In light of social norms, almost all of the purchase money is liquidated.

The disposition imposed on the different year of attribution is illegal because the parties cannot be deemed to have implied agreement on the settlement date of the balance, and it cannot be deemed that almost all of the sales amount was liquidated under the social norms.

Article 95 (Transfer Income Amount)

Article 98 (Time of Transfer or Acquisition)

2016-Gu group-638 Revocation of imposition of capital gains tax

AA

O Head of tax office

2016.07.20

2016.21

1. The Defendant’s rejection disposition against the Plaintiff on November 3, 2014 is revoked.

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

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On February 6, 2011, the Plaintiff entered into a sales contract with ○○○, ○○, ○○, and ○○○ (hereinafter referred to as “Plaintiff, etc.”) who is his/her spouse, to sell ○○○○○, ○○, ○○, ○○, and ○○○○, and ○○○, and ○○, (hereinafter referred to as “instant land”). On November 27, 201, the Plaintiff entered into a sales contract with ○○, ○, ○, and ○○, and ○, (hereinafter referred to as “instant sales contract”). On September 17, 2013, the Plaintiff entered the said land transfer date into a preliminary return and payment with ○○, ○○, and ○○, and ○○.

B. From May 26, 2014 to June 14, 2014, the Defendant denied the special long-term possession deduction on the ground that the instant land constitutes non-business land, and notified the Plaintiff of a prior notice of taxation to additionally impose capital gains tax on the Plaintiff. The Plaintiff filed a request for pre-assessment review on July 23, 2014, but received non-adopted decision on September 5, 2014, and the Defendant notified and imposed capital gains tax on the Plaintiff for capital gains tax of 00,000,000,000 won for capital gains tax of 2013 on September 12, 2014.

C. The time of transfer of the instant land by the Plaintiff is not on September 6, 2013 (the date of transfer stated in the preliminary return by the Plaintiff appears to have been erroneously made even on September 17, 2013), but on June 24, 2014 or June 26, 2014, the year to which the transfer income tax was reverted to the instant case as of June 24, 2014, should be subject to the special long-term holding deduction after 2014, the Plaintiff filed an application for rectification on the grounds that the special long-term holding deduction should be applied. However, the Defendant refused the Plaintiff’s request for correction on November 3, 2014 (hereinafter “instant disposition”).

D. On August 6, 2015, the Plaintiff filed a request for a trial with the Commissioner of the National Tax Service on August 6, 2015, but was dismissed on November 9, 2015.

[Ground of recognition] No dispute, Gap 1, Gap 23 through 28, Gap 36, Eul 1 through 3, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff’s ○○ billion won received from the buyer on September 6, 2013 includes not only the amount equivalent to the unpaid balance but also the amount equivalent to the interest in arrears arising from the instant conciliation, and thus, cannot be deemed to have been completely settled at the above date and time. In addition, the Defendant’s disposition that reported otherwise is unlawful and thus ought to be revoked, even if the unpaid balance was converted into a monetary loan for consumption on June 24, 2014, or the buyer’s transfer registration of ownership to the instant land was made on June 26, 2014.

B. Relevant statutes

Attached Form is as shown in the attached Form.

(c) Fact of recognition;

1) On February 6, 2011, the fact that the Plaintiff, etc. entered into the instant sales contract that sells the instant land to Nonparty KK at KRW 0,00,00,000,000,000 is as seen earlier, and the Plaintiff, etc. received the down payment KRW 00 million from KK at the time of entering into the contract.

2) As the special terms and conditions of the instant sales contract, KK agreed to pay the balance to the Plaintiff, etc. within one week after permission for development of the instant land and land transaction permission. As the permission for development was delayed, disputes arising between the parties regarding the payment of the price were incurred.

3) On April 15, 201, KK, along with the JJJ (hereinafter “JJ”) on April 15, 201 with respect to the Plaintiff’s spouse ○○○○○○○ (hereinafter “JJ”) as well as with the JJJ (hereinafter “JJ”) on April 15, 201, KK, upon obtaining permission to engage in the development of the instant land, drafted a letter of commitment (A 2) whereby the JJ will succeed to the down payment and all costs associated with authorization and permission and development.

4) Meanwhile, under the name of a person designated by KK as a separate special agreement of the instant sales contract, the registration of ownership transfer of the instant land was made. Accordingly, the JJ applied for permission of development in its name and obtained approval of factory construction from ○○ City on April 18, 2012. The instant land was released from the land transaction permission zone around that time.

5) Accordingly, the Plaintiff et al. filed a lawsuit against KK and JJ against the Seoul Central District Court for a claim for the payment of the purchase price under the Seoul Central District Court of Justice 2012Gahap41033, and on September 12, 2012, the lawsuit was brought about on September 12, 2012 that “the Defendant and the ○○○ (JJ representative director) shall jointly and severally pay 3.2 billion won to the Plaintiff et al. by October 31, 2012. If delay is made, the amount unpaid shall be paid by adding 7.5% delay damages per annum from November 1, 2012 to full payment (hereinafter “instant conciliation”).

