Article 154(1)1 of the Enforcement Decree of the Income Tax Act

Litigation costs shall be borne by the plaintiff.

The following facts may be acknowledged if there is no dispute between the parties, or if Gap evidence Nos. 1, 2, 3, 1, 2, 3, 1, 2, 3, 3-1 through 6, 8, 9, 4, and 4 are collected in each entry of evidence Nos. 4.

A. On April 6, 1988, the Plaintiff acquired a house (1st floor, 87.31 square meters, 2nd floor, 41.02 square meters, underground workplaces, 102.7 square meters; hereinafter referred to as the "house of this case") with two floors of cement brick and ground cement, brick, and roof (1st floor, 87.31 square meters, 2nd floor, 41.02 square meters, and 102.7 square meters at underground workplaces; hereinafter referred to as the "site and building of this case") from around that time, and sold the house of this case to ○○ on February 2, 2004, while residing at that place, 260 million won. The Plaintiff completed the registration of ownership transfer from ○○○○ on March 3, 1988; 30 million won for down payment on the 16th of that month; 100 million won for intermediate payment on the 3.16th of that month; 3.13 billion won for the remainder of this year.

B. On February 5, 2004, the Plaintiff purchased 18,8710,000 won from ○○○○-dong ○○○○○○-dong ○○○○○, and the cement brick structure slives and retail stores and housing (hereinafter referred to as “first house”) on the ground of the above ○○○-si ○○○-dong ○○ ○○ ○○, and the third floor of the cement brick slive roof, and paid the purchase price to ○○ ○○ by March 18, 200, and completed the registration of ownership transfer on the first house due to the above trading in the future of the Plaintiff.

C. On February 6, 2004, △△△△△△ was the Plaintiff’s husband, and on 11,6150,000 won, purchased ○○○○-dong ○○○○○-dong ○○○○○○, 149.1 square meter and multi-household housing on the ground of cement brick slock slock slock (hereinafter “second-class house”) and paid the purchase price by March 31 of the year, and completed the registration of ownership transfer on 2th of April of the year, based on the above trading.

D. On June 9, 2005, the Defendant announced the Plaintiff that the Plaintiff filed a return after the deadline for capital gains tax based on the actual transaction price on the ground that the Plaintiff did not file the report despite the fact that the transfer of the instant house was actually subject to taxation. On the 24th of that month, the Plaintiff reported to the Defendant on June 24, 200 that the transfer of the instant house constitutes one house for one household under the Income Tax Act, and thus, the transfer income tax base and its tax amount were nonexistent.

E. However, on April 19, 2004, the Plaintiff and △△△△△△, her husband, owned three houses for the household at the time of the transfer of the instant house, and thus, on January 2, 2006, the Defendant issued a disposition imposing capital gains tax of KRW 62,216,676 and additional tax of KRW 9,824,012 on the Plaintiff (hereinafter “instant disposition”) on the ground that the transfer of the instant house by the Plaintiff does not fall under one house for one household under the Income Tax Act and is not subject to non-taxation of capital gains tax under the Income Tax Act.

2. Whether the instant disposition is lawful

A. The parties' assertion

The defendant asserts that the disposition of this case is lawful as a disposition under the provisions of the statutes of this year.

