Whether transfer margin is calculated based on the actual transaction price.

Even if it is based on any of the new Enforcement Decree or the former Enforcement Decree, it is illegal to impose capital gains tax and defense tax on the land transaction permission portion based on the gains from the transfer calculated based on the actual transaction price, although the gains from the transfer calculated based on the actual transaction price shall be calculated based on the standard market price.

The contents of the decision shall be the same as attached.

1. The disposition imposing capital gains tax of KRW 127,136,510 and defense tax of KRW 16,951,530 on the Plaintiff on May 16, 1996 is revoked, respectively. 2. The litigation cost is assessed against the Defendant.

1. Details of the instant disposition

The following facts are acknowledged in accordance with the evidence Nos. 1 to 3, evidence Nos. 4-1, 2, evidence Nos. 5-1, 5-2, evidence Nos. 6, evidence No. 7-1, 2, evidence Nos. 1, 2, 2-2, Eul evidence Nos. 2-3, evidence Nos. 4-1, 5-2, Eul evidence Nos. 5, 6-1, 2, 7-1 to 7, and 8 of evidence Nos. 8.

A. On May 29, 1989, the Plaintiff and Nonparty ○○○○○○○○○ ○○○○○○○○○○○, and Kim ○○-gun (hereinafter the Plaintiff et al.) purchased KRW 322,350,00 from Nonparty A and B, jointly purchase KRW 322,350,00 from Nonparty 2, and completed the registration of ownership transfer on October 10 of the same year with respect to KRW 1,091 square meters (hereinafter “6,089,20 square meters) of 97,000,000 of 97,000.

B. On April 25, 1990, the Plaintiff et al. sold the instant land to Nonparty ○○○○ Co., Ltd. for gold KRW 1,197,30,000,000. On the same day the down payment of KRW 120,000,000, and the intermediate payment of KRW 977,30,000 on June 12 of the same year, and KRW 100,000,000 on October 18 of the same year respectively, while receiving any balance, the Plaintiff et al. additionally received KRW 10,00,000 as capital gains tax when receiving any balance.

C. The instant land was located within the land transaction permission zone at the time of the said sale and purchase contract. Accordingly, on October 18, 1990, the Plaintiff, etc. and the said company filed an application for land transaction permission with respect to 4,958 square meters (205 square meters among the instant land and 97-4 square meters among the land located within 97-1 square meters and 4,753 square meters among the land located within 97-4 square meters), which is the remaining liquidation date. On October 22 of the same year, the Plaintiff, etc. and the said company received land transaction permission on October 22, 199. However, unlike the fact that the land transaction application amount was transferred, the Plaintiff, etc. and the said company entered the amount of KRW 54,538,00 (in accordance with the original contract, KRW 194,975,300,000) as KRW 4,958/3046).

D. Meanwhile, on October 19, 190, the Plaintiff et al. concluded a mortgage agreement with the above non-party company as the debtor with respect to the entire land of this case, and completed the establishment of a mortgage on the following day. On November 8, 1998 of the same year, the Plaintiff et al. reported to the non-party company as the total purchase price of KRW 54,538,000,000 and the total purchase price of KRW 6,50,000,000. On October 23, 1990, the Plaintiff et al. completed the establishment of a mortgage agreement on the following day. On November 8, 1997, the share equivalent to the share equivalent to the land transaction permission (hereinafter the land transaction permission portion) out of the land of this case and the share corresponding to the share corresponding to the share (4743/295,295,000 among the land of this case and the share of KRW 54,538,000,000,000.

E. Next, upon the application of the ○○ Bank, the land of this case was awarded a successful bid of KRW 462,00,000 on July 28, 1995 with respect to the entire land of this case as a result of the auction procedure for the entire land of this case. On December 30, 1995, the Plaintiff voluntarily paid the transfer income tax amount of KRW 3,11,600,60,000, out of the part remaining in the name of the Plaintiff, etc. (hereinafter “land transaction unpermitted portion”) among the land of this case on December 30, 1995 as to the portion remaining in the name of the Plaintiff, etc. (hereinafter “land transaction unpermitted portion”).

F. However, on October 18, 1990, the Defendant deemed that the Plaintiff did not report all of the Plaintiff’s share in the instant land even after the Plaintiff transferred it, and imposed and notified the Plaintiff of KRW 15,046,240 [the amount of capital gains tax (including additional tax) calculated by base market price minus KRW 18,157,843 (including the amount of capital gains tax calculated by subtracting KRW 3,11,600 that the Plaintiff paid voluntarily on December 30, 1995; hereinafter the same shall apply] and the defense tax amount of KRW 3,631,560 (including additional tax; hereinafter the same shall apply) and the defense tax amount of KRW 15,157,843 (including additional tax) on March 16, 196.

G. However, in the process of the special tax investigation into the above non-party company, details of the land in this case were clarified. The defendant, on May 16, 1996, notified 108,978,670 won [including additional taxes] of the capital gains tax again determined based on the actual transaction price, less than 3,11,60 won paid by the plaintiff on December 30, 1995, less 15,04,246,243 won (the second notified capital gains tax amount) and 13,319,960 won (the amount of the second notified capital gains tax) calculated based on the tax base calculated based on the actual transaction price, less than 127,136,514 won, less than 15,000 won and the first notified 15,046,000 won, less than 13,000 won and 29,000 won (the second notified capital gains tax amount) calculated based on the tax base calculated based on the actual transaction price.

