Plaintiff

head of Dongjak-gu Tax Office

June 8, 2016

1. The Defendant’s imposition disposition of capital gains tax of KRW 132,091,20 on April 11, 2013 to the Plaintiff on April 11, 2013 exceeding KRW 112,293,883 shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3. Of the costs of lawsuit, 90% is borne by the Plaintiff, and the remainder is borne by the Defendant.

The disposition of imposition of capital gains tax of KRW 132,091,200, which the Defendant rendered to the Plaintiff on April 11, 2013 (see, e.g., Supreme Court Decision 201Do320, Apr. 15, 2013) was revoked.

1. Details of the disposition;

A. On April 10, 2002, on December 24, 2002, the Plaintiff acquired land and buildings (hereinafter referred to as “instant land No. 1”, “building No. 1”, “the instant building,” and “the instant real estate No. 1”) on April 10, 2002 to the head of △△△△△△△ District Office, the Plaintiff transferred the actual transaction value to Nonparty 1 on October 10, 200, and the transfer value was calculated as KRW 336,60,00,00, and the acquisition value was calculated as the actual transaction value at KRW 319,450,00,000, necessary expenses, and KRW 15,957,350, and KRW 350.

B. On April 11, 2013, the Defendant issued a revised and notified the Plaintiff to additionally pay KRW 252,745,800 (including additional tax for negligent return 8,672,838, additional tax for negligent payment 156,919,613) based on the premise that the transfer value of the instant real estate and the instant land No. 1 was KRW 336,60,000, not KRW 580,000, and KRW 15,957,350, and KRW 252,745,800 (including additional tax for negligent return 8,672,838, additional tax for negligent payment 156,919,613) for the Plaintiff.

C. The Plaintiff asserted that the acquisition value of the instant real estate No. 1 and the instant land No. 2 is not KRW 319,450,000, not KRW 435,000 (i.e., KRW 168,000 + KRW 267,00,000 on the instant real estate No. 1) and necessary expenses are KRW 15,957,350, not KRW 15,000 on the instant real estate No. 2) and filed a request for a trial with the Tax Tribunal after filing an objection, and the Tax Tribunal decided to the effect that “The acquisition value of the instant real estate No. 1 is KRW 168,00,000, and the acquisition value of the instant land No. 2 shall be KRW 168,000 on the basis of financial transactions, etc., and that the remaining request for a trial is dismissed.”

D. On May 1, 2015, the Defendant conducted a reinvestigation for verifying the acquisition value of the instant land No. 2 pursuant to the decision of the Tax Tribunal, and rendered a decision of correction to reduce the acquisition value of the instant real estate and the instant land No. 2 to KRW 435,00,00 (including the disposition of the instant real estate No. 168,00,000 + the acquisition value of the instant land No. 267,000,000, the transfer value of KRW 15,957,350, the necessary expenses, and the amount of KRW 120,654,60,000 for the transfer income tax for the year 202 (hereinafter referred to as “the disposition of the instant case”).

[Ground of recognition] Facts without dispute, Gap 1 to 3 evidence, Eul 1 to 3 evidence (including paper numbers; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) The proviso of Article 12-3(1)1 of the Enforcement Decree of the Framework Act on National Taxes excludes the period of preliminary return from one association member's relocation right, one of which is unconstitutional, that the method of determining transfer income tax is not reflected in the change of the reported tax payment system and denies the ability to confirm the preliminary return. In determining the starting point of the exclusion period of imposition of national taxes, the following day of the final return without considering the characteristics of each tax item is deemed to excessively extend the period of imposition of national taxes as prescribed by the Act, thereby undermining the prompt stability of tax legal relations, thereby violating the equal rights under Article 11 of the Constitution, the prohibition of unjust infringement of property rights under Article 23 of the Constitution, and the principle of excessive prohibition under Article 37 of the Constitution, and the period of exclusion of imposition of transfer income tax is proceeding after the final return and logical inconsistency. Accordingly, the exclusion period after the scheduled return period shall be calculated on the grounds that the reported details are identical with the previous return and the taxation authority may impose tax thereon.

(2) In addition to those recognized as necessary expenses at the time of the instant disposition, the Plaintiff paid KRW 4 million as brokerage commission (i.e., KRW 1 million at the time of the instant disposition + KRW 1 million at the time of the acquisition of the instant 1 real estate + KRW 1 million at the time of the acquisition of the instant 2 land + KRW 2 million at the time of the transfer of the instant 1 real estate and the instant 2 land), KRW 5 million as construction repair cost, KRW 10 million as construction design cost, KRW 10 million as construction design cost, KRW 560 as a certified judicial scrivener’s fee, and KRW 19,069,560 as additional necessary expenses. Therefore, the instant disposition on a different premise is unlawful.

