Seoul Administrative Court 2016Gudan59181 ( November 14, 2017)

An apartment that is used for the purpose of "a villa without a permanent residence" is viewed as a house.

Even if apartment was used for a separate purpose, it can not be said that there is a non-taxable practice that regards apartment as not being a house in the application of non-taxation on the income tax of one house for one household in the same case as the issue house

Article 89 of the Income Tax Act

2017Nu86271 Revocation of Disposition of Imposing capital gains tax

AA

The director of the tax office

on October 03, 2018

on October 27, 2018

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

On April 6, 2015, the Defendant revoked the disposition of imposition of capital gains tax of 00 ○○ and ○○○○○○○○○○ for the Plaintiff for the year 2014.

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

The court's explanation on this part is the same as the corresponding part of the reasoning of the judgment of the court of first instance. Thus, it is accepted by Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

① The key issue house is that the Plaintiff and his spouse use the apartment house for a separate purpose, and thus, it does not fall under the “house” under Article 89 (1) 3 (a) of the former Income Tax Act, and (2) a non-taxation practice is formed that no villa does not regard the house as a house even if the villa falls under Article 89 (1) 3 (a) of the former Income Tax Act, and (3) a tax office has expressed its view that the apartment house is not deemed a house for several times, and the Plaintiff, who trusted it, transferred the apartment house in this case while he owned the house at issue, the disposition in this case goes against

(b) Related statutes;

The entry in the attached Form is as specified in the relevant statutes.

(c) Fact of recognition;

The court's explanation on this part is consistent with the corresponding part of the reasoning of the judgment of the court of first instance, except for dismissal or addition as follows. Thus, this part of the reasoning of the judgment of the court of first instance is cited in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

○ Imprison 13, 5, 13, 5, 5, 5, 5, 5, 5

○ In accordance with the 6th sentence of the first instance court, the following 3 and 4 of the 6th sentence:

7) On November 2016, Kim○-○ leased the key house to ○○○○○, a deposit, KRW 00,000,000,000,000,000.

D. Determination

1) Whether the issue issue house constitutes "house" under Article 89 (1) 3 (a) of the former Income Tax Act

In a case where a transferor of a house owns another building, whether the other building constitutes "house" under Article 89 (1) 3 (a) of the former Income Tax Act shall be determined by whether the actual purpose of use is a building actually used for residence regardless of the usage classification of the injury caused by the building. Even if the building is temporarily used for other purpose than a residence, the structure, function, or facility is in a state suitable for residence as its original residential purpose, and the residential function is maintained and managed as it is, so that the building can be used for a house by himself or a third party (see, e.g., Supreme Court Decision 2004Du14960, Apr. 28, 2005).

The key issue of housing is one household (exclusive area 46.7293 square meters) of a tenement consisting of 120 households in total, consisting of 2 rooms, living rooms, bathing rooms, boiler rooms, etc., which are originally constructed for residential purpose and can be used as a house at any time because the residential function is maintained and managed as it is. Thus, it constitutes a house under Article 89(1)3 (a) of the former Income Tax Act.

On the other hand, with respect to the non-taxation of income tax due to the transfer of one house for one household, the laws and regulations on income tax shall be defined in Article 104-3(1)6 of the former Income Tax Act, Article 13(5) of the Local Tax Act, i.e.

There is no provision as to whether a building for use, such as recreation, summering, and amusement, is a house or not. Therefore, the fact that a house is used for the above villa cannot be excluded from a house under Article 89 (1) 3 (a) of the former Income Tax Act on the sole basis that it is used for the above villa. The Plaintiff’s assertion on this part is without merit.

2) Whether non-taxable practices have been established

Article 18(3) of the Framework Act on National Taxes provides for non-taxation practices. Such non-taxation practices shall be applied only to cases where there are special circumstances that, even if they sacrifice the principle of legality, the protection of taxpayers’ trust is deemed to conform to the justice, and the interpretation of the tax-related Act or the practice of national tax administration, which is generally accepted by taxpayers, refers to erroneous interpretation or practice, but to the extent that it is not unreasonable for taxpayers to believe such interpretation or practice by being accepted by an unspecified general taxpayer who is not a specific taxpayer without justifiable reason, and it cannot be deemed that such interpretation or practice exists merely on the sole ground that there was a statement of public opinion on the standard of interpretation of the tax-related Act;

The burden of proving the existence of such interpretation or practice lies on the taxpayer who is the claimant (see, e.g., Supreme Court Decisions 2000Du1652, Feb. 8, 2002; 2005Du2858, Jun. 29, 2006). In addition, in order to establish a non-taxable practice, there are not only objective facts that have not been taxed over a considerable period of time, but also any special circumstances that the tax authority knows that it can impose tax on the matter, and such public opinion or intention should be expressed explicitly or implicitly, but also there is an implied indication.

Unlike simple omission of taxation, tax authorities should have expressed their intent not to impose tax on the state of non-taxation for a considerable period of time (see the Supreme Court).