H. In the administrative appeal procedure following the Plaintiff’s objection, the National Tax Tribunal rendered a decision to re-examine the time of transfer regarding the portion of land transaction permission. However, as a result of re-examination of the time of transfer, the Defendant decided to maintain the instant disposition on the ground that the initial decision was justifiable, and notified the Plaintiff thereof.

2. Whether the instant disposition is lawful

A. Provisions of relevant Acts and subordinate statutes

According to the proviso of Article 23(4)1 and the proviso of Article 45(1)1(a) of the former Income Tax Act (amended by Act No. 4281, Dec. 31, 1990; hereinafter the same), where transfer margin is calculated based on the actual transaction price, pursuant to Article 170(4)2(e) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 13194, Dec. 31, 1990; hereinafter the same), where acquisition or transfer of real estate exceeding a certain scale prescribed by the Commissioner of the National Tax Service violates the relevant Acts and subordinate statutes, such as the use of another person’s name, preparation of a false contract, and false transfer of resident registration, or where the actual transaction price at the time of transfer or acquisition is confirmed, the transfer or acquisition price shall be based on the actual transaction price, and Article 89-8(8) of the National Tax Service’s Act provides for the purport that real estate exceeding a certain size prescribed by the Commissioner of the National Tax Service is at least 600 square meters.

Meanwhile, Article 96 Subparag. 1 proviso and Article 97(1)1 proviso of the current Income Tax Act (amended by the Presidential Decree No. 14860, Dec. 30, 1995; hereinafter the same) Article 166(4)2 of the current Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 14860, Dec. 30, 1995; hereinafter the same) provides that cases where real estate is acquired or transferred by unlawful means, such as preparation of false contract, false relocation of resident registration, etc. for the purpose of evading tax burden, which fall under the standard prescribed by the Commissioner of the National Tax Service, shall be one of the cases where gains from transfer are calculated based on the actual transaction price. Article 8(2) of the new Enforcement Decree provides for one of the amended provisions that apply from the determination of capital gains after the new Enforcement Decree enters into force, and Article 166 of the new Enforcement Decree provides for the purport that the transfer price of land is at least 30 billion won in the urban planning zone.

B. Summary of Defendant’s assertion on legality

While the Plaintiff et al. transferred the entire land of this case to 1,207,00,000 won, the Plaintiff et al. entered the land transaction application with false statement as to the intention to transfer KRW 4,958 square meters, which is part of the instant land, to 54,538,000,000, and completed the registration of ownership transfer on the basis of the same false contract with regard to the land transaction permission portion. On the land transaction permission portion, the said non-party company provided the land transaction permission portion as security to ○○ bank, thereby having the said non-party company use and profit from the ownership, and actually maintained the ownership transfer registration under the name of the Plaintiff et al., while maintaining the ownership transfer to the said non-party company, the ownership transfer registration was in violation of the Act on the Registration of Real Estate under Actual Titleholder’s Name by completing the registration of ownership transfer to the third party through the auction procedure. Since the land of this case is a natural green area within the urban planning zone and the area corresponding to the Plaintiff’s share of

Therefore, the transfer of the Plaintiff’s share among the land in this case constitutes a case where the transfer margin should be calculated based on the actual transaction price, regardless of what is applicable to the former Enforcement Decree or the new Enforcement Decree.

C. Determination

(1) As to the portion of land transaction permitted

In a case where a sale contract is concluded within a land transaction permission area under the Act on the Utilization and Management of the National Territory without permission for land transaction, if the sale contract becomes final and conclusive from the beginning, and if it is based on the premise that the permission is granted for the future, it shall be null and void in a state of genetic invalidation and if it becomes impossible to obtain permission prior to obtaining permission (see Supreme Court en banc Decision 90Da12243, Dec. 24, 1991). If the sale contract is null and void, even if the sale price was paid to the transferor, it shall not be deemed that the transfer of assets subject to capital gains tax or there was income from the transfer of assets (see Supreme Court Decisions 92Nu8361, Jan. 15, 1993; 95Nu18383, Mar. 20, 1997).

Examining the instant case, the entire land in this case was awarded to a third party other than the above non-party company at the auction procedure, and thus the sales contract between the plaintiff et al. and the above non-party company becomes null and void finally and conclusively as it becomes impossible to obtain land transaction permission. Therefore, as long as the sales contract for the portion of land transaction permission becomes null and void, even if the plaintiff et al. paid all the purchase price to the above non-party company, and used and profit from the money provided as collateral, it cannot be deemed that the transfer of assets subject to capital gains tax or the transfer of assets did not have any income from the above non-party company (the defendant alleged that the plaintiff et al. received permission only for the part of the land in this case for the purpose of excluding or avoiding land transaction permission from the beginning, and the remaining transfer was made through the auction procedure, but the sales contract between the plaintiff et al. and the above non-party company and the above non-party company becomes null and void. In addition, in the case of auction permission under the Act on the Utilization and Management of the National Territory, it does not need to obtain any land transaction permission from the above third party.