이에 대하여 원고는, "① 원고가 이 사건 주택을 매도한 후 주거이전 및 자녀들의 통학 편의를 위하여 남편 △△△과 함께 제1주택은 원고 명의로, 제2주택은 △△△ 명의로 각 매수⦁취득하였는데, ○○○가 이 사건 주택의 잔대금 지급을 지체하는 바람에 이 사건 주택의 양도시기가 뒤로 미루어지고, 그 사이에 원고와 남편 △△△이 무심코 제1, 2주택에 관하여 자신들 명의의 각 소유권이전등기를 마침으로 말미암아 이 사건 주택의 양도 당시 우연히 1세대 3주택이 되었을 뿐 결코 원고가 부동산에 관한 투기목적으로 이 사건 주택을 양도한 것이 아니므로, 원고의 이 사건 주택의 양도에 관하여 일시적인 1세대 2주택 중 종전 주택의 양도에 관한 비과세특례규정인 소득세법 시행령 제155조 제1항의 규정의 유추적용을 통하여 양도소득세 비과세대상으로 보아 양도소득세를 부과하지 않아야 함에도 불구하고, 이와 달리 원고의 이 사건 주택의 양도에 관하여 양도소득세를 부과한 이 사건 처분은 위법하고, ② 설령 원고의 이 사건 주택의 양도에 관하여 양도소득세를 부과한 피고의 이 사건 처분이 적법하다고 하더라도 18년 동안 이 사건 주택을 보유하다가 ○○○에게 이를 양도한 원고로서는 세법을 잘 알지 못하여 적어도 ○○○와의 사이에 이 사건 주택에 관한 매매계약을 체결할 당시에는 1세대 1주택이어서 이 사건 주택의 양도가 양도소득세 비과세 대상이라고 판단할 수밖에 없었으므로, 원고가 법정기한 내에 이 사건 주택의 양도에 관한 양도소득세를 신고⦁납부하지 못한 데에 정당한 사유가 있음에도 불구하고, 원고가 정당한 이유 없이 이 사건 주택의 양도에 관한 양도소득세를 신고⦁납부하지 않았다는 이유로 원고에게 양도소득세의 본세 외에 그 가산세까지 부과한 피고의 이 사건 처분은 적어도 가산세 범위 내에서는 위법하다."고 주장한다.

B. Relevant statutes

former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005)

Article 89:Non-taxable Transfer Income

No income tax on transfer income (hereinafter referred to as “transfer income tax”) shall be levied on the following incomes:

3. Income accruing from a transfer of one house for one household as prescribed by the Presidential Decree (excluding expensive houses whose prices exceed the standard prescribed by the Presidential Decree) and the appurtenant land within the area calculated by multiplying the area of land to which a building is built by the ratio as determined by region under the Presidential Decree

Article 94 Scope of Transfer Income

(1) Transfer income shall be the following incomes, which have been generated in the current year:

1. Income accruing from transfer of land (referring to a lot of land subject to registration of land category in the cadastral record under the Cadastral Act) or buildings (including the facilities and structures annexed to such buildings);

Article 96 Transfer Price

(1) The transfer value of assets referred to in Article 94 (1) 1 and 2 shall be the standard market value at the time of transfer of the assets concerned: Provided, That where the assets concerned fall under any of the following subparagraphs, the actual transaction value between the transferor and transferee (hereinafter referred to as “actual transaction value”) shall apply:

7. Other cases prescribed by Presidential Decree in consideration of types, holding period, number of assets held, scale of transaction, transaction methods, etc. of the relevant assets.

Article 98 Time of Transfer or Acquisition

In calculating gains on transfer of assets, the time of acquisition and transfer shall be determined by Presidential Decree.

Article 104 (Rate of Transfer Income Tax)

(1) A resident shall pay his/her tax amount calculated by applying the tax rates under the following subparagraphs to the tax base of transfer income in the current year (hereinafter referred to as "calculated tax amount of transfer income"). In such cases, when one asset falls under two or more of the tax rates under the following subparagraphs, the highest tax rate shall apply thereto:

2-3. Housing falling under one of three houses or more for one household as prescribed by the Presidential Decree (including land annexed thereto; hereafter in this Article the same shall apply);

60/100 of the tax base of transfer income;

Article 115:Additional Tax on Transfer Income Tax

(1) Where a resident fails to file a final return or files a return of any amount short of the income amount to be returned, the amount equivalent to 10/100 of the amount calculated by multiplying the calculated tax amount by the ratio of the income amount not returned or short of the amount to be returned to the transfer income amount (hereinafter referred to as "amount of additional tax on negligent tax returns") to the calculated

(2) If a resident fails to pay the transfer income tax amount under Article 111 or pays it below the payable tax amount, the amount calculated by applying the rate prescribed by the Presidential Decree in consideration of the interest rate on loans in arrears by financial institutions to the unpaid tax amount (hereinafter referred to as the "additional paid tax amount") shall be added

Enforcement Decree of the former Income Tax Act (amended by Presidential Decree No. 18705 of Feb. 19, 2005)

