In the absence of any provision on the ratio to be applied at the time of acquisition of real estate in a specific area, the transfer profit method

In order to be the basis of calculation of transfer income tax pursuant to Article 115 (1) 1 (a) and (2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 9229, Dec. 30, 1978); the real estate is located in an area designated by the Commissioner of the National Tax Service as a specific district and there must be the rate determined by the Commissioner of the National Tax Service to be applied to the area at the time of its acquisition as well as the time of its transfer; therefore, if the transferor of the real estate has no applicable rate at the time of its acquisition, both the transfer and acquisition value cannot be calculated by the standard market

Article 60 of the Income Tax Act, Article 115 (1) 1 (a) and Article 115 (2) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 9229, Dec. 30, 1978)

Supreme Court Decision 84Nu63 Decided May 29, 1984 84Nu237 Decided March 26, 1985

Plaintiff

The director of the tax office.

Seoul High Court Decision 84Gu1172 delivered on November 14, 1985

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal are examined.

Article 115 (1) 1 (a) and (2) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 9229, Dec. 30, 1978) provide that the amount calculated by multiplying the standard market price under the Local Tax Act at the time of the transfer or acquisition of land by the amount calculated by multiplying the standard market price of the land and building with a similar price under the Local Tax Act by the ratio as determined by the Commissioner of the National Tax Service, i.e., the value assessed by the ratio., the standard market price under the Local Tax Act at the time of the transfer or acquisition of the land. In order to determine the standard market price under this method as the calculation basis of the transfer income tax, the real estate should be located within the area designated by the Commissioner of the National Tax Service, and at the time of the acquisition as well as at the time of the transfer or acquisition of the real estate, the transfer price and acquisition price cannot be calculated by the standard market price at the time of the acquisition or acquisition of the real estate.

The reasoning of the judgment of the court below is that Article 115 (1) of the former Enforcement Decree of the Income Tax Act, which enters into force at the time of the acquisition of the real estate of this case, requires the assessment of the standard market price based on the standard market price under the Local Tax Act, and Article 115 (1) 1 (a) of the Enforcement Decree of the same Act at the time of the transfer provides that the standard market price shall be determined based on the value assessed according to the multiple factor, so such a case is somewhat insufficient, but the conclusion that the assessment based on which the standard market price should be determined according to the multiple factor method is illegal is identical to the opinion of the party members, so the decision of the court below is correct and that there

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating judges.

Justices Jeong Jong-tae (Presiding Justice)