Examination Donation 2014-007 (Law No. 13, 2014)

Fees for resolution of land disputes shall be deemed necessary for transfer and shall not be deemed as being donated with acquisition funds.

It is reasonable to recognize land dispute resolution fees as necessary expenses for transfer, and there is no fact that the acquisition and management of real estate was conducted, and part of the funds for acquisition of real estate is repaid before the tax investigation, and it shall not be deemed that funds for acquisition were donated

Article 97 of the Income Tax Act as necessary expenses

Article 2 (Gift Tax Taxables) of Inheritance Tax and Gift Tax Act

2014Guhap63329

Kim AA et al.

○ Head of Tax Office and one other

November 20, 2015

December 22, 2015

1. On November 1, 2013, the head of △△ Tax Office revoked the imposition of ○○○○○○○ on the aggregate of KRW ○○○○○○○○○, which was made against Plaintiff NewB on November 1, 2013, 2009, KRW 2010, KRW 00, KRW 201, KRW 201, and KRW 200, KRW 201.

2. On November 1, 2013, Defendant 1’s head of △△△ Tax Office revoked the part exceeding 000 won among the disposition of imposition of capital gains tax on Plaintiff KimA in 2006.

3. The remaining claims of Plaintiff KimA are dismissed.

4. Of the costs of lawsuit, the part arising between the Plaintiff NewB and the head of the △△ Tax Office shall be borne by the head of the relevant tax office, and the 1/2 of the part arising between the Plaintiff KimA and the head of the relevant tax office, and the remainder by the head of the relevant tax office, respectively.

Cheong-gu Office

The disposition of imposition of capital gains tax on November 1, 2013 by the head of the relevant tax office and the head of the relevant tax office is revoked.

1. Details of the disposition;

A. Imposition of capital gains tax on Plaintiff KimA

1) On March 28, 200, Plaintiff KimA borrowed the name of GCC and acquired the instant land at ○○○○○○○○○○○○○○○○○○○○○○○○○○○○ (hereinafter “instant land”) through the auction procedure (Cheongju District Court ○○○○○○○○ Real Estate Auction, hereinafter “instant auction procedure”).

2) On July 5, 2006, the instant land was sold to ○○○○○○ Construction Co., Ltd. (hereinafter “○○ Construction”) in the auction procedure.

3) On September 30, 2006, Plaintiff KimA reported and paid KRW 00 of the capital gains tax calculated by applying the standard market price pursuant to Article 96(2) of the former Income Tax Act (amended by Act No. 8144, Dec. 30, 2006; hereinafter the same) to the transfer of the instant land under the name of GCC, based on the standard market price, ○○○○, the acquisition price of ○○, and other necessary expenses ○○○○, each of which was calculated by applying the said standard market price.

4) On November 1, 2013, the head of the Defendant △△△ Tax Office deemed that Plaintiff KimA violated the Act on the Registration of Real Estate under Actual Titleholder’s Name by practically acquiring the instant land by lending the name of GCC. Accordingly, on November 1, 2013, he notified Plaintiff KimA of the rectification and notification of the capital gains tax amount calculated by applying the actual transaction price to Plaintiff KimA, ○○○○○, ○○○○, and necessary expenses, respectively. After that, on February 19, 2014, the head of the Defendant △△△△△△ Tax Office additionally recognized necessary expenses KRW ○○○, thereby reducing the capital gains tax amount by ex officio (hereinafter “instant disposition imposing capital gains tax on the capital gains tax of the reduced ○○○○○”).

5) Plaintiff KimA filed a request for review with the National Tax Service on January 27, 2014, but the decision of dismissal was rendered on April 22, 2014.

B. Imposition of each gift tax on Plaintiff NewB

1) From May 13, 2009 to May 1, 2012, Plaintiff NewB acquired real estate as indicated in the table in paragraph (3) below, and leased one apartment bond (hereinafter collectively referred to as “each of the following real estate”).

