Cho High-2016-Seoul Government-2680 ( October 18, 2016)

The rejection disposition is against the principle of proportionality or against the principle of equality.

Although ex officio revocation of a disposition imposing global income tax for the tax years 2006, 2008, 2009, rejection of a request for correction seeking revocation of the disposition imposing global income tax for the tax years 2007 violates the principle of equality by treating the private interest that is infringing on the public interest (legal stability) protected by it, or otherwise treating the same differently.

Request for correction, etc. under Article 45-2 of the Framework Act

2016Guhap84290 and revocation of the disposition rejecting a request for rectification of global income and disposition

○ ○

○ Head of tax office

June 16, 2017

July 14, 2017

1. The Defendant’s rejection disposition that seeks revocation of the disposition imposing global income tax amounting to KRW 000,000, imposed on the Plaintiff on May 26, 2016, is revoked.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On July 6, 2012, the Plaintiff: (a) served as the head of ○ University administrative office, the head of the general affairs office, etc.; and (b) served as the deputy head of the general affairs office, etc.; (c) received an illegal solicitation from ○○○○○○○ to continuously maintain transactions with ○ University and received KRW 000 in total in 2006, totaling KRW 000 in 2007, totaling KRW 000 in 2007, totaling KRW 000 in 2008, and KRW 000 in total in April 2009, the Plaintiff received KRW 1 year and six months in total due to the crime of breach of trust (○○ District Court 2012 Gohap00).

B. On September 4, 2012, when the appellate trial was in progress, the Plaintiff returned KRW 000 to ○ University, and paid KRW 000,000 as a surcharge on the same day. On November 9, 2012, the appellate court recognized the criminal facts of the first instance court, and sentenced the sentence of KRW 3 years of suspended execution, KRW 160 hours of community service order, and KRW 000 of additional collection on the ground of unfair sentencing (○○ High Court 2012No000). The said judgment became final and conclusive on November 17, 2012.

C. The Defendant deemed the money the Plaintiff received as other income and determined and notified the Plaintiff of KRW 000 global income tax for April 21, 2014, global income tax for the year 2006, KRW 000 global income tax for the year 2007, KRW 000 global income tax for the year 2008, and KRW 000 global income tax for the year 2009.

D. On February 3, 2015, the Plaintiff filed a lawsuit seeking the revocation of the imposition of global income tax amounting to 000 won for the year 2006, and was sentenced to a judgment against July 17, 2015 (Seoul ○○ Court 2015Guhap000 and revocation of such disposition). On the other hand, the Supreme Court held that even if the judgment of additional collection was final and conclusive in a criminal case on illegal income for the previous criminal act, it would be subject to taxation under the Income Tax Act (see, e.g., Supreme Court en banc Decision 2002Du431, May 10, 200). However, even if the tax liability was established on the grounds that the aforementioned reasons were satisfied, such as control and management of illegal income for the appellate court 200 years, the lower court did not have any special grounds for revocation of the imposition of global income tax, and the lower court did not have any special premise that it would have become unlawful after the final and conclusive judgment of 2014 years thereafter.

E. On March 11, 2016, the Plaintiff filed a civil petition for grievance with the Defendant by asserting that the imposition of global income tax for the year 2007, 2008, and 2009 should be revoked. However, on March 22, 2016, the Defendant issued a notice that “the imposition of global income tax for the year 2008, and the year 2009 was ex officio revised, but the global income tax for the year 2007 was excluded from the rectification after the exclusion period expires.” Accordingly, on March 28, 2016, the Plaintiff filed a petition for correction on the ground that the imposition of global income tax for the year 2007 constitutes “after-ex post facto reasons” under Article 45-2 of the Framework Act on National Taxes and Article 25-2 of the Enforcement Decree of the same Act, but the Defendant did not constitute the instant rejection disposition for the Plaintiff on May 26, 2016 (hereinafter “the instant rejection disposition”).

[Reasons for Recognition] Unsatisfy, Gap 1 through 3, 6 through 8, the purport of the whole pleadings

2. Related statutes;

The entries in the attached Table-related statutes are as follows.

