National High Court Decision 1996Na3533 ( December 31, 1997)

Transfer

Dismissal

It is natural to impose additional tax on non-performance of the obligation to pay capital gains tax in accordance with the substance over form principle. If the claimant, regardless of whether he/she is the claimant or a corporation other than the claimant, thereby imposing national tax, there is no reason not to impose additional tax by applying Article 15 of the Framework Act on National Taxes to the principle of good faith.

Article 60 of the Income Tax Act / [Determination of Standard Market Price of Land and Buildings]

National Trial 195Gu3130

I dismiss the appeal.

1. Summary of disposition;

The claimant acquired 320 shares issued by a corporation other than the above claim and transferred 320 shares issued by the corporation other than the above claim, after acquiring 89.4.7, 90.3.2, from among the stores (23.80 square meters in the site and 20.82 square meters in the total area of the building) located in Suwon-si O and O market located in O (6,698 square meters in the site, 18,102.39 square meters in the site) in the name of the OO market corporation (hereinafter referred to as "non-claim corporation").

The disposition agency has determined and notified the applicant of the transfer income tax of 90 years belonging to the transfer income tax of 22,430,440 and the same defense tax of 3,738,400 based on the standard market price of the real estate at issue, on the ground that the claimant's acquisition and transfer of the stocks of a corporation other than the claim constitutes the acquisition and transfer of the real estate at issue.

The claimant appealed against this and filed an appeal on October 11, 96.7.4

2. Opinions of the applicant and the Commissioner of the National Tax Service;

(a) Request;

When the merchants of the OO market, including the claimant, set up a market building in the name of the corporation and newly constructed the market building in the name of 72.11 under the name of the corporation, since it is not subject to the market permission in the personal name under Article 3 of the former Market Act (Act No. 704).

(1) Since market merchants have to pay real estate price according to their shares, the number of houses is considered to be owned by each individual, and the sale and purchase is freely made after obtaining consent from the legal entity other than the claim, which is not the transfer of real estate, but the transfer of stocks must be regarded as a transfer of

(2) Even if a transfer income tax is levied on the real estate, since the acquisition date is 89.4.7 and the transfer date is 90.3.2, there is no officially assessed individual land price at the time of transfer and acquisition, no transfer income tax

95.12.30 New Article 164.10 of the Enforcement Decree of the Income Tax Act provides for the method of calculating the officially announced value at the time of acquisition of the land acquired before the announcement of the officially announced value, but applying the same provision as newly established after the decision of the Constitutional Court, taxation by applying the same provision is contrary to the no taxation without law

(3) It goes against the principle of good faith and the principle of prohibition of retroactive taxation by non-taxable practice to impose taxes on individual stores, such as the pertinent real estate, regardless of the transfer of shares, for 20 years.

(4) Additional tax can not be imposed if a taxpayer has justifiable grounds for nonperformance of his/her duty (see, e.g., Supreme Court Decision 92Du3475, Dec. 26, 92; Supreme Court Decision 88Nu4218, Apr. 25, 84), and thus, the claimant visited the disposition agency and asked questions, and thus the owner of the key real estate was a legal entity, and did not report that the return of gift tax should not be made. Therefore, the imposition of additional tax should be revoked on the ground that the claimant

(b) Opinions of the Commissioner of the National Tax Service;

According to the provisions of Article 3 of the former Market Act, market owners at the time of the establishment of the O market only permitted corporations. At that time, market merchants established the O market by establishing a non-claim corporation, to bear the cost of land purchase, the construction cost of O market buildings, and the construction cost of the O market. On the register of land and buildings due to this deferred oil, market merchants who paid land and construction cost are corporations other than the claim, and were actually shop owners. However, in order to clarify the real ownership, the non-claim corporation and the ownership confirmation document were notarized by the KO market, and the KO market was prepared by the KO market at the Suwon District Court on August 30, 90.