2) From May 13, 2009 to May 1, 2012, the head of the Si/Gun/Gu Tax Office: (a) determined and notified the Plaintiff’s ○○○○○○ out of the acquisition funds of each of the instant real estate from May 13, 2009 to May 1, 2012; (b) on November 1, 2013, the following to the Plaintiff’s newB: (c) KRW ○○○, ○○○, ○○○, ○○, ○○○, ○○○, and ○○○○, 201, the gift tax reverted to 201; and (d) determined and notified the Plaintiff’s ○○○ out of the total KRW ○○○ out of the gift tax reverted to 201

3) On January 29, 2014, Plaintiff NewB filed a request for review with the National Tax Service on January 29, 2014. Of the initial imposition of gift tax on June 13, 2014, the first imposition of gift tax on May 13, 2009, and the value of donated property on August 18, 2010 excluded Plaintiff KimA from KRW ○○○ and KRW ○○○, which have been repaid to Plaintiff KimA, respectively, and rendered a decision of citing part of the correction as indicated in the table below.

4) According to the above decision, the head of the △△ District Tax Office, as indicated in the Disposition No. 1 of November 27, 2014, corrected the total amount of the gift tax to ○○○○○ (hereinafter referred to as “the disposition imposing the gift tax remaining after the reduction”) (hereinafter referred to as “the disposition imposing the gift tax of this case”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 7, 34 (including branch numbers for those with provisional numbers; hereinafter the same shall apply), Eul evidence Nos. 1 through 3, the purport of the whole pleadings

2. Related statutes;

Attached Table 1 shall be as stated in the relevant statutes.

3. Whether the disposition of transfer income tax of this case is legitimate

(a) Facts of recognition;

1) At the time when Plaintiff KimA acquired the instant land by auction, part of the land excavation works for new construction of department stores and the construction works for installing H beam beams under the ground was carried out (such as above 'H beam structure’).

2) In addition, at the time, the registration of creation of a mortgage over the instant land of ○○○○○○○○○○○○, the sum of the amount of preserved claims, and the provisional seizure or seizure (provisional seizure or seizure right holder ○○○○○○○○○○○○○○○○○○○○) was completed. In the instant auction procedure, ○○ enterprise, including △△△△○ Co., Ltd., applied for commercial lien with the preserved

3) In the instant auction procedure, the appraisal value of the instant land was calculated as ○○○○○○○, but the Plaintiff KimA was awarded a successful bid on nine occasions at the end of the bid.

4) On April 17, 2000, Plaintiff KimA paid ○○○○ as compensation to the buyers related to the instant land. From the companies in charge of constructing the instant underground structures, the Plaintiff Kim Jong-A paid KRW ○○○○○ as compensation for the possession of the instant land on April 25, 2000, the ○○○○○○ and the management expenses and consolation money on May 27, 2002, in return for the transfer of possession of the instant land.

5) On May 27, 2002, Plaintiff KimA entered into an agreement on the following (hereinafter “instant construction permit-related agreement”) with ○○○○○○○ (hereinafter “instant building permit-related agreement”), including the acquisition of the instant building permit right (the owner: ○○ Integrated Construction Co., Ltd.; hereinafter “the instant building permit-related right”) from the name of MaCC, from May 27, 2002. On the same day, Plaintiff KimA paid KRW 300 million for Mari Development on June 10, 2002, and the said owner’s name was changed from Mari Development to MaCC.

6) 한편, 원고 김AA은 고DD으로 하여금 이 사건 토지의 소유권을 아무런 제한 없이 취득할 수 있도록 경매물건 검색, 중개, 수분양자 및 유치권자와의 교섭 등 이해관계인 관련 분쟁해결 업무(이하 '토지 분쟁해결 업무'라 한다)를 담당하도록 하고, 그 대가로 1999. 6. 25.부터 2002. 10. 18.까지 합계 ○○○원[○○○원(갑 제12호증) + ○○○원(2014. 2. 19.자 감액경정시 추가로 인정된 필요경비), 이하 '이전 송금액'이라 한다]을 임CC가 대표이사로 재직하던 주식회사 ★★★★★★(이후 주식회사 ◇◇◇으로 상호 변경, 이하 '★★★★★★'이라고만 한다) 명의 계좌에서 고DD이 대표이사로 재직하던 주식회사 ○○○○광고 계좌로 송금하였다.

7) On November 19, 2002, Plaintiff KimA transferred ○○○○○ on December 26, 2002, 2002, ○○○○○○○ on March 13, 2003, 2003, ○○○○○○ on April 21, 2003, ○○○○○○○ on July 10, 2003, and ○○○○○○○○○ on September 30, 2003 (hereinafter referred to as “the remittance amount in this case”), from the account in the name of ○○○○○○’s employee credit card.