3. Whether the rejection disposition of this case is legitimate

A. In the event that a person who received an imposition of income tax and received an application for correction (ex post facto request for correction) becomes aware of the en banc decision of this case after the period for filing a lawsuit, the tax authority’s ex officio revocation of the imposition of income tax within the exclusion period for the imposition of national tax and rejection of the portion for which the exclusion period for the imposition of national tax has expired is deemed unlawful, barring any special circumstance (see Supreme Court en banc Decision 2016Guhap81482, May 26, 2017).

B. In full view of the facts and circumstances that were acknowledged by the health team, Gap evidence 6, and the purport of the entire pleadings, and the facts and circumstances as seen below, the defendant's refusal of the plaintiff's request for correction for revocation of the disposition imposing global income tax for the year 2006, 2008, and 2009, even after ex officio revocation of the disposition imposing global income tax for the year 2007, there are special circumstances to deem that the refusal of the plaintiff's request for correction violates the principle of equality by treating the same or different facts that are contrary to the principle of proportionality (the plaintiff's trust), such as the private interest that is more infringed than the public interest protected thereby (legal stability). Therefore, the rejection disposition of this case is unlawful

1) The Plaintiff came to have a legitimate and protected trust that the imposition of global income tax for the year 2007 would be revoked.

① On July 6, 2012, the Plaintiff was sentenced to a surcharge of KRW 000 from the first instance court in a criminal case. On September 4, 2012, the Plaintiff paid the surcharge. The Plaintiff appears to have failed to deem that the imposition of global income tax for the year 2006 was different even if the imposition of global income tax for the year 2006, December 1, 2014, the global income tax for the year 2007, 2008, and 2009 was imposed on the Defendant (the first imposition of global income tax for the year 2006 was deemed to have been the exclusion period of national tax assessment). Since the imposition and payment of the surcharge and the imposition of global income tax were conducted based on the criminal facts in a criminal judgment, the Plaintiff could be treated differently even if the imposition of global income tax for the year 206, 2007, 2008, and 209 were different.

② The Plaintiff was subject to a disposition of global income tax for the tax year 2006 (Seoul ○○ court 2015Guhap0000 and revocation of such disposition). The Plaintiff trusted that the disposition of global income tax for the tax year 2007, 2008, and 2009 imposed on the same ground will be dealt with according to the outcome of the said lawsuit. However, the instant en banc Decision was rendered in the course of the lawsuit. On December 10, 2015, the appellate court recommended the Defendant to fully revoke the disposition of global income tax for the tax year 2006, 2007, 2008, 2008, and 2009. However, the Defendant revoked the disposition of global income tax for the tax year 206.

③ On March 11, 2016, the Plaintiff filed a civil petition for grievance with the Defendant. On March 22, 2016, the Defendant revoked ex officio a disposition imposing global income tax for the year 2008 and 2009. Accordingly, the Plaintiff only imposed global income tax for the year 2006, 2007, 2007, 2008, and 2009, while imposing global income tax for the year 2007.

2) If the Plaintiff did not dispute the imposition of global income tax within the filing period, the refusal of a request for correction of global income tax for the year 2006 and the year 2007 due to the lapse of the exclusion period of the imposition of national taxes can be justified in terms of legal stability. However, if the Plaintiff contests the imposition of global income tax for the year 2006 within the filing period (if the Defendant was on the same date as the imposition of global income tax for the year 2006 and the imposition of global income tax for the year 2007, 2008, and 2009, the Plaintiff also contests the imposition of global income tax for the year 2006 as well as the imposition of global income tax for the year 207, 2008, and 2009).

3) The imposition of global income tax for the year 2006, the year 2007, the year 2008, and the year 2009 was imposed by the Plaintiff on the basis of the fact that the Plaintiff was sentenced to the imposition of global income tax for the crime of breach of trust. Although considering that each disposition is a separate disposition for which the period of imposition differs from the taxable period, tax base, tax amount, exclusion period of imposition, etc., it is difficult to deem that there exists a reasonable ground to maintain only the imposition of global income tax for the year 2007, unlike the imposition of global income tax for the year 2006, the year 2008, and the year 209.