First, as shown in the first instance, the claimant only held a title trust to a corporation other than the claimant as the actual owner of the pertinent real estate, and it is confirmed that it was freely used, profit-making, and disposed of, so it is justifiable to impose capital gains tax on the transfer of the pertinent real estate in accordance with the principle of substantial taxation under

Second, since the officially assessed individual land price first announced August 30, 90.8.30, the land acquired before August 30, 90 is difficult to calculate the standard market price, but the Constitutional Court ruled that it does not go against the constitutional ideology even if it is applied for a limited period of time in accordance with Article 60 of the former Income Tax Act, it is reasonable to interpret that the former Income Tax Act can be applied retroactively to a limited period of time in consideration of equity in tax burden, etc. (the same purport is Seoul High Court Decision 95Gu3130, May 30, 96).

Third, the transfer of the key real estate held in title by the claimant is natural to impose additional tax on the non-performance of the obligation to pay capital gains tax under Article 4 of the Framework Act on National Taxes and Article 7 of the Income Tax Act. If the claimant, regardless of whether he/she is the claimant or a corporation other than the claimant, is in title trust and imposes national tax, there is no reason not to impose additional tax by applying the principle of good faith under Article 15 of the Framework Act

3. Hearing and determination

A. Key issue

1. Whether capital gains tax shall be levied on the commercial buildings in the name of a corporation other than the applicant, considering the acquisition and transfer of stocks indicating the ownership of the store by the claimant;

2. Whether the taxation on this case does not violate the principle of good faith, the principle of gold speech, and the principle of prohibition of retroactive taxation by non-taxable practice

3. Where it is deemed real estate, whether it is impossible to impose tax without the officially announced value at the time of its acquisition.

4. Appropriateness of the disposition imposing additional tax on capital gains tax; and

B. Facts and determination

(1) As to the issue 1

A) Relevant statutes

Article 14(1) of the Framework Act on National Taxes provides that if the ownership of income, profit, property, act or transaction subject to taxation is nominal, and there is another person to whom it actually belongs, the person to whom it actually belongs shall be liable for tax payment and the tax law shall apply. Article 14(2) of the same Act provides that the provisions on the calculation of tax base under the tax law shall apply according to the substance, notwithstanding the name or form of income, profit, property

In addition, Article 34 (1) of the Inheritance Tax Act provides that the value of the property transferred to a spouse or a lineal ascendant or descendant shall be deemed to be donated to the transferee when the transferor transfers the property.

B) Facts and determination

1) The claimant and the agency have no dispute over imposing capital gains tax on the transfer, regardless of whether the taxable object is viewed as stocks or as real estate.

2) The land of Suwon-si Odong OO and OOOO in Suwon-si, Gyeonggi-do, where the controversial land belongs, was the commercial area, which was owned by Suwon-si before the transfer is registered to a corporation other than the claim. 29.29.

The transfer of these lands to a corporation other than the claim is that the market permission under Article 3 of the former Market Act, which was enforced in 71 years, was made only for the corporation. Therefore, if the market is received under the name of the merchants who engage in the business in the above area, the merchant could not engage in the business, but the commercial building was established by the non-claim corporation and the commercial building on these lands was paid by the merchants, but the amount of the purchase is paid by the merchants, but the commercial building on these lands was also a corporation other than the claim, but the merchants owned the shares of the corporation other than the claim, and the transaction of the commercial building, which is the real estate, was made by the transfer and acquisition of the shares, and it is recognized by the claimant.

As above, the real owner of the OO market located in the name of the non-claimed corporation is the merchant, and the non-claimed corporation is only the owner in the name and the merchant and the non-claimed corporation shall be entitled to a protocol of compromise between the merchant and the non-claimed corporation by the "certificate of transfer of ownership", etc. which is notarized in accordance with the "certificate of transfer of ownership", etc.

In addition, while the claimant has paid the property tax, etc. imposed on the key real estate while the key real estate is registered in the name of the corporation other than the claim, the real owner of the key real estate will be the claimant.

