Early High Court Decision 201J 1160 (Law No. 111.03)

Even if the tax authority's correction and notification were made several times, it cannot be viewed as a justifiable reason that does not cause any violation of the duty.

Even if a preliminary return or payment of capital gains tax was made under the name of a title trustee, it cannot be deemed a legitimate report or payment, and even if the tax authority made a mixed report of correction or notification of capital gains tax several times, it cannot be deemed as a justifiable ground that does not constitute a violation of an obligation, and thus, the disposition of imposition of tax for additional return

2011Guhap10783 Revocation of Disposition of Imposing capital gains tax

IsaA

The director of the tax office

November 18, 2011

December 2, 2011

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of KRW 8,93, and KRW 393 on December 13, 2010 against the Plaintiff on December 13, 2010 (the Director appears to be a clerical error on December 20, 2010) shall be revoked, respectively, for the disposition of imposition of KRW 7,421, and 738 on the additional tax for additional tax for arrears.

1. Details of the disposition;

A. On April 4, 2004, the Plaintiff acquired and owned each of the 00-0 square meters in the name of the Plaintiff’s wife KimB and transferred all of cCC Co., Ltd. on August 12, 2005, when the Plaintiff acquired and owned the 112 square meters in the same 00-0 forest and 230 square meters in the same 00-0 forest and 00-0 forest and 156.25 square meters in the same 00-0 forest and 156.25 square meters in the same 00-0 forest and 156.25 square meters in the same 2004.

B. On October 31, 2005, the Plaintiff reported and paid capital gains tax of KRW 15,835,330, and KRW 330, with the acquisition value of the instant land under the name of KimB, a title trustee, as the standard market price conversion amount, at KRW 1,076,336,340.

C. On December 2005, the Defendant issued to KimB a revised and notified the acquisition value of the instant land at KRW 900,114,457, which is the standard market price conversion value, to increase the capital gains tax of KRW 71,339,120. On December 20, 2005, the Defendant issued a revised and notified the acquisition value of the instant land at KRW 930,836,289, which is the standard market price conversion value. On July 2010, the Defendant issued a revised and notified the reduction of capital gains tax of KRW 12,288,653, which is the transfer income tax. On December 20, 2010, the acquisition value of the instant land at KRW 364,00,000, which is the purchase value under the approval contract, to increase and notify KRW 345,923,330,

D. After that, the Defendant confirmed the title trust of the instant land to KimB through a tax investigation, revoked the transfer income tax reported under the name of KimB, and subsequently, on December 13, 2010, the Plaintiff, a title truster, deducted the acquisition value of the instant land from the amount to be deducted from the amount to be deducted from the amount to be deducted from the amount to be deducted from the amount of the scheduled tax return, deeming the acquisition value of the instant land as the standard market price conversion value, and 8,993,393 (hereinafter “the instant additional tax on negligent tax”) as the non-reported return, 7,421,738 (hereinafter “the instant additional tax on negligent tax”), including the additional tax on negligent tax, 7,421,738 (hereinafter “the instant additional tax on negligent tax”), and 109,214,735 won for the transfer income tax for the year 205, 7485,860 won, 2,665, and 36363 (hereinafter “the instant tax notice”).

E. The Plaintiff filed an appeal with the Tax Tribunal on June 3, 201, against the instant report and the disposition for additional payment for arrears (hereinafter referred to as “instant disposition”). However, the Plaintiff was dismissed on June 3, 201.

F. Meanwhile, Article 115(1) and (2) of the former Income Tax Act (amended by Act No. 8144, Dec. 30, 2006; hereinafter the same) and Article 178 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19890, Feb. 28, 2007; hereinafter the same) shall be the amount equivalent to 10% of the calculated tax amount. The additional tax on negligent tax in this case shall be the amount equivalent to 15,048,132 won (determined tax amount 927,799,604; - 77,751,472 won) and 1,644 days (amended by Presidential Decree No. 19890, Dec. 1, 2010; hereinafter the same shall apply).

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1-2, Eul evidence Nos. 1-2, Eul evidence Nos. 2 and the purport of the whole pleadings

A. The plaintiff's assertion

(1) The Defendant made a decision of correction more than four times to impose the capital gains tax of this case on the Plaintiff. If the Defendant made a proper decision at the time of initial correction, the Plaintiff did not bear any additional tax, and thus, the disposition of this case is unlawful. In particular, in the case of the additional tax on non-payment, the Plaintiff paid the tax according to the Defendant’s first correction notice, but received the excess by the second correction notice. In addition, it is obviously unreasonable to impose additional tax on the Plaintiff as long as it would result in the Plaintiff’s return of the amount of tax returned to the first correction notice through the 3th correction notice, and it is unreasonable to predict or expect the payment of the amount of tax equivalent to the difference that was refunded to the Plaintiff due to the Defendant’s belief of correction notice over several times, which is the tax authority, and thus, it is unlawful to impose additional tax on the Plaintiff.

