When the standard date for determining high-class houses is the date;

It is applicable on the basis of the actual transaction price at the time of transfer to high-class housing

Article 29 of the Addenda of the Restriction of Special Taxation Act (Special Taxation)

Article 99 of the Restriction of Special Taxation Act for Newly-built house acquisitors

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The disposition of imposition of capital gains tax of KRW 43,501,070, which the Defendant rendered to the Plaintiff on January 2, 2006, shall be revoked.

1. Details of the disposition;

A. On November 29, 2002, the Plaintiff, from ○○ Housing Co.,, Ltd. (hereinafter “○○ Housing,” only referred to as “○○○ Housing”) on November 29, 2002, sold 449,50,000 won in lots and paid the down payment, and completed the registration of ownership transfer in its own name on December 3 of the same year.

B. On July 20, 2005, the Plaintiff transferred the instant housing in KRW 660,000,000 (hereinafter “instant transfer”) to Y○○ and Hong○○.

C. On August 2005, the Plaintiff: (a) determined that the transfer of this case was subject to reduction or exemption of capital gains tax under the Restriction of Special Taxation Act; and (b) reported and paid to the Defendant only KRW 10,875,260,000 for special rural development tax.

D. On January 2, 2006, on the ground that the actual transaction price at the time of the transfer of the instant housing was more than 600 million won and the said transfer was not subject to reduction or exemption of capital gains tax, the Defendant, on January 2, 2006, issued a disposition to state the purport of the claim that imposes the Plaintiff the amount of KRW 10,875,260 (the amount of capital gains tax already paid by the Plaintiff from KRW 54,376,340) on the transfer of the instant housing (the amount below 10 won) (hereinafter referred to as the “disposition of this case”).

E. On February 7, 2006, the Plaintiff filed an appeal with the National Tax Tribunal on the instant disposition, but was dismissed on August 23, 2006.

[Ground of recognition] Facts without dispute, purport of whole pleading

2. Determination on the legality of the disposition

A. The plaintiff's assertion

The defendant, on July 20, 2005, at the time when the plaintiff transferred the house of this case, deemed the house of this case as a high-class house subject to non-reduction or exemption of capital gains tax, on the ground that the actual transaction price of the house of this case exceeds 600 million won at the time of transfer. However, the issue of whether the house of this case constitutes a high-class house subject to non-reduction or exemption of capital gains tax shall be determined based on the actual transaction price of the house of this case as of November 29, 2002 under the Addenda of the Restriction of Special Taxation Act (No. 6762, Dec. 11, 2002; hereinafter referred to as "the Addenda clause of this case"). Thus, the disposition of this case is unlawful.

In contrast, the interpretation that the instant house should be determined on the basis of the actual transaction value at the time of the transfer of the instant house may fall under the high-class house according to the transfer value, and the occurrence of unstable situations that may not fall under the said house, and such interpretation is unreasonable.

(b) Relevant Acts;

It is as shown in the attached Form.

C. Determination

In the latter part of Article 99(1) or 99-3(1) of the Addenda of this case, where "the former sales contract was entered into with a housing constructor before the enforcement of this Act, or the newly-built house which was approved for use or inspection for use (including approval for temporary use) was transferred after the enforcement of this Act, the former provisions shall apply to the calculation of the income amount subject to capital gains tax reduction or exemption and imposition of capital gains tax, notwithstanding the amended provisions of Article 99(1) or 99-3(1), and where "in the latter part, the former provisions shall apply to the calculation of the income amount subject to capital gains tax reduction or exemption and imposition of capital gains tax," and where "in the latter part, the first-class house of this case is a high-class house as of the date when the down payment was made after the contract was made or when the approval for use or inspection was obtained as a newly-built house constructed by it." In determining whether the housing of this case is a high-class house based on the provisions of the latter part,

However, the proviso of Article 99-3 (1) of the Restriction of Special Taxation Act (amended by Act No. 6762 of Dec. 11, 2002) which applies to the transfer of this case under the supplementary provision of this case provides that "where the relevant house constitutes a high-class house under subparagraph 3 of Article 89 of the Income Tax Act, capital gains tax shall not be reduced or exempted." Meanwhile, Article 156 subparagraph 2 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 17825 of Dec. 30, 202) provides that "high-class house under subparagraph 3 of Article 89 of the Income Tax Act is a high-class house with an exclusive area of at least 149 square meters, and the actual transaction price at the time of transfer exceeds 60 million won, the issue of whether the house in this case (a high-class house is subject to reduction or exemption of capital gains tax shall be determined based on the actual transaction price at the time of transfer and exclusive use area and at the time of transfer.

