The burden of proving the assertion that a house for concurrent use in the public register was actually used for a real residence is the taxpayer.

Even in cases of multiple-use houses registered in the public register, it shall be determined according to the actual purpose when applying the provisions of non-taxation for one house for one household, and the fact that all of the multiple-use houses are subject to non-taxation should be borne by the taxpayer who asserts it

Article 89 (1) of the Income Tax Act

2018Guhap1260 Revocation of Disposition of Imposing capital gains tax

LAA

BB Director of the Tax Office

April 25, 2019

May 30, 2019

1. The plaintiff's claim is dismissed.

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

On January 1, 2018, the defendant of the Gu office was revoked the imposition of capital gains tax of 89,150,300 won for the plaintiff on January 1, 2015 (the date of the disposition is stated as "the date of January 18, 2018, but it seems to be a clerical error).

1. Details of the disposition;

A. On January 27, 2013, the Plaintiff acquired an OOO O O O 00-0 large 536 square meters, 21 square meters of the above ground block structure housing, 49 square meters of a block structure sloping roof housing, 127.1 square meters of a place of business of a steel-retic sloping roof (hereinafter “instant real estate” in total,”) and completed the registration of ownership transfer on October 00, 2013. (B) The Plaintiff transferred the instant real estate to KRW 530,000,000 on October 0, 2015, and did not consider that the said real estate is exempt from capital gains tax under Article 89(1)3 of the former Income Tax Act (wholly amended by Act No. 14389, Dec. 20, 2016; hereinafter the same shall apply) and completed the registration of ownership transfer under Article 89(1)3 of the same Act.

C. The Defendant: (a) deemed the instant real estate as one house for one household under Article 89(1)3(a) of the former Income Tax Act and Article 154(3) of the Enforcement Decree of the same Act (wholly amended by Presidential Decree No. 26982, Feb. 17, 2016; hereinafter the same shall apply) and one land attached thereto, among the instant real estate, as “one house for one household and land attached thereto,” and excluded the instant real estate from the subject of capital gains tax; (b) on January 18, 2018, the Defendant deemed that the instant real estate is subject to capital gains tax, but was excluded from the subject of capital gains tax; (c) on the land of 127.1 square meters and land attached thereto (hereinafter “the instant workplace”; hereinafter collectively referred to as “the instant workplace”).

D. The Plaintiff dissatisfied with the instant disposition and filed an objection on October 0, 2018, but the foregoing objection was dismissed on October 00, 2018. The Plaintiff thereafter filed a request for examination with the Commissioner of the National Tax Service on October 0, 2018, but was dismissed on October 0, 2018.

[Reasons for Recognition] Unsatisfy, Gap evidence 10, 11, Eul evidence 1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Considering the photograph taken inside and outside the workplace of this case, the electric consumption at the workplace of this case, the list of family members residing in the real estate of this case, etc., the Plaintiff used the entire real estate including the above workplace for residential purposes at the time of transferring the real estate, and thus, the above workplace is also subject to exemption from capital gains tax under Article 89 (1) 3 (a) of the former Income Tax Act.

Nevertheless, since the defendant separated the workplace of this case from the real estate of this case and rendered the disposition of this case, the above disposition shall be revoked as unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Article 154(3) of the former Enforcement Decree of the Income Tax Act provides that "where a single building is combined with a house and a building is located on the land other than a house, the entire house shall be deemed a house: Provided, That where the area of a house is smaller than or equal to the area other than a house, the part other than a house shall not be deemed a house." Here, the term "house" shall be determined by the approval of a building that actually provides a residence in fact, regardless of the classification of the use on the public register, such as a house ledger, or the permission of an authority for the construction or alteration of the use, and whether the registration has been granted or not (see, e.g., Supreme Court Decisions 91Du10367, Aug. 18, 1992; 2013Du24945, Mar. 27, 2014). In addition, whether a house is subject to non-taxation under the main sentence of Article 154(3) of the former Enforcement Decree of the Income Tax Act (see, 97Du1985, Jul. 19, 19, 209, etc.).

2) However, in light of the following circumstances, it is insufficient to acknowledge that the workplace of this case was used for actual residence at the time of the transfer of real estate by the evidence presented by the Plaintiff, and there is no other evidence to acknowledge that the workplace of this case was used for actual residence.

A) The Plaintiff asserted that the instant plant was used for residential purpose, and submitted a photograph outside the said workplace (Evidence A1, 2, and 3). However, it is not clear whether the instant plant was “at the time of transfer of the instant real estate” due to the lack of objective verification of the date, time, place, etc. of each of the above photographs, and the images shown in each of the above pictures alone are insufficient to recognize that the instant plant was actually used for residential purpose.

B) The Plaintiff asserted that the instant plant was remodeled into a house around October 0, 2004, but the Plaintiff did not present any objective evidence to acknowledge the said construction work. In this regard, the Plaintiff and the Plaintiff’s respective income-proof sources (Evidence A7 and 8) of the YO submitted by the Plaintiff are proved to have accrued income to the Plaintiff, etc., and it is difficult to view it as direct evidence to support the said construction work.

C) The Plaintiff asserts that 8 members, including the Plaintiff, reside in the instant real estate from October 0, 2004 on the basis of the family’s resident registration record, including the instant workplace from around October 0, 2004. However, solely on the ground that the Plaintiff’s family members moved in the instant real estate, it cannot be deemed that the Plaintiff’s family members were actually residing in the said real estate, and the possibility of moving the said real estate into the Plaintiff’s real estate only on the resident registration card regardless of whether the Plaintiff’s family

D) The Plaintiff’s mother KimCC confirmed that from October 0, 200 to October 00, 2015, the instant real estate was engaged in real estate rental business at its domicile. The Plaintiff’s mother KimCC reported value-added tax on 27 occasions in total from February 2, 2001 to January 201, 201.

E) Regarding the instant workplace, electricity was newly established on October 0, 1981 and terminated on October 00, 2015, and its use was ‘commercial use', and the deposit account holder of the electric fee payment account is ‘(Uniform) Dodin'. In addition, when examining the electric usage of the instant workplace, there is considerable doubt as to whether monthly usage is not specified and the said workplace has been used for residential purpose.

3) Therefore, it is difficult to view the workplace of this case as falling under “one house for one household and its appurtenant land subject to non-taxation of capital gains tax under Article 89(1)3(a) of the former Income Tax Act and Article 154(3) of the Enforcement Decree of the same Act.” Thus, the instant disposition imposing capital gains tax on the workplace is lawful.

3. Conclusion

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