provides the grounds for interruption of a tax claim under Article 28(1) of the Framework Act on National Taxes. In light of this, it is difficult to interpret that Article 28(1) of the Framework Act on National Taxes constitutes a special provision under Article 2

C) In a case where it is impossible to commence the collection procedure due to the unknown whereabouts of a taxpayer, the statute of limitations cannot be interrupted due to the taxpayer’s insolvency or the concealment of assets, etc. under Article 28(1) of the Framework Act on National Taxes. In such a case, there is a need for a method to interrupt the statute of limitations of taxation claims in preparation for the taxpayer’s whereabouts or the identification of assets in the future. Furthermore, in the current situation where international transactions are active, such need is more emphasized in terms of responding to the tax collection of foreign taxpayers or the taxpayer’s property overseas concealment, etc. and securing the period required for international tax cooperation, etc.

D) The National Tax Collection Act, as the first phase of the collection procedure, presents the procedure for the duty payment notice, and then urgings the next phase. However, as long as the same content has already been repeated even when the duty payment notice was issued, it is difficult to recognize the validity of interrupting prescription in a repeated tax payment notice. In addition, where the tax authority urgings the payment of delinquent taxes or additional dues and then demands the same contents again, it is difficult to recognize the validity of interrupting prescription. In addition, where the tax authority makes the same demand after urgings the payment of delinquent taxes or additional dues, only the first demand is an administrative disposition subject to appeal litigation as a collection disposition, and the same demand thereafter becomes an administrative disposition subject to appeal litigation, and is merely a simple peremptory notice under the Civil Act, not a demand for suspending extinctive prescription, which is a prerequisite for disposition on default (see Supreme Court Decision 97Nu119, Jul. 13, 199). As long as the duty payment notice and demand are effective only once as the grounds for suspending extinctive prescription, it is necessary

E) The reason for the existence of the statute of limitations is that respect the permanent state of fact and protect the locked person on the right, and in particular, the latter is meaningful in the extinctive prescription, and thus, when the right holder expresses that he/she is not a locked person on the right by asserting his/her right, the cause for interrupting prescription is the cause for interrupting prescription (see, e.g., Supreme Court en banc Decision 91Da32053, Mar. 31, 192). Prohibiting the means of suspending the statute of limitations even if the right holder did not neglect to realize a tax claim, such as taking necessary measures to collect the tax claim, even though he/she did not neglect

F) In a case where a civil obligee becomes final and conclusive upon winning a judgment in favor of the civil obligee, if, exceptionally, the ten-year extinctive prescription period of a claim based on a final and conclusive judgment becomes more difficult to enforce compulsory execution, a judicial claim with the same content is inevitable for the interruption of extinctive prescription, regardless of whether compulsory execution is possible prior to the foregoing, so it cannot be deemed that a judicial claim has been made for the interruption of extinctive prescription against the same claim for the interruption of extinctive prescription or prohibition of double lawsuit (see, e.g., Supreme Court Decisions 87Meu1761, Nov. 10, 1987; 2005Da74764, Apr. 14, 2006). For the same purport, even in a case of a tax claim specifically determined by a tax notice, etc., if it is practically difficult to proceed with a disposition on default in close proximity to the completion of extinctive prescription, it is reasonable to allow the interruption

G) The Defendant asserts that the suspension of extinctive prescription through a judicial claim should not be allowed in terms of systematic and justifiable nature, in order to prevent cases where a disposition on default is impossible or where a disposition on default leads to a waste of administrative power, or where a disposition on default poses a threat to the livelihood of a taxpayer. However, a disposition on default under Article 86 of the former National Tax Collection Act is left at the discretion of the head of a tax office, not a disposition on default. Moreover, even if a disposition on default with respect to a tax claim is made, it is merely a disposition on default, not a tax claim itself, but a disposition on default is not extinguished (see Supreme Court Decision 2005Du2414, Oct. 27, 2006). In addition, the above provision, which provides for a disposition on deficits, was deleted by the amendment of the National Tax Collection Act on December 31, 2011. The above argument by the Defendant is unacceptable.

