Cho High 2013 Mine1383 (Law No. 23, 2013)

Cho High 2013 Mine1383 (Law No. 23, 2013)

Whether a comprehensive provision that sets forth the scope of small and medium enterprises by Presidential Decree violates the prohibition of comprehensive delegation.

This case’s enforcement decree goes beyond the legislative purpose of the former Restriction of Special Taxation Act and goes beyond the scope of the special taxation without any reasonable ground, and it is difficult to view that the enforcement decree of this case deviates from the limit of delegated legislation.

Article 2 of the Restriction of Special Taxation Act

2013Guhap10809 Revocation of Disposition of Imposition of Gift Tax

The AA

Head of tax office

March 20, 2014

May 1, 2014

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The imposition of the gift tax OO(including additional OOO) imposed on the Plaintiff on December 12, 2012 by the Defendant shall be revoked.

1. Details of the disposition;

A. Operation of the Plaintiff’s father’s KCCA by the Plaintiff’s father andB

“The Plaintiff’s father JeongB (40. 30. 30. 30. 1) established on January 30, 1996, a limited liability company, a driving school under the Road Traffic Act, and operated the said driving school after completing business registration on March 13, 1996.”

"The plaintiff was appointed as a director of theCCA on February 12, 2003, and on March 5, 2009 from 162,283 shares issued by CCA on the total number of shares issued by 162,283, the plaintiff was donated to 112,783 shares (OOO of the donated property value, hereinafter referred to as "the shares of this case")." (c) The plaintiff reported and paid gift tax.

“The Plaintiff reported OO of gift tax reduced to the Defendant on June 30, 2009 in accordance with special provisions and paid the said money on June 30, 2009 and August 31, 2009, considering that the donation of the instant shares satisfies the requirements for special taxation pursuant to Article 30-6(1) of the former Restriction of Special Taxation Act (amended by Act No. 9512, Mar. 25, 2009; hereinafter “former Restriction of Special Taxation Act”). D. Determination and notification of gift tax by the Defendant

"The defendant, on December 6, 2012, concluded that the operation of the above private teaching institute does not constitute a family business to which the above special provisions apply, and decided and notified the plaintiff on December 6, 2012, OOO (including additional OOO) of the gift tax on the shares of this case (hereinafter referred to as the "disposition of this case"), and dismissed the appeal for tax trial."

On March 6, 2013, the Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on March 6, 2013, but was dismissed on July 23, 2013.

[Ground of recognition] Unsatisfy, Gap evidence 1 to 4, Eul evidence 1 (including each number), the purport of whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Violation of the statutory deadline and the Plaintiff’s trust

"The defendant should have determined and notified the gift tax base and the amount of tax in accordance with Articles 76 and 77 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter referred to as the "former Inheritance Tax and Gift Tax Act") and Article 78 (1) 2 of the Enforcement Decree of the same Act from June 30, 2009 to September 30, 2009, which is the deadline for filing the gift tax base, and made the disposition in this case after about three years and three months from the said statutory deadline." Therefore, the disposition in this case is illegal as being conducted after the said statutory deadline for determining the tax base and the amount of tax expires, and it is a disposition that infringes the plaintiff's trust that the return and payment of gift tax are legitimate.

2) Illegality of imposing additional tax

In light of the fact that the Plaintiff cannot be deemed to have filed a false report in violation of its duty under tax-related Acts, and that the Defendant issued the instant disposition after about three years and three months from the statutory deadline, this case does not constitute the subject of penalty tax.

Therefore, the penalty part among the disposition of this case is illegal disposition that violates the law and violates the principle of trust protection.

3) Disposition based on invalid enforcement decree

Article 2 (1) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 22037, Jan. 18, 2010; hereinafter referred to as the "Enforcement Decree of the Restriction of Special Taxation Act") (hereinafter referred to as the "Enforcement Decree of the same case") provides that the former Inheritance Tax and Gift Tax Act comprehensively prescribes the scope of small and medium enterprises without stipulating the scope of the small and medium enterprises in comparison, violates the principle of prohibition of comprehensive delegation, and Article 2 (1) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 22037, Jan. 18, 2010) excludes driving schools under the Road Traffic Act

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) The statutory deadline and whether the plaintiff's trust was infringed

Article 68 of the former Inheritance Tax and Gift Tax Act provides that a taxpayer shall report the taxable value and tax base of donated property within three months from the last day of the month to which the date of donation belongs, and Article 76 of the same Act and Article 78 (1) 2 of the Enforcement Decree of the same Act provide that the head of the tax office, etc. shall determine the tax base and tax

Meanwhile, since the date on which the Plaintiff donated the instant shares on March 5, 2009, the statutory deadline for filing gift tax was June 30, 2009, and the statutory deadline for filing a gift tax under Article 78(1)2 of the Enforcement Decree of the said Act was September 30, 2009, but the Defendant rendered the instant disposition number to the Plaintiff on December 6, 2012, when the statutory deadline for filing a gift tax was expired.

However, Article 78(1)2 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act merely provides that a taxpayer’s obligation to pay gift tax should be determined as soon as possible, and thus, the instant disposition cannot be deemed unlawful on the ground that the period of determination pursuant to the above provision was established, and on the ground that the Plaintiff did not make a decision within the period of determination, it cannot be deemed that the Plaintiff’s legitimate trust was infringed, on the ground that the Plaintiff’s tax base or tax amount reported

Therefore, the plaintiff's assertion is without merit.

