Article 49 of the Enforcement Decree of Inheritance Tax and Gift Tax Act

Litigation costs shall be borne by the plaintiff (appointed party).

A. On April 22, 2004, the Plaintiff (designated parties; hereinafter the Plaintiff and the designated parties, both the Plaintiff and the designated parties, jointly donated ○○○○○○○○○ apartment 130-dong 304 (hereinafter the instant apartment) from the mother ○○○○○○○○○○○○○○ apartment 130-dong 304 (hereinafter the instant apartment) and reported the value of donated property of the instant apartment to KRW 487,50,000 based on the National Tax Service’s standard market price.

B. As to this, the head of Defendant ○○ Tax Office assessed the value of the apartment of this case as KRW 658,50,000 on September 1, 2005, and assessed the value of the apartment of this case as KRW 12,321,102 on the sales price of the apartment of this case under Article 60(1) and (2) of the Inheritance Tax and Gift Tax Act (amended by Act No. 7580, Jul. 13, 2005; hereinafter the same shall apply) and Article 49(1) and (5) of the Enforcement Decree of the Act (amended by Presidential Decree No. 18989, Aug. 5, 2005; hereinafter the same shall apply).

C. On September 1, 2005, the head of the ○○ Tax Office imposed and notified KRW 12,321,102 on both ○○○○○○○ on September 1, 2005 upon Defendant’s notice of taxation data (hereinafter “instant disposition imposing gift tax on the Plaintiff et al.”).

Each entry of Gap 3's evidence 1, 2, and 5's evidence 1 to 3

2. Whether the disposition of this case is lawful

A. The plaintiff's assertion

(1) Article 60 of the Act merely provides that the value of the pertinent property, such as sale and purchase, shall be the criteria for the assessment of the pertinent property, and there is no provision that the said value shall be the basis for the assessment of the sale and purchase, etc. of other property and there is no delegation to the Presidential Decree concerning the specific method of calculation. Thus, Article 49(5

(2) In order for the sales price of the apartment of this case to be the criteria for the assessment of the apartment of this case, the objective exchange values of the apartment of this case should be reflected in the price formation factors. However, the apartment of this case has no similarity in the apartment of this case and the price formation factors, since the alteration of the apartment of this case and the floor of this case is significantly different.

(b) Related statutes;

Article 60 (Evaluation of Inheritance Tax and Gift Tax Act)

(1) The value of property on which an inheritance tax or gift tax is levied under this Act shall be the market price as of the date the inheritance commences or the date of donation (hereinafter referred to as the "date of appraisal"). In such cases, the value appraised by the method of appraisal stipulated in Article 63 (1) 1 (a) and (b) (excluding cases falling under the provisions of Article 63 (2))

(2) The market price under paragraph (1) shall be the price which is generally accepted in cases of free trade between many and unspecified persons and shall include the price which is recognized as the market price under conditions prescribed by Presidential Decree, such as the expropriation and public auction price and appraisal

(3) In applying paragraph (1), where it is difficult to compute the market price, the price assessed by the methods prescribed in Articles 61 through 65 shall be based on the types, scale, transaction conditions, etc. of the relevant property.

(4) In applying paragraph (1), the value of the donated property added to the value of the inherited property pursuant to Article 13 shall be based on the market price as of the date of donation.

Article 61 of the Inheritance Tax and Gift Tax Act: Appraisal of Real Estate

(3) Notwithstanding the provisions of paragraph (1), with respect to multi-family housing, officetels and commercial buildings (including land annexed thereto) prescribed by Presidential Decree in consideration of the use, area, number of buildings partitionedly owned, etc. of a building, the value of land and buildings shall be appraised at least once a year by the Commissioner of the National Tax Service based on the type, scale, transaction status, location, etc. of the property, at least once a year.

Article 49 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act

(1) The term "those recognized as the market price, as prescribed by Presidential Decree, such as the expropriation or public sale price, the appraised price, etc." in Article 60 (2) of the Act means the price confirmed under one of the following subparagraphs in cases of sale, appraisal, expropriation, auction (referring to an auction under the Civil Execution Act; hereafter the same shall apply in this paragraph) or public auction (hereafter referred to as "sale, etc." in this paragraph) within six months (three months in the case of donated property; hereafter referred to as the "evaluation period" in this paragraph) before or after the evaluation base date: Provided, That even if sale, etc. are conducted during a period not falling under the evaluation period, if it is deemed that there are no special circumstances of price fluctuation in view of the management status of the company issuing stocks, the passage of time, changes in surrounding environment, etc. during the period from the evaluation base date to the date falling under any subparagraph of paragraph (2), the relevant value of sale, etc. may be included in the price confirmed under the following subparagraphs