§ 154. Scope of housing for one household

(1) The term “one house for one household as prescribed by the Presidential Decree” in subparagraph 3 of Article 89 of the Act means the case where a household comprised by a resident and his spouse together with the family members living together with him at the same address or same residence (hereinafter referred to as “one household”) in Korea as of the transfer date, and where the relevant house is held for not less than 3 years (in the case of the house located in the area of subdivision, day delivery, square village, mountain village, mountain village, mountain village, and new urban area designated and publicly notified as a planned area for housing site development under Article 3 of the Seoul Special Metropolitan City, Metropolitan City, and the Housing Site Development Promotion Act, the retention period of the relevant house is not less than 3 years and the residing period is not less than 2 years during the retention period): Provided, That where one household possesses one house in Korea as of the transfer date and falls under any of the following subparagraphs,

§ 155. Special case of housing for one household:

(1) Where one household which has one house in Korea comes to possess two houses temporarily by acquiring another house (including the case where it acquires by constructing by itself) before transferring the relevant house, if it transfers the previous house within one year (including the case where unable to transfer within one year, and which falls under the causes as determined by the Ordinance of the Ministry of Finance and Economy) from the date of acquiring another house, it shall be regarded as one house for one household, and the provisions of Article 154 (1) shall be applicable. In this case, where a part of previous house and appurtenant land is purchased by consultation or expropriated under Article 154 (1) 2 (a), and where it transfers the relevant remaining house and appurtenant land within two years from the date of such transfer or expropriation, the transfer of relevant remaining house and appurtenant land shall be deemed to be included in the transfer or expropriation of the previous house and appurtenant land

§ 162. Time of transfer or acquisition

(1) The time of acquisition and transfer under Article 98 of the Act shall be the date of liquidation of the price of relevant assets (if the transferee agrees to bear the capital gains tax and additional tax of capital gains tax on the transfer of relevant assets, excluding such capital gains tax and additional tax of capital gains tax) except in the following cases:

1. Where the date of the settlement of price is not clear, the date of registration, receipt of registration, or transfer date entered in the register, registry, list, etc.;

2. Where registration of transfer of ownership (including registration and statements of change of name) has been made before the price is settled, the date of receipt of the registration entered in the register, register, list, etc.;

Article 162-2 Transfer Price

(5) The term “cases prescribed by the Presidential Decree” in Article 96 (1) 7 of the Act means the case where one household possessing three or more houses transfers the house (including the land appurtenant thereto). In this case, the provisions of Article 155 (15) shall apply mutatis mutandis to the calculation of the number of houses in a multi-family house (limited to the case where residents select), and the provisions of Article 154 (9) shall apply mutatis mutandis to the method of determining the transfer house where two or more houses are transferred on the same day.

Article 178 (Computation of Additional Tax on Transfer Income Tax)

(1) The amount of income to be reported under Article 115 (1) of the Act, shall be the amount determined or adjusted by the director of the regional tax office or the director of the regional tax office.

(2) The provisions of Article 146 (1) and (2) shall apply mutatis mutandis to the amount short of the income amount to be returned under Article 115 (1) of the Act.

(3) "Rate prescribed by Presidential Decree" in Article 115 (2) of the Act means the rate of 3/10,000 per day for the period from the day following the payment deadline to the date of voluntary payment or notification.

C. Determination

(1) Principal capital gains tax portion

Article 89 subparagraph 3 of the former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005; hereinafter referred to as the "Act") and Article 89 subparagraph 3 of the same Act provide that "one house for one household as prescribed by the Presidential Decree and its appurtenant land shall not be subject to any income tax on the transfer of land within the area calculated by multiplying the area on which the building is fixed by the ratio as determined by the Presidential Decree by the area, by the ratio as determined by the Presidential Decree." The former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 18705 of Dec. 31, 2005; hereinafter referred to as the "Decree") provides that "one house for one household as determined by the Presidential Decree" in Article 154 (1) of the former Enforcement Decree of the Income Tax Act shall apply to cases where the resident and his spouse have one house in Korea together with his family members living at the same address or same place of residence, and the former house is temporarily transferred within 15 years from the date of possession of the house.