4. Conclusion

The claim of this case is justified, and it is so decided as per Disposition.

Related Acts and subordinate statutes

▣ 국세기본법

Article 45-2 (Request for Correction, etc.)

(2) Where any of the following grounds arises, a person who has filed a tax base return by the statutory deadline for return, or who has the tax base and amount of national taxes determined may request the determination or correction within three months from the date he/she becomes aware that such ground has occurred, regardless of the period referred to in paragraph (1):

1. Where the transaction, act, etc. which forms the basis of calculation of the tax base and the amount of tax in the initial return, determination or correction is confirmed as a different one by a final judgment (including any reconciliation or other act having the same effect as the judgment) in the lawsuit against it;

2. Where a determination or correction exists, converting the ownership of the income or other taxable object to a third person;

3. Where mutual agreement under a tax treaty is implemented differently from the details of the initial return, determination or correction;

4. The taxable period, other than the taxable period, which is the object of a decision or revision, due to such decision or revision.

If the tax base and amount of national taxes initially reported exceeds those to be reported under tax-related Acts;

5. Where the ground similar to those referred to in subparagraphs 1 through 4 and prescribed by Presidential Decree, occurs after the statutory due date of return of the national tax expires.

▣ 국세기본법(2015. 12. 15. 법률 제13552호로 개정되기 전의 것)

Article 45-2 (Request for Correction, etc.)

(2) Where any of the following grounds arises, a person who has filed a tax base return by the statutory deadline for return, or who has the tax base and amount of national taxes determined may request the determination or correction within two months from the date he/she becomes aware that such ground has occurred, regardless of the period referred to in paragraph (1):

1. Where the transactions, act, etc. which forms the basis of calculation of the tax base and the amount of taxes in the initial return, determination or correction, is confirmed to be a different one by a final judgment (including any reconciliation or other act having the same effect as the judgment) in the lawsuit against it;

2. Where a determination or correction exists, converting the ownership of the income or other taxable object to a third person;

3. Where mutual agreement under a tax treaty is implemented differently from the details of the initial return, determination or correction;

4. Where the tax base and amount of the national tax initially returned for the taxable period other than the taxable period subject to the decision or rectification, due to such decision or rectification, exceed the tax base and amount to be returned under the tax-related Acts;

5. Where the ground similar to those referred to in subparagraphs 1 through 4 and prescribed by Presidential Decree, occurs after the statutory due date of return of the national tax expires.

The Addenda to the Framework Act on National Taxes (No. 1352, 15 December 15, 2015)

Article 2 (Application Examples, etc. concerning Requests for Correction, etc.)

(1) The amended provisions of Article 45-2 (2) shall apply to the portion of request for decision or correction after the enforcement of this Act.

(2) Notwithstanding paragraph (1), notwithstanding the provisions of Article 45-2 (2), the provisions of the previous provisions shall apply to the portion for which the period of request under Article 45-2 (2) has elapsed before this Act enters into force.

▣ 국세기본법 시행령(2017. 2. 7. 대통령령 제27833호로 개정되기 전의 것)

Article 25-2 (Ex Post Factor Causes)

"Grounds prescribed by Presidential Decree" in Article 45-2 (2) 5 of the Act means any of the following cases:

1. Where permission or other disposition by the authorities related to the validity of transactions or acts, etc. which served as the basis for the calculation of the tax base and the amount of tax is revoked when the initial return, determination or correction is made;

2. Where a contract related to the validity of a transaction or act, etc. which forms the basis for calculating the tax base and the amount of tax, is cancelled by the exercise of the right to cancel or is cancelled or cancelled due to unavoidable reasons that occur after the relevant contract is concluded when the first return, determination

3. Where the tax base and the amount of tax could not be calculated due to the seizure of books and records and documentary evidence when the initial return, decision or correction was made, or due to other unavoidable reasons, but the relevant reasons cease to exist thereafter;

4. Other cases where there are reasons corresponding to the provisions of subparagraphs 1 through 3. The end.