Where a registration of transfer of ownership is made before the price is settled, the time of transfer of assets.

The date of transfer shall be the date the price of the relevant assets is settled, and where the registration for transfer of ownership is made before the price is settled, the date of receipt of the registration recorded in the register shall be deemed the

2015Gudan521 Revocation of Disposition of Imposing capital gains tax

Section AA

Head of the Pakistan Tax Office

November 18, 2015

January 20, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 357,426,30 (including additional tax) for the Plaintiff on April 16, 2014 shall be revoked.

1. Details of the disposition;

A. On July 27, 2011, the Plaintiff owned forest land (hereinafter “instant land”) including OOOO-OOO, OOOO2,814,350 won on the ground of expropriation in the Korea Land and Housing Corporation (hereinafter “LH”) according to the OOO planning zone housing development project. However, on September 30, 201, the Plaintiff made a preliminary return and payment of the transfer value at KRW 168,76,260,260 of capital gains tax by using the above expropriation amount, acquisition value as KRW 773,00,00,000, and other necessary expenses as KRW 3,247,54,467.

C. On September 24, 2013, the Defendant denied the total amount of KRW 3,247,544,467 as reported by the Plaintiff and notified the Plaintiff of KRW 1,039,758,90 for the transfer income tax reverted to year 2011.

D. The Plaintiff filed an objection on December 23, 2013. According to the re-audit decision, the Defendant: (a) acknowledged that evidence among other necessary expenses claimed by the Plaintiff was verifiable; (b) reduced capital gains tax of KRW 682,332,600; and (c) notified the Plaintiff of KRW 357,426,300 for capital gains tax of KRW 20,228,649,00 for the year 201 (hereinafter “instant disposition”).

E. The Plaintiff appealed and filed an appeal with the Tax Tribunal on August 18, 2014, but was dismissed on December 8, 2014.

[Ground of recognition] Unsatisfy, Gap evidence 1, Eul evidence 1, Eul evidence 1 (including each number; hereinafter the same shall apply), the whole purport of pleading

2. Determination on the legitimacy of the disposition

A. Summary of the plaintiff's assertion

After the designation and public notice of housing site development was made in the first place of the land of this case, the plaintiff failed to conduct all development projects (in particular, selling or leasing logistics warehouses, etc. constructed on the land of this case for lease on the land of this case), and only spent considerable interest costs on the borrowed amount from financial institutions to cover construction costs. As such, since the land of this case was seriously obstructed the exercise of ownership from September 21, 2006, which is the date the designation and public notice of housing site development was given, it shall be deemed that LH was actually transferred at that time (On the other hand, if the transfer date is considered to be September 21, 2006, the transfer value and acquisition value under the Restriction of Special Taxation Act, which was enforced at that time, should be calculated based on the standard market price, even though the defendant calculated the transfer value and acquisition value on the premise that the transfer date of the land of this case is the date of receipt of the transfer registration of ownership, as the actual transaction price). Accordingly, the defendant's disposition of this case should be revoked.

B. Determination

Under the principle of no taxation without law, the requirements for taxation, non-taxation, or tax reduction or exemption should be interpreted in accordance with the text of the law, unless there are special circumstances. According to Article 98 of the former Income Tax Act (wholly amended by Act No. 10625, May 2, 201) and Article 162 (1) of the former Enforcement Decree of the Income Tax Act (wholly amended by Presidential Decree No. 22950, Jun. 3, 2011), the time of transfer of assets shall, in principle, be the date of settlement of the price of the assets. In the case of the registration of transfer before the settlement of the price, the date of receipt of the registration (Article 162 (1) 2 of the former Enforcement Decree) recorded on the register if the date of settlement is unclear, the date of receipt of the price shall be the date of transfer (Article 162 (1) 1 of the former Enforcement Decree); Article 162 (1) of the former Enforcement Decree of the Income Tax Act (wholly amended by Presidential Decree No. 20684, Sep. 16, 29, 20, 20064).

On the other hand, since the plaintiff's land in this case falls under the case of expropriation by public works, ① the date of liquidation of the price for the land, ② the date of commencement of expropriation or the date of the receipt of the transfer registration of ownership, whichever comes earlier, and according to the evidence and evidence Nos. 2 and 3 above, the date of settlement of the price to the plaintiff (the date of full payment of the compensation for expropriation) shall be October 5, 201, and the date of commencement of expropriation shall be October 9, 201, which is the date of commencement of expropriation determined by the Central Land Expropriation Committee's decision, and the date of receipt of the transfer registration of ownership shall be recognized respectively as the fact on July 27, 201, which is the date of receipt of the transfer registration of ownership, whichever comes earlier, as of July 27, 2011. The defendant's disposition in this case is legitimate.

Accordingly, the Plaintiff asserts that the transfer date of September 21, 2006 (the date of designation and public notice of housing site development) should be regarded as the date when the freedom to exercise land ownership is de facto restricted. However, such assertion is not acceptable as it is against the legislative text of the income tax law.

3. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.