Whether the income from the transfer of real estate is business income or capital gains under the Income Tax Act shall be determined in consideration of all circumstances such as the transferor's acquisition of real estate and current status.

Since it is reasonable to see that the act of transferring apartment units continuously and repeatedly with multiple apartment sales transactions for the purpose of apartment sales marginal profit is made as part of "real estate sales business", the income from such act also constitutes business income under the Income Tax Act.

Article 4 of the Income Tax Act shall be classified.

2018Guhap2147 The revocation of Disposition of Imposition of Value-Added Tax, etc.

SAA

지지지지

June 22, 2018

August 10, 2018

1. All of the plaintiff's claims are dismissed.

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

Cheong-gu Office

Value-added tax shall be revoked in total by the Defendant on January 11, 2017, the total amount of value-added tax of 2011 and 22 years from 2012 to 2013 and the total amount of value-added tax of 14,771,790 won, value-added tax of 2 years from 2011 to 2013 against the Plaintiff on January 11, 2017, value-added tax of 15,117,740 won, value-added tax of 60,043,310 won, value-added tax of 2 years from 2013 and value-added tax of 14,771,774,630 won, and the total amount of value-added tax of 14,704,630 won from 201 to 305,201, 2031, 2039, 2013

1. Details of the disposition;

가. 원고는 별지 1 기재와 같이 미분양아파트인 ○○ ○○구 ○○동 소재 '◎◎◎◎'아파트를 2010. 9. 24. 20세대, 2011. 1. 28. 2세대(이하 '이 사건 아파트'라 한다)를 취득한 후 2011년 2세대, 2012년 12세대, 2013년 8세대를 각 양도하면서 조세특례제한법 제98조의5에 따라 양도소득세를 100% 감면 신고하였다.

B. From December 8, 2016 to February 13, 2017, the Commissioner of the National Tax Service conducted an individual integration investigation on the Plaintiff (from December 14, 2016 to January 2, 2017) and notified the Defendant that the Plaintiff engaged in real estate sales business, including continuous and repeated acquisition and transfer of a large number of real estate during the period from 2010 to 2013.

C. Accordingly, the Defendant imposed the value-added tax on January 11, 201, and the global income tax on March 16, 2017 on the Plaintiff, respectively, on the following grounds that the Plaintiff engaged in real estate sales for profit-making purposes and transferred 22 households’ apartment houses between 2011 and 2013 (hereinafter “instant disposition” (in addition to the imposition of value-added tax and global income tax on the Plaintiff) (hereinafter “instant disposition”).

D. On September 11, 2017, the Plaintiff dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on September 11, 2017, and the Tax Tribunal rendered a decision on January 30, 2018 that the instant disposition is not subject to penalty tax and that the remaining appeal is dismissed.

E. The Defendant revoked the penalty tax according to the decision of the tax judgment and rendered a decision of the reduction of penalty as follows.

[Ground of recognition] Unsatisfy, Gap evidence 1 to Gap evidence 3 (including satisfy number), the purport of whole pleadings

2. The plaintiff's assertion and judgment

A. The plaintiff's assertion

1) The Plaintiff’s acquisition of the instant apartment for the purpose of housing rental profit in response to the government’s policy for resolving unsold apartments, and then sold the apartment after running a rental business, does not constitute a continuous and repeated real estate sales activity for business income.

2) On July 3, 2014, the Defendant requested the Plaintiff to submit explanatory materials on the grounds that the Plaintiff did not file a value-added tax return on the instant apartment transfer, and notified the Plaintiff of taxation to register the Plaintiff as a real estate sales business and impose value-added tax ex officio. The Plaintiff rendered a prior notice of taxation that the instant apartment transfer constitutes capital gains without falling under a defect in the request for pre-assessment review. The Defendant’s reversal of the instant disposition and the instant disposition are illegal dispositions contrary to the principle of trust and good faith, protection of trust, and binding force of the pre-assessment review decision.

3) The Defendant had already conducted a tax investigation on the transfer of apartment units of this case in writing as a request for explanatory materials, and thereafter, the Defendant’s act of conducting a tax investigation on the same taxable period and items as the higher administrative agency, constitutes a duplicate tax investigation prohibited under Article 81-4(2) of the Framework Act on National Taxes, and thus, is unlawful.

B. Relevant statutes

Attached Form 2 shall be as listed in attached Table 2.

C. Determination

1) Determination on the first argument

A) The business income subject to income tax refers to the income accrued from a business, which is a social activity that is continuously and repeatedly conducted on an independent position for profit-making purposes (see, e.g., Supreme Court Decisions 2010Du8430, Sept. 9, 2010); and whether the income from the transfer of real estate is a business income or capital gains under the Income Tax Act shall be determined according to ordinary social norms, taking into account whether the transfer is for profit-making purposes and whether the transfer is made in light of the transferor’s real estate acquisition and holding status, whether the transfer is made, the scale, frequency, mode, the other party, etc. of the transfer; and in making such determination, the determination shall take into account not only the transfer of real estate, but also all the circumstances before and after the transfer of the real estate held by the transferor (see, e.g., Supreme Court Decisions 2008Du21768, Jul. 22, 2010; 2014Du5385, Jul. 24, 2014).