[Ground of recognition] Facts without dispute, entry of Gap evidence Nos. 11 through 16, purport of the whole pleadings

B. As to whether the acquisition price of the instant building permit is necessary

1) Article 97 (1) of the former Income Tax Act provides that "acquisition value under subparagraph 1, "capital expenditure amount under subparagraph 2, etc. prescribed by the Presidential Decree", and "transfer expense under subparagraph 4, etc. prescribed by the Presidential Decree" respectively. Article 163 (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19687, Sep. 22, 2006; hereinafter the same) provides that "the said amount of capital expenditure, etc. prescribed by the Presidential Decree as necessary expenses to be deducted from the transfer value" as "the expenses disbursed for the alteration, improvement, or convenience of the use of transferred assets under subparagraph 3."

2) In light of the following circumstances revealed by adding the aforementioned facts and the purport of the entire pleadings, the acquisition price of the instant building permit is the cost disbursed for convenience in the use of the instant land, which is the acquisition asset, and actually contributed to increasing the economic value of the land, and thus, it should be deemed that the capital expenditure falls under the capital expenditure and should be included

① In the instant auction procedure, the instant land was sold at a price lower than 1/00 of the appraised value via a bid on nine occasions. This is because there were many interested parties asserting the right to the instant land. The exercise of lien, etc. by a construction company that carried out construction of the instant underground structure is one of the main causes, and there was a need to exclude all rights of the said construction company, including taking over the instant building permit right, to use the instant land without interference with the said construction company.

② In light of the contents of the instant building permit-related agreement, the transfer proceeds of the instant building permit, beyond simply acquiring the instant building permit right, has the nature of a kind of agreement that was paid for the purpose of preventing the Plaintiff KimA from raising an objection to the use of the instant land, etc. from being compensated for the construction companies participating in the instant building construction project beyond simply acquiring the instant building permit right.

③ As indicated in the above paragraph A-4, Plaintiff KimA paid the sum of KRW 000 in ○○○○○○○○, and the Defendant recognized all of the necessary expenses. Of the aforementioned payments, the amount of the aforementioned payments, the amount of the transfer of possession means preserving the construction costs, etc. of the construction companies invested in the instant underground structures, and it is not clearly distinguishable from the acquisition price of the instant construction permit (the payment was made pursuant to the instant construction permit-related agreement entered into between △ Development and Plaintiff KimA, which represents the subcontractor due to the bankruptcy of the comprehensive construction for promotion of the original owner of the building).

④ If the Plaintiff KimA fails to secure the instant building permit right and underground structure, the third party’s right exists on the instant land. As such, the Plaintiff KimA is unable to use the land for other purposes after proceeding or removing construction with the instant underground structure, and thus is extremely limited to the utilization of the land, other than selling the land to another person.

B. As to whether the remittance amount of this case is necessary expenses

In light of the following circumstances, the aforementioned facts and evidence, Gap evidence Nos. 17 (the same as evidence No. 36), 35, Eul evidence No. 6 through 9, and Eul evidence No. 111, and the witness Kim Jong-Un, Kim Jong-Un, Go-Un, and Shin-dae's testimony as a whole, it is reasonable to view that the remittance amount of this case is included in necessary expenses as the money paid by plaintiff Kim Jong-A to GoD as fees for the dispute resolution of land following the transfer amount.

① On September 1, 2013, in the course of the tax authority’s investigation of capital gains tax with respect to Plaintiff KimA, it was prepared and submitted a confirmation that Plaintiff KimA received ○○○○○○○ from the Plaintiff KimA as a commission for land dispute resolution affairs. This was made before the instant disposition of imposition of capital gains tax, which was not included in necessary expenses, was taken before the issue was whether the amount of the instant remittance falls under the fee for the instant remittance amount. Plaintiff KimA argued to the effect that only ○○○○ won should be additionally recognized until the request for examination and the instant written complaint were submitted, but if DaD made the said statement upon the request of Plaintiff KimA, it is natural to state the same amount as the amount claimed by Plaintiff KimA.

