법무법인(유한) 율촌 | Yulchon LLC

Yulchon's tax group earned a trial court victory for our clients S-oil and GS Caltex in litigation seeking the cancellation of clawback of petroleum import tax refunds.

Oil refinery companies such as S-Oil and GS Caltex receive refunds of petroleum import tax paid at the time importation of crude oil if they later export the petroleum products refined from the imported crude oil. The Board of Audit and Inspection (BOAI), however, claimed that the relevant tax refund calculation did not factor in fuel gas produced during the crude oil refining process conducted by these companies and, as a result, they have been enjoying excessive refunds. As a result, the BOAI ordered that Korea National Oil Corporation claw back the refunds previously granted.

Initially, the taxpayers' case appeared weak, as an unfavorable precedent had already been rendered on similar facts in a case handled by another law firm. However, Yulchon thorough examined the intent behind the system granting petroleum import tax refunds, as well as the history of related provisions in a holistic manner, and identified a contradiction that would be created by the denial of the refunds. In written briefs and oral hearings, Yulchon challenged the disposition with a whole new line of arguments. As a result, the Suwon Administrative Court overturned the precedent and cancelled the clawback of petroleum import tax refunds.

This case is meaningful to the entire industry, as it provides a solid basis for similarly situated firms to defend their refunds, and also shows Yulchon tax group's comprehensive understanding and capacity to deal with issues surrounding the oil refinery industry as a whole.

Soon Moo Soh, Seok Hoon Kang, Dong Soo Kim and Jeong Cheol Cho supervised the litigation while Jong Hyok Lee, Se Hoon Park, and Seung Mok Lee were in charge of the tasks related to the litigation.