B) In light of the following circumstances, it is reasonable to view that the Plaintiff’s act of transferring the apartment of this case constitutes a business income under the Income Tax Act, and the transfer of the apartment of this case is subject to the value-added tax, since it is reasonable to view that the Plaintiff’s act of transferring the apartment of this case constitutes a business income under the Income Tax Act, since it is not simply a acquisition of the apartment of this case for the purpose of lease income, but continuously repeats the transaction of the apartment of this case in order to obtain profits by selling it at a proper time after purchasing it.

(1) On September 24, 2010 and January 28, 2011, the Plaintiff realized the gains on transfer equivalent to approximately KRW 1.6 billion by selling approximately KRW 5.8 billion in a short period from December 201 to December 2013 after acquiring a discounted total of 22 households of the instant apartment at approximately KRW 4.2 billion.

(2) The Plaintiff acquired 88 real estate including the instant apartment from 2000 to 2014, and subsequently transferred 61 real estate, and frequently performed real estate transactions.

(3) 원고가 운영하는 주식회사 ◇◇은 원고(40%), 박BB(25%), 공CC(25%) 등이 출자한 법인으로 이 사건 아파트와 동일한 아파트를 83세대 취득하고 82세대를 양도한 바 있으며, 박BB과 공CC 또한 같은 아파트를 각 20세대, 12세대를 취득하여 그 중 각 20세대, 8세대를 양도하고 양도소득세를 신고하였으나, ▼▼세무서장은 위 소득을 부동산매매업자의 사업소득으로 보아 종합소득세 등을 과세하였으며,

ParkB and GongCC, dissatisfied with this, filed a suit for revocation of taxation disposition with the △△ District Court △△△△△△△△, but the above court dismissed their claims on January 19, 2018, and is still pending in the appeal trial (Yeong High Court △△△△△△△).

(4) The Plaintiff operates a newly built-sale corporation from 2002 to ever, and the status, method, etc. of real estate sales in the status of representative directors, etc. of a number of corporations for real estate sales since 2010 (△△ corporation, △△△ corporation, △△ corporation, etc.).

I seem to have been well aware of (e.g. omission)

(5) The present lease status of the apartment of this case is as follows (unit: per annum, per million won), and most of the rental periods are short-term of not more than two years, and no additional lease contract was concluded after the expiration of the lease period. The plaintiff did not make business registration regarding the lease of the apartment of this case.

(Omission of Table)

(6) The Plaintiff asserted that it acquired the instant apartment for the purpose of lease, but did not have registered as a real estate rental business operator, and did not report the rental income while leasing the instant apartment. On July 3, 2014, the Plaintiff paid the comprehensive income tax on the rental income on July 24, 2014, after being informed the Defendant of the submission of the data on the explanation of the value-added tax on the apartment, and submitted the revised tax base return on October 29, 2014 after receiving the Defendant’s prior notice of taxation on October 7, 2014.

2) Determination on the second argument

A) A decision on the claim for pre-assessment review, separate from the de facto binding force on the tax authority, is a system that seeks to prevent the taxpayer from filing a prior objection to the tax assessment that was notified prior to the determination of the amount of tax at the pre-assessment stage, and thus, is not a legally binding act, as it is an act of the tax authority prior to the determination of the amount of tax. Accordingly, the Plaintiff’s assertion on a different premise is without merit.

B) Article 15 of the Framework Act on National Taxes provides for the principle of trust and good faith. In general, in order to apply the principle of trust and good faith to the tax authority’s acts in tax and legal relations, the tax authority must issue a public opinion list that is the object of trust to the taxpayer. The tax authority’s explanation of opinion is justifiable, and there is no cause attributable to the taxpayer. The taxpayer must act in trust to the taxpayer, and the tax authority should make a disposition contrary to the above opinion list, thereby infringing the taxpayer’s interest (see, e.g., Supreme Court Decision 2007Du7741, Oct. 29, 2009). The burden of asserting and proving the above requirement lies on the taxpayer (see, e.g., Supreme Court Decision 91Nu9824, Mar. 31, 1992). Meanwhile, the principle of trust and good faith and protection should be applied to the tax authority’s acts that are reasonable and 2010 taxpayers’ interest through the principle of trust and good faith.

With respect to the instant case, it cannot be deemed that there was a public opinion expressed by the Defendant that the instant disposition will not be imposed again even if any error or omission of the amount of tax on the transfer of the instant apartment was discovered at the time, or that the Plaintiff operating a real estate sales company, etc. has formed a trust worth protecting the Plaintiff, on the grounds that the instant disposition did not constitute a violation of the principle of trust and good faith or trust protection.

3) Judgment on the third argument

A) Facts of recognition

In full view of Gap evidence No. 4, Gap evidence No. 5, Eul evidence No. 1, Eul evidence No. 4 and the purport of the whole pleadings, the following facts are recognized:

(1) On July 3, 2014, the Defendant sent a notice of submission of the value-added tax explanatory data on the transfer of the instant apartment to the Plaintiff in the process of processing transfer income tax data reported by the Plaintiff as follows.