② 원고 김AA은 임CC의 명의를 빌려 이 사건 토지를 매수하였기 때문에 본인의 계좌가 아닌 임CC가 대표이사로 재직하던 ★★★★★★ 명의의 계좌를 통하여 고DD에게 돈을 송금하였고, ★★★★★★이 사실상 폐업하는 등으로 위 계좌로의 지급이 어려워지자 직원인 신대권 명의로 지급하도록 한 것으로 보인다.

③ DaD received the transferred amount by October 2002, and deemed that it was commenced to receive the transferred amount from November 2002, and can be deemed that it continued to receive the transferred amount from the Plaintiff KimA without any interruption at the time.

④ Even during the period of transferring the transferred amount and the instant remittance to DaD, the Plaintiff KimA also transferred the transferred amount from the account in the name of the Plaintiff KimA individual. However, it may be deemed that monetary transactions for other purposes, such as monetary transactions related to land dispute resolution affairs, have been conducted separately.

⑤ It is difficult to deem that there exists a practical reason to treat the instant remittance amount differently from the remittance amount recognized as necessary expenses by the Defendant. There is no agreement between Plaintiff KimA and DaD, or DaD did not return and pay income tax, or it is unclear whether the instant remittance amount is a commission fee, or part of DoD’s ○○○○○○○○○○○○, which was paid, stated as follows: “The Defendant used the instant remittance amount to repay the funds borrowed from Plaintiff KimA while selling the commercial building at the time of the auction.” As such, it is common for each remittance amount, and there is no reason to treat only the instant remittance amount differently, and solely on the above basis, each remittance amount cannot be deemed to have been paid as a commission.

④ In light of the fact that GoD’s statement related to the above set-off appears in the DaD’s statement (Evidence B No. 18) on September 4, 2013, it is difficult to conclude that Plaintiff KimA claims the amount set-off as necessary expenses, and that it is difficult to conclude that Plaintiff KimA claims the amount set-off as above, and that it is difficult to find the exact content as to the place of use of ○○○○○○○○○○ in the above statement, and that DaD replys to the above statement, it is difficult to conclude that the entire statement of DaD cannot be trusted solely based on the above statement.

7) The fact that DaD prepared a certificate (Evidence 16) stating that it was awarded a successful bid with DaD as a common investment concept. However, it is not appropriate to determine the remittance nature of the instant case on the premise that DaD is an investor, since DaD consistently stated to the effect that it was intended to acquire it by auction at the first time from the statement in the process of the tax investigation to the testimony of the instant lawsuit, but it was intended to introduce it to the Plaintiff KimA due to insufficient funds.

8) Even if the remittance amount of this case was not actually used for the settlement of disputes among the interested parties to the land of this case, such circumstance does not interfere with recognizing that the remittance amount of this case was paid as a fee, unless it is viewed as a fee for business affairs of DaD, not as the pretext of payment of actual expenses, such as agreement, etc.

9) In light of the appraisal value of the instant land and the purchase amount acquired by the Plaintiff KimA as seen earlier, it is unreasonable to pay a considerable amount of fee in return for the resolution of the work, if the said value is not invested but all of the disputes have been settled with interested parties.

C. Therefore, the part of the disposition imposing the transfer income tax of this case which does not include the acquisition price of the building permit of this case and the remittance amount of this case in the necessary expenses is unlawful. Of the disposition imposing the transfer income tax of this case, the part of the disposition that exceeds the ○○○○ Won (attached Form 2 '(attached Form 2' in the calculation of the political party tax amount) is unlawful.

4. Whether the imposition of gift tax of this case is legitimate

(a) Facts of recognition;

The Plaintiff borrowed the instant real estate from the land manager or borrowed the instant real estate from the land manager as collateral and sold the instant third real estate, etc., and repaid the money ○○○○○ KRW equivalent to the value of the donated property (○○○○) of the gift tax imposition of the instant gift tax, as indicated in the following table, to the Plaintiff, KimA, or to the Lee Jae-jin, who is the seat of the Plaintiff Kim

[Ground of recognition] Facts without dispute, Gap evidence Nos. 18 through 31, Eul evidence No. 12, the purport of the whole pleadings

B. Determination

1) In light of the following circumstances, the facts and evidence as seen earlier, Gap evidence Nos. 32, 33, Eul evidence No. 4, and Eul evidence Nos. 32, 33, and Eul evidence Nos. 4 and 10, the testimony of the witness Kim E-E, and the fact-finding with respect to the head of the ○○○○○○○○○○○○○○○○○ (the amount calculated by deducting ○○○○○○ from the value of donated property at the time of the initial disposition of the acquisition fund recognized by the defendant as the first value of donated property; hereinafter referred to as "the acquisition fund of this case") shall be reasonable to deem that Plaintiff NewB borrowed from Plaintiff KimA.