On the other hand, as to the plaintiff's assertion that the above interpretation may constitute a high-class house subject to non-reduction or exemption of capital gains tax depending on the value at the time of transfer, and that unstable situation may arise, as long as the Enforcement Decree of the Income Tax Act provides that "the actual transaction price at the time of transfer exceeds 600 million won with respect to a high-class house" as one requirement, it cannot be determined whether it is a high-class house according to the value at the time of transfer, and it cannot be deemed an unreasonable interpretation that causes unstable situation

Therefore, as seen above, the instant house constitutes a high-class house based on the actual transaction price at the time of the transfer of the instant house, and as seen above, the instant house constitutes a high-class house subject to reduction or exemption of capital gains tax (60,000,000 won) since its exclusive area is at least 149 square meters (1.754 square meters) and its actual transaction price at the time of transfer exceeds 60 million won (660,754 square meters). Therefore, the Defendant’s disposition

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

Related Acts and subordinate statutes

(1) Restriction of Special Taxation Act (amended by Act No. 6762 of December 11, 2002)

The Addenda No. 6762, Dec. 11, 2002

Article 29 (Transition Measures for Special Taxation of Transfer Income Tax on Purchasers of Newly-Built Houses)

(1) Where a newly-built house, which was concluded for the first time with a housing constructor under the previous provisions of Article 99 (1) or 99-3 (1) prior to the enforcement of this Act, has been paid the down payment, or which was approved for use or inspected for use (including the approval for temporary use) as a newly-built house built by himself, is transferred after this Act enters into force, the previous provisions shall apply to the calculation of the income amount subject to abatement or exemption of transfer income tax and object of taxation of transfer income tax, notwithstanding the amended provisions of Article 99 (1) or 99-3 (1). In this case, the standard of the deluxe

(1) Restriction of Special Taxation Act (amended by Act No. 6762 of Dec. 11, 2002)

Article 99 (Abatement or Exemption of Transfer Income Tax for Purchasers of Newly-Built Houses)

(1) With respect to the income accruing from the transfer of a newly-built house (including land less than twice the total floor area of the relevant building attached thereto; hereafter the same shall apply in this Article) falling under any of the following subparagraphs by a resident (excluding a housing construction business operator) within five years from the date of its acquisition, the tax amount equivalent to 100/100 of the transfer income tax shall be reduced or exempted, and where the relevant newly-built house is transferred after five years have elapsed from the date of its acquisition, the income amount accruing for five years from the date of its acquisition shall be subtracted from the income amount subject to the transfer income tax: Provided, That this shall not apply where a newly-built house

1. A house which is constructed by himself (including any house acquired by a member of a housing association under the Housing Construction Promotion Act, or an redevelopment cooperative under the Urban Redevelopment Act) and for which the approval for use or inspection for use (including the approval for temporary use) has been obtained during the period from May 22, 1998 to June 30, 199 (it shall be from May 22, 1998 to December 31, 199 in the case of national housing; hereafter in this Article, referred to as the “new house acquisition period”); and

2. A house acquired from a housing developer by a person who first concludes a sales contract and pays a down payment within the newly-built house acquisition period (including a house as prescribed by the Presidential Decree, which is acquired through a housing association under the Housing Construction Promotion Act, or an redevelopment association under the Urban Redevelopment Act): Provided, That a house that has been occupied by another person as of the date of a sales contract,

Article 99-3 (Special Taxation for Transfer Income Tax on Purchasers of Newly-Built Houses)

(1) With respect to the income accruing from transfer of a newly-built house (including land attached to a house, the total floor area of which is less than twice the total floor area of the relevant building; hereafter the same shall apply in this Article) falling under any of the following subparagraphs by a resident (excluding a housing construction business operator) within five years from the date of its acquisition, the tax amount equivalent to 100/100 of the transfer income tax shall be reduced or exempted, and where the relevant newly-built house is transferred after five years from the date of its acquisition, the income amount accruing for five years from the date of its acquisition shall be subtracted from the income amount subject to the transfer income tax: Provided, That this shall not

1. In cases of newly-built house acquired from a housing developer:

A newly-built house acquired by a person who first concludes a sales contract and pays a down payment with a housing construction proprietor during the period from May 23, 2001 to June 30, 2003 (hereafter in this Article, referred to as the “newly-built house acquisition period”) (including such houses as prescribed by the Presidential Decree, which are acquired through a housing association under the Housing Construction Promotion Act or an redevelopment association under the Urban Redevelopment Act): Provided, That a house which has been occupied as of the date of a sales

2. Cases of newly-built house (including a house acquired by a housing association under the Housing Construction Promotion Act or a member as prescribed by the Presidential Decree through an redevelopment association under the Urban Redevelopment Act); and

A newly-built house that has obtained approval or inspection for use (including approval for temporary use) within the newly-built house acquisition period

(1) Income Tax Act (amended by Act No. 6781 of Dec. 18, 2002)

Article 89 (Non-Taxable Transfer Income Tax) shall not be levied on any of the following incomes (hereinafter referred to as “transfer income tax”):

1. Income accruing from a disposition by an adjudication of bankruptcy;

2. Income accruing from the exchange, separation, or integration of farmland falling under such cases as prescribed by the Presidential Decree;

3. Income accruing from a transfer of one house for one household prescribed by Presidential Decree (excluding high-class houses the total floor area, value, facilities, etc. of which exceed the standards prescribed by Presidential Decree of residential buildings) and the appurtenant land within the area calculated by multiplying the area of land on which a building is built by the ratio prescribed by Presidential Decree by

4. Income accruing from substituted land for farmland falling under such cases as prescribed by the Presidential Decree.

(1) The Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 17825 of Dec. 30, 2002)

The term “high-class houses in excess of the standard prescribed by the Presidential Decree” in Article 89 (3) of the Act means the houses falling under any of the following subparagraphs and the land annexed thereto:

2. An apartment house (including a tenement house, but excluding the case deemed to be a detached house under Article 155 (15)) whose exclusive area (including the area of an underground part to be exclusively used for residence) is not less than 149 square meters and whose actual transaction price at the time of transfer exceeds 600 million won;