2) Whether the imposition of additional tax is illegal

A) Legal principles

Under the tax law, penalty taxes are administrative sanctions imposed in accordance with the law in cases where a taxpayer violates a duty to report and pay taxes without justifiable grounds in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, and the taxpayer’s intention and negligence is not considered, and the land or mistake of the law does not constitute justifiable grounds (see, e.g., Supreme Court Decision 2013Du1829, May 23, 2013).

B) First of all, we examine the issues of the special taxation of the former Restriction of Special Taxation Act. Article 30-6(1) of the former Restriction of Special Taxation Act provides that a resident aged 18 or older has received a donation of stocks or equity shares for the purpose of succeeding to the pertinent family business from a parent aged 60 or older who has engaged in a family business under Article 18(2)1 of the Inheritance Tax and Gift Tax Act for the purpose of succeeding to the pertinent family business for 10 years or more. However, Article 18(2)1 of the former Inheritance Tax and Gift Tax Act provides that "small and medium enterprises prescribed by Presidential Decree are small and medium enterprises prescribed by Presidential Decree, which have continuously run for 10 years or more" and Article 15 of the Enforcement Decree of the same Act provides that "small and medium enterprises are small and medium enterprises under Article 5(1) of the Restriction of Special Taxation Act as of the end of the taxable year immediately preceding the taxable year in which the commencement date of inheritance falls."

Article 5(1) of the former Restriction of Special Taxation Act delegates the scope of small and medium enterprises to Presidential Decree, and the Enforcement Decree of this case stipulates that the scope of the above small and medium enterprises includes a private teaching institute in the occupational field under Article 7(1)1 (k) of the Restriction of Special Taxation Act, and Article 7(1)1 (k) of the former Restriction of Special Taxation Act provides that the above private teaching institute shall be a private teaching institute which teaches vocational skills under the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons. However, Article 2 subparag. 1 (f) of the former Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons (amended by Act No. 10916, Jul. 25, 201; hereinafter referred to as the “former Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons”) excludes a private teaching school from a private teaching institute governed by the same Act. Thus, it is clear that the instant private teaching school is excluded from the subject of special taxation for succession to family business.”

Therefore, even if the Plaintiff, by mistake, deemed that the donation of stocks of the driving school is subject to special taxation, and the gift tax was reported and paid by applying this, it is merely a legal site or mistake, and thus, it does not constitute a justifiable reason to exempt the penalty tax.

In addition, the reason that the defendant did not make a decision within the decision period alone cannot be deemed to have a public opinion statement, and since the plaintiff's trust cannot be deemed to be a legitimate trust, there is no illegality in violation of the principle of protection of trust.

Ultimately, the plaintiff's assertion is without merit.

3) Whether a disposition is based on the invalid enforcement decree

A) First, we examine whether the parent law comprehensively delegates to the enforcement decree of the instant case.

As seen above, Article 30-6(1) of the former Restriction of Special Taxation Act, Article 18(2)1 of the former Inheritance Tax and Gift Tax Act, Article 15(1) of the Enforcement Decree of the same Act, and Article 5(1) of the former Restriction of Special Taxation Act delegate the scope of small and medium enterprises in sequence to the Enforcement Decree of the same case. The above delegation sets the scope of small and medium enterprises which form the premise of special taxation under the former Restriction of Special Taxation Act and the former Inheritance Tax and Gift Tax Act, and therefore, it cannot be deemed a comprehensive delegation, since it sets

B) Next, we examine whether the provision of the Enforcement Decree of the instant case deviates from the delegation scope of the parent law and becomes invalid.

One of the important criteria for determining whether a provision of the Enforcement Decree deviates from the scope of delegation by the mother law. This means that the content of the Enforcement Decree in question is already specifically delegated by the mother law, and it must be within the scope that can be predicted by anyone from the mother law itself. The existence of such possibility should not be determined with only one of the relevant specific provisions, but should be determined with an organic and systematic comprehensive consideration of all the relevant provisions in light of the legislative intent of the law (see, e.g., Supreme Court Decision 2006Du19570, Nov. 27, 2008).

In light of the above legal principles, the Enforcement Decree of this case, which sets the scope of small and medium enterprises subject to special taxation on gift tax on succession to family business, excludes driving schools from small and medium enterprises among private teaching institutes in the vocational technology field. This case’s Enforcement Decree is a private teaching institute in the vocational technology field under Article 7(1)1 (k) of the former Restriction of Special Taxation Act, and Article 7(1)1 (k) of the same Act provides that private teaching institutes in the vocational technology field shall teach the vocational technology field under the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons, and Article 2 subparag. 1 (f) of the former Enforcement Decree of the Act on the Establishment and Operation of Private Teaching Institutes and Extracurricular Lessons provide that driving schools under the Road Traffic Act shall be excluded from private teaching institutes under the Road Traffic Act. Accordingly, it is difficult to view that the Enforcement Decree of this case’s legislative purpose of this case’s private teaching institutes in the vocational technology field subject to special taxation on succession to private teaching institutes under Article 30-6 of the former Restriction of Special Taxation Act as well-founded or special taxation reduction and exemption of taxes.

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.