그리고 법 제96조 제1항 제7호는 "기타 당해 자산의 종류⦁보유기간⦁보유수(數)⦁거래규모 및 거래방법 등을 감안하여 대통령령이 정하는 경우 양도자와 양수자간에 실제로 거래한 가액을 자산의 양도가액으로 본다."고 규정하고 있고, 영 제162조의2 제5항은 "법 제96조 제1항 제7호에서 '대통령령이 정하는 경우'라 함은 3주택 이상을 소유한 1세대가 주택을 양도하는 경우를 말한다."고 규정하고 있다.

Meanwhile, in calculating gains on transfer of assets, Article 98 of the Act provides that "the time of acquisition and time of transfer shall be determined by Presidential Decree", and Article 162 (1) of the Decree provides that "the time of acquisition and time of transfer under Article 98 of the Act shall be determined by Presidential Decree, except in cases where the date of liquidation of the price is unclear and where the registration of transfer is made before the price is settled."

However, the principle of no taxation without law is a requirement for taxation, or a requirement for tax exemption or tax exemption, and the interpretation of tax laws is interpreted as a legal text, barring any special circumstances, and it is not allowed to expand or analogically interpret it without reasonable grounds. In particular, it accords with the principle of fair taxation to strictly interpret the provision that can be seen as a clear preferential measure among the requirements for tax exemption or exemption (see, e.g., Supreme Court Decision 2003Du7392, May 28, 2004).

Therefore, according to the facts acknowledged earlier, the Plaintiff sold the instant house to ○○○ on February 2, 2004 at KRW 260 million, and received full payment from ○○○○ on April 19 of that year, and transferred the instant house to ○○○○ on that day. On April 19, 2004, the transfer date of the instant house, the Plaintiff and her husband, as a member of one household, owned the instant house and the first and second houses owned three houses for one household. Accordingly, according to the aforementioned legal principles, each provision of Articles 89, 155(1), and 154(1) of the Decree, which provide for special cases concerning the transfer of the Plaintiff’s instant house, cannot be applied by analogy to each of the provisions of Article 154(1) of the Act.

Therefore, the disposition of this case where the Defendant imposed capital gains tax on the transfer of this case on the Plaintiff on the ground that the transfer of this case’s house does not fall under the transfer of one house for one household, which is the object of exemption from capital gains tax under Article 89 of the Act and Article 154(1) of the Decree, among the two houses for one household, which are the object of exemption from capital gains tax under Articles 89, 155(1), and 154(1) of the Act, does not fall under the transfer of previous house, is lawful as a disposition based on the relevant Acts and subordinate statutes, and the Plaintiff’s assertion on the different premise

(2) Additional tax on capital gains tax

살피건대, 세법상 가산세는 과세권의 행사 및 조세채권의 실현을 용이하게 하기 위하여 납세자가 정당한 이유 없이 법에 규정된 신고⦁납세의무 등을 위반한 경우에 법이 정하는 바에 의하여 부과하는 행정상의 제재로서 납세자의 고의⦁과실은 고려되지 아니하는 것이고, 법령의 무지 또는 오인은 그 정당한 사유에 해당한다고 볼 수 없으며(대법원 1999. 12. 28. 선고 98두3532 판결 등 참조),다른 한편으로 원고 스스로도 이 사건 주택의 양도가 1세대 1주택의 양도로서 비과세대상인 것으로 알았다고 주장하고 있는 점에 비추어 보면 원고는 주택을 양도할 경우 일반적으로 양도소득세를 납부하여야 하고 1세대 1주택의 양도와 같은 특수한 경우에 한하여 비과세대상에 해당하여 양도소득세를 납부하지 않아도 된다는 점을 알고 있었던 것으로 보이기 때문에 원고가 조금만 주의를 기울여 과세관청 등에 문의하였다면 이 사건 주택의 양도의 경우 비과세대상에 해당하지 않는다는 점을 알 수 있었을 것으로 보이는 점 등을 종합하여 보면, 원고가 법정기한 내에 이 사건 주택의 양도에 관한 양도소득세를 신고⦁납부하지 못한 데에 정당한 사유가 있다고 할 수 없으므로, 원고의 이 부분 주장도 역시 이를 받아들일 수 없다.

3. Conclusion

Therefore, the plaintiff's claim of this case seeking its revocation on the ground that the disposition of this case is unlawful is dismissed. It is so decided as per Disposition.