early 2012west0477 (2012.04.10)

It does not constitute unregistered transfer because it does not register the transfer of ownership even after it has been actually acquired.

Since the approval for use of apartment was granted and the registration of ownership preservation was completed in the name of the selling company, it can be seen that the apartment itself was in the actual status of acquisition by paying most of the apartment price to the selling company, except for the portion of the sale price, even though the registration of ownership transfer was possible.

2012Gudan14128 Revocation of Disposition of Imposing capital gains tax

Hong Kong et al.

Head of Yongsan Tax Office

October 17, 2012

November 14, 2012

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The Defendant’s imposition of KRW 000 of transfer income tax for the year 2006 against Plaintiff HongA on October 1, 201 and the imposition of KRW 000 of transfer income tax for the year 2006 against Plaintiff KimB shall be revoked.

1. Details of disposition;

A. On December 31, 2002, the plaintiffs acquired the right to sell the apartment of this case from the TPP the main apartment unit sale right (hereinafter referred to as the "right to sell the apartment of this case") against the Songpa-gu Seoul Metropolitan Government 0-000 Dong 0000 Dong 20000 (hereinafter referred to as "the apartment of this case") on December 31, 2002, and transferred the right to sell the apartment of this case to thisCC and KimD (hereinafter referred to as "CC et al.") under the state of unpaid 00 won out of the sale price on December 27, 2006." However, on February 28, 2007, the plaintiffs made a final return on the tax base of transfer income and paid the tax amount by applying the transfer income tax rate on the transfer of the right to purchase the apartment of this case by considering the right to acquire the transfer of the apartment of this case.

C. On October 1, 201, the Defendant: (a) deemed the transfer of the instant sales right as an unregistered asset; and (b) applied the tax rate for unregistered transferred assets on October 1, 201, the Defendant rendered a disposition imposing KRW 000 of the transfer income tax for the year 2006 on Plaintiff HongA; and (c) KRW 000 of the transfer income tax for the year 2006 on Plaintiff KimB (hereinafter “each disposition of this case”).

D. The Plaintiffs had completed the procedure of pre-trial trial (request for trial).

[Reasons for Recognition] Unsatisfy, Gap evidence 7, 8, Eul 1, 2 (including each number), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. Summary of the plaintiffs' assertion

“The Decree of the Income Tax Act stipulates that the date of transfer or acquisition of assets is the date of settlement of the price in principle. However, the right to acquire real estate is merely the right to acquire the instant apartment because the Plaintiffs did not fully pay the balance of the purchase price at the time of transfer of the instant sales right, and the instant apartment was not acquired. Therefore, each of the instant dispositions by the Defendant, which rendered the transfer of unregistered assets, violates the principle of no taxation without law and strict interpretation.”

(b) Fact of recognition;

(1) On December 13, 2002, the Plaintiffs entered into a sales contract with the TPP to purchase KRW 000 ( KRW 000,000 for the sales contract, KRW 000 for the sales contract) and received confirmation on the succession of rights and duties due to resale from the OO Co., Ltd. (hereinafter referred to as the “sale company”) which is the selling company of the apartment of this case on the same day.

(2) On February 6, 2003, the Plaintiffs paid 000 won out of the remainder of the apartment purchase price of this case on February 10, 2006 to the selling company for the first or the sixth intermediate payment (=00 won x6) on a lump sum discount of 00 won by advance payment. The Plaintiffs paid 000 won out of the remainder of the apartment purchase price of this case on February 10, 2006. The details are as follows.

(3) Under the remaining 00 won of the remainder of the purchase price of the apartment of this case, the Plaintiffs entered into a sales contract to sell the instant purchase price of this case to non-CC and one other on November 17, 2006. The unpaid sale price was paid to non-CC and one other for the selling company. On December 27, 2006, the non-CC and one other completed the transfer of ownership, etc. in the name of the non-CC and one other on the same day.

(4) The apartment of this case was approved on November 22, 2005, and was registered as preservation of ownership in the name of the selling company on December 29, 2005.

(5) The Plaintiffs owned another house at the time of the transfer of the instant sales right.

[Ground of recognition] Facts without dispute, evidence before the dispute, Gap evidence Nos. 1 through 6 (including each number), the purport of the whole pleadings

C. Determination

Unregistered transferred assets under Article 104 (3) of the Income Tax Act (amended by Act No. 8144 of Dec. 30, 2006; hereinafter the same) refers to the transfer of assets by a person who acquires assets under Article 94 (1) 1 and 2 of the Income Tax Act without registering the acquisition of such assets. According to Article 94 (1) 2 (a) of the Income Tax Act, the right to acquire a building and its appurtenant land are included in the right to acquire real estate when the building is completed, so the right to sell the apartment of this case also constitutes "property that can become unregistered transferred assets."

In addition, Article 88 (1) of the Income Tax Act provides that "transfer" means that an asset is actually transferred for price due to sale, exchange, investment in kind in a corporation, etc. regardless of the registration or enrollment of the asset, and Article 98 of the same Act provides that the time of acquisition and time of transfer of the asset shall be determined by Presidential Decree, and accordingly, Article 162 (1) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19890, Feb. 28, 2007; hereinafter the same shall apply) provides that the time of acquisition and time of transfer under Article 98 of the Act shall be the date of liquidation of the price of the asset (excluding the amount of capital gains tax and additional tax of capital gains tax in cases where the transferee has agreed to pay the capital gains tax and additional tax of capital gains tax for the transfer of the asset) except for cases falling under any of the following subparagraphs. In light of the purport of the above provision, it shall be deemed that the payment of the price of the asset in question has been made within 19084.97.

As seen in the above facts, the approval for use of the apartment of this case was granted on November 22, 2005, and on December 29, 2005, the registration of ownership preservation was completed under the name of the selling company. Thus, even though it was possible for the plaintiffs to transfer the ownership of the apartment of this case until November 17, 2006, they did not register the ownership transfer, but the plaintiffs did not register the ownership transfer. On January 31, 2006, immediately after January 31, 2006, the remainder of the sale price of the apartment of this case was left after being left until February 10, 2006, and only KRW 00 ( approximately 2.3%) out of the sale price of this case was paid after deducting a portion of the sale price of this case, it can be deemed that the apartment of this case had the actual status already acquired the apartment of this case under Article 94 (1) 1 of the Income Tax Act.

Therefore, since the transfer of sale right of this case constitutes transfer of unregistered transferred assets under Article 104 (3) of the Income Tax Act, the plaintiffs' assertion is without merit and each disposition of this case is lawful.

3. Conclusion

The plaintiffs' claims are dismissed in entirety for lack of reasonable grounds.