H) In the case of a taxation claim, the Defendant is not exempted from liability even when the taxpayer is declared bankrupt and immunity (Article 566 subparag. 1 of the Debtor Rehabilitation and Bankruptcy Act). As such, permitting the interruption of extinctive prescription through a judicial claim in respect of such taxation claim brings about a harsh result in the taxpayer’s life. However, excluding a taxation claim from the subject of bankruptcy and immunity is based on the legislative policy to protect the taxation claim more strongly than that of the general civil law. As such, excluding a taxation claim from the subject of bankruptcy and immunity is based on the legislative policy that intends to protect the taxation claim more strongly than that of the general civil law, and it cannot be a ground for recognizing a judicial claim as a ground for suspending extinctive prescription of a taxation claim. Rather, if the interruption of extinctive prescription of a taxation claim based on a judicial claim is denied on the foregoing ground, contrary to the purport of protecting a taxation claim more strongly than that of the general civil law claim, the interruption of extinctive prescription becomes unreasonable.

I) In Supreme Court Decision 75Da385 Decided December 9, 1975, the defendant asserts that a judicial claim is not allowed as a ground for suspending the extinctive prescription against a tax claim. However, the above decision has the effect of interrupting the extinctive prescription in a notice of payment pursuant to Article 73 of the former Budget and Accounts Act (amended by Act No. 2826, Dec. 31, 1975; hereinafter the same), so long as there are no special circumstances to bring a lawsuit in order to interrupt the extinctive prescription of a claim for indemnity based on a final and conclusive decision of compensation, it may be interpreted to the effect that the interruption of extinctive prescription by a judicial claim can be recognized in the event of special circumstances (in addition, the former Budget and Accounts Act did not provide for the provision of extinctive prescription under the Civil Act, such as Article 27(2) of the former Framework Act on National Taxes).

B. Whether a special circumstance exists for a judicial claim seeking interruption of extinctive prescription of the instant taxation claim

Comprehensively taking account of the overall purport of arguments in Gap 1, 3 through 5, and Eul 4 (including a serial number), the head of ○○○ Tax Office notified the defendant on March 2, 201 of the payment deadline for corporate tax ○○○ (○○○○○○ Won for 2006 + KRW ○○○○ for 2007) as of March 31, 201. The defendant did not own any property in Korea **** operates a golf course business with the trade name of ○○○ Development Co., Ltd. ? ○○○○○ on April 8, 201. The head of ○○ Tax Office sent a demand notice to the defendant on the above corporate tax and additional dues (hereinafter referred to as “instant tax claims”) to the defendant on April 11, 201, and then sent the demand notice to the defendant on March 2, 201 to the head of ○○ Tax Office for the tax claim under Article 201-14 of the Adjustment of International Taxes Act.

According to the above facts, with respect to the fact that the Defendant, a taxpayer of the instant taxation claim, normally runs a golf course business in Japan without holding any property in Korea, the Plaintiff adequately performed all necessary measures for collecting the instant taxation claim, such as sending a reminder after the notice of tax payment, the progress of international tax administration assistance procedures, and the sending of a peremptory notice for payment. Despite such measures, despite the fact that the instant taxation claim is not collected, the Plaintiff filed the instant lawsuit in order to suspend the statute of limitations on May 26, 2015, which was inevitable for the lapse of the five-year statute of limitations (five-year period from the day after March 31, 201, which is the due date for the tax payment notice) as of the date on which the said five-year statute of limitations (five-year period from the day after March 31, 2011, which is the due date for the tax payment notice), and thus, the Plaintiff’s filing of the instant lawsuit seeking confirmation of the existence of the instant taxation claim as a judicial

3. Conclusion

Therefore, the judgment of the first instance court is just, and the defendant's appeal is dismissed as it is without merit.