(3) An amendment to uniformly impose additional tax on the number of delayed payment days by means of multiplying the additional tax rate by the number of days for delay of payment is an appropriate disciplinary measure to impose additional tax on the unpaid amount of tax, which is to maintain a reasonable proportional relationship between the degree of violation of the obligation and the sanction, and the additional tax for unfaithful payment was reduced from 5/10,00 to 3/10,000 upon the amendment of the Enforcement Decree of the Income Tax Act on December 30, 202. In light of its legislative intent, the additional tax on global income tax should be applied from the income portion arising from the taxable period in which the date of promulgation falls, while Article 4 of the Addenda provides that the additional tax on transfer income tax should be applied from the first transfer after the enforcement of the Enforcement Decree so that the amendment of the Enforcement Decree of the Income Tax Act violates the purpose of legislation and Article 13 of the Addenda of the Income Tax Act, not from 100 to 310,000.

(b) Related statutes;

It is as shown in the attached Form.

C. Judgment on the assertion that the exclusion period of national tax has expired

The Plaintiff, at the time of the preliminary return of capital gains tax on the first real estate of this case and the second land of this case, prepared a false sales contract with the actual transaction value of KRW 580,00,000, which is KRW 336,600,000, and under-reported, there is no dispute between the parties. Thus, it is recognized that the exclusion period of ten years is applied as it constitutes fraudulent or other unlawful acts.

However, there is no ground to deem that the initial date of calculating the exclusion period of national taxes would affect the calculation of the exclusion period of national taxes as exceptional cases to reduce the burden of a taxpayer with no change after the preliminary return. Where a preliminary return of capital gains tax is filed again with the same contents after the preliminary return, the effect of the confirmation of liability for tax by the preliminary return is maintained as it is (see Supreme Court Decision 2009Du22850, Sept. 29, 201). Where a final return is filed with any different content after the preliminary return is filed, the effect of the confirmation of liability for tax by the preliminary return becomes extinct by absorbing the effect of the confirmation of liability for tax by the final return (see Supreme Court Decision 2006Du1609, May 29, 2008). Considering that the principle of taxation of capital gains tax is applied to the total tax base and tax amount generated during the relevant taxable period, and thus, it cannot be deemed that the final return constitutes a violation of Article 110(4)1 through 37 of the Constitution.

Therefore, the exclusion period of imposition of capital gains tax due to the transfer of assets shall commence from June 1 of the following year, which is the next day from the time when the period of final return of tax base expires, and the fact that the Plaintiff transferred the real estate of this case and the land of this case No. 1 and the land No. 2 of this case to October 10, 2002, is not a dispute between the parties. Thus, the exclusion period of imposition of capital gains tax due to the transfer of the real estate of this case and the land No. 2 of this case is legitimate as of May 31, 2003, which is the time when the final return of tax base of capital gains tax for the transfer of the real estate of this case ends from the next day of June 1, 2003, which is the time when the final return of tax base of capital gains tax for the transfer of this case ends, and the disposition of this case was made on May 31, 2013.

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

D. Determination on the assertion of necessary expenses

(1) Facts of recognition

(A) On April 10, 2002, the Plaintiff acquired the instant 1 real estate, and acquired the instant 2 land on April 16, 2002. At the time of the acquisition of the instant 2 land, the Plaintiff had a single-story house (hereinafter “instant 2”) on the ground of the instant 2 land, and the Plaintiff acquired the instant 2 building including the instant 2 building.

(B) On April 16, 2002, the Plaintiff newly constructed the instant land No. 1 and accommodation facilities on the ground of the instant land, and submitted an application for construction, substantial repair, and alteration of the purpose of use on May 10, 200, to the head of YU and obtained the permission from the head of YUD.

(C) On October 10, 2002, the Plaintiff: (a) transferred to Nonparty 1 the instant real estate and the instant land No. 2 and the instant building No. 2 (hereinafter “instant real estate”); (b) on the basis of the preliminary return of the capital gains tax, the Plaintiff omitted the instant building No. 2 from the transferred assets, while combining the instant real estate No. 2 and the instant building No. 2 (hereinafter “instant real estate”).

(D) On October 15, 2002, Nonparty 1: (a) removed all the instant building and the instant building; and (b) newly built a telecom on the ground of the instant land No. 1 and 2 after reporting on the change of construction participants to the head of YLU on October 15, 2002

[Ground of recognition] Facts without dispute, Gap 8, 14, 17 evidence, Eul 1 and 7 evidence, non-party 1's testimony and the purport of the whole pleadings

(2) Determination as to the assertion on the brokerage commission

In light of the following circumstances, it is acknowledged that there is no intermediary in the process of concluding a sales contract on real estate with the testimony of ○○○○○○○ by adding the whole purport of the pleadings to the following: (a) it appears that there is no intermediary in the process of concluding a sales contract on real estate; (b) in consideration of the relationship between the Plaintiff, the seller, and the buyer; (c) in the event of a real estate transfer, it is general to pay a brokerage commission to the broker; (d) it is difficult to easily obtain that the broker is zero won; and (e) Nonparty 2, the broker, who was involved by the Plaintiff at the time of the transfer of the real estate 2, was involved in the acquisition and transfer of the real estate 1, 2, and received a total of four million won as a brokerage commission.

