Supreme Court Decision 2014Du3891 (No. 24, 2014)

If a tax notice does not state the basis of calculation of the tax base and tax amount, the collection disposition is unlawful.

Unless there are special circumstances, the collection disposition should be deemed unlawful if the tax base of the principal tax and the basis for calculation of the amount of tax are not stated in the tax notice.

Article 9 (Notification, etc. of Tax Payment)

2014Nu649 Detailed statement and revocation of disposition of dividend income

△△△ Group

○ Head of tax office

Supreme Court Decision 2014Du3891 Decided July 24, 2014

oly 31, 2014

November 21, 2014

1. The defendant's appeal is dismissed.

2. 10% of the total litigation costs shall be borne by the Plaintiff, and the remainder 90% shall be borne by the Defendant.

3. To rectify the dividend income tax of KRW 695,812,040 for the year 207 in the first instance court's order in paragraph (1) 1 as a collection disposition for the dividend income of KRW 695,812,040 for the year 207, and to delete "each" in paragraph (1) 2 of the order of the first instance court's decision.

1. Purport of claim

"A collection disposition of 695,812,040 won of the principal tax on dividend income for the year 2007, which the Defendant reported to the Plaintiff on May 8, 2012 (the Plaintiff stated as the purport of the claim and in the application for correction of the cause of the claim on May 8, 2013, which appears to be a clerical error) is revoked (In addition to the initial claim, the Plaintiff filed a claim seeking revocation of the disposition of imposition of 69,581,200 won of the additional tax on dividend income for the year 207, which the Defendant filed with the Plaintiff on March 5, 2013, and as seen below, the judgment before the remand became final and conclusive by the Supreme Court prior to the remand), and the purport of appeal 2."

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

1. Object of the trial after remand;

The plaintiff filed a claim for revocation of the disposition imposing the principal tax on dividend income tax and the disposition imposing the additional tax on dividend income tax, and the judgment of the court of first instance accepted all the plaintiff's claims. The judgment of the court of first instance prior to remand was revoked and the judgment of the court of first instance dismissed all the plaintiff's claims. The plaintiff appealed. The Supreme Court accepted part of the plaintiff's appeal and reversed only the portion concerning the principal tax on dividend income tax in the judgment prior to remand, and then remanded the case to the party member and dismissed the remainder of the plaintiff's appeal. Thus, the judgment of the court of first instance prior to remand dismissed the part concerning the claim for revocation of the disposition

Therefore, the subject of judgment after remand is limited to the part that was reversed and remanded as above, i.e., the revocation of the main collection disposition of dividend income tax.

2. Details of the disposition;

A. The Plaintiff is a company established for the purposes of export and import business, export and import agency business, etc., and the largestA, the largestB, the largestCC, and the largestD (hereinafter collectively referred to as the “minimumA, etc.”) are the former shareholders of the Plaintiff, who are the largest shareholders of the Plaintiff and the remainder of the Plaintiff.

(B) On April 27, 2007, the largestA et al. sold to the Plaintiff the Plaintiff the Plaintiff’s shares (hereinafter collectively referred to as “instant shares”) owned as follows, and reported and paid the capital gains tax on June 30, 2007.”

Number of shares (number of shares)

The sales price per share of the sales price;

Total (won)

LAA

219,016

16,500

3,613,764,00

LB

69,574

16,500

1,147,971,000

LCC

49,810

16,500

821,865,000

MaximumD

49,810

16,500

821,865,000

Total

388,210

16,500

6,405,465,000

C. However, on May 8, 2012, the Defendant: (a) deemed the Plaintiff and LAA et al. to be deemed to have been deemed to have made the instant stock transaction due to the retirement of stocks or the reduction of capital; and (b) rendered a disposition to collect KRW 779,60,262 from the principal tax on dividend income accrued in the year 2007; and (c) imposed and collect additional tax on the Plaintiff.

