The legitimacy of the Plaintiff’s assertion that the instant disposition based on a double tax investigation is unlawful

The tax authority’s demand for explanation made prior to the instant tax investigation is based on the audit and inspection records, etc., and the Plaintiff was made in writing and the Plaintiff also explained in writing. The previous demand for explanation can be easily responded from the Plaintiff’s side and it cannot be deemed to have reached the degree of infringing on freedom of business or legal stability, etc.

Article 81-4 of the Framework Act on National Taxes

Gwangju District Court 2019Guhap10818 Revocation of Disposition of Imposition of Gift Tax

○ ○

○ Head of tax office

September 19, 2019

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposing gift tax on the Plaintiff on February 2, 2000. The imposition of gift tax on the Plaintiff in 2011 is revoked.

1. Details of the disposition;

A. On November 14, 2000, 2000, ○○○○ Co., Ltd. (hereinafter “General○○○”) issued new shares with capital increase, and the existing shareholders did not acquire new shares, so that ○○○ and the Plaintiff allocated ○○○○ Co., Ltd. (hereinafter “instant shares”) each of the acquisition price per share to ○○○○ and the Plaintiff.

B. From November 9, 200 to December 29, 2000, the ○○○ National Tax Service conducted a tax investigation on the Plaintiff’s gift tax (hereinafter “instant tax investigation”) with respect to the Plaintiff, and concluded the tax investigation by deeming that the Plaintiff received a donation from the existing shareholders of ○○○○○○ under Article 39(1)1 of the Inheritance Tax and Gift Tax Act at the time of capital increase with consideration, deeming that the Plaintiff received a donation from the existing shareholders, and notified the Defendant

C. On February 2, 200, the Defendant imposed on the Plaintiff KRW 00 on the sum of 2000,000,000,000,000, including additional tax, for gift tax for 200,000 (hereinafter “instant disposition”).

D. The Plaintiff appealed and filed a tax appeal with the Tax Tribunal, but was dismissed on December 5, 200.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 4, 5, Eul evidence Nos. 1 and 2 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. The plaintiff's assertion

A. Before the instant tax investigation, the Plaintiff was subject to three times the tax investigation with respect to the evaculation of stocks of this case in △○○ Tax Office, Maumcium, and ○○ Tax Office. Therefore, the instant tax investigation constitutes a duplicate tax investigation prohibited by the Framework Act on National Taxes, and the instant disposition based on the said tax investigation is unlawful.

B. The instant disposition is unlawful in violation of the principle of good faith.

C. The penalty tax portion among the instant disposition is unlawful since it is recognized as a legitimate ground for reduction or exemption under Article 48 of the Framework Act on National Taxes.

3. Relevant statutes;

It is as shown in the attached Form.

4. Determination

(a) Whether a double tax investigation is conducted;

1) As a form of an administrative investigation to realize the State’s right to impose taxes, a tax investigation refers to any act of asking questions in order to determine or correct the tax base and amount of national taxes and inspecting or investigating books, documents and other articles, or ordering the submission thereof. In the case of a tax investigation for which the tax authority’s right to ask questions to a taxpayer or a person, etc. who is deemed to have a transaction with the taxpayer (hereinafter referred to as “taxpayer, etc.”) bears the legal obligation to allow a tax official to answer questions and undergo an inspection in order to collect the taxation data. The repeated tax investigation for the same item and taxable period may seriously infringe not only on taxpayers’ freedom of business or legal stability, etc., but also lead to the abuse of the authority to impose taxes. Thus, it is necessary to be prohibited except in cases where it is unfair that

In light of the nature and effect of such tax investigation, the purport of prohibiting duplicate tax investigations, etc., where a tax official’s investigation practically affects taxpayers’ freedom of business by having taxpayers answer questions and undergo an inspection, etc., it shall be deemed as a “tax investigation prohibited from re-audit” even if it follows the procedure of “local confirmation” as stipulated by the former Regulations on the Management of Investigations, which is the instructions of the National Tax Service. However, where it is deemed that all investigation conducted by the tax authority for the collection of taxation data or for the verification of accuracy of the details of the investigation constitutes a tax investigation prohibited from re-audit, the tax authority may not always commence a regular tax investigation in sufficient cases only with the confirmation of facts, and the taxpayer, etc. shall not be deemed as an “tax investigation prohibited from re-audit” inasmuch as the taxpayer, etc. is not obliged to answer or accept the tax payer’s business, and it does not constitute a “tax investigation prohibited from re-audit.”

In addition, whether an investigation by a tax official constitutes a "tax investigation prohibited from re-audit" cannot be determined individually in specific cases by comprehensively taking into account the purpose and details of the investigation, the object and method of the investigation, the materials acquired through the investigation, the scale and period of the investigation, etc. In addition, it is difficult to regard it as a "tax investigation prohibited from re-audit" in principle where it is anticipated that a taxpayer, etc. can easily respond to such investigation, or there is no substantial impact on the taxpayer's freedom of business, etc., but it is difficult to regard it as a "tax investigation prohibited from re-audit" in cases where a tax official's investigation directly contacts taxpayers, etc. on a considerable date in the office, workplace, factory, or residence of the taxpayer, etc., and asks questions about a considerable period of time, or inspects books, documents, articles, etc. for a certain period, barring special circumstances (see Supreme Court Decision 2012Du3684, Mar. 26, 2017).

2) The following facts can be acknowledged in full view of the evidence evidence Nos. 2 and 3 as well as the purport of the entire argument.

