Plaintiff, the deceased Nonparty 1’s taking-off of lawsuit (Attorney Kim Jong-soo et al., Counsel for the plaintiff-appellant)

Head of Si Tax Office

May 22, 2008

Suwon District Court Decision 2007Guhap604 Decided December 5, 2007

1. Revocation of a judgment of the first instance;

2. The Defendant’s disposition of imposition of KRW 2,179,231,510 on June 15, 2005 against the deceased Nonparty 1 shall be revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Quotation of judgment of the first instance;

The reasoning for the court’s explanation on the instant case is as stated in the column of reasoning for the judgment of the court of first instance except for the addition of the following judgments (except for the part regarding the “3. conclusion”), and thus, it is cited in accordance with Article 8(2) of the Administrative Litigation Act, Article 420 of the Civil Procedure Act.

2. Additional determination

The plaintiff asserts that the plaintiff is liable to pay taxes within the limit of the property acquired by inheritance, and that the plaintiff does not succeed to the liability to pay global income tax imposed on the deceased as the plaintiff did not have any property acquired by inheritance due to the death of the deceased.

Article 24(1) of the Framework Act on National Taxes (amended by Act No. 8139 of Dec. 30, 2006) provides that "the heir (including testamentary donee at the time of commencement of inheritance; hereinafter the same shall apply) or administrator of inherited property under Article 1053 of the Civil Act shall be liable to pay national taxes, surcharges, and expenses for disposition on default imposed on or to be paid by the predecessor within the limit of the property acquired by inheritance." Article 11(1) of the Enforcement Decree of the Framework Act on National Taxes provides that "the term "property acquired by inheritance" under Article 24(1) of the Act refers to the total amount of assets acquired by inheritance minus the total amount of liabilities imposed or to be paid by inheritance, and the amount of total liabilities under the provisions of paragraph (1) shall apply mutatis mutandis to the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act."

On the other hand, the purport of the above provision of the Framework Act on National Taxes is that the heir succeeds to the obligation to pay national taxes, etc. of the decedent to the extent of inherited property, or that the heir succeeds to the entire obligation to pay national taxes, etc. of the decedent to the extent of inherited property, but it does not mean that the tax authority is able to collect from the heir within the extent of inherited property (see Supreme Court Decision 90Nu7395 delivered on April 23, 191). In this case, the burden of proving that the heir has property acquired by inheritance shall be deemed that the defendant, who is the tax authority, has the burden of proving that the heir has the property acquired by inheritance. On the other hand, where the heir has renounced his inheritance, the heir is placed in the same position as that of the heir since the commencement of inheritance by the retroactive effect of the renunciation of inheritance (see Supreme Court Decision 2004Du3335 delivered on June

In this case, after the death of the deceased, the deceased was his wife, Nonparty 2 and 3, who is his wife. However, the plaintiff was qualified and the non-party 2 and 3 did not waive inheritance. As seen earlier, the plaintiff, the only inheritor, should be liable to pay the global income tax of this case within the scope of the property acquired by inheritance.

However, there is no dispute between the parties as to the fact that the plaintiff's active property acquired by inheritance (hereinafter omitted), but there is a value assessed by the plaintiff under the Inheritance Tax and Gift Tax Act at the time of the commencement of the above apartment house (the publicly notified price as of January 1, 2008 of the above apartment is KRW 340,00,000 according to the record of the evidence No. 17) and the amount of the debt succeeded by the plaintiff due to the inheritance (the fact that the mortgage is set up by the maximum debt amount of KRW 400,000,000 with respect to the above apartment as the mortgagee), and there is no way to calculate the value of the "property acquired by inheritance" by the plaintiff pursuant to the provisions of the Enforcement Decree of the Framework Act on National Taxes, because there is no evidence showing the amount of the inheritance tax to be imposed on the plaintiff.

If there is no evidence to calculate the legitimate amount of tax, the disposition of this case shall be revoked in its entirety (see Supreme Court Decision 94Nu13527 delivered on April 28, 1995).

3. Conclusion

Therefore, the disposition of this case is unlawful, so it shall be revoked, and the judgment of the court of first instance is unfair, so it is so decided as per Disposition by accepting the plaintiff's appeal.

Judges Lee Sung-sung (Presiding Judge)