6) Since then due to the delay of the obligation to pay money under the above conciliation by KK and JJJ, the Plaintiff et al. agreed with KK and JJ to provide the instant land to financial institutions as collateral and to settle the balance of loans and interest thereon (hereinafter referred to as “instant agreement”) on August 28, 2013, and received authentication of a deed signed by a private person. At the same time, the JJJ et al. written a written request for the provision of collateral against the Plaintiff et al. as separate against the same person (A) and written by the JJJ et al. on August 28, 2013.

7) According to the aforementioned agreement, the Plaintiff et al. offered the instant land as security to the Hysung-si Branch Co., Ltd., and on September 6, 2013, the registration of creation of a mortgage was completed with the maximum debt amount of 00,000,000 won, the debtor BB and CCC, and the NongHyHyup Bank Co., Ltd. on the same day, KK renounced renounced the status of purchaser of the instant land and transferred both the land to the JJJ, and issued a written confirmation to the Plaintiff et al. that the JJ would be responsible for the Plaintiff et al. as a sole purchaser. The JJJ paid 3.2 billion won to the Plaintiff on September 6, 2013.

8) On September 24, 2013, the Plaintiff sent a content-certified mail to the JJ on the name of ○○○○○○, and to the extent that the Plaintiff did not fully pay the land transaction balance to the Plaintiff, the Plaintiff sent to the JJ on September 24, 2013, stating that the transfer of the land transaction balance to the present date is not possible without agreement with the Plaintiff and any construction other than the civil engineering works, and that, if performing construction works other than the above construction works, the said construction works are immediately suspended and the time for restoration to the original state, the Plaintiff sent the same content-certified mail against BB, signed and sealed by the Plaintiff as a joint guarantor at the later ○○○○○ on October 2, 2013.

9) On November 2013, 2013, the Plaintiff prepared and submitted to the ○○ Western Police Station a complaint to punish the JJ, etc. due to the crime of causing property damage on the ground that ○○ Construction Company occupied the Plaintiff’s land without permission while demanding the payment of the balance due to the failure of the JJ to perform its duty after the instant conciliation was completed.

10) On June 24, 2014, the Plaintiff et al. entered into an agreement (A18) with the JJ on the condition that the Plaintiff et al. shall have the right to transfer the ownership of the instant land to the JJ, and the JJ shall have the Plaintiff et al. receive additional loans on the said land as collateral and pay the remainder of KRW 260 million to the Plaintiff et al., and accordingly, on June 26, 2014, the Plaintiff et al. cancelled the existing establishment registration of mortgage on the instant land and completed the registration of the ownership transfer before the JJJJ. On June 26, 2014.

11) On August 28, 2014, the Plaintiff drafted a letter of payment with which the JJ and BB shall pay the Plaintiff’s child ○○○○ by November 30, 2014 (A 22-1), and as of December 1, 2014, the Plaintiff drafted a new letter of payment with the JJ as of December 31, 2015 (A 22-2) extending the payment deadline of KRW 60 million to the said ○○○○ by January 31, 2015.

[Reasons for Recognition] In addition to the aforementioned evidence, each entry in Gap 2 through 22, Gap 29 through 35 (including each number), witness MM's testimony, and the purport of the whole pleadings

D. Determination

1) Relevant legal principles

In the case of appropriation of performance to expenses, interest, and principal, Article 479 of the Civil Act is stipulated in the order of appropriation, and Article 476 of the same Act does not apply mutatis mutandis to the appropriation of payment to the designated performance. Thus, unless there is any special agreement between the parties concerned, the appropriation shall be made in the order of expenses, interest, and principal. The order of appropriation cannot be designated unilaterally differently from the above order of court (see, e.g., Supreme Court Decision 2001Da60767, Jan. 11, 2002).

Meanwhile, in calculating gains from transfer of assets, Article 98 of the Income Tax Act provides that the time of acquisition and time of transfer of assets shall be determined by the Presidential Decree. According to delegation, Article 162(1) of the Enforcement Decree of the Income Tax Act 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 relevant assets except for the following cases. In addition, cases where the price of the relevant assets is not deemed the date of liquidation under each subparagraph are not deemed the date of liquidation. Each of the above provisions provides that the time of acquisition and time of transfer of assets, which serve as various standards within the framework of the income tax law with the aim of uniformly grasping the taxpayer’s exclusion and uniformly understanding taxable income and interpreting and applying the relevant provisions without inconsistency, are limited to the time of acquisition and time of transfer of assets in the tax calculation (see, e.g., Supreme Court Decision 200Du6282, Apr. 12, 2002). 202; in light of the legislative purport of such provision and the Enforcement Decree of the Income Tax Act, the entire amount of payment should be determined as follows.

