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  • Imposing a Registration Tax (Local Tax)
    • 담당부서 : 외투기업고충처리실(고상원)
    • 조회수 : 2,280
  • Organization : Ministry of Public Administration and Security (MOPAS)
  • Regulation : Restriction of Special Taxation Act, Local Tax Act
Grievance
Grievance
•Backgrounds: Foreign-invested Company H was in the individual-type foreign investment zone and was subject to a tax reduction. It received registration tax, or local tax cut for its capital increase made for reinvestment.

In December 2009, however, the Ministry of Public Administration and Security (MOPAS) sent an official document about legal interpretation, notifying that the registration tax at a time of capital increase was not subject to tax reduction under the Restriction on Special Taxation Act. The Company had to pay KRW 120 million of registration tax imposed by the local government.

•Main Issue: When MOPAS had been asked about registration tax reduction at a time of capital increase by foreign-invested firms before, it replied twice that the tax was "subject to exemption". (June 8, 2004, October 23, 2008). Furthermore, the Tax Tribunal ruled in March 2011 that the registration tax imposed on anther foreign-invested company should be canceled under the principle of good faith and the principle of estoppel.

•Request: The registration tax collected unfairly should be refunded.

Resoultion and Results
Resolution and Results•Resolution: Through consultation with the MOPAS, the Ombudsman helped the company file a civil complaint with the Anti-corruption & Civil Rights Commission about the tax. The Commission reviewed the case and recommended that the local government return the tax.

•Resolution Process
‣(May 26, 2011) A Home Doctor visited MOPAS to discuss the grievance

※MOPAS said the tax already paid cannot be refunded directly despite the decision made by the Tax Tribunal. However, the company may file a civil complaint about the tax with the Anti-corruption & Civil Rights Commission, and the Commission may recommend the relevant local government take corrective measures and refund the money.

‣(December 12, 2011) The Ombudsman office helped the company file a civil complaint and requested cooperation of the Anti-corruption & Civil Rights Commission

※Through an internal review, the Commission judged that the company's claim was reasonable and recommended the local government refund the tax.

Outcome:
•Results: The local government notified the company on February 17, 2012 that it would refund KRW 120 million of tax and the interests.