National High Court Decision 2000Du1413 ( November 24, 2000)

Transfer

Revocation

Even if ownership was transferred to a direct successful bidder on the registry, it is reasonable to view that Seoul Metropolitan Government omitted the procedures for the transfer registration and transferred the registration of transfer by borrowing the form of sale between Party A and the successful bidder.

Article 88 of the Income Tax Act / Article 14 of the Framework Act on National Taxes

The head of Seodaemun-gu District Tax Office's disposition of imposition of KRW 106,330,60 on the capital gains tax for the year 1997 filed by the applicant shall be revoked.

1. A shooting room;

The claimant is the wife of the OO (the president) which is a major shareholder of the O construction company, and the O department store collapse case owned by the OO department in June 29, 195 occurs, the claimant entrusted the management and disposal of the OO accident countermeasure headquarters of Seoul Special Metropolitan City (hereinafter referred to as the "Seoul City") to cover the land and the building on three lots outside 451m2 and outside 165m2, Jung-gu, Seoul Special Metropolitan City, the property owned by the claimant in March 19, 196, which are the property owned by the claimant for the OOOOOO, and the land and the building on three lots outside 451m2, OOO, Seo-do, Seopo-do, the property owned by the claimant, for the sale of the OOOOO, and transferred the ownership due to the purchase and sale on March 7, 1997.

On April 6, 200, the disposition agency calculated the transfer margin as the standard market price for the transfer of ownership of the real estate in question and determined and notified the applicant of the transfer income tax of KRW 80,240,040 in total and KRW 26,090,560 in total and KRW 106,330,60 in total.

On May 22, 2000, the claimant appealed against this and filed an appeal for adjudication.

2. Opinions of the claimant and disposition agency;

A. The claimant's assertion

The key real estate is the property donated to Seoul Metropolitan Government by delegating the right of use, profit-making and management of the key real estate so that the claimant is fully responsible for the collapse of the OO department store and the victims can compensate for the damages, damage recovery and rescue expenses, and the right of management and disposal of the key real estate. The Seoul Metropolitan Government sells the donated real estate through the procedure of sale announcement, etc. without the transfer registration and directly uses the total amount of the proceeds from the sale.

It is improper to impose capital gains tax on the applicant who does not receive the actual transfer price on the basis of the fact that the registration of transfer of ownership was directly made from the successful bidder due to sale without the procedure of transfer of ownership to Seoul Metropolitan Government on the registry.

(b) Opinions of disposition agencies;

Since the claimant is the perpetrator of the OO department collapse incident, it is natural that the claimant should compensate for the damages, and since it was not possible to mobilize enormous funds at once, the Seoul Special Metropolitan City had made compensation prior to the budget, and the claimant's assertion that the claimant has contributed to Seoul Special Metropolitan City by disposing of the claimant's property and claiming compensation for subrogated payment of the Seoul Special Metropolitan City is not reasonable, it is reasonable to consider the transfer of ownership of real estate and impose the transfer income tax

3. Issues and judgments

(a) Points in dispute;

Considering the transfer of ownership transfer of the real estate at issue, it is reasonable to impose the transfer income tax.

(b) Related statutes;

Article 88(1) of the Income Tