[1] In the case of transfer by exchange, whether the transfer value should be calculated based on the transferred real estate (affirmative)

[2] Whether the amount of transfer income tax based on the standard market price exceeds the transfer margin based on the actual transaction price (negative), and whether the transfer margin based on the standard market price can exceed the actual transfer value (negative)

[3] The meaning of the actual transaction price and whether the value assessed by retroactive market price appraisal is included in the actual transaction price (negative)

[4] The case where the actual transfer value can be verified in the transfer by exchange, and the method of calculating the actual transfer value in that case

[1] In the event that the transfer value is calculated by the standard market price for the transfer of land by exchange, such standard market price shall be based on the standard market price for the pertinent real estate transferred by exchange, and it shall not be based on the standard market price for the real estate newly acquired by exchange.

[2] In a case where transfer margin is calculated based on the standard market price, the tax amount calculated based on the principle of substantial no taxation without law or prohibition of excessive taxation under the Constitution cannot exceed the scope of transfer margin based on the actual transaction price, and the transfer margin calculated based on the standard market price shall not exceed the actual transfer value.

[3] The term "real value of transfer" refers to the value received by the transferor at the time of transaction for the transfer of the pertinent asset, which is the value objectively recognized by sales contract and other documentary evidence, and the value identified by the market price appraisal retroactively at the time of transfer after the fact does not constitute that.

[4] Where a transaction subject to the transfer income tax is a simple exchange, the actual transfer value shall not be confirmed. However, in the case of an exchange accompanied by the procedure for settlement of the difference in the market price of the object to be exchanged, the actual transfer value shall be confirmed. In this case, where the difference between the appraised value of the object to be acquired by the owner of the object to be exchanged and the appraised value of the object to be acquired by the exchange in cash is paid in cash, the actual transfer value of the object to be acquired by the exchange shall be the sum of the appraised value of the object to be acquired by the exchange, and where the difference between the appraised value is renounced or donated, the actual transfer value of the object to be acquired by the exchange shall be

[1] Article 23 (4) of the former Income Tax Act (amended by Act No. 4661 of Dec. 31, 1993) / [2] Article 59 of the Constitution of the Republic of Korea, Article 14 (2) of the Framework Act on National Taxes, Article 7 (2), Article 23 (4) (see current Article 96), Article 45 (1) 1 (a) (see current Article 97 (1) 1 (a)) of the former Income Tax Act / [3] Article 23 (4) (see current Article 96 of the Income Tax Act) of the former Income Tax Act (amended by Act No. 4661 of Dec. 31, 1993), Article 14 (2) of the former Income Tax Act, Article 7 (2), Article 23 (4) of the former Income Tax Act (amended by Presidential Decree No. 46661 of Dec. 31, 194) of the former Income Tax Act (see current Article 164 (166 (14) of the former Income Tax Act) of Dec. 4, 964)

[1] Supreme Court Decision 91Nu1424 delivered on November 12, 1991 (Gong1992, 145), Supreme Court Decision 94Nu4127 delivered on June 10, 1994 (Gong1994Ha, 1984) / [2] Supreme Court Decision 87Nu483 delivered on December 22, 1987 (Gong198, 359), Supreme Court Decision 92Nu186 delivered on October 9, 1992 (Gong192, 3165), Supreme Court Decision 92Nu1532 delivered on March 26, 1993 (Gong193, 193; 194Nu29497 delivered on May 10, 1996 (Gong29494, Nov. 26, 194)

Ansan Co., Ltd (Attorney Kim Jong-he et al., Counsel for defendant-appellant)

The Head of the Maternization Tax Office

Supreme Court Decision 94Nu4127 delivered on June 10, 1994

Seoul High Court Decision 94Gu20091 delivered on November 28, 1995

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. In the event that the transfer value is calculated based on the standard market price for the transfer of land by exchange, the standard market price shall be based on the standard market price for the real estate in question transferred by exchange, and it shall not be based on the standard market price for the real estate newly acquired by exchange (see, e.g., Supreme Court Decisions 91Nu1424, Nov. 12, 191; 91Nu1424, Nov. 12, 1991;

2. Each provision of Articles 23(4)1 and 45(1)1(a) of the former Income Tax Act (amended by Act No. 4661 of Dec. 31, 1993) and Article 170(4)3 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 1467 of Dec. 31, 1994) shall be interpreted to the purport of recognizing an exception to the principle of substantial taxation as it declared that the transfer of assets is converted from the existing taxation principle to the standard market price taxation principle in calculating the transfer margin. Thus, in case of transfer of assets, in calculating the transfer margin or the final return of tax base, if evidential documents verifying the actual transaction price are submitted, the transfer margin shall be calculated based on the actual transfer and acquisition price, and in case where evidential documents are not submitted, the transfer margin shall be calculated based on the standard market price, and in case where transfer margin or the standard market price should be calculated based on the standard market price, the amount of transfer margin shall not exceed 196Nu 19684.2, 198.2.298.3

In this case, the term "actual transfer value" means the value received by the transferor at the time of transaction for the transfer of the relevant asset, which is objectively recognized by the sale contract and other documentary evidence, and it does not correspond to the value determined by the market price appraisal retrospectively after the time of transfer. Thus, if a transaction subject to the transfer income tax is a simple exchange, the actual transfer value cannot be confirmed. However, if the market price appraisal of the object subject to the exchange is accompanied by the procedure for settlement of the difference of the appraised value, the actual transfer value can be confirmed (see, e.g., Supreme Court Decisions 84Nu407, Nov. 27, 1984; 92Nu1472, Feb. 12, 193; 94Nu6840, Dec. 9, 1994; if the owner acquires the object through the exchange of the object through the exchange of the object, the difference between the real transfer value and the appraised value in cash and the appraised value can be determined by the actual transfer value.

According to the records, the plaintiff, who is the founder of a private teaching institute in the territory of the non-party 1 and 2 of this case, intends to exchange the land of this case 3, which is the basic property for education owned by the above school foundation. Article 28 (1) of the Private School Act provides that when the school foundation intends to exchange its basic property, it shall obtain permission from the competent agency. In the case of exchange, Article 11 (1) 2 of the Enforcement Decree of the Private School Act provides that the appraisal report of both properties shall be attached to the application for permission under Article 28 of the above Act. As of September 18, 1991, the above school foundation requested the Korea Appraisal Board to appraise the above land as of September 1, 1991. Since the Korea Appraisal Board concluded the exchange of the above land 838,80,00,000 won (the officially announced land price 216,940,000 won) with the above school foundation's real value of the land, the appraisal price of the above land 3,130,500,500 won

In the plaintiff's assertion that the transfer income tax should not be imposed because the plaintiff obtained any income from the exchange of this case, it shall be deemed that the above assertion is included in the plaintiff's assertion to the same purport (it shall not be known as to whether gains from transfer actually accrue since the plaintiff did not assert or prove the actual acquisition value of the land Nos. 1 and 2 of this case, or whether the amount calculated according to the standard market price exceeds the gains from transfer). The court below determined that the disposition imposing the transfer income tax of this case is legitimate, which calculated the gains from transfer according to the standard market price of the land transferred through exchange without examining and determining this point. Thus, the court below erred in the misapprehension of the legal principles as to the principle of no taxation without the law or the principle of no taxation without the excessive restriction under the Constitution, or in the omission of judgment as to the plaintiff's argument, which affected the conclusion of the judgment. Thus, there is a reason

3. Therefore, the lower judgment is reversed and the case is remanded to the lower court. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeong Ho-ho (Presiding Justice)