In this case, if the claimant transferred the shares of a corporation other than the claimed real estate on January 30, 92 and received the price for the transfer of the real estate at issue, this day will be the time of transfer under the Income Tax Act, and the subject of taxation of capital gains tax should also be

(2) As to the issue 2

A) Relevant statutes

When a taxpayer performs its obligations under Article 15 (1) of the Framework Act on National Taxes, he/she shall faithfully perform such obligations.

Article 18 (1) provides that a tax official's property right shall not be unfairly infringed upon in light of the equity in taxation and the purpose of the relevant provision, while interpreting and applying tax-related Acts.

Paragraph (2) provides that with respect to income, profit, property, act or transaction in which an obligation to pay national taxes (in the case of national taxes separately provided for by tax-related Acts, the obligation to collect and pay it; hereinafter the same shall apply) is established, no tax shall be levied retroactively by new tax-related Acts after the establishment thereof, and Paragraph (3) of the same Article provides that after the interpretation of tax-related Acts or practices in tax administration has been generally accepted by taxpayers, any act or calculation according to such interpretation or practice shall be deemed legitimate and that no tax shall

B) Facts and determination

The key issue is that the real estate is registered in the name of a corporation other than the claimant who is the actual owner, and this transaction is traded with the stocks of the corporation other than the claim. However, it is difficult for the taxation office to grasp this transaction because the non-claim corporation or the party who traded the transaction without reporting the fact of transaction to the tax office without reporting the fact of transaction to the tax office.

Meanwhile, in order for the instant taxation disposition to be contrary to the principle of trust and good faith as prescribed by the Framework Act on National Taxes or the principle of prohibition of retroactive taxation, if shares of a corporation other than the claimed real estate are transferred, no capital gains tax shall be imposed on the taxpayer, or with respect to such stock transaction, there is no evidence to deem that there was no such declaration of intent or practice, even though the practice on which no capital gains tax, etc. was imposed is to be established. Moreover, as seen earlier, it is difficult to understand the taxation data on the transfer of shares of a corporation other than the claimed real estate, the key issue is that the pertinent real estate was trusted in trust to a corporation other than the claimed real estate, and thus, it is difficult to accept the

(3) As to the issue 3

A) Relevant statutes

The determination of the standard market price under Articles 60 (Determination of Standard Market Price) and 23 (4) and 45 (1) 1 of the former Income Tax Act shall be governed by the Presidential Decree.

Article 115 (Determination of Standard Market Price) (1) The determination of the standard market price under Article 60 of the former Enforcement Decree of the Income Tax Act shall be made as follows:

1. Land:

(a) Except as referred to in item (b), a land price (hereinafter referred to as "individually published land price") for an individual parcel calculated by the head of a Si/Gun/Gu on the basis of the officially announced land price pursuant to Article 10 of the Act on the Publication of Land Prices and Evaluation of Land, etc.;

1-2. Dried water;

(a) The value based on the standard market price under Article 80 of the Enforcement Decree of the Local Tax Act, except for the case of item (b); and

Addenda (Law No. 12994, May 1, 1990)

(Effective Date) ThisO shall enter into force on September 1, 1990.

(General Application) TheO shall begin to apply from the first transfer after thisO enters into force.

(3) The standard market price at the time of the acquisition of land acquired prior to thisO shall be the price converted by the following formula:

“Individual officially assessed individual land price as of January 1, 1990 】 (Standard market price of taxation at the time of acquisition / the standard market price of the officially assessed individual land price as of January 1, 1990).”

Article 99 (Computation of Standard Market Price) (1) The standard market price provided for in Articles 96, 87 (1) 1, and 100 of the amended Income Tax Act shall be as follows:

1. Assets under subparagraph 1 of Article 94:

(a) Land:

The land price (hereinafter referred to as the "individually published land price") for an individual parcel calculated by the head of a Si/Gun/Gu (referring to the head of an autonomous Gu) on the basis of the officially announced land price under the provisions of the Act on the Publication of Land Prices and the Evaluation of Land, etc. pursuant to the provisions of Article 10 of the same Act.

(b) Dried water;

Except as provided in item (c), the value based on the standard market price as prescribed by the Presidential Decree.

