Method of assessment, where the actual transaction value of the property inherited or donated is unclear;

If the actual transaction price of the inherited or donated property is unclear, the provision that the value assessed by the gift tax law can be considered as the actual transaction price required for acquisition is not the provision that unfairly expands the taxation requirement beyond the delegation scope of the mother law.

Article 163 of the Enforcement Decree of the Income Tax Act

1. The plaintiff's claim is dismissed.

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

1. Summary of disposition;

A. The plaintiff on August 26, 1997 200 Sungnam-dong, Sungnam-dong, Sungnam-dong, 104 Dongdong-dong, 104.

On October 10, 2003, the apartment house of this case (hereinafter referred to as "the apartment of this case") was inherited and owned. After the transfer on October 10, 2003, the preliminary return was made on October 25, 2003 based on the standard market price.

B. At the time of the transfer of the instant apartment, the Defendant confirmed that the Plaintiff had three houses including the instant apartment at the time of the transfer. Pursuant to Article 96(1)7 of the former Income Tax Act (amended by Act No. 7006, Dec. 30, 2003; hereinafter the same) and Article 162-2(5) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 18173, Dec. 30, 2003; hereinafter the same), the Defendant investigated the actual transaction price and assessed the transfer price at KRW 590,00,000, and the acquisition price at KRW 330,00,000, which is the value assessed pursuant to Article 163(9) of the Enforcement Decree of the Income Tax Act, the Plaintiff imposed the transfer income tax for the year 2003 on Nov. 1, 2006.

C. The Plaintiff, who was dissatisfied with the instant disposition, filed a request for examination on December 20, 2006, but was dismissed by the Commissioner of the National Tax Service on February 6, 2007.

[Ground of recognition] Evidence No. 1, Evidence No. 2, Evidence No. 1-2, Evidence No. 1-2 to No. 2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Article 163(9) of the former Enforcement Decree of the Income Tax Act (hereinafter “instant provision”) which considers the amount appraised pursuant to Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as the acquisition value if the market price cannot be confirmed at the time of acquisition due to inheritance or donation is contrary to the purport of legislation of the mother law and is null and void beyond the scope of delegation by the mother law. Thus, in calculating the acquisition value of the instant apartment, the acquisition value shall be calculated based on the market price at the time of acquisition or the conversion value under Article 176-2(2)2 of the Enforcement Decree of the Income Tax Act.

(b) Related statutes;

(1) The income from transfer under Article 94 of the former Income Tax Act (amended by Act No. 7006 of Dec. 30, 2003) shall be the following income generated during the relevant 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) The transfer price under Article 94 (1) 1 and 2 shall be based on the standard market price at the time of the transfer of the assets concerned: Provided, That where the assets concerned fall under any of the following subparagraphs, the actual transaction price between the transferor and transferee (hereinafter referred to as “actual transaction price”) shall apply:

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

§ 97. Necessary expenses for capital gains

(1) In calculating gains on transfer of a resident, necessary expenses to be deducted from the transfer value shall be as follows:

1. Acquisition value:

(a) In case of assets as prescribed in Article 94 (1) 1 and 2, the standard market price at the time the assets are acquired: Provided, That in case where the assets concerned fall under any of subparagraphs of Article 96 (1), it shall be based on the actual transaction price required for the acquisition of such assets;

(b) In case of assets falling under Article 94 (1) 3 and 4, it shall be based on the actual transaction price required for the acquisition of the relevant assets;

(c) In the case of the proviso of item (a) or (b), where it is impossible to confirm the actual transaction price at the time of acquisition, the sale, appraisal price or conversion price prescribed by

(5) Matters necessary for calculation of necessary expenses, such as the scope of actual transaction price required for acquisition and gift tax amount shall be prescribed by Presidential Decree.

Article 162-2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 18173 of Dec. 30, 2003)

(5) The term "cases prescribed by Presidential Decree" in Article 96 (1) 7 of the Act means cases where one household possessing three or more houses transfers the house (including the land appurtenant thereto).

§ 163. Necessary expenses of transferred property

(9) In the application of the provisions of Article 97 (1) 1 (a) (proviso) and (b) of the Act to the assets inherited or donated, the value appraised under the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the date of commencing an inheritance or of donation shall be deemed the actual transaction value at the time of its acquisition: Provided, That in the case of the land inherited or donated before the individual officially announced values are publicly announced on August 30, 1990, the larger amount between the value appraised under the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the date of commencing an inheritance or of donation, and

C. Facts and determination

According to Articles 94(1) and 96(1)7 of the former Income Tax Act and Article 96(1)1(a)1(c) of the former Enforcement Decree of the Income Tax Act and Article 162-2(5) of the former Enforcement Decree of the Income Tax Act, where one household possessing three or more houses transfers a house, the transfer value and acquisition value of the assets shall be calculated based on the actual leisure price. In this case, if it is impossible to confirm the actual transaction price at the time of acquisition, the amount calculated by applying the transaction example, appraisal value, or conversion value in sequential order as prescribed by the Presidential Decree may be the acquisition value. Meanwhile, Article 97(5) of the former Income Tax Act provides that the necessary matters concerning the calculation of the actual transaction price required for acquisition, such as the scope of the actual transaction price required for acquisition, the calculation of gift tax amount equivalent, etc. shall be prescribed by the Presidential Decree. In applying the proviso of Article 97(1)1(a) of the Act to the inheritance or donation property, the amount appraised under the provisions of

In full view of the purport of the above provisions, in a case where the transferred asset is to be calculated based on the actual transaction value as it falls under a house transferred by three houses of one household and thus, in accordance with the proviso of Article 97 (1) 1 (a) of the former Income Tax Act, if it is impossible to confirm the actual transaction value required for the acquisition, it shall be calculated based on the transaction example, appraisal value, or conversion value as prescribed by the Presidential Decree. However, in a case where the transferred asset is to be calculated based on the actual transaction value as it falls under a high-priced house, etc., a separate provision is required as to the actual transaction value at the time of acquisition, since there is no actual transaction value at the time of acquisition, and accordingly, in a case of the asset inherited or donated under the provisions of this case, the value assessed pursuant to the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the date

Therefore, the provision of this case cannot be deemed as the provision of Article 97 (5) of the former Income Tax Act, which delegates necessary matters concerning the calculation of necessary expenses such as the scope of "the actual transaction price required for the acquisition" to be prescribed by the Presidential Decree, and which is the provision of invalidity without delegation of the mother law, where the assets inherited or donated are transferred, the value corresponding to the tax base of inheritance tax or gift tax (the value assessed pursuant to Articles 60 through 66 of the Inheritance Tax Act as of the date of commencement of inheritance or donation) may be recognized as necessary expenses for the relevant assets when calculating transfer margin, and the imposition of transfer income tax may prevent tax evasion or double taxation only when the transfer value exceeds the above value (see, e.g., Supreme Court Decision 2006Du1326, Oct. 26, 2007).

3. Conclusion

Therefore, the plaintiff's claim of this case premised on the invalidity of the provision of this case is dismissed as it is without merit. It is so decided as per Disposition.