Claim for rectification seeking the increase or decrease of the carry-over deduction amount does not meet the requirements for filing a claim for rectification.

The rejection of a claim for correction seeking the increase or decrease of the carry-over deduction amount shall not constitute a rejection disposition subject to appeal litigation.

Article 57 of the Corporate Tax Act

2018Guhap5586 Disposition of revocation of refusal to correct corporate tax

○○ Incorporated Company

○ Head of tax office

on January 13, 2018

November 29, 2018

1. The instant lawsuit shall be dismissed.

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

Cheong-gu Office

The defendant's revocation of each request for correction by the plaintiff**,**,**,**,**,**,**,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,*,**,**, respectively.

1. Basic facts

(a) The plaintiff is a corporation established for the purpose of film screening, distribution and other film-related business, which is an overseas subsidiary of the People's Republic of China (hereinafter referred to as "China"), around 2006, established each of them (hereinafter referred to as "the subsidiary of this case") in S***************************************************** (49 per share of the plaintiff), W************************************) (hereinafter referred to as "the subsidiary of this case").

B. The Plaintiff received total dividends from the instant subsidiaries from the business year from 2011 to the business year 2014 (hereinafter referred to as “instant business year”),**,***,*** (hereinafter referred to as “instant dividends”). The instant subsidiaries withheld 5% of the instant dividends and granted foreign tax credit for directly paid foreign tax amount to China, and reported and paid corporate tax for each of the instant business years to the Defendant.

C. On the other hand, the Plaintiff’s deductible tax amount recognized for each business year of this case based on the amount of the tax credit directly paid to the said foreign countries exceeded the credit limit as indicated in the following table.

(unit: Won)

Classification

Carry-over

(2) The occurrence of the

credit limit

Tax Credit

2011

**,063,465

***,155,295

***,374,132

***,844,628

2012

***,844,628

***,624,656

***,854,616

***,614,668

2013

***,614,668

***,817,309

***,149,350

***,282,627

2014

***,282,627

***,863,471

***,910,204

***,235,894

* Un-paid = (such carried forward + occurrence of time) - Credit limit

(d) On March 31, 2017, the Plaintiff applied tax credit deemed to be paid to the Defendant for 5% on the dividend of the instant case, **,**,**,*** (*,*,**,**,*,*,*,*,*,*,*,*,*,*,*,*,*,* in the business year *,*,*,*,**,*,*,*,*,*,* in the business year *,*,*,*,*,*,* in the business year *,*,*,*,* in the 2014?**,**,*,**,*,**, in the above amount, claiming for correction of the balance of the carried-over tax credit as above (hereinafter referred to as “instant claim”).

E. On May 31, 2017, the Defendant rejected the instant claim for correction on the ground that “the Plaintiff is not eligible for foreign tax credit as provided by Article 57(3) of the Corporate Tax Act” (hereinafter “instant refusal”).

F. The Plaintiff appealed and filed a request for a trial with the Tax Tribunal, but *.* on 2017.*.

[Ground of recognition] Facts without dispute, Gap evidence 1 to 4, Eul evidence 1 to 5 (including provisional number), the purport of the whole pleadings

2. Judgment on the defendant's main defense

A. The parties' assertion

1) The defendant's assertion

In each business year of this case, the Plaintiff’s tax base and tax amount at the time of filing a corporate tax return on each business year, and the tax base and tax amount after filing a request for correction, even in cases where the Plaintiff’s tax credit limit of corporate tax was exceeded, are the same. Therefore, the claim for correction of this case, which is the purport of seeking a correction of the carried-over amount, does not meet the requirements for a request for correction stipulated in Article 45-2(1) of the Framework Act on National Taxes, so there is no legal interest or legal interest in seeking a revocation

2) The plaintiff's assertion

The plaintiff clearly made it clear that the sum of the amount of the claim for correction was KRW 2*,***,**, and upon acceptance of the claim for correction in this case, 6**,***,**,* the amount of the tax credit (amount of the tax credit for each month + the amount of the tax credit for each month) as of the business year 2014, but not accepted, 4**,**,****,*****,**,****, as only the tax credit for the same business year is recognized, there are differences in the amount of the tax credit 2***,********. Accordingly, regardless of whether the tax amount was refunded for each business year in this case, the plaintiff has legal interest in securing the tax amount properly recognized for the plaintiff. On the other hand, according to the defendant's argument, the plaintiff has no method of deeming the tax credit to be applied under Article 57 (1) and (2) of the former Corporate Tax Act and the Supreme Court ruling.

B. Determination

1) Article 45-2(1) of the Framework Act on National Taxes provides that, in order for a person who has filed a return on a tax base by the statutory due date of return to seek the determination or correction of the tax base and amount of the national tax for which the initial return and the revised return have been filed, the tax base and amount of the tax recorded in the return on tax base exceed those to be reported under the tax laws, or (2) the deficit amount or amount of tax recorded in the return on tax base

However, according to the facts acknowledged above and the purport of the whole pleadings, since the plaintiff is unable to obtain a tax credit any longer due to the excess of the credit limit for each of the business years of this case, it is recognized that the plaintiff entered "no tax credit (the increase in the balance of the carried-over tax amount)" in the written request for correction of this case. It is clear that the plaintiff does not seek correction of the tax base, the tax amount, the deficit amount, or the tax amount entered in the tax base return for each of the business years of this case through the correction claim of this case, and the "increased in the amount of the carried-over tax credit" requested by the plaintiff cannot be deemed as "increased in the amount of the tax credit" under Article 45-2

Therefore, the plaintiff is not entitled to file a claim for rectification based on Article 45-2(1) of the Framework Act on National Taxes.

2) Furthermore, even if the Plaintiff’s assertion that there is a legal interest in receiving the increased carry-over deduction amount in order to verify the claim for rectification of the instant case, is based on the assertion that the claim for rectification should be acknowledged, barring any express provision that recognizes the claim for rectification under the Framework Act on National Taxes or individual tax laws, the right to demand rectification by cooking cannot be acknowledged (see, e.g., Supreme Court Decisions 2007Du18284, Feb. 25, 2010; 2003Du7651, May 12, 2006).

Furthermore, if the plaintiff reported and paid corporate tax by applying the carry-over tax deduction amount as argued in the following business year, and then the tax authority denies the decision, it can be argued through objection to the above decision, so it is less practical to recognize the right to claim for correction in cooking.

3) As to the plaintiff's claim for correction of this case based on the right to file a claim for correction against the amount carried forward, the rejection of correction of this case by the defendant does not constitute a rejection disposition subject to appeal litigation. The lawsuit of this case seeking revocation is unlawful on the premise that the rejection of correction of this case constitutes a rejection disposition, and the defendant's main safety defense is with merit.

3. Conclusion

Therefore, the lawsuit of this case is unlawful and thus, it is so decided as per Disposition.