Cho High 2010 Before 0416 (Law No. 25, 2010)

The disposition imposing a factory building on the transfer of unregistered assets is legitimate.

In determining whether unregistered transferred assets are transferred, there is no reasonable ground to exclude transfer of ownership on the ground of expropriation only, and it constitutes a transfer of unregistered transferred assets because it falls under a case of transfer of ownership without immediately performing the registration, even though it was possible to obtain approval for use of factory buildings.

Article 104 (1) of the former Income Tax Act

Article 88 (1) of the former Income Tax Act

2010Guhap2123 Revocation of Disposition of Imposing capital gains tax

Dok-si

○○ Head of tax office

May 26, 2011

June 9, 2011

1. The plaintiff's claim is dismissed.

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

The portion exceeding KRW 98,67,244 of the disposition imposing capital gains tax of KRW 215,905,200 for the Plaintiff on December 14, 2009 shall be revoked.

1. Circumstances of dispositions;

A. On April 24, 2002, the Plaintiff registered the business with the trade name of 3A COM for the purpose of the business of manufacturing household sterilization and killing chemicals, and completed the registration of ownership transfer on July 23, 2002 for each land indicated in the attached real estate indication in order to use it as a factory site (hereinafter “each land of this case”).

B. On May 25, 2002, the Plaintiff obtained approval from the head of the voice Gun for the establishment of a factory on each of the instant land pursuant to Article 21 of the Support for Small and Medium Enterprise Establishment Act (the scheduled date of completion: November 30, 2002). At the time, the head of the voice Gun obtained approval from the Plaintiff for the use of the final building and submitted a completion certificate of factory establishment within two months from the date of completion of the installation of machinery equipment.

C. Since August 26, 2002, the Plaintiff obtained a building permit to construct a factory building on each land of this case from the head of the Audio Gun, and commenced the construction on August 28, 2002, but suspended the construction on or around December 2002. On July 31, 2006, the Plaintiff resumed the construction on August 31, 2006, and completed the construction of the 1,193.01 square meters for a general steel-frame structure and the 15 square meters for a toilet (hereinafter “factory building of this case”) from August 31, 2006, but did not register the ownership of the factory building of this case after obtaining approval for use on September 18, 2006.

D. Meanwhile, on the other hand, in the case of the Chungcheong BB-GunCC, which is the location of each land of this case, it was finally selected as a candidate for the innovation city on December 23, 2005, along with the Chungcheong BB-Gun EE page, and on October 30, 2006, the housing site development district was designated and publicly notified (No. 2006-49 of the Ministry of Construction and Transportation Notice) as a housing site development district for the construction of the innovation city according to the Housing Site Development Promotion Act, and on March 19, 207, the designation and public notification was made as a housing site development district for the innovation city due to the relocation of public agencies (No. 2007-80 of the Ministry of Construction and Transportation Notice).

E. On October 27, 2008, the land and the factory building of this case were expropriated in the Korea National Housing Corporation. The plaintiff received the total of 567,106,650 won (51,50,000 won for the portion of the factory building of this case, 55,606,650 won for other obstacles: 51,500 won for the portion of the factory building of this case, and 55,606,650 won for other obstacles). On March 31, 2009, the plaintiff filed an application for deferred taxation against the defendant under the Restriction of Special Taxation Act for the transfer income tax of this case with the transfer value of the factory of this case as KRW 51,50,00 for 204,640,640,000 for the acquisition value and necessary expenses from the transfer value of the factory of this case as KRW 12,573,790 for the transfer income tax of this case.

F. Around October 2008, the Defendant rejected the Plaintiff’s application for deferment of taxation on the grounds that the Plaintiff did not have manufactured or sold the product by installing the machinery equipment after its business registration. On December 14, 2009, the Defendant revised the acquisition value of the instant factory building to KRW 193,710,000, and necessary expenses to KRW 6,90,000, and then the instant factory building falls under the “unregistered transfer assets” under Article 104(1)3 of the former Income Tax Act (amended by Act No. 9897, Dec. 31, 2009; hereinafter the same), deeming that the instant factory building falls under the “unregistered transfer assets” under Article 104(1)3 of the former Income Tax Act (amended by Act No. 9897, Dec. 31, 2009; hereinafter the “instant disposition”).

G. On January 20, 2010, the Plaintiff, who was dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on January 20, 2010, but was dismissed on June 25, 2010.

Facts that there is no dispute over the basis of recognition, Gap evidence 1, Eul evidence 6 (including the branch numbers in case of a natural disaster; hereinafter the same shall apply), Eul evidence 1 through Eul evidence 10, and the purport of the whole pleadings

2. Whether the disposition of this case is legitimate

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful for the following reasons.

