Seoul Administrative Court-2016-Gu Group-11660 ( April 18, 2017)

A taxpayer's presumption of loyalty shall be presumed to be true unless there is any reason prescribed in the subparagraphs of Article 81-6 (3) of the Framework Act on National Taxes.

Article 81-3 of the former Framework Act on National Taxes provides that "Presumption of Sincerity of Taxpayers" shall be presumed to be true unless there is any reason prescribed in the subparagraphs of Article 81-6 (3) of the former Framework Act on National Taxes.

Article 81-3 of the former Framework Act on National Taxes Presumption of Sincerity

2017Nu49326 Revocation of Disposition of Levying Transfer Income Tax

Park ○

AA Head of the Tax Office

September 28, 2017

October 19, 2017

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked. The imposition of capital gains tax of KRW 74,58,510 on March 4, 2015 that the Defendant rendered to the Plaintiff on March 4, 2015 shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning of this court's judgment is as follows, except for the dismissal or addition of a part of the following, and thus, it refers to the grounds for the judgment of the court of first instance. Thus, it is accepted in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence

Parts to be removed or added.

○ The fourth 8th malth of the judgment of the first instance court is "in this court," and "in this court, in the court of first instance".

○ The following shall be added to the 3rd part of the judgment of the first instance.

Article 81-3 of the Framework Act on National Taxes provides that a taxpayer shall be presumed to be sincere and the return, etc. filed by a taxpayer shall be presumed to be sincere and thus, even though the Defendant denied the content reported by the Plaintiff without any objective evidence to reverse the Plaintiff’s sincerity in rendering the instant disposition, and thus, the instant disposition is unlawful.

○ The following shall be added to the fourth decision of the court of first instance No. 14:

3) Furthermore, we examine the Plaintiff’s assertion on presumption of taxpayers’ loyalty.

Article 81-3 of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 29, 2014; hereinafter the same) provides that "Except where a taxpayer falls under any of the subparagraphs of Article 81-6 (3), a tax official shall presume that the taxpayer is sincere and the return, etc. submitted by the taxpayer is true." Article 81-6 (3) provides that "a tax official may conduct a tax investigation in any of the following cases other than the investigation by periodic selection under paragraph (2)." Paragraph 1 of the same Article provides that "Where a taxpayer fails to perform his/her duty to cooperate in taxation such as filing a return, submission of a certificate of bona fide return, preparation, delivery and submission of a tax invoice or invoice, preparation and submission of a statement of payment, etc." under subparagraph 2, "where there is a suspicion different from the fact of a transaction, such as a false transaction, disguised or fictitious transaction," and "where a taxpayer has specific information about a tax evasion under subparagraph 3," and "where there is obvious errors in the details of a tax return."

As seen above, “Presumption of Sincerity of Taxpayers” under Article 81-3 of the former Framework Act on National Taxes should be presumed to be true unless there exist grounds as stated in the subparagraphs of Article 81-6(3) of the former Framework Act on National Taxes. As seen earlier, the Plaintiff submitted a factual confirmation (Evidence A2) and a gift contract (Evidence A3) as evidence to support the acquisition value of the land in this case by reporting the acquisition value of the land in this case to KRW 217,061,769. However, when concluding a donation contract, the Plaintiff cannot be deemed to be a dead case where the Plaintiff received a gift at a specified price for the real estate subject to the gift, and there is no indication as to the value of the land in this case. Nevertheless, the Plaintiff’s assertion that the Plaintiff’s report on the transfer income tax of this case was not based on the above donation contract and the date of reporting the transfer income tax of this case, and that the Plaintiff’s report on the purchase value of the land in this case constitutes a false premise under Article 27(1)6) of the former Framework Act.

2. Conclusion

Since the judgment of the first instance is justifiable, the plaintiff's appeal is dismissed as it is groundless.