(Omission of Table)

(2) On July 30, 2014, the Plaintiff submitted the current status of the acquisition and transfer of the instant apartment and the value-added tax explanatory data upon the transfer of the instant apartment.

(3) After October 7, 2014, the Defendant: (a) deemed the income accrued from the sale of the instant apartment as the business income of the real estate sales businessman and notified the Plaintiff of the pre-announcement of taxation to register the Plaintiff ex officio as the real estate sales businessman; (b) the Plaintiff filed a request for pre-assessment review on October 21, 2014; and (c) on November 20, 2014, the Defendant decided to accept the Plaintiff’s claim on the ground that the said income constituted capital gains from the sale of assets of the housing rental business operator.

(4) According to the data on suspicion of tax evasion adopted and published by the National Tax Service at the main office of the National Tax Service, the Plaintiff was selected as a person subject to investigation pursuant to the tax evasion (in spite of apparent business income earner engaging in real estate sales business, by applying 100% reduction and exemption following the transfer of housing unsold in lots). From December 8, 2016 to February 13, 2017, the instant apartment sales investigation was conducted, and the income from the instant apartment sales was deemed as having been the business income of the real estate sales businessman and notified the Defendant of the relevant taxation data, and the Defendant accordingly, issued the instant disposition against the Plaintiff.

B) Determination

(1) As a type of an administrative investigation to realize the State’s right to taxation, a tax investigation refers to an act of questioning taxpayers to determine or correct their tax base and amount of national tax and inspecting books, documents and other things or ordering them to submit them. In the event that the tax authority conducts a tax investigation to impose taxes, a taxpayer or a person, etc. who is deemed to have transactions with the taxpayer (hereinafter “taxpayer, etc.”) bears the legal obligation to answer questions for the collection of taxation data and to undergo inspections. Meanwhile, repeated tax investigations on the same item and taxable period may seriously infringe on taxpayers’ freedom of business or legal stability and may lead to abuse of the authority to conduct a tax investigation. In light of the nature and effect of such tax investigation, the purport of prohibiting duplicate tax investigations, etc., it is difficult to view that an act of a tax official’s duty to undergo a tax investigation constitutes an act of simple investigation or re-audit prohibited by the National Tax Service’s order even if it actually affects taxpayers’ freedom of business, etc., and thus, such act constitutes an act of tax investigation or re-audit prohibited.

(2) Meanwhile, Article 81-2(2)1 of the Framework Act on National Taxes provides that "where a taxpayer asks questions to determine or correct his/her tax base and amount of tax, or inspects or investigates the relevant account books, documents or other things or orders the submission thereof (including the investigation of tax offence under the Procedure for the Punishment of Tax Evaders Act)," "tax investigation" means an act of surveying, investigating or investigating the taxpayer or the taxpayer who is deemed to have transactions with the taxpayer after giving notice of tax investigation or tax investigation in order to correct or correct accurate tax base and amount of tax on the taxpayer's tax base and amount of tax in accordance with the above tax investigation plan, and Article 3 subparag. 1 of the Regulations provides that "if there is no serious correction or correction of tax base and amount of tax, etc. or any error in the return is found in the pertinent tax investigation or tax investigation by the taxpayer's office, place of business, factory or address, etc." (Article 81-2(2)2 of the Income Tax Act provides that "where the taxpayer or the taxpayer concerned is found to have any error in the tax return or tax investigation, etc."

(3) In addition, in order to view it as a field investigation as a tax investigation to which the principle of prohibition of double tax investigation is applied, the purpose of taxation should be (the objective requirement), the taxpayer or a person who is deemed to have a transaction with the taxpayer, etc. should be the office, place of business, factory, or domicile of the taxpayer, etc. (the location requirement), and the taxpayer should be asked about the taxpayer, etc. over a considerable period of time (the location requirement), and inspect and investigate books, documents, articles, etc. for a given period of time (the period and act requirements), and such questions or books, etc. should be suspected of having relations or relevance with the determination or correction of the tax base and amount (the requirement

It should be sought.

(4) Regarding the instant case, the following circumstances, which are acknowledged comprehensively based on the aforementioned evidence and the overall purport of the pleadings, i.e., ① there is no specific calculation data to determine or correct the tax base or tax amount (tax data amount, etc.), ④ there is no specific data to determine or correct the tax base or tax amount on the ground that the sales of the instant apartment are transfer income; ② there was no additional data to collect data from the Plaintiff after the guidance to submit the above explanatory data; ② there was no direct contact with the Plaintiff’s office; ③ there was no prior notice for the commencement of the tax investigation at the time of the guidance to submit the explanatory data; ③ the submission of explanatory data is merely a request for cooperation to confirm whether the tax return and payment have been faithfully made by clarifying transaction relations such as unclear real estate sales businessman; ④ It is difficult to deem that there was a possibility that the right to submit the above explanatory data might be abused without any infringement of freedom of business or private life, etc.

3. Conclusion

If so, the plaintiff's claim of this case is without merit, and it is dismissed. It is so decided as per Disposition.