(1) In light of the legislative intent of Article 104 (1) 3 of the Income Tax Act to restrain real estate speculation, "unregistered assets" in the "unregistered assets" under Article 104 (1) 3 of the former Income Tax Act means only a case where the ownership has not been registered for transfer of ownership, and it does not include a case where the ownership has not been registered for transfer of ownership, and it includes arbitrary transfer of ownership, such as sale and purchase of the concept of "transfer". Thus, as in this case, the transfer of ownership due to expropriation does not constitute "unregistered assets" under Article 104 (1) 3 of the former Income Tax Act.

(2) Unless otherwise, the Plaintiff started the construction of the instant factory building and suspended the construction due to financial difficulties, and subsequently resumed the construction after receiving notification that the approval of the project plan may be revoked if the factory is not completed in the voice group. Accordingly, it was determined that it is unnecessary to register the construction of the instant factory building because the site of the instant factory building was incorporated into the building site of Chungcheong innovation zone, and thus, it is not necessary to register the construction after expropriation. Moreover, the public official of the voice group did not register the ownership preservation because the Plaintiff did not explain that it is unnecessary to register the ownership preservation on the ground that the Plaintiff did not register the instant factory building with the purpose of real estate speculation or tax avoidance. Therefore, the instant factory building should be excluded from the unregistered transfer assets whose transfer income tax is excessive.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Judgment on the Plaintiff’s first assertion

(A) Article 104 (3) of the former Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009) provides that "transfer of unregistered assets" refers to the transfer of assets under Article 94 (1) and (2) without registering the acquisition of such assets. Article 94 (1) 3 provides that "transfer of unregistered assets shall apply heavy taxation rates of 70/100 of the tax base of transfer income to such unregistered assets." Generally, "acquisition of assets" includes sale, exchange, inheritance, donation, contribution, construction, repair, reclamation of public waters, creation of land through reclamation, etc. and others similar thereto, and includes original acquisition, succession acquisition, acquisition with or without compensation, or transfer of unregistered assets. Therefore, in relation to "transfer of unregistered assets" under Article 104 (1) 3 of the former Income Tax Act, the plaintiff's assertion that such transfer of assets should be excluded from the original acquisition of assets, such as the building of this case, and the plaintiff's assertion should not be accepted even if the plaintiff acquired them at the original acquisition of the assets.

(B) In addition, under Article 88 (1) of the Income Tax Act, the term "transfer" means that an asset is actually transferred for price due to sale, exchange, investment in kind in a corporation, etc. regardless of registration or enrollment of the asset. This does not refer only to voluntary transfer by the purchaser of the asset, but also to compulsory transfer that is not based on the intent of the purchaser of the asset, such as expropriation based on the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects, etc. (see Supreme Court Decision 94Nu8020, Apr. 11, 1995). Therefore, it is apparent that the transfer of ownership due to the expropriation without registration of preservation of ownership of the factory building of this case constitutes transfer without registration of ownership, and there is no reasonable ground to exclude the transfer of ownership due to expropriation only in determining whether the "unregistered transferred asset" under Article 104 (1) 3 of the former Income Tax Act, such as the Plaintiff's assertion. Therefore, the Plaintiff's assertion on this premise is without merit.

(2) Judgment on the second assertion by the Plaintiff

(A) The purport that the transfer income tax is subject to the imposition of transfer income tax on unregistered transferred assets is to prevent and avoid the transfer of assets without registering their acquisition at the time of transfer, thereby evading various taxes, such as transfer income tax, or selling and purchasing assets before transfer without paying the residual gains, etc. Therefore, in acquiring the assets at the beginning, it is recognized that there is no purpose of speculation, such as tax avoidance through transfer of assets or acquisition of resale gains, etc., and in other cases, it is harsh to enforce the transferor on the responsibility of failing to register the acquisition of the assets at the time of transfer. In other words, in cases where an inevitable circumstance is recognized, it shall be excluded from the transfer of assets subject to transfer as corresponding to each subparagraph of Article 104 (1) of the former Income Tax Act, and Article 168 (1) of the former Enforcement Decree of the Income Tax Act (amended by Act No. 22034, Feb. 18, 2010).

(B) In light of the above legal principles, the Plaintiff paid acquisition tax after the construction of the instant factory, and the Plaintiff voluntarily sentenced capital gains tax after the expropriation of the instant factory building. However, the Plaintiff’s failure to complete the construction of the instant building for the first time after the commencement of construction with the permission to construct the instant factory and neglected the construction for four years after the completion of construction, and the Plaintiff’s failure to use the instant building for the first time after the final selection as an innovative city, even if the construction was completed on September 18, 2006, on the ground that it was difficult to view that the instant building was not completed for the first time after the construction of the instant building, and it was difficult to view that the instant building was not completed for the first time after the construction of the instant building, and that the Plaintiff would not have been able to have completed the registration of new construction of the instant building for the first time after the completion of the construction of the construction of the new building for the second time after the completion of the construction of the construction of the existing building for the second time.

(C) Therefore, the Plaintiff’s assertion on this part is without merit.

3. Conclusion

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