Tax authorities cannot impose punitive levies on seven people who declared the proceeds from stock options as one-time income and not regular income, the Supreme Court ruled Tuesday.
The top court's third petty bench overturned high court rulings that supported the National Tax Agency. The four justices unanimously ruled that the tax agency was "unfair or too harsh, and illegal" in imposing the punitive taxes on the plaintiffs for entering the income in a category with a lower tax rate.
The top court said the tax agency began to regard proceeds from stock options as a part of salary around 1998 but "failed to fully inform the public of the measure by at least around June 2002."