① As to the acquisition fund of this case, Plaintiff NewB did not prepare and provide Plaintiff KimA with a document related to the borrowing of money, such as a loan certificate, but it is natural that Plaintiff NewB had been in an internal relationship with Plaintiff KimA and had produced son. Therefore, it is more natural that Plaintiff NewB did not prepare the document.

② From 2007 to 2013, Plaintiff NewB had an average annual income of ○○○○○, and did not seem to have an economic ability to acquire each of the instant real estate. Plaintiff Kim Jong-A had a considerable financial ability to operate △△△△△△△ (a total amount of assets KRW 00,000 as of December 31, 2012, KRW 00,000), ○○ Construction (a total amount of earned income as of December 31, 2014, KRW 00,000, and KRW 00,000, ○○○○○ Company, etc.) as a major shareholder of the instant company. In light of the relationship between the Plaintiffs and the fact that Plaintiff KimA actually performed legal acts, such as the acquisition of each of the instant real estate, etc., Plaintiff Kim Jong-A appears to have led Plaintiff NewB to recover the said funds. However, there was no interest agreement, which would have led Plaintiff Kim Jong-B to have accrued a certain amount of profits from the acquisition of the instant real estate.

③ Even if the Plaintiff’s newB paid gift tax, it consistently argues that it was economically favorable to asserting that the instant acquisition fund was received as a gift, and in fact, it was repaid to the Plaintiff KimA the entire acquisition fund of this case with the sale price of real estate, etc. (the details of repayment of acquisition fund asserted by the Plaintiff NewB are the same as the attached Table 3’s statement of repayment of the Plaintiff’s claim). While the aforementioned repayment was made after June 19, 2013 when the tax investigation of the gift tax was commenced, it may be deemed that the Plaintiff NewB paid the said amount in order to clearly assert that it is not a gift. The said circumstance alone does not change the legal nature of the acquisition fund of this case.

④ The Defendant excluded the Plaintiff’s transfer of the instant gift tax to Plaintiff KimA prior to the commencement of the tax investigation on the gift tax of this case from the gift tax on the Plaintiff’s total ○○○○○○○○○○ on June 9, 2011, and on February 19, 2013, deeming that the loan constituted the loan and excluded the Plaintiff’s transfer. All of the instant acquisition funds was received from Plaintiff KimA in the course of the series of acquisition of each of the instant real estate by Plaintiff NewB. There is no special ground to treat the instant ○○○○○○○○ differently from the remaining acquisition funds.

If the Plaintiff NewB had already repaid the entire amount before the tax investigation, it is natural to view that the entire amount was borrowed and that the remainder of the repayment was donated is very natural.

⑤ On January 24, 2013, the Plaintiff: (a) responded to the meeting of the Plaintiff KimA in prison; (b) responded to whether or not the Plaintiff KimA received money; and (c) replyed to whether or not the Plaintiff KimA received money; and (d) it is natural to view that the Plaintiff KimA’s dialogue was not related to the recovery of claims between the Plaintiff KimA and other debtors; (b) it is not related to the Plaintiff’s pecuniary relationship between the Plaintiff, but to the Plaintiff. Since the Plaintiff NewB appears to have recovered the instant deposit as of the end of 2012, it is difficult to conclude that the Plaintiff KimB received money as above; (c) whether or not the Plaintiff KimB received money; and (d) whether or not it was related to the Plaintiff’s demand to repay money in the course of the tax investigation on July 23, 2013; and (d) whether or not it was related to the Plaintiff’s new demand to repay the money to the Plaintiff, which was not related to the Plaintiff’s new demand to repay.

2) Therefore, the imposition of the gift tax of this case on the premise that the Plaintiff NewB received a donation from the Plaintiff KimA is unlawful.

5. Conclusion

If so, the claims of the plaintiff KimB shall be accepted on the ground of the reasons, and the claims of the plaintiff KimA shall be accepted within the scope of the above recognition, and the remaining claims shall be dismissed as they are without merit.

this decision is delivered with the judgment of the court.