The propriety of a disposition denying the tax amount paid by preliminary return and imposing additional tax in the future;

Even if a taxpayer was at a disadvantage to make a return and an additional payment for arrears without receiving a preliminary return payment deduction, this constitutes a legitimate disadvantage due to the return and payment under the name of the title trustee of the capital gains tax that should be paid under his/her own name.

Article 108 of the Income Tax Act (Deduction for Preliminary Tax Payment)

Article 115 of the Income Tax Act shall apply to additional taxes on transfer income tax.

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The imposition of capital gains tax of KRW 585,581,960 against the Plaintiff on November 6, 2006 by the Defendant shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning for the court's explanation on this case is as follows: Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act recognize the title truster's "title truster" in the second part of the judgment of the court of first instance as "title trustee" in addition to the fact that the title truster's "title truster" in the second part of the judgment of the court of first instance is changed

2. Conclusion

Therefore, the judgment of the court of first instance is legitimate, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.

[Seoul Administrative Court 2007Gudan9597, May 23, 2008]

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The disposition of imposition of capital gains tax of KRW 585,581,960, which the Defendant rendered to the Plaintiff on November 6, 2006, shall be revoked.

1. Details of the disposition;

In full view of the evidence Nos. 1 through 9, Eul evidence Nos. 1, Eul evidence Nos. 2-1 through 5, Eul evidence Nos. 3, Eul evidence Nos. 4-1 through 5, and the purport of the whole pleadings, the following facts may be acknowledged:

A. On June 25, 1987, the Plaintiff invested 100 million won in total in capital, and established ○○○ Co., Ltd., a corporation with 20,000 capital, only 6,400 shares out of 20,000 shares (5,00 won per share) under its own name. The remainder 13,60 shares to ○○○, 3,200 shares to 4,00 shares, 4,000 shares, and 3,200 shares to ○○, 1,200 shares, and 1,200 shares to ○○, respectively.

B. On November 21, 2003, the Plaintiff transferred all 20,000 shares of the ○○○○ Share Industry Co., Ltd. (hereinafter referred to as “the shares of this case”) to Hoelel KGA, and on February 29, 2004, reported and paid the transfer income tax on shares transfer in the name of the Plaintiff and the said title truster, who are shareholders on the shareholder registry, respectively.

C. After the Seoul Regional Tax Office conducted a tax investigation against the Plaintiff, the Plaintiff’s above title trust was revealed, and the Defendant excluded the Plaintiff from deducting KRW 257,595,00 from the deductible amount of the tax paid for preliminary return filed under the name of the title trustee. The transfer margin reported under the name of the title trustee shall be deemed as a non-reported return, and the amount calculated by deducting KRW 2,318,35,000, which was already paid by the Plaintiff under the name of the title trustee, from the tax amount calculated by applying the additional tax for negligent tax returns and for negligent tax payments, 585,581,960, which was deemed as the transfer income tax amount to be additionally paid by the Plaintiff in relation to the transfer of the instant shares. On November 9, 2006

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The transfer income tax on the transfer of stocks of this case does not vary by 10% regardless of whether the title payer is the Plaintiff or the title trustee. The Plaintiff mistakenly knows that the transfer income tax on the transfer of the stocks held in title should be paid in the name of the title trustee when the transfer of the stocks held in title is made, and that the transfer income tax on the transfer of the stocks of this case is paid in the name of the title trustee and not for tax evasion, and even in this case, the amount equivalent to 100-10 of the tax amount to be paid in the calculated tax should be deducted from the tax amount to be paid in advance. However, the Defendant asserted that the tax amount calculated by deducting 257,595,000 of the tax amount to be paid in advance by deeming that the Plaintiff did not report the scheduled payment, and the transfer gains reported in the name of the title trustee shall be deemed to be a non-reported return and the amount calculated by applying the additional tax on negligent return and additional tax on the transfer under the name of the title trustee was unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

On the other hand, if the person who actually reported the transfer income tax under the name of the title trustee is the plaintiff, the above return cannot be deemed as the plaintiff even if the person who actually reported the transfer income tax. If the shares of this case were to be transferred to the title trustee and income accrued from the transfer thereof, under the principle of substantial taxation, if the title truster transfers the shares to the title truster, the person liable to pay the transfer income tax does not become the title truster, who is the subject of the transfer, and the person liable to make a preliminary return and payment of gains from the transfer of the shares held in title trust is the title truster, who is the taxpayer, so even if the return and payment under the name of the title trustee were made, the person liable to pay the transfer income tax cannot be deemed to have been duly reported and paid (see Supreme Court Decision 96Nu6387, Oct. 10, 1997). Thus, the defendant's argument that the provisional return return and additional tax on transfer under the name of the title trustee should not be deemed to have been paid under the name of the title trustee and the title trustee.

In addition, the plaintiff asserts that tax under the tax law is not imposed in cases where a taxpayer violates various obligations, such as a return and tax payment, without justifiable grounds, in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, and where there are justifiable grounds for not misunderstanding the duty of taxation, such as when it is unreasonable to expect the taxpayer to fulfill the duty. However, it is difficult to view that the reasons alleged above by the plaintiff alone is unreasonable to expect the plaintiff to report the transfer income tax and pay the transfer income tax following the transfer of stocks of this case, and therefore, the plaintiff's above assertion is not reasonable.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.