A) Around March 2000, the director of the tax office requested the following vindication in accordance with the audit and inspection of the head of the tax office ○○○○.

With regard to the inspection of dumpium, the taxpayer's point of view is known, and the taxpayer's point of view is examined, and the content of dumpium is explained to the dumpium (property team).

Title: Subjects subject to deemed donation due to increase or merger of inequalitys, etc.

(unit: State, source)

Testamentary donee and deemed donation amount

Jinay

Name

Resident Registration Number

(1)The number of shares directly (excess)

Amount of deemed donation

Ma-○

*****************

○

○

*****************

○

○

B) Man○○ submitted to the director of the tax office the explanatory materials called 'the explanatory materials related to the deemed donation based on the person with Mandong divestyposis'. The main contents of the said explanatory materials are as follows.

1. Factual basis

(1)정○○은 20○○년 ˜ 20○○년 신규투자 관련하여 은행과 협의하는 과정에서 부채 증가에 따른 재무구조 개선을 컨설팅 받고 회사의 경영형편상 외자유치를 통하여 재무구조를 개선하고자 신주를 발행하기로 하였음.

(2) While allocating new shares from the existing shareholders, the ○○○ has sold forfeited shares by waiver of the existing shareholders’ preemptive rights, and conspired with the general public without cultivating forfeited shares to the existing shareholders, and allocated new shares.

(3) 고정자산투자의 불가피성으로 경영이 어려운 정다운은 재무구조 개선을 위해 자금이 필요하였으나 기존주주도 자금여력이 없어 신주인수권을 포기하였기에 붇득이 일반인에게 주식을 공모하기로 이사회결의 하였음.

3. Conclusion

The ○○○ allocating new shares to the existing shareholders for the purpose of improving the financial structure, but the existing shareholders did not have any financial capacity and treated the forfeited shares, and offered them to the general public. In addition, the new shareholders do not have special relationship with the existing shareholders.

4. Attached documents;

- All documentary evidence related to the increase of capital, such as board minutes

- Banking obligations (as of October 31, 200, as of August 31, 2000, as of August 31, 200)

- 20○○년 ˜ 20○○년 신규투자 관련 등기부 등본

C) On September 3, 200, 200, the head of △△ District Tax Office requested the Plaintiff to give an explanation by sending the following official documents (hereinafter referred to as “each previous written explanation request”). On September 24, 200, the Plaintiff submitted the same explanatory materials as the above explanatory materials.

As a result of reviewing the detailed statement on changes, such as the stocks submitted by a corporation in 200 to the year of 200, on the details of changes in the stocks or equity shares he/she owns, he/she shall submit the following supplementary data by September 18, 2000 to confirm that there is a suspicion of perjury.

Review Contents

Data to be submitted

The charge of proving ○○○’s gift allocated at a low price in excess of the equity ratio at the time of ○○○○○○’s capital increase;

- Details of payments for capital increase (financial evidence and receipts);

- Documents related to stock assessment on which calculation of details of each stock transaction is based, and a stock sales contract;

It is known that if the requested data is not submitted or the submitted data is insufficient, it is possible to conduct an investigation for confirmation of facts.

* A request for the submission of supplementary data will be made by submitting the due date for cooperation to your history without the prosperity process of the on-site investigation in order to confirm the detailed details of stock changes.

3) The following circumstances that are acknowledged by adding the evidence and the overall purport of the pleadings as mentioned above, namely, the request for each of the previous vindications appears to have been made for the purpose of confirming the facts in accordance with the audit and cadastral records of the Commissioner of ○○○○○○○ National Tax Service. ② The request for each of the previous vindications was made in writing and sent once in writing to ○○○ and the Plaintiff, ③ the contents of the request for explanation are also deemed to have been relatively easily responded from the Plaintiff due to the details of payment of the capital increase, etc. ④ The mere fact confirmation of the single fact relevance does not seem to have reached the degree of infringing upon the Plaintiff’s freedom of business or legal stability, etc. ⑤ The Plaintiff’s request for each of the previous vindications that received a tax investigation from ○○○○○○ National Tax Service around June 2000, and it is difficult to view that each of the previous demands constitutes a tax investigation prohibited by duplicate investigations. The Plaintiff’s assertion in this part is without merit.

B. Whether the principle of good faith is violated

In general, in order to apply the principle of trust and good faith to the acts of tax authorities in tax and law relations, ① the tax authority must express the public opinion that is the subject of trust to taxpayers, ② the taxpayer should not be responsible for the taxpayer’s reliance on the tax authority’s reliance on the tax authority’s reliance on the tax authority’s reliance on the tax authority’s reliance on the reliance on the tax authority’s reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the reliance on the Privacy, and ④ the tax authority’s disposition contrary to the above reliance on the reliance on

The Plaintiff decided to rectify the instant shares to the Plaintiff as not subject to a deemed donation by an inequal person, and this was a public expression of opinion that is the subject of trust, but there is no evidence to acknowledge this. Furthermore, the mere fact that the tax authority did not impose gift tax by February 2, 2000 where the instant disposition was issued against the Plaintiff cannot be deemed to have expressed a public opinion that is the subject of trust. The Plaintiff’s assertion on this part is without merit.

(c) Whether there exists any justifiable reason for additional tax reduction or exemption;

The plaintiff asserts that no gift tax has been levied on the defendant due to his fault and that there exists a justifiable ground for his trust, but there is no evidence to prove that there is any reason attributable to the defendant regarding the disposition of this case as seen earlier, the plaintiff's allegation in this part is rejected.

5. Conclusion

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