[1] In a case where the actual transaction price is confirmed after the final return period of capital gains tax base expires, whether transfer margin can be determined based on the actual transaction price (negative)

[2] Whether the acquisition value to be deducted in calculating gains from transfer based on the actual transaction price includes incidental expenses, such as acquisition tax, etc. (affirmative)

[3] Whether a taxpayer's intentional or negligent act is required to impose an additional tax (negative), and whether the taxpayer's site for the law is a justifiable ground for not being able to impose an additional tax (negative)

[4] The case holding that the disposition imposing additional tax cannot be deemed unlawful merely on the ground that the transferor did not pay transfer income tax on the ground that there is no transfer margin by applying the standard market price for the year of acquisition even though the transferor is required to calculate the acquisition value by applying the standard market price for the year immediately before the acquisition of the relevant real estate, and the tax authority

[1] The provisions of Articles 23(4) and 45(1)1 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. 14083 of Dec. 31, 1993) are interpreted to have recognized exceptions to the principle of substantial taxation by adopting the principle of taxation in determining transfer margin in case of transfer of assets. Thus, in filing a preliminary return on transfer margin or a final return on tax base of assets, if evidentiary documents confirming the actual transaction value are submitted, the transfer margin shall be calculated based on the actual transfer and acquisition value. However, if there is no such report or if there is no documentary evidence submitted, or if either of the acquisition value or transfer value is confirmed by such documentary evidence, the transfer margin shall be determined based on the standard market price, and even if the actual transaction value is confirmed after the period for filing the final return on tax base expires, the transfer margin shall not be determined based on the standard market price.

[2] In full view of the provisions of Article 45 (1) 1 (a) (proviso), Article 23 (1) 1 of the former Income Tax Act (amended by Act No. 4661 of Dec. 31, 1993), Article 94 (1) 1 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994), and Article 86 (1) of the same Act, the "actual transaction price required for the acquisition of assets, which are necessary expenses to be deducted from the transfer value in calculating gains on transfer of land or buildings, can be known as the fact that they are the value at the time of purchase, including the registration tax and incidental expenses, since the acquisition price to be deducted in calculating gains on transfer based on the actual transaction price includes the above expenses such as acquisition tax and incidental expenses.

[3] In order to facilitate the exercise of the right to impose taxes and the realization of tax claims, the taxpayer's intention and negligence as administrative sanctions imposed pursuant to the law shall not be considered if the taxpayer violates the reporting, tax liability, etc. under the law without justifiable grounds, and the land of the law shall not be considered as legitimate grounds.

[4] The case holding that the disposition imposing additional tax cannot be deemed unlawful merely on the ground that the transferor did not pay transfer income tax on the ground that there is no transfer margin by applying the standard market price for the year of acquisition even though the transferor is required to calculate the acquisition value by applying the standard market price for the year immediately before the acquisition of the relevant real estate, and the tax authority also

[1] Article 23 (4) 1 (see current Article 96), Article 45 (1) 1 (see current Article 97 (1) 1), Article 47 (4) 3 (see current Article 166 (4) 3) of the former Income Tax Act (Amended by Presidential Decree No. 14083, Dec. 31, 1993); Article 170 (4) 4 (see current Article 166 (4) 3) of the former Income Tax Act (Amended by Act No. 4661, Dec. 31, 1993); Article 23 (1) 1 (see current Article 94 (1) 1) of the former Income Tax Act (Amended by Act No. 4661, Dec. 31, 1993); Article 45 (1) 1 (a) (see current Article 97 (1) 1 of the Income Tax Act); Article 170 (4) 4 (1) (1) (proviso) 4) of the former Framework Act (Amended by Act No. 197 (see current Article 14 (14) of the Act) of the Framework Act)

[1] [2] Supreme Court Decision 88Nu7460 delivered on May 9, 1989 (Gong1989, 922) / [1] Supreme Court Decision 95Nu13807 delivered on May 10, 1996 (Gong1996Ha, 1922) Supreme Court Decision 95Nu8201 delivered on December 23, 1996 (Gong197Sang, 549), Supreme Court Decision 97Nu2771 delivered on February 10, 198 (Gong198Sang, 79299) / [2] Supreme Court Decision 87Nu757 delivered on January 19, 198 (Gong198, 420) / [3] Supreme Court Decision 97Nu96979 delivered on June 29, 197 (Gong1997Du9649799 delivered on June 29, 1997

Plaintiff

Head of Geumcheon Tax Office

Supreme Court Decision 96Nu3616 delivered on March 25, 1997

Seoul High Court Decision 97Gu17584 delivered on January 8, 1998

The part of the judgment below regarding additional tax is reversed, and that part of the case is remanded to the Seoul High Court. The defendant's remaining appeal and the plaintiff's appeal are dismissed.