[See Articles 21(2)1 and 22(2)3 of the former Framework Act on National Taxes (amended by Act No. 8830 of Dec. 31, 2007) and Articles 17(1) and 127(1)2 of the former Income Tax Act (amended by Act No. 8825 of Dec. 31, 2007; hereinafter the same), dividend income tax is withheld at source, and is a tax automatically determined at the same time when a tax liability is established at the time when a dividend income tax is paid. Accordingly, even if the Plaintiff, who is a withholding agent of dividend income tax, failed to perform his/her tax liability, issued a tax payment notice to the Plaintiff by adding additional tax to the principal tax amount of the principal tax of dividend income tax, this is combined with a collection disposition ordering performance of the principal tax of dividend income tax that has been automatically determined, the imposition disposition of additional tax, and its collection disposition.

“Disposition” (see, e.g., Supreme Court Decision 2011Du7311, Jul. 11, 2013; Supreme Court Decision 2013Du19066, Feb. 13, 2014)

D. The Plaintiff, who was dissatisfied with the above disposition, filed an appeal with the Tax Tribunal on May 30, 2012, but was dismissed on November 26, 2012.

E. Meanwhile, on March 5, 2013, during the instant lawsuit, the Defendant revoked ex officio the portion of the penalty tax during the instant disposition, and subsequently imposed the same amount by specifying the type of and the basis for calculation of the penalty tax. On May 1, 2013, the Defendant deemed that 41,743 shares of the instant disposition were owned by the de facto FF, such as the mother of the largestA, etc., and accordingly, deducted the principal tax from KRW 695,812,04 and the penalty tax from KRW 69,581,20 (hereinafter referred to as the “instant disposition”).

In recognition, Gap evidence Nos. 1, 2, 3, 8, 10, 13, 18, and Eul evidence Nos. 1, 5, 6, and 9 (including branch numbers; hereinafter the same shall apply), and the purport of the entire pleadings.

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) On May 8, 2012, the Defendant, while rendering the instant disposition to the Plaintiff on May 8, 2012, stated only the tax base and calculated tax amount on the principal tax, but did not state the grounds for calculation or calculated tax rate, and did not attach a separate statement of calculation of tax amount, etc. Therefore, the instant disposition was procedurally erroneous.

2) The Plaintiff first lent the instant shares as collateral upon receiving the claim for purchase of the instant shares from the largestA, etc., which is a shareholder. Since it is determined that the said loan does not constitute the grounds for claim for purchase of shares, it was intended to recover the said loan, but it was difficult to recover, it was inevitable to acquire the company’s own shares to achieve its purpose in exercising its rights, and it was not acquired for the retirement of shares. Thus,

3) If the above inevitable cause is not acknowledged, the Plaintiff’s acquisition of the instant shares is null and void since it is the acquisition of treasury shares that are not permitted by the Commercial Act. Thus, the instant disposition is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Article 9(1) of the former National Tax Collection Act (amended by Act No. 11605, Jan. 1, 2013; hereinafter the same) provides that when the head of a tax office intends to collect national taxes, he/she shall issue a tax notice stating the taxable year, tax item, amount of taxes, grounds for calculation, deadline for payment, and place of payment of national taxes to the taxpayer. The provision pertaining to the duty payment notice of the National Tax Collection Act is based on the following: (a) the principle of due process under the Constitution and the basic principles of the Administrative Procedures Act are accepted in the area of the collection disposition; (b) the tax authority has prudent and reasonable collection disposition excluding the taxpayer; and (c) the taxpayer has to notify the taxpayer of the details of the collection disposition in detail; and (d) the basic purpose of the decision to ensure the convenience of appeal; (c) the collection disposition should be deemed to be unlawful unless there are special circumstances where the tax base, basis for calculation, etc. of the principal tax is not properly stated in the tax notice (see, e.g., Supreme Court en banc Decision 201237Du10.

Examining these facts in light of the above legal principles, given that there is a defect in the notice of tax payment under Article 7(1) of the former National Tax Collection Act, and there is no other circumstance to deem that the defect was corrected or cured, the instant disposition was unlawful without further examining the remainder of the Plaintiff’s assertion.

2) On this issue, the Defendant asserts that the duty payment notice of this case is an order for the receipt of the amount of tax already determined and only based on Article 85(3) of the former Income Tax Act, and that Article 9(1) of the former National Tax Collection Act is not a notification of the collection disposition under Article 9(1) of the former National Tax Collection Act.

