Seoul Administrative Court 2007Gudan1241 (208.01)

Whether a final return based on the standard market price is valid after receipt of notice of taxation in the actual transaction price.

Since the tax authority confirmed the actual transaction price after filing a preliminary return of capital gains tax based on the actual transaction price, even if the final return was again filed based on the standard market price, the final return is not effective, and the disposition corrected the capital gains tax due to the actual transaction

The contents of the decision shall be the same as attached.

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposition of KRW 83,505,960 on June 1, 2005 against the Plaintiff was revoked.

Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

The court's reasoning in this part is the same as the corresponding part of the judgment of the court of first instance, and thus, this part is cited in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The court's reasoning in this part is the same as the corresponding part of the judgment of the court of first instance, and thus, this part is cited in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

B. Relevant statutes

The court's explanation in this part is the same as the corresponding part of the judgment of the court of first instance, and thus, it refers to Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

C. Determination

The legislative intent of the proviso of Article 114 (4) of the former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005) is to determine that, in cases where a taxpayer transfers real estate and makes a preliminary return or a final return on tax base of transfer income based on the actual transaction price different from the facts and then the actual transaction price is confirmed by an investigation by the tax authority, a taxpayer is able to again pay tax according to the standard market price and thereby, in order to correct moral hazard and unfairness, the tax authority has the tax authority correct the tax base of transfer income and the tax amount by using the verified value as the transfer value or acquisition value. Therefore, in cases where the tax authority confirms the actual transaction price pursuant to the above proviso, it shall be deemed that the provisions of the above simple provision are satisfied. Accordingly, even if a taxpayer who has reported a actual transaction price differently from the fact makes a final return on tax base of transfer income by the standard market price before the final return on tax base of transfer income was made,

In this case, since the Plaintiff confirmed the actual transaction value after making a preliminary return of tax base of transfer income based on the actual market price different from the fact, even if the Plaintiff again made a final return of transfer income based on the standard market price before the final return of tax base, this final return does not take effect, and the Defendant’s disposition of this case is lawful to correct the transfer income tax by using the confirmed value as the transfer value (as long as the final return was made within the final return within the final return period, the Plaintiff cited the Supreme Court Decision 2006Du1609 Decided May 29, 2008 on the grounds of the Plaintiff’s assertion that the tax base and tax amount of the preliminary return based on the actual transaction price will be extinguished by absorbing the tax base and tax amount determined as the standard market price by the final return of tax base. However, the above judgment differs from this case where the preliminary return based on the actual transaction price

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and since the judgment of the court of first instance is unfair with different conclusions, the defendant's appeal is accepted, and the judgment of the court of first instance is revoked, and the plaintiff's claim is dismissed as per Disposition.