The case holding that, in case where the acquisition value of real estate falls short of the current base value and the current base value is determined appropriately under the relevant Acts and subordinate statutes;

In a case where the acquisition price of real estate is below the standard market price and the standard market price is below the standard market price, in light of the provisions of Article 111 (2) 1 and 2 of the Local Tax Act, Article 80 (1) 1 of the Enforcement Decree of the Local Tax Act, Article 99 (1) 1 (b) of the former Income Tax Act (amended by Act No. 7575 of July 13, 2005), and Article 80 (3) of the Enforcement Decree of the Local Tax Act, in a case where the determination of the standard market price is made by the head of a local government, if it is deemed that the standard market price is considerably unreasonable in light of the market price or other circumstances, the determination of the standard market price is unlawful; however, in calculating the standard market price of real estate by the tax authority, the appropriate standard market price is determined according to the officially assessed individual land price, and the remaining rate per structure, use index, location index, and year of each building is determined in addition to the application of the standard market price per building.

Article 111(2) of the Local Tax Act, Article 80(1)1 and (3) of the Enforcement Decree of the Local Tax Act, Article 99(1)1(b) of the former Income Tax Act (amended by Act No. 7575 of July 13, 2005)

Centrality: Driedness

The head of Gangseo-gu Seoul Metropolitan Government

February 24, 2006

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

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

The part of the acquisition tax imposed by the Defendant on the Plaintiff on February 19, 2005, which exceeds KRW 2,338,200, KRW 283,820, KRW 1,993, KRW 170, KRW 398,630, KRW 398, KRW 630, and KRW 153,00, KRW 153,000, registration tax, KRW 386, KRW 920, KRW 277,380, KRW 28,590, and KRW 28,590 due to the reduction or exemption of registration tax.

1. Details of the disposition;

A. On January 20, 2005, the Plaintiff acquired real estate listed in annexed Form 1 (hereinafter “instant real estate”) from Kim Young-type to KRW 76,50,000, and reported to the Defendant as the tax base for the instant real estate on February 19, 2005, when completing the registration of ownership transfer for the instant real estate.

B. However, as the above reported amount falls short of the standard market price of the real estate of this case, the Plaintiff reported and paid to the Defendant KRW 112(1), 131(1)3, 260-3(1), and 2,338,200, and special rural development tax amount to KRW 283,820, and registration tax amount to KRW 1,93,170, local education tax, KRW 398,630, and KRW 69,000,00 based on the special rural development tax reduction and exemption of registration tax (as above, Article 72(1) of the Local Tax Act is deemed as the “disposition of this case”).

[Ground of recognition] The non-contentious facts, Gap evidence 1, 2, 3, Eul evidence 1, 2, and 3

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff acquired the instant real estate in gold KRW 76,50,00, and even though the reported amount was the reported amount, the Defendant made the instant disposition using the current base amount of KRW 116,910,105, which was set higher than the above reported amount as the tax base. The above current base amount was not properly reflected the real value of the object of taxation at the time of acquisition, and thus, it violates the substance over form principle, and is also considerably unreasonable in light of the transaction tax of neighboring real estate. Thus, the Defendant’s disposition based on this is unlawful.

B. Relevant statutes

Attached Form 3 shall be as listed in attached Table 3.

(c) Markets:

(1) Whether the disposition based on the statutory standard price is lawful

Article 111 and Article 130 of the Local Tax Act stipulate that the tax base of acquisition tax and registration tax shall be the value at the time of acquisition and registration, and in principle, the value at the time of acquisition and registration shall be the amount reported, and if there is no reported value or the reported value is short of the standard market value, the standard market value shall be applied.

Acquisition tax and registration tax are imposed on the fact that the transfer of property is based on the fact that it is the transfer of property, and tax is imposed on the distribution tax and acquisition tax that recognizes the tax capacity and imposes tax as the object of taxation. In addition, acquisition tax and registration tax are not a tax imposed on the profits that the acquisitor may gain by using or using the goods or disposing of the goods, but a tax is imposed on the value of the object of taxation at the time of acquisition and registration. Therefore, the tax base should be determined on the basis of the objective value of the acquired property rather than the amount actually paid for the acquisition.

However, when the acquisitor files a report on the actual acquisition value reflecting the value of the acquired property as it is, the reported value may be considered the objective value of the property. However, if the acquisitor files a report on a false lower price or acquires property at a remarkably lower price than the objective value, or in the case of acquisition without the actual acquisition value, such as exchange, inheritance, gift, etc., the objective value of the object of taxation should be grasped. However, it is extremely difficult for the taxpayer to investigate the value or actual transaction value of each objective property under tax administration, as well as for the tax burden to vary depending on the public official’s ability or attitude, and rather, it may substantially undermine the fairness of tax burden. Accordingly, the Local Tax Act introduced the current base value and reported the current base value as tax base under a certain requirement.

Therefore, as long as the current base value is appropriately reflected the objective value of property, the proviso of Article 111(2) of the Local Tax Act and Article 130(2) of the Local Tax Act, which excludes any irregularities that can be opened in the process of enforcing the tax law, thereby realizing the fairness of tax burden and the justice of tax, which shall not violate the principle of equality or the principle of no taxation without law (see, e.g., Constitutional Court Order 99Hun-Ga2, Dec. 23, 199).

Therefore, this part of the plaintiff's assertion is without merit.

(2) Whether there was an error in determining the standard market price of this case

In full view of the provisions of relevant Acts and subordinate statutes, the standard market price for land and housing publicly notified pursuant to the Public Notice of Values and Appraisal of Real Estate Act shall be the price publicly notified pursuant to the same Act (Article 111 (2) 1 of the Local Tax Act); and the standard market price for buildings shall be the standard market price for the structure index, use index, location index, and past years in addition to the application of the remaining rate by the head of a local government, if the standard market price for buildings is considerably unreasonable due to the change of market price or other reasons (Article 111 (2) 2 of the Local Tax Act; Article 80 (1) 1 of the Enforcement Decree of the Local Tax Act; Article 99 (1) 1 (b) of the former Income Tax Act; Article 80 (3) of the Enforcement Decree of the Local Tax Act); and Article 80 (3) of the Enforcement Decree of the Local Tax Act provides that the standard market price for buildings shall be determined to be unlawful if the determination of the standard market price or other circumstances is deemed unlawful.

However, in the case of this case, in full view of the purport of the argument in evidence Nos. 3 and 7 of this case, the defendant determined the appropriate standard market price according to the officially assessed individual land price in calculating the standard market price of this case as stated in the separate sheet No. 2 of this case. Further, with respect to a building, the above facts can be acknowledged that the standard market price of this case is determined by taking account of the structure index, use index, location index, past years and existence of special auxiliary equipment, etc. according to the size, form, and other circumstances of the building in addition to applying the remaining rate of the building's size, use index, location index, and past years. According to the above facts, the above standard market price of the real estate of this case is deemed to have been determined appropriately in accordance with the relevant laws and regulations, and it cannot be concluded that the standard market price of the real estate of this case is significantly unreasonable merely because the above standard market price is somewhat higher than the actual market price of the real estate of this case, and the statement No. 6-1 through 3 of evidence No. 7, and evidence No. 8 of this case cannot be accepted.

Therefore, the plaintiff's assertion on this part is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed in entirety as it is without merit. It is so decided as per Disposition.

Judge Ahn Jae-chul (Presiding Judge)