We examine the grounds of appeal.

1. As to the Plaintiff’s appeal

Articles 23(4) and 45(1)1 of the former Income Tax Act (amended by Act No. 4661, Dec. 31, 1993; hereinafter the same) and Article 170(4)3 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 14083, Dec. 31, 1993; hereinafter the same) shall be interpreted to have recognized exceptions to the principle of substantial taxation by adopting the principle of taxation in determining transfer margin in case of transfer of assets. Thus, in filing a preliminary return on transfer margin or a final return on tax base of assets, where evidentiary documents verifying the actual transaction value are submitted, transfer margin shall be calculated based on the actual transfer and acquisition value. However, if there is no report or if there is no evidentiary document submitted, or if either of the actual transaction value or transfer value is confirmed by such documentary evidence, transfer margin shall be determined based on the standard market price, and even if the actual transaction value is confirmed after the period for filing the final return on tax base expires, transfer margin shall not be determined based on such basis (see Supreme Court Decision 27Nu7.

In light of the records, in this case where there is no evidence to prove that the plaintiff voluntarily made a preliminary return of transfer margin on the basis of the standard market price, and submitted evidentiary documents to confirm the actual transaction price at the time of the acquisition and transfer of the real estate in this case, the court below's rejection of the plaintiff's assertion that the transfer margin should be calculated on the basis of the actual transaction price is just, and there is no error of law by misunderstanding the legal principles as to the taxation principle based on the standard market

2. As to the defendant's appeal

A. As to the acquisition value to be deducted in calculating gains on transfer based on the actual transaction price

In full view of the provisions of the proviso of Article 45 (1) 1 (a), Article 23 (1) 1 of the former Income Tax Act, and Articles 94 (1) 1 and 86 (1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 1467 of Dec. 31, 1994), "actual transaction price required for the acquisition of assets, which is necessary expenses to be deducted from the transfer value, can be known the fact that they are the value at the time of purchase, including the registration tax, the acquisition tax, and other expenses incidental to the actual transaction value, and in the same purport, the acquisition price to be deducted shall include the above acquisition tax and other expenses incidental to the actual transaction value. Accordingly, the decision of the court below that calculated gains from transfer based on the actual transaction value by deducting incidental expenses such as acquisition tax and other expenses is just, and there is no error of law by misunderstanding legal principles as to the calculation

B. As to the legitimacy of imposing additional tax

According to the reasoning of the judgment below, the court below acknowledged the facts as to the reason for imposing the transfer income tax of this case against the plaintiff, and judged that the part of the disposition of this case and the part of the additional tax on negligent tax returns and the additional tax on negligent tax are unlawful on the ground that the plaintiff did not know that the plaintiff was liable to pay the transfer income tax of this case due to the transfer of the real estate of this case, in light of the circumstances leading up to the disposition of this case, it is unreasonable for the plaintiff to not know that the plaintiff was liable to pay the transfer income tax of this case due to the transfer of the real estate of this case, and the plaintiff reported the standard market price of 1991 through a tax accountant as the acquisition price of the real estate of this case and recognized it as it is, and thus, the transfer income tax of this case was not imposed on the plaintiff.

Under the tax law, in order to facilitate the exercise of the right to impose taxes and the realization of tax claims, the taxpayer's intention and negligence is not considered as administrative sanctions imposed in accordance with the law when the taxpayer violates the duty to report and pay taxes without justifiable grounds and the taxpayer's intention and negligence is not considered as legitimate grounds (see Supreme Court Decision 98Du16705 delivered on September 17, 199).

However, according to the facts acknowledged by the court below, the plaintiff calculated the acquisition value by applying the standard market price of 1991, which is the 1990 year prior to the public notice of the standard market price in 191, in accordance with Article 115 (6) of the former Enforcement Decree of the Income Tax Act, based on the relationship between the time of acquisition of the real estate in this case and the time of acquisition prior to the public notice of the standard market price in 1991, and it is clear that this is due to the legal sites. Thus, it cannot be said that there is a justifiable reason for the plaintiff not paying capital gains tax on the ground that the plaintiff did not have capital gains tax due to the absence of transfer margin, and even if the tax authority did not impose any

Nevertheless, the court below held that the disposition of imposing additional tax was unlawful on the ground that the plaintiff did not pay the transfer income tax of this case on the ground that there was a justifiable reason. The judgment below erred by misapprehending the legal principles on imposing additional tax, which affected the conclusion of the judgment. The defendant's ground of appeal pointing this out

3. Therefore, the part of the judgment of the court below concerning additional tax shall be reversed, and that part of the case shall be remanded to the court below for a new trial and determination. The defendant's remaining appeal and the plaintiff's appeal are without merit, and they are dismissed. It is so decided as per Disposition by the assent of all

Justices Lee Im-soo (Presiding Justice)