Article 1 of the former National Tax Collection Act provides that the purpose of this Act is to secure national tax revenue by providing for matters necessary for the collection of national taxes and its legislative purpose. Article 2 of the former National Tax Collection Act provides for the relationship between the former National Tax Collection Act and other Acts by providing for one of the matters provided for in this Act with respect to the provisions of the Framework Act on National Taxes or other tax-related Acts, and Article 9(1) of the former National Tax Collection Act provides that the head of a tax office shall issue to the taxpayer a tax payment notice stating the taxable year, tax item, tax amount, grounds for calculation, deadline for payment and place for payment of national taxes. Meanwhile, the main sentence of Article 85(3) of the former Tax Collection Act provides that the head of a tax office having jurisdiction over the place of tax payment shall collect the tax to be collected by the withholding agent or the person who is liable to collect the tax amount collected or to be collected, by adding the additional tax amount under Article 158(1) to the amount to be collected from the withholding agent concerned.

In full view of the language and text, structure, legislative purpose, etc. of the above-mentioned provisions, Article 9(1) of the former National Tax Collection Act provides for what matters must be entered in a tax payment notice, i.e., the extent of entry in a tax payment notice. However, Article 85(3) of the former Income Tax Act cited by the Defendant merely provides for the other party to whom the tax is to be collected or to be collected by the head of the tax office having jurisdiction over the place of tax payment in cases where the tax amount collected or to be collected by the withholding agent, etc. has not been paid within the prescribed period or was paid in short of the prescribed period. Furthermore, it cannot be deemed that

Article 85 (3) of the former Income Tax Act is difficult to be a special provision for Article 9 (1) of the former National Tax Collection Act.

Therefore, the instant disposition is a collection disposition ordering the performance of principal tax obligation based on the dividend income tax that has been automatically determined. The instant disposition constitutes a notice of tax payment for the collection of national taxes, i.e., a notice of tax payment for the collection of national taxes, and Article 9(1) of the former National Tax Collection Act, which is the basis law for the notice of tax collection, must be applied as a matter of course to the notice of tax payment, and Article 85(3) of the former Income Tax Act does not exclude the application of Article 9(1)

3) Furthermore, even if Article 9(1) of the former National Tax Collection Act applies to the notice of tax payment of the instant disposition, the Defendant, and the Plaintiff, a withholding agent, appears to have been fully aware of the tax rate as a matter of law pursuant to Article 129(1)2 of the former Income Tax Act, as to the withholding agent of the instant disposition, as well as the fact that it would not interfere with the determination of whether to object to and appeal against the instant notice of tax payment, and that the tax base is divided from the calculated tax amount, the 14% tax rate is automatically calculated. In this case, the Plaintiff, a withholding agent, who is obligated to pay the relevant tax amount, has already been aware of not only the taxable items and the tax items, but also the tax rate is already known to the tax authorities under the relevant Acts and subordinate statutes, thereby urging the Plaintiff to comply with the relevant Acts and subordinate statutes. In light of the fact that the Defendant issued the order to receive the relevant tax amount on the ground that the tax payment notice of this case was not written in the notice

Comprehensively taking account of Article 8(2) of the Administrative Litigation Act, Article 8 of the Court Organization Act, and the latter part of Article 436(2) of the Civil Procedure Act, the court that received the case from the court of final appeal ought to be bound so long as the court of final appeal presents new evidence in the trial process after remanding the case and changes in the relationship of evidence that served as the basis for binding judgment occur, with respect to the factual and legal judgment that the court of final appeal considered

According to the above legal principles, in this case where there is no change in the evidence relationship, which forms the basis for binding judgment after remanding, the court after remand cannot make a judgment contrary to the binding force of the judgment after reversal, and the defendant's above assertion is without merit.

4. Conclusion

Thus, the plaintiff's claim for revocation of the main collection disposition of dividend income tax must be accepted on the ground of the reasons. Since the judgment of the court of first instance is just, the defendant's appeal is dismissed as it is without merit, and the part of the decision of the court of first instance which rendered the disposition of this case as the collection disposition of this case under Paragraph 1 of the judgment of the court of first instance is clearly erroneous, and the corresponding part