Therefore, this part of the plaintiff's assertion is justified.

(3) Judgment on the assertion of repair cost

According to the evidence No. 7, the plaintiff paid the building repair work for the building No. 1 and No. 2 of this case to the non-party 3, the representative of the cost of this case around May 2002, the plaintiff paid the building repair work for the building No. 1 and No. 2 of this case to the non-party 3, the representative of the cost of this case. The above cost is the cost paid for the alteration, improvement or convenience of the use of the transferred asset. Thus, the plaintiff

(4) Determination as to the assertion on the construction design cost

In light of the following circumstances, the statement of No. 8 and the witness Non-party 1's testimony added to the purport of the entire pleading, namely, the plaintiff obtained permission from the head of YUG for new construction of accommodation facilities on the land No. 1 and No. 2 of this case, the plaintiff paid KRW 10 million with construction design expenses to obtain a building permit, and Non-party 1 was a building permit for new construction of accommodation facilities on the land No. 1 and No. 2 of this case, and it seems to have purchased the real estate No. 1 and No. 2 of this case. In fact, Non-party 1 completed the cartels on the land No. 1 and No. 2 of this case after the construction report was made on Oct. 15, 202. Thus, the plaintiff's allegation in this part is justified.

(5) Judgment on the assertion about the costs of a certified judicial scrivener

The Plaintiff asserts that the registration fee of a certified judicial scrivener, which was omitted from the necessary expenses at the time of preliminary return of capital gains tax, should be recognized as necessary expenses. However, it is insufficient to acknowledge only the statement of Gap evidence No. 5 submitted by the Plaintiff, and there is no other evidence to acknowledge it. Therefore, the Plaintiff’s assertion

(6) Sub-committee

Therefore, brokerage commission fee of KRW 4 million, repair cost of KRW 5 million, construction design cost of KRW 10 million is considered as necessary expenses. Therefore, this part of the plaintiff's assertion is reasonable within the scope of KRW 19 million, and 19 million should be deducted from the transfer value.

E. Determination as to the assertion that the rate of additional payment for arrears ought to be applied 3/10,000

Article 115(2) of the former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005; hereinafter the same shall apply) provides that when capital gains tax has not been paid or has been paid below the payable tax amount, an amount calculated by applying the rate prescribed by the Presidential Decree to the unpaid or unpaid tax amount by taking into account the interest rate of financial institutions’ overdue loan to the unpaid tax amount shall be added to the calculated tax amount. The amended Enforcement Decree of the former Income Tax Act (amended by Presidential Decree No. 17825 of Dec. 30, 2002) lowers all of the additional tax rate on global income tax provided for in Article 146-2 and the additional tax rate on capital gains provided for in Article 178(3) at the rate of 5/10,000 per day to 3/10,000 per day (Article 1) of the Enforcement Decree of the amended Enforcement Decree of the Income Tax Act from January 1, 2003 to the enforcement date of the above provision on global income tax (Article 4).

The delegation of the additional tax rate to the Presidential Decree of the former Income Tax Act is to determine the additional tax rate by appropriately taking into account the loan interest rate of a financial institution changing depending on time and transaction circumstances. The separate provision of the revised Enforcement Decree is to prevent the tax authorities from sustaining any unreasonable reason depending on when the tax authorities impose the additional tax rate, and Article 4 of the Addenda to guarantee clarity of tax imposition cannot be said to go against the legislative intent of the former Income Tax Act or to unfairly infringe on property rights. Furthermore, the separate provision of global income tax and transfer income tax is different from global income tax and transfer income tax, because of the characteristics of the transfer income tax that the long-term unrealized income is realized at once, which provides that the additional tax rate on transfer income tax shall be imposed individually under a separate calculation structure. In light of the purport of the separate provision that Article 4 of the Addenda to the amended Enforcement Decree provides that the additional tax rate on transfer income tax shall be applied differently from the additional tax on global income tax without reasonable grounds.

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

(f) Calculation of legitimate capital gains tax;

If the Plaintiff calculates the capital gains tax to be paid on the basis of the above facts of recognition, the portion exceeding KRW 112,293,883 of the instant disposition is unlawful.

3. Conclusion

Thus, the plaintiff's claim is accepted within the above scope of recognition, and the remaining claims are dismissed as they are without merit.

[Attachment]

Judges Lee Jin-ap