See Supreme Court Decision 2001Du7855 delivered on September 5, 2003

It seems that the tax authorities established the established rules (No. 46014-1195 second day of May 14, 1996, second day of June 25, 1997, second day of 46014-1549 of June 25, 1997) stating that "one house for one household which is exempt from capital gains tax shall not be deemed a house" (the reference materials attached to Plaintiff’s preparatory documents as of January 13, 2017, 5 attached to Defendant’s preparatory documents as of August 11, 2017) with respect to non-taxation of one house for one household which is exempt from capital gains tax; and the tax authorities determined that "one house for one household which is not a house for which capital gains tax is exempted is excluded from taxation (the reference documents for Defendant 1 as of August 11, 2017, and the preparatory documents as of June 25, 2017).

However, the above trial decision case pertains to "the case where property tax, etc. is imposed as a villa for the purpose of the villa after completing the interior construction in order to acquire a house of a wooden floor located in the Dorasium and use it for the villa," and the above inquiry case concerns "the case where the house of a rural area is acquired and used for the weekend resort, etc. for the purpose of a villa" or "the case concerning the share of a building sold for the purpose of a villa for the purpose of a villa". In addition, when the tax authority determines one house of one household which is not subject to capital gains tax, it seems that it is a reservation answer such as "the fact verification is required rather than a conclusive response to the question as to whether it is included in a villa" (as of August 11, 2017, the defendant's preparatory document attached 2, and 4).

On the other hand, even if a residential officetel is acquired for the purpose of recreation and used for the purpose of permanent residence, it shall be deemed a house on the ground that the structure, function, etc. is suitable for residence and there is no excessive amount of property tax, etc. as a villa (Seoul High Court Decision 201No. 2317).

A house shall be deemed to be a house on the ground that cooking, washing, etc. is possible for the use of a Ri, etc., and that there is no excessive acquisition tax, property tax, etc. as a villa.

There are also cases of adjudication decision, etc. (the defendant's reference materials as of March 22, 2018).

In light of the above precedents of adjudication and inquiry, even though the tax authority has determined that the above regulations were enacted and the actual residential buildings were not housing as a villa, it seems that the actual taxation practice of capital gains tax did not automatically determine that the actual residential buildings do not fall under housing merely because they were used for recreation, summering, amusement, etc. without using them as a permanent residential area, but rather, it seems that the tax authority has determined whether to impose capital gains tax exemption on a selective basis by taking into account the following: the purpose of construction, the location and structure of the building, the existence of special facilities, etc. for the villa use as a villa for weekend, weekend, recreation, etc., and whether the acquisition tax or property tax has been in separate place

Therefore, even if there is room for the tax authorities to recognize the establishment of non-taxation practices in accordance with the above legal principles regarding the cases where the tax authorities applied non-taxation of capital gains tax regarding residential buildings as separate residential buildings, in order to ensure that housing at issue is subject to such non-taxation practices, specific similaritys should be recognized with the cases where non-taxation of capital gains tax has been applied beyond the extent that housing was used for non-permanent residence and recreation

However, the following circumstances acknowledged by the above facts and evidence, i.e., one household of the apartment house, one of the typical forms of residential buildings, which can be used as permanent residence at any time, and the majority of neighboring households actually use it as permanent residence. ② The plaintiff and Kim Young-young did not engage in any particular remodeling in using the house for any purpose, other than permanent residence, and there is no special facility for recreation, etc., and it seems that there is no need for any alteration in the lease of the house at issue as above. ③ The house at issue is treated as a separate house and there is no property tax imposed on the house at issue (the Kim Young-young issue was issued a separate letter from the Jeju mayor around March 2015, but this is considered to have been transferred the apartment house at issue on or around May 2014, and it does not constitute the Plaintiff’s non-taxation practice in the application of this part of the house at issue.

3) Whether the principles of trust protection are violated

In order to apply the principle of trust protection to the tax authority's act in the tax law relations, first, the tax authority must give the taxpayer a public opinion that is the subject of trust, second, the taxpayer has no reason to be attributable to the taxpayer when the taxpayer trusted that the tax authority's expression of opinion is justifiable, third, the taxpayer must trust the expression of opinion and act what it is, fourth, the tax authority's disposition against the above expression of opinion should result in infringing the taxpayer's interest (referring to the Supreme Court Decision 2001Du403 delivered on September 5, 2003).

Even if a tax authority has implemented the above established rules and has determined that a part of a residential building does not constitute a house by deeming it as a villa, the quantity of one house per household shall be the quantity of one house.

In applying Do income tax exemption, it is difficult to readily conclude that the Plaintiff expressed a public opinion that the same case as the Do-based house is not a house, and there is no reason to believe that the Plaintiff used the Do-based house for recreation, etc., and there is no reason to believe that the Do-based house is not a house, with only the fact that the Plaintiff used it for recreation, etc.

The plaintiff's assertion on this part cannot be seen as having been justified.

3. Conclusion

If so, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance shall conclude this conclusion.

Therefore, the plaintiff's claim is revoked and dismissed.