If so, the part on which land transaction was not permitted among the disposition of this case is transferred from the plaintiff, etc. to the above non-party company is subject to the transfer income tax, and thus, it is unlawful without examining further.

(1) As to the land transaction permission portion

Article 8(2) of the Addenda to the new Enforcement Decree provides that the provisions of the mother law amended by Act No. 5031 of Dec. 29, 1995 and the provisions of the new Enforcement Decree concerning capital gains shall apply from the first transfer after the enforcement of the mother law and the new Enforcement Decree (Article 8 of the Addenda to the amended provisions of the former Enforcement Decree and Article 8(1) of the Addenda to the amended provisions of the former Enforcement Decree), notwithstanding the provisions of Article 8(2) of the former Enforcement Decree, where capital gains are determined after the enforcement date of the former Enforcement Decree, even if they are transferred before the enforcement date of the former Enforcement Decree (Article 153(4), 155(1) and (15), 164(1) and 166 of the former Enforcement Decree, which provide that the amended provisions of the former Enforcement Decree shall be applied retroactively to taxpayers within the scope of application favorable to taxpayers. Therefore, it is unfavorable to taxpayers to calculate capital gains from transfer based on the actual transaction price, and if it is impossible to calculate capital gains from transfer due to any one of the former Enforcement Decree.

Therefore, in applying the new Enforcement Decree, I first examine whether the transfer of the land transaction permission portion should fall under the case where the transfer margin should be calculated based on the actual transaction price.

Article 196-16 of the National Tax Service’s notice provides to the effect that the transfer value based on the standard market price by transaction unit is 100 million won or more, and that the transfer of land exceeding a certain area constitutes the standard prescribed by the Commissioner of the National Tax Service under Article 166(4)2 of the Enforcement Decree. Here, the transaction unit refers to an effective transaction unit. Therefore, even where a sale contract was concluded by a single unit prior to obtaining a land transaction permission, as in the instant case, it shall be valid with a land transaction permission only for a part of the subject matter, and the remainder shall be determined as null and void, based on the part for which a land transaction permission was granted, if it falls under the standard prescribed by the Commissioner of the National Tax Service under Article 166(4)2 of the Enforcement Decree of the National Tax Service. However, if the former purport of pleading was gathered in the statement in subparagraph 1-2 of the evidence No. 1-2, the standard market price of the instant land at the time of October 18, 1990.

In addition, as alleged by the Defendant, even if the Plaintiff et al. obtained a land transaction permit only for a part of the instant land from the beginning, and caused the said non-party company to use and make profits from the entire instant land by providing it as a physical collateral for the said non-party company, it cannot be deemed as a violation of the Act on the Registration of Real Estate under Actual Titleholder’s Name. Therefore, the transfer of the land transaction permit portion among the instant land does not constitute a case where the transfer of the land among the instant land should be calculated based on the actual transaction price pursuant to Article 166(4)2 of

Next, in applying the former Enforcement Decree, it is examined whether the transfer of the land transaction permission part falls under the case where the transfer margin should be calculated based on the actual transaction price.

Unlike the provision that the transfer value and size of real estate, which are the basis of the National Tax Service Notice No. 196-16 under the Enforcement Decree of the National Tax Service Act, shall be based on each transaction unit, Article 170(4)2(e) of the former Enforcement Decree of the National Tax Service publicly notified by the National Tax Service, which sets forth the scope of real estate above a certain size prescribed by the Commissioner of the National Tax Service, stipulates only the size of the land that is the basis. Therefore, even where several persons jointly transfer real estate, whether the land constitutes real estate above a certain size prescribed by the Commissioner of the National Tax Service under Article 170(4)2(e) of the former Enforcement Decree shall not be based on each transaction unit, rather than on each co-owner’s share. However, the issue of whether the land transaction constitutes real estate above a certain size prescribed by the Commissioner of the National Tax Service under Article 170(4)2(e) of the Enforcement Decree of the former Enforcement Decree of the National Tax Service’s new Enforcement Decree is not based on the transaction unit, but on each co-owner’s share.

Therefore, even according to any of the new Enforcement Decree or the former Enforcement Decree, the capital gains tax and the defense tax on the land transaction permission portion among the land in this case should be calculated based on the standard market price. However, as seen in paragraph (d) of Article 1 of the same Act, the Plaintiff was properly paid after calculating the capital gains tax and the defense tax based on the standard market price with respect to the land transaction permission portion on May 31, 1991. Nevertheless, the part imposed on the Plaintiff by calculating the capital gains tax and the defense tax on the land transaction permission portion based on the gains from transfer calculated based on the actual transaction price is not subject to double taxation.

3. Conclusion

Thus, since the disposition of this case is unlawful in whole, the plaintiff's claim seeking its revocation is justified, and the lawsuit cost is assessed against the losing defendant and it is so decided as per Disposition.

February 4, 1998