1. If the fact of sale and purchase of the relevant property exists, the transaction value: Provided, That this shall not apply where the transaction value is deemed objectively unfair, such as transactions with persons with a special relationship provided for in Article 26 (4);

(2) In applying the provisions of paragraph (1), whether provisional drugs referred to in any subparagraph of paragraph (1) fall within 6 months before or after the standard date of appraisal (3 months in the case of donated property), shall be determined based on the dates prescribed in each of the following subparagraphs, and where there are two or more values deemed the market price under the provisions of paragraph (1), the value falling under the date which is the nearest day before

1. The sales contract date for the case of paragraph (1) 1;

(5) In applying the provisions of paragraph (1), where there exists any value falling under any subparagraph of the same paragraph of the same paragraph of the relevant property and the area, location, use and category of the same or similar property, such value shall be deemed the market value under Article 60 (2) of the

(6) In evaluating inherited or donated property, the Commissioner of the National Tax Service may determine detailed matters on the criteria, methods, procedures, etc. for appraisal by property in order to ensure fairness in appraisal.

(c) Fact of recognition;

(1) The apartment of this case was traded in the same way as the apartment of this case and the location of the second and third floors, and in the same way that is located in the same direction, the apartment of this case was traded in KRW 658,50,000 on April 21, 2004.

(2) The apartment complex of this case and the ○○○ apartment complex where the apartment complex of this case is located is currently being reconstructed, and according to the real estate sale and purchase schedule offered on the Internet ○○ bank website, the general transaction price of the same-type apartment in the same complex as the apartment of this case was KRW 655,00,000, the sales price was KRW 65,250,000, and the sales price was KRW 665,00,000,000.

(3) On December 1, 2003, the standard market price of the instant apartment and the instant apartment and the sales case by a public notice of the Commissioner of the National Tax Service is equal to KRW 487,50,000 in all.

The grounds for recognition attached to the evidence Nos. 2-2-3, 1-5 of the evidence Nos. 3-5, 1-2 of the evidence Nos. 4-2, and the purport of the body prior to the pleadings.

D. Determination

○ Determination on the assertion of invalidation under Article 49(1) and (5) of the Enforcement Decree of the Act

Article 60(2) of the Act provides that the market price under the provision of paragraph (1) includes the price that is generally recognized as the market price in cases of free trade between many and unspecified persons and that is recognized as the market price in accordance with the Presidential Decree, such as the expropriation and public auction price and appraisal price. Since the market price of donated property in the above provision is not limited to those recognized as the market price in accordance with the Presidential Decree, such as the expropriation and public auction price and appraisal price, etc., according to delegation of the above provision, each subparagraph of Article 49(1) or (5) of the Enforcement Decree of the Act merely presents representative cases where the market price of donated property can be seen as the market price (see, e.g., Supreme Court Decision 2000Du5098, Aug. 21, 2001). Meanwhile, in light of the principle of substantial taxation and the principle of fair taxation without law, the market price means an objective exchange value formed by the normal transaction of the pertinent property in question and an objective appraisal value that should be reflected in the sale price of the pertinent property (see, 2. 3).

Therefore, Article 49(1) and (5) of the Enforcement Decree of the Act is only an exceptional provision for the market price stipulated in Article 60(2) of the Act, and if the value of other similar properties does not correspond to the market price reflecting the objective exchange value of the pertinent property, it cannot be assessed according to the value. Therefore, it cannot be deemed that there is no ground for delegation of the above provision, or that the above provision violated the legal stability and predictability of the property right and violated the principle of clarity of tax requirements

(2) Determination on similarity between the apartment of this case and the sales case

As seen earlier, the apartment of this case and the apartment of this case are the same Dong, the same direction, and the same horizontal apartment with only the floor location of the second and the third floor. The standard market price publicly notified by the Commissioner of the National Tax Service is the same. The sales price of apartment of this case is within the scope of the estimated sale price on the Internet real estate sale and purchase price on the same-type apartment as the sale price of apartment of this case, and the time of sale and sale is not different from the donation day of this case. There is no evidence to prove the plaintiff's assertion as to whether to remodel the apartment of this case, and the apartment of this case can not be seen as being large as the price formation factor. In light of the overall circumstances, it is reasonable to view that the sales price of apartment of this case reflects the objective exchange value of apartment of this case as the transaction price of other property identical with, and similar to, the size, location, purpose of use and items of the apartment of

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.