Review Transfer 2010-0157 (28. 2010.06)

A decision to correct a reduction shall not be subject to an appeal litigation.

With respect to tax by the method of return and payment, the tax authority shall not seek revocation of the disposition of reduction or correction because the tax authority's ex officio determination of correction does not affect the taxpayer if the amount of tax has been reduced as a result of the reduction of some items and other items at the same time.

2010Gudan21146 Revocation of disposition of capital gains tax rectification

Gangwon ○

○ Head of tax office

1. The instant lawsuit shall be dismissed.

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

The Defendant’s revocation of the part exceeding KRW 90,745,090 in the disposition of correction of capital gains tax for the year 2004, which belonged to the Plaintiff on November 11, 2009.

1. Basic facts

A. On May 31, 2004, the Plaintiff owned 63,396 shares (hereinafter “instant shares”). The Plaintiff and the ○○○○○○cam (hereinafter “○○○”) issued new shares and exchanged them with the shares of the existing ○○○○○○○ on a stock basis, and entered into a comprehensive share swap agreement to exchange the shares with KRW 32,760 and 1,126 shares with the shares of the ○○○ stock with the ○○○ stock per share of the ○○ stock in the △○○○○○.

B. Under the above share swap contract, on August 17, 2004, the shares of the above two companies were exchanged, and the Plaintiff calculated the transfer value per share of the instant shares as 20,365 won ( = exchange rate of 29.0942x 700 won) based on the closing price of 700 won on August 17, 2004, and by applying the tax rate of 20%, the Plaintiff reported and paid KRW 181,490,182 for the transfer of the instant shares by applying the tax rate of 20%.

C. Around July 2009, the Defendant filed a pre-assessment review with the Plaintiff by asserting that the transfer value per share of the instant shares shall be 32,760 won, the appraised value at the time of the exchange contract, and that the Plaintiff would correct the transfer income tax. The Plaintiff filed a request for pre-assessment review by asserting that the transfer value per share of the instant shares shall be 20,365 won as originally reported, and that the transfer value per share of the instant shares shall be 10% as a small and medium enterprise, and the Seoul Regional Tax Office rejected the Plaintiff’s claim on the transfer value among the Plaintiff’s assertion on August 26, 2009, but the Plaintiff’s claim on the tax rate was accepted

D. On November 11, 2009, the Defendant decided to reduce the transfer income tax of the instant stocks to KRW 177,164,297 by applying the transfer income tax rate of 10%, and to refund KRW 4,325,885 in difference with the transfer income tax already paid.

[Ground of recognition] Facts without dispute, Gap evidence 1, 3 through 5, Eul evidence 1 to 4, the purport of the whole pleadings

2. The plaintiff's assertion

The transfer value of the instant shares shall be calculated as of August 17, 2004 when the exchange actually took place, and in that case, 20.365 won applying the exchange rate between two shares to the closing price of ○○ shares as of August 17, 2004, becomes the transfer value of the instant shares. As such, the Defendant shall reduce all of the parts exceeding KRW 90,745,090 calculated as above and refund to the Plaintiff. Accordingly, it is unlawful to deem otherwise to refund KRW 4,325,85,00 to the Plaintiff.

3. Whether the lawsuit of this case is legitimate

A disposition of reduction or correction is not the original return or disposition of imposition and separate individual independent taxation, but the substance of the disposition is the change of the original return or disposition of imposition and thereby brings a favorable effect to taxpayers, and thus the decision of correction is not revoked, and the remaining part of the disposition of correction is illegal, which is not yet revoked, the object of appeal litigation is the remaining part of the original return or disposition of correction, and the decision of correction is not the object of appeal litigation. Whether a correction disposition is disadvantageous or not shall be determined on the basis of whether a taxpayer has increased the amount of tax to be borne by the taxpayer. Thus, in the tax method of return and payment, when the tax amount has been reduced at the same time as a result of the increase of some items and reduction of items other than the original return or disposition of imposition, the revocation of the reduction disposition shall not be claimed (see Supreme Court Decision 95Nu8904 delivered on Nov. 15, 1996).

In light of the above legal principles, the Plaintiff’s assertion regarding transfer income tax on the transfer of the instant shares was rejected, but the Plaintiff’s assertion regarding transfer income tax rate was accepted, and in this case, the Plaintiff’s request for correction of reduction or correction of the amount of tax reduced as a whole was filed within the period for filing a claim for correction, barring the Plaintiff’s request for correction seeking reduction of the amount of tax originally declared and paid to the Defendant within the period for filing a claim for correction, it is not allowed to seek cancellation of the reduction or correction disposition giving favorable effect to the Plaintiff. Accordingly, the

4. Conclusion

Therefore, since the lawsuit of this case is unlawful, it is decided to dismiss it. It is so decided as per Disposition.