Chungnam Wins Lawsuit to Cancel Acquisition Tax and Other Charges on Coal-Fired Power Plants

[Asia Economy (Hongseong) Reporter Jeong Il-woong] Chungnam Province won a lawsuit against a coal-fired power plant in the region regarding the 'cancellation of acquisition tax and other imposition dispositions.'

According to the province on the 13th, a power company A in the region filed an administrative lawsuit in January last year at the Daejeon District Court seeking the 'cancellation of acquisition tax and other imposition dispositions.' This was to seek the court's judgment after objecting to the province's supplementary levy of local taxes through a tax investigation.

However, with power company A losing the lawsuit to the province, it became possible to collect the previously deferred provincial and city/county taxes.

In particular, the province focuses on the fact that winning this lawsuit allows it to clarify whether specific facilities of the power plant are subject to taxation. It is also expected that this will give momentum to local governments nationwide, where coal-fired power plants are located, to collect local taxes.

Earlier, from August 19, 2019, for 15 days, the province conducted a local tax audit against power company A.

This was because B City requested a tax investigation to determine the appropriateness of taxation on power facilities after power company A sequentially obtained temporary use approvals for various power facilities while constructing a new power plant within B City's jurisdiction.

Accordingly, the province formed a joint team with B City and conducted a general tax audit for 10 days on Headquarters C and 5 days on Headquarters D of power company A.

During this process, 13 cases such as improper tax reductions, underreporting, tax omissions, and tax rate errors were identified, resulting in a supplementary levy of 2.209 billion KRW in provincial tax and 440 million KRW in city/county tax, totaling 2.649 billion KRW.

However, power company A objected to this decision by the province and filed an appeal with the Tax Tribunal in January of the following year. Accordingly, the province actively responded to the tribunal by attending several Tax Tribunal meetings and submitting evidence such as facility handover documents and related videos.

Subsequently, based on the facts, the Tax Tribunal dismissed power company A's appeal, but power company A again objected to the tribunal's decision and filed a lawsuit at the Daejeon District Court against the mayor of B City seeking cancellation of acquisition tax and other imposition dispositions.

However, the court also dismissed power company A's claim with the same judgment as the province, B City, and the Tax Tribunal, concluding the lawsuit after about 1,000 days. Currently, power company A has abandoned its appeal.

Shim Jun-hyung, head of the province's Taxation Division, evaluated, "Conducting a direct tax audit on the coal-fired power plant to find new tax sources and protecting local taxes through winning the Tax Tribunal appeal and court lawsuit is the fruit of efforts to expand autonomous revenue."

He added, "This victory is also meaningful in that it clarified that coal unloading machines and chimneys are subject to taxation, thereby laying the groundwork for local governments nationwide with coal-fired power plants to collect local taxes."

This content was produced with the assistance of AI translation services.