Addenda (Law No. 4803, Dec. 22, 1994)

Article 1 (Enforcement Date) (1) This Act shall enter into force on January 1, 1996: Provided, That the amended provisions of Article 99 (referring to the previous provisions of Article 60) shall enter into force on January 1, 1995.

Article 164 of the Enforcement Decree of the amended Income Tax Act (Assessment of Standard Market Price of Land and Building)

(1) A person undergoes or (viii)

(9) In applying Article 99 (1) 1 (a) of the Act, where the acquisition or transfer is made before the new standard market price is publicly announced, the immediately preceding standard market price shall be applied.

(10) The standard market price at the time of acquisition of land which was acquired before a publicly announced individual land price was publicly announced on August 30, 1990 under the Act on the Public Announcement of Land Prices and the Evaluation of Land, etc. shall be the price calculated by the following formula. In this case, the standard market price in the following formula means the standard market price under the Local Tax Act before amendment by Act No. 4995 (Newly Inserted by Presidential Decree

The officially assessed individual land price as of January 1, 1990 ¡¿ (the standard market price at the time of acquisition / the aggregate of the standard market price at the time of taxation as of August 30, 1990 and the immediately preceding determined market price, divided by two).

Addenda (Presidential Decree No. 14467, Dec. 31, 1994)

Article 1 (Effective Date) ThisO shall enter into force on January 1, 1996, except that the provisions of Article 164 shall enter into force on January 1, 1995.

B) Facts and determination

1) As Article 60 of the former Income Tax Act (hereinafter “Delegation Clause”) goes against the purport of the Constitution that provides for the limitation of the principle of no taxation without law and delegated legislation, the Constitutional Court shall, in principle, make a decision of unconstitutionality. However, in a case where a decision of unconstitutionality is rendered and the validity of a decision of unconstitutionality is lost, the legal gap may not be imposed on the capital gains tax based on the standard market price. Accordingly, a decrease in tax revenue and a considerable amount of government finance would result in a violation of equity between taxpayers who paid capital gains tax pursuant to this provision and taxpayers who have paid capital gains tax pursuant to this provision. The unconstitutionality of delegation provision of this case is due to a mistake in the legislative form, which is not enacted by the National Assembly, even if it continues to be applied for a limited period of time, and it would be extremely contrary to the constitutional ideology, such as justice and equity, and in this case, it would not be deemed that a decision of unconstitutionality has been made by the Constitutional Court on the following grounds: (1) 2).

The purport of the above decision of inconsistency with the Constitution of the Constitutional Court is to prevent legal and social confusion, such as preventing legal gap from imposing capital gains tax, and ensuring fairness with taxpayers already paid pursuant to the provisions of the former Income Tax Act, since the unconstitutionality of delegation provision is due to errors in the legislative form, which was not enacted by the National Assembly, and even if the delegation provision continues to apply for a limited period of time, it does not necessarily mean that it would cause serious harm to the specific feasibility and thus, it would not always be significantly contrary to the constitutional ideology,

2) Article 96 Subparag. 1 and Article 97(1)1 of the amended Income Tax Act provides that the transfer value and acquisition value of land shall be based on the standard market price, Article 99(1)1(a) of the same Act provides that the standard market price of land shall be based on the individual published land price under the Act on the Publication of Land Prices and the Evaluation of Land, etc., and Article 164(9) of the Enforcement Decree of the same Act provides that “where a land is acquired or transferred before the new standard market price is announced, it shall be based on the immediately preceding standard market price,” and Article 1 of the Addenda of the same Decree provides that “The amended provisions of Article 164 shall take effect from January 1, 95.”