(2) In addition, the Defendant was confused with the Defendant’s correction of capital gains tax four times, and it is unreasonable in light of the principle of trust and good faith that the Plaintiff, as the Plaintiff, predicted the Defendant’s correction act more than four times and identified the penalty tax to be imposed in the future, and thus, the Defendant is liable to compensate the Plaintiff for its nonperformance on the ground that there is no possibility of expectation that the Defendant would be responsible to compensate the Plaintiff for its nonperformance. The same applies to the Plaintiff, even if the Plaintiff was under title trust with KimB, so that the Defendant could not be able to mislead the Plaintiff into filing a report on acquisition value. Therefore,

(3) Furthermore, the Defendant imposed the Plaintiff the additional tax on negligent tax returns by 10% on the total amount of tax, while the additional tax on negligent tax was imposed on the basis of the difference after deducting the amount of tax paid in the name of KimB. As long as both the Plaintiff and the return and payment of capital gains tax under the name of KimB were made, the instant additional tax on negligent tax returns should be calculated on the basis of the difference as the Plaintiff did not have any reason for filing

(b) Relevant light age;

The entry in the attached Form is as specified in the relevant statutes.

C. Determination

(1) Under the tax law, additional tax is a kind of administrative sanction imposed when a taxpayer is obliged to faithfully report the tax base and pay the tax amount in order to ensure the propriety of taxation. Such sanction is a kind of tax sanction imposed when the taxpayer performs his/her duties in order to ensure the propriety of taxation. It is unreasonable for the taxpayer to be unaware of his/her duties due to a conflict of opinion due to an objection beyond the scope of simple legal sites or misunderstandings, etc. under the tax law interpretation. If there is a circumstance where the taxpayer can be deemed legitimate, or if there is a circumstance where it is unreasonable to expect the relevant party to fulfill his/her duties, or it is unreasonable to expect the relevant party to fulfill his/her duties, it cannot be imposed (see, e.g., Supreme Court Decision 2002Du666, Aug. 23, 2002). If a title truster transferred real estate to a third party and income accrue from such transfer to the title truster, and thus, it is not reasonable for the title truster to be deemed a person liable to pay capital gains tax under the title trustee’s’s title trust.

(2) In light of the above legal principles, the instant land is the real estate that the Plaintiff was effectively nominal to KimB, the title truster, and the Plaintiff, the title truster, is also liable for capital gains tax due to the transfer of the said land. If the Plaintiff did not perform his/her duty to report and pay capital gains tax, even if he/she did not make a preliminary return and payment under the name of KimB, it cannot be deemed a legitimate report and payment. Thus, even if the Defendant had made several revisions and notification of capital gains tax on KimB, such circumstance alone does not constitute a justifiable cause that does not constitute a violation of the Plaintiff’s duty to report and pay capital gains tax (the Plaintiff’s assertion all of the instant land is premised on the fact that he/she actually performed the preliminary return and payment of capital gains tax on the instant land, which is based on the same premise as the title truster and the title trustee, which is contrary to the above legal principles. Moreover, it cannot be deemed that the Defendant did not have any actual predicted the amount of tax due to the Defendant’s non-payment of capital gains tax on the instant land.

(3) In general, in order to apply the principle of trust and good faith to the tax authority’s acts in tax and law relations, the tax authority must issue a public opinion list that is trusted to taxpayers; the tax authority’s opinion list is just and trusted; and there is no cause attributable to taxpayers; the taxpayer must trust the opinion list and perform what is; and the tax authority shall make a disposition contrary to the above opinion list, thereby infringing the taxpayer’s interest (see, e.g., Supreme Court Decision 2007Du7741, Oct. 29, 2009); and the Defendant’s correction of the acquisition value of the land of this case against KimB, a title trustee, could not be deemed to have given a public opinion list that is the subject of trust to the Plaintiff, a title truster; and the tax authority may make a decision on imposing capital gains tax or a decision on correction at any time, unless it takes place within the exclusion period (see, e.g., Supreme Court Decision 200Du5494, Apr. 29, 2002).

(4) As seen earlier, since the return and payment of the capital gains tax originally made by the Plaintiff under the name of KimB, a title trustee, is not a lawful return and payment as a taxpayer, it is deemed that the Defendant, in calculating the additional tax for arrears of this case against the Plaintiff, deducted the already paid tax amount to be returned to KimB in accordance with the relevant provisions, is a reasonable measure favorable to the Plaintiff, who is the taxpayer (However, it is a separate issue to seek a return of the already paid amount as an erroneous payment). In addition, in calculating the additional tax for negligent return of this case, the Defendant’s calculation of the additional tax for negligent return of this case is not unlawful because the Plaintiff did not deduct the already paid tax amount under the name of KimB.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.