Whether the calculation of additional tax shall be based on the calculated tax amount before the tax credit, where a tax credit for the capital gains tax, which is the principal tax (affirmative)

Article 121 (1) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994) provides that the amount equivalent to 10/100 of the amount calculated by multiplying the calculated tax amount by the ratio of the income amount not reported or the corresponding income amount short of the amount to be reported to the transfer income amount, etc., shall be added to the calculated tax amount. Article 16 (1) 1 through 3 of the same Act provides that the calculated tax amount shall be calculated by applying the basic tax rate to the capital gains tax base, and the determined tax amount shall be calculated by deducting various tax credits from the calculated tax amount, and the determined tax amount shall be calculated by deducting the reduced or exempted tax amount. Thus, the amount equivalent to 10/100 of the calculated tax amount for negligent tax returns on neglect of the duty to file the final return on capital gains tax base shall not be deemed the amount equivalent to 10/100 of the calculated tax amount deducted the reduced or exempted tax amount under the Regulation of Tax Reduction and Exemption Act from the calculated tax amount.

Article 47(2) of the Framework Act on National Taxes, Article 3(2) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4451 of Dec. 27, 1991), Article 121 of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994) (see current Article 81)

Supreme Court Decision 79Nu289 delivered on December 23, 1980 (Gong1981, 13590) Supreme Court Decision 94Nu12692 delivered on April 11, 1995 (Gong1995Sang, 1898) Supreme Court Decision 95Nu14602 delivered on May 16, 1997 (Gong197Sang, 1784)

Chinese trade name

The Director of Gangnam District Office

Seoul High Court Decision 96Gu2264 delivered on May 14, 1996

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

As to the Grounds of Appeal

Article 121 (1) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994) provides that the amount equivalent to 10/100 of the amount calculated by multiplying the calculated tax amount by the ratio of the income amount not reported or the corresponding income amount short of the amount to be reported to the transfer income amount, etc., shall be added to the calculated tax amount. Article 16 (1) 1 through 3 of the same Act provides that the calculated tax amount shall be calculated by applying the basic tax rate to the capital gains tax base, and the determined tax amount shall be calculated by deducting various tax credits from the calculated tax amount, and the determined tax amount shall be calculated by deducting the reduced or exempted tax amount. Thus, the amount equivalent to 10/100 of the calculated tax amount for negligent tax returns on neglect of the duty to file the final return on capital gains tax base shall not be deemed the amount equivalent to 10/100 of the calculated tax amount less the reduced or exempted tax amount under the Regulation of Tax Reduction and Exemption Act from the calculated tax amount (see Supreme Court Decision 200Nu6 May 16, 196, 196.

Nevertheless, on the contrary, the concept of the calculated tax amount under Article 121 of the Income Tax Act should be interpreted in a combined manner, i.e., the amount of tax not paid or payable by a taxpayer, i.e., the amount of tax credit if a tax credit is granted from the amount obtained by multiplying the tax base of income tax, and the amount equivalent to 10/100 of the amount of tax calculated by deducting the amount of tax reduced or exempted under the Regulation of Tax Reduction and Exemption Act from the amount of tax calculated based on the transfer income, as the additional tax for negligent tax returns to be paid by the Plaintiff, the lower court erred by misapprehending the legal doctrine on the calculation of the calculated tax for negligent tax returns under

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jong-sik (Presiding Justice)