(ii)the practical interest in the dispute;

Article 13-2(1)1 of the Industrial Cluster Development and Factory Establishment Act, Article 34(1) of the Farmland Act, Article 168-6 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 26067, Feb. 3, 2015; hereinafter the same) and Article 168-8(3)4 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 26067, Feb. 3, 2015; hereinafter the same), the JJ, who succeeded to the buyer status of the instant sales contract, obtained approval for the establishment of a long-term possession special deduction since two years have not elapsed from the date of approval for the establishment of a factory until the date of June 18, 2012, on the other hand, whether the transfer period can be applied to the special deduction for long-term possession of the instant land after the lapse of two years from the date of approval for the establishment of a factory until the date of June 2014.

3) In the instant case:

First, according to the above legal principles, as to whether there was an explicit or implied agreement on preferential appropriation of principal at the time of receipt of KRW 3.2 billion between the Plaintiff and the JJ on September 6, 2013, the following circumstances revealed by the facts established earlier: ① the purchaser of the JJ explicitly testified that HH, the actual private owner of the JJ, has not agreed to pay the Plaintiff KRW 3.2 billion in advance, and that there was no agreement to appropriate the said money in advance to the principal amount of the damages incurred therefrom; ② the Plaintiff submitted a written request for the suspension of construction due to the payment of the principal amount after September 6, 2013, or a written complaint related thereto; ③ the JJJ concluded an additional payment of KRW 260 million in the remainder of the payment of the principal amount due to the payment of the said money to the Plaintiff on June 24, 2014, and ④ the Plaintiff’s additional payment of the said money to the Plaintiff at KRW 2600,000,0000,000.

In particular, according to the testimony of HH, the JJ was able to enjoy benefits such as exemption from acquisition tax when acquiring real estate within a certain period of time after its establishment, and due to the failure to complete the registration of ownership transfer in 2013. Thus, the JJJ’s testimony to the effect that the Plaintiff, etc., who was the seller of the instant land and the Plaintiff, were not obliged to pay KRW 3.2 billion, not in full, until he received the loan from the financial institution on September 6, 2013. In light of the circumstances, the JJJ’s proposal or agreement was not possible to first appropriate the Plaintiff, etc. to pay the outstanding amount of KRW 3.2 billion to the principal over the delayed payment damages, and the transfer registration of ownership was made on June 2014, 2014.

As alleged by the Defendant, the mere fact that the Plaintiff received KRW 3.2 billion, and on November 27, 2013, the Plaintiff reported capital gains tax to the Defendant on September 6, 2013 on the transfer date (However, as seen earlier, the fact that the Plaintiff actually stated “ September 17, 2013” as the transfer date) or that the Plaintiff did not dispute the transfer date at the tax investigation process, pre-assessment review, and examination request stage cannot be a ground to change the above judgment.

Next, we examine whether the above date can be seen as the date of settlement of balance, considering that the JJ paid KRW 3.2 billion to the Plaintiff on September 6, 2013, and that the payment of KRW 3.2 billion to the Plaintiff at least was made in full. According to the above evidence, when the JJ calculates the amount to be paid to the Plaintiff, etc. as of September 6, 2013 according to the conciliation of this case, it is difficult to view that the balance of KRW 3.2 billion is 3.2 billion + delayed damages + KRW 203,178,082 (3.2 billion + KRW 3.2 billion + KRW 3.2 billion) as the total remainder of the outstanding amount of KRW 3.29 billion as of September 6, 2013, the remaining amount of the remainder of KRW 3.29 billion after the above date is 3.2 billion.1 billion (i.e., the remaining amount of the outstanding amount of KRW 203,178,2982.2 billion).

Therefore, the transfer time of the instant land is not on September 6, 2013 when the Plaintiff received 3.2 billion won as a part of the remainder. As seen earlier, the date when the Plaintiff, etc. and the JJJ entered into an agreement with the Plaintiff, etc. to impair the registration of ownership transfer of the instant land to the JJ and to pay the remainder to the Plaintiff, etc. by receiving additional loans as security, i.e., the date when the JJ entered into an agreement with the Plaintiff, etc. on June 24, 2014, which is the date of the quasi-loan Loan Agreement (if the National Tax Service’s General Rules of Income Tax Act (98-1621, and the date of transfer or acquisition is different from the date of the balance payment agreement entered into in the sales contract) that is the date of the remainder payment agreement entered in the sales contract, etc. as a loan for consumption, it is reasonable to deem that the date of change into the loan for consumption is the date of settlement (paragraph 2) or Article 98 of the Income Tax Act and Article 162(1)2)26.6.

E. Sub-committee

The time of the transfer of the instant land is justifiable as of June 24, 2014 or June 26, 2014, and the Defendant’s disposition of this case, which was deemed unlawful as of September 6, 2013, is deemed to be the date of the remainder liquidation. In other words, the Defendant’s disposition of this case is unlawful. If the year to which the capital gains tax as prescribed by the taxation belongs belongs, i.e., the year to which the time of the transfer of assets belongs, is the actual period, and the pertinent taxation is deemed to be unlawful, the entire disposition should be revoked (see, e.g., Supreme Court Decision 2004Du6914, May 13, 2005). Ultimately, the instant disposition should

3. Conclusion

The plaintiff's claim shall be accepted, and it is decided as per the Disposition.