3) If the Income Tax Act is applied pursuant to the Constitutional Court’s decision to apply the above Act to all cases for which the imposition of capital gains tax by applying the “Delegation Clause” has not become final and conclusive and all of the disposition imposing capital gains tax to be conducted in the future, the transfer or acquisition value of the land should be applied. Since the officially announced land price under the provisions of the Act on the Publication of Land Prices and the Evaluation of Land, etc. was publicly announced for the first time 90.8.30 days before the publicly announced individual land price was publicly announced, the transfer or acquisition value of the land cannot be calculated on August 30, 90 because there is no immediately announced individual land price, so there is no standard market price. This means that there is no legal ground for imposing capital gains tax on the land that is transferred or acquired before the publicly announced individual land price was publicly announced. Accordingly, it ultimately means that there is no legal ground for imposing capital gains tax on the land that is likely to be taxed by the Constitutional Court, and it constitutes a result contrary to

In addition, the Constitutional Court pointed out that the delegation clause is a mistake in the enforcement decree of the standard market price to be defined by the law, and pointed out that the revised Income Tax Act with the contents consistent with the Constitution has already been implemented and implemented in a constitutional manner, and therefore, it is clear that it does not mean that the calculation method of the acquisition or transfer price of land under the former Income Tax Act itself has the unconstitutionality, considering these points.

In addition, in the case where the Constitutional Court's decision of inconsistency with the Constitution is limited simply to the purport of the decision of inconsistency with the Constitution of the Republic of Korea, and the above revised law is applied to all of the cases for which the decision of the Constitutional Court is not finalized and all of the disposition of imposition of capital gains tax to be imposed in the future by applying the "Delegation Clause", the above revised law will cause legal gap, such as making it impossible to impose capital gains tax according to the standard market price if it loses its validity by a decision of simple unconstitutionality. Accordingly, it would result in a decrease in tax revenue and a substantial change in national finance, and bring about a result contrary to equity between taxpayers who have already paid capital gains tax pursuant to this provision and taxpayers who have already paid capital gains tax pursuant to this provision. Thus, the unconstitutionality of the delegation provision of this case is due to a mistake in the legislative form, which was not enacted by the National Assembly, and even if it continues to be applied for a limited period, it would be extremely inconsistent with the constitutional ideology such as justice and equity, and it would be questionable that the Constitutional Court's decision of inconsistency with the Constitution.

4) Therefore, the decision of the Constitutional Court is limited to the application of the amended Income Tax Act with a formal constitutionality so that the former Income Tax Act at the time of transfer can be applied, rather than to prevent legal and social confusion, and thus, it is consistent with the purport of the Constitutional Court’s decision on inconsistency with the Constitution. Therefore, the initial disposition that was imposed by applying the standard market price under Article 60 of the former Income Tax Act and Article 115 of the Enforcement Decree of the same

(4) As to the issue 4

A) Relevant statutes

If the resident under Article 121 (1) of the Income Tax Act fails to make a final return on the tax base or makes a return on the amount short of the 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 unreported or insufficient amount to the global income, retirement income, transfer income, or forest income, shall be added to the calculated tax amount, and if the resident under paragraph (3) fails to pay the income tax amount under Article 107, or pays under the amount to be paid, the amount equivalent to 10/100 of the unpaid tax amount shall be added to the calculated

B) Facts and determination

As the claimant visited the public service center of the disposition agency and consulted, since the real estate in question is registered under the name of the corporation other than the claim, it is not necessary to report the transfer income tax, the claimant's additional tax should not be imposed because there is no reason attributable to the claimant. However, there is no proof of the claimant, and even though the return of the transfer income tax is made in accordance with the Income Tax Act, the claimant fails to fulfill his obligation to report the transfer income tax after transferring the real estate in question (whether it is viewed as the transfer of the real estate or as the claimant's assertion) and the trust under the name of the corporation other than the claim is not a legitimate title trust under the provisions of the Trust Act, etc., so the disposition agency has become very difficult to collect the taxation data on the title trust because the title trust is not publicly announced.

Therefore, it is difficult to accept the claimant's argument that the claimant's failure to report and pay transfer income tax and making a decision by adding additional tax for additional tax for negligent return and additional tax for unfaithful payment when imposing transfer income tax under the above law should not be seen as legitimate disposition

As such, the decision is made as per the disposition under Articles 81 and 65(1)2 of the Framework Act on National Taxes on the grounds of the above-mentioned ground.