Cho Jae-2015- Busan District Court-4615 ( November 24, 2015)

If a report of capital gains tax has been made by means of preparing a false real estate sales contract, it constitutes fraud or other unlawful acts, the exclusion period shall be ten years.

The filing of a false report of capital gains tax by means of preparing a false real estate sales contract constitutes fraud or other fraudulent acts, and the unlawful means include not only the unlawful methods done by the taxpayer himself but also the unlawful methods by the taxpayer's agent or performance assistant, etc. to gain the profit of determining the scope of the act by entrusting the relevant business by himself/herself.

The exclusion period for national tax assessment under Article 26-2 of the Framework Act on National Taxes

2016Guhap316 Revocation of Disposition of Imposing capital gains tax

○ ○

○ Head of tax office

June 24, 2016

July 22, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The imposition of the capital gains tax on April 16, 2015 that the Defendant rendered to the Plaintiff on April 16, 2015 is revoked.

1. Circumstances of dispositions;

A. On January 26, 2004, the Plaintiff acquired ownership by purchasing ○○○○○○○-dong ○○○-dong ○○○○○○○○ 2,063 square meters and ○○-○ 660 square meters in the same ○-○ ○ ○ ○ ○ ○ ○63 square meters (hereinafter “instant land”).

A. On December 28, 2004, the transfer income tax was reported and paid to the Defendant on January 31, 2005 with the transfer value of KRW 000 and acquisition value of KRW 000.

B. On December 30, 2014, the head of △△-gu reported that ○○, etc., reported the transfer income tax after transferring the instant land on December 30, 2014, he purchased the instant land from the Plaintiff in KRW 000, and notified the Defendant of such taxation data. Accordingly, on April 16, 2015, the Defendant corrected the Plaintiff’s transfer value of the instant land at KRW 000 and issued the instant disposition imposing the Plaintiff KRW 00 of the transfer income tax for the year 2004 (including penalty tax for the failure to file a report, KRW 00, and penalty tax for the failure to pay).

C. On August 28, 2015, the Plaintiff filed an appeal with the Tax Tribunal on the instant disposition, but was dismissed on November 24, 2015.

Facts that there is no dispute over recognition, Gap evidence 1, 2, Eul evidence 1, 2, and 3, the purport of the whole pleadings, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

(a)the plaintiff's assertion;

Although the Defendant imposed the instant taxation by applying the exclusion period of ten years pursuant to Article 26-2(1)1 of the Framework Act on National Taxes, the exclusion period of five years shall apply since the Plaintiff did not commit any fraudulent or other unlawful act. Therefore, the instant disposition should be revoked as an unlawful disposition conducted after the exclusion period of transfer income tax.

(b) Fact of recognition;

1) On December 28, 2004, the sales contract (Evidence B No. 4) submitted by the Plaintiff to the Defendant at the time of filing a transfer income tax return on the instant land was KRW 000,000, but the purchase price is paid in lump sum at the same time as the contract was concluded, and no real estate intermediary is written.

2) The sales contract (No. 6-3) dated October 12, 2004, which was submitted by Jeon○○, etc. to the Defendant at the time of filing a transfer income tax return on the land of this case, shall be KRW 000,000,000,000 for the intermediate payment on the contract date, October 29, 2004, and the remainder of the contract deposit shall be paid on December 16, 2004. The reported amount shall be the officially announced amount, and the real estate broker’s office’s seal is affixed to the real estate broker’s office.

3) The former ○○, etc. received a receipt of KRW 0 million from an intermediate payment of KRW 0 million for which the date of preparation made in the name of the Plaintiff is unknown, a receipt of KRW 0 million from December 20, 2004, and a receipt of KRW 0 million from the remainder of December 28, 2004.

Facts without any dispute, Gap's 5, 6, 7, and Eul's 4, the purport of the whole pleadings, and the purport of the whole pleadings.

C. Determination

According to Article 26-2(1)1, 2, and 3 of the Framework Act on National Taxes, national taxes shall not be imposed after the expiry of the five-year period from the date on which the pertinent national tax is assessable. However, if a taxpayer fails to submit a tax base return by the statutory due deadline, national taxes may be imposed for seven years, and if a taxpayer evades national taxes by fraud or other unlawful means, national taxes may be imposed for ten years. The term "Fraud or other unlawful acts" refers to fraudulent or other active acts that make it impossible or considerably difficult to impose and collect taxes impossible or considerably difficult. In determining the tax base based on the amount reported by a taxpayer, preparing and submitting a false contract in which the taxpayer under-reported the reported amount of taxes gives credibility to the amount of the tax return and under-reported the sales price to conceal the actual transaction price constitutes "Fraud or other unlawful acts that make it significantly difficult to impose and collect taxes by actively deception (see, e.g., Supreme Court Decision 2012Du1315, Oct. 11, 2012).

As to the instant case, the following circumstances revealed by the fact of recognition, namely, ① the purchase price in the sales contract dated December 28, 2004, which is similar to the officially announced price at the time of the instant land. This is consistent with the entry in the special agreement entered in October 12, 2004, ② the sale price is paid in a lump sum as of December 28, 2004, ② the sale price is paid in a sales contract as of December 28, 2004, and there is a difference between ordinary real estate transaction practices, ③ the sales contract as of October 12, 2004 is written in detail, ③ the payment contract as of October 12, 2004 is written in detail, with the seal of the real estate broker, and accordingly, the receipts in the Plaintiff’s name are also issued. Accordingly, it is difficult to deem that the Plaintiff made a false report on the instant land sales contract as of October 12, 2004, the exclusion period of imposition of capital gains tax and other unlawful acts.

In this regard, the Plaintiff delegated the authority to conclude the instant land sales contract to Kim-won by delivering his/her own seal, etc. to Kim-won. Since Kim-won prepared a false real estate sales contract at a price lower than the actual price and embezzled the difference, the Plaintiff alleged that the Plaintiff was unaware of preparing a false report on capital gains tax. However, even if the evidence submitted by the Plaintiff was integrated, it is insufficient to acknowledge such fact, and there is no other evidence to acknowledge it. In addition, the “illegal method” under Article 26-2(1)1 of the Framework Act on National Taxes includes not only the unlawful method done by the taxpayer himself/herself but also the unlawful method by which the taxpayer’s agent or performance assistant, etc. obtains profits from expanding the area of his/her act by entrusting the relevant business (see Supreme Court Decision 2009Du15104, Sept. 29, 201). The Plaintiff’s assertion is without merit.

3. Conclusion

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