Busan District Court 2012Guhap5405 (Law No. 19, 2013)

Seoul High Court Decision 201Da3723

Temporary 3 Whether a house is exempt from taxation when it is transferred

Article 155 (1) of the Enforcement Decree of the Income Tax Act applies to cases where two houses are temporarily held, and the plaintiff has three houses for one household at the time of the transfer date of the instant house, and does not fall under the application of the above provision, and it is not allowed to apply the above provision by analogy under the principle of strict interpretation. Therefore, the plaintiff's assertion on this part

2013Nu1102 Revocation of disposition of imposing capital gains tax, etc.

United Kingdom A

Head of Eastern Tax Office

Busan District Court Decision 2012Guhap5405 Decided April 19, 2013

July 3, 2013

July 24, 2013

1. The plaintiff's appeal is dismissed.

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

1. Purport of claim

The imposition of the capital gains tax belonging to the year 201 on August 8, 2012 by the defendant against the plaintiff on August 8, 2012 is revoked, respectively.

2. Purport of appeal

Of the judgment of the first instance court, the part against the Plaintiff seeking revocation as set forth below shall be revoked. The Defendant revoked the imposition disposition of the capital gains tax OOOOOO on August 8, 2012 against the Plaintiff (the court of the first instance rendered a ruling dismissing a lawsuit against a claim for revocation of imposition of local income tax, but the Plaintiff did not object thereto, so the scope of the judgment of this court is limited to the claim for revocation of imposition of capital gains tax).

1. Details of the disposition;

The court's explanation on this part is the same as the corresponding part of the judgment of the first instance, and thus, it is citing this in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 11420 of the Civil Procedure Act.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The purpose of the Income Tax Act, which provides for a multi-household with respect to a single-household income tax, is to promote a taxation-oriented balance by absorbing gains from real estate speculation as taxes and block real estate speculation. Meanwhile, the Income Tax Act delegates specific taxation requirements to the Enforcement Decree of the Income Tax Act, which is a subordinate statute. The delegated Enforcement Decree of the Income Tax Act provides that capital gains tax shall be imposed on cases where three houses are temporarily acquired in the process of acquiring a substitute house for the purpose of migration, not for the purpose of speculation, unlike the legislative intent of the Income Tax Act, which ultimately brings about the expansion of the scope of taxation in subordinate statutes, and ultimately violates the tax principle

2) Meanwhile, in the process of selling the instant apartment and acquiring BB apartment, a substitute house, for the relocation of residence, the Plaintiff was in the status of 10 days for 10 days, and the Plaintiff did not acquire BB apartment for the purpose of speculation, and thus, at the time of transferring the instant apartment, the Plaintiff could not be deemed to have actually possessed 3 houses. Nevertheless, the Defendant’s disposition based on the premise that the Plaintiff is a 3rd house owner for one household is illegal

3) In addition, it would be contrary to the principle of excessive prohibition to exclude a person who has become three houses per household for several days in the course of moving a residence from special deduction for long-term holding, deeming him as subject to capital gains tax and tax rate, thereby infringing on the freedom of movement guaranteed by the Constitution.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Determination on the first argument of the Plaintiff

In light of the principle of no taxation without law, or the requirements for tax exemption or tax exemption, the interpretation of tax laws shall be interpreted as the text of the law, barring special circumstances, and it shall not be permitted to expand or analogically interpret without reasonable grounds. In particular, it accords with the principle of fair taxation to strictly interpret that the provision is clearly preferential in terms of the requirements for tax exemption or exemption (see, e.g., Supreme Court Decision 2003Du7392, May 28, 2004).

Article 95(1) of the former Income Tax Act (amended by Act No. 10854, Jul. 14, 201; hereinafter “the Act”) provides that “The amount of capital gains tax shall be calculated by deducting necessary expenses under Article 97 from the total amount of capital gains under Article 94 and subtracting the special deduction for long-term holding from such amount.” Articles 95(2) and 104(1)4 of the Act provide that housing falling under three or more houses for one household prescribed by Presidential Decree shall be excluded from the special deduction for long-term holding.” Article 167-3(1) of the Enforcement Decree of the Act (amended by Presidential Decree No. 22977, Jun. 24, 201; hereinafter “Enforcement Decree”) provides that “Housing falling under three or more houses for one household prescribed by Presidential Decree and falling under one of the following three or more houses owned by one household shall not be subject to strict interpretation of Article 104(1)4 of the Act, and thus, housing falling under one of the first three or more houses owned for the purpose of Article 16-17(3(1) of the Enforcement Decree.

2) Judgment on the second argument by the Plaintiff

In a case where a house is transferred and another house is inevitably owned in the process of acquiring a substitute house for the purpose of relocation, and it cannot be deemed that the said house had three houses actually, it cannot be deemed that it constitutes a taxable object among three houses for one household under the Income Tax Act (see Supreme Court Decision 2009Du13788, Dec. 24, 2009).

In light of the following circumstances, the remaining payment date of the apartment house sold by the Plaintiff was about 10 days later than the remaining payment date of BB apartment house purchased by the Plaintiff’s wife, and the Plaintiff became a temporary holder of three apartment houses for the above period. However, the Plaintiff and its wife purchased B apartment first under the circumstance that it cannot be known that the apartment house was sold at any time and at any time, and the sales contract of the apartment was concluded about 45 days later than the BB apartment purchase contract. ② The remaining payment date of the apartment house was not changed due to the changes in the sales contract after the conclusion of the apartment sales contract of this case or the remaining payment date was not inevitable due to the reasons that the apartment house was acquired by the Plaintiff’s replacement of the apartment house in this case. ③ Even if there was no evidence to acknowledge that there was an inevitable circumstance that the Plaintiff had been a director of the apartment house in this case, other than the Plaintiff’s remaining payment date, in light of the following circumstances, the Plaintiff did not appear to have been able to acquire the apartment house in this case’s remaining payment date.

Therefore, the second argument of the plaintiff is without merit.

3) Judgment on the third assertion by the Plaintiff

As seen earlier, Article 167-3(1) of the Enforcement Decree of the Income Tax Act does not provide for the exception of cases where three or more houses temporarily exist for one household while defining three or more houses for one household. However, in cases of two houses for one household, the provision that does not recognize the special deduction for long-term possession (Articles 95(2) and 104(1)6 of the Act, and Article 167-5(1) of the Enforcement Decree of the Income Tax Act), which provides that even if three houses for one household are three houses, general tax rate is applied pursuant to the provision that temporarily excludes heavy taxation against multi-households and tax rates (Article 104(6) of the Act), and that only the special deduction for long-term possession (Article 95(2) and Article 104(1)4 of the Act, Article 167-3(1) of the Enforcement Decree of the Income Tax Act, which provides that the special deduction for long-term possession of one house for one household temporarily becomes 12 houses for the purpose of acquiring them, it is difficult to be determined as 198.

Therefore, the plaintiff's assertion on this part is without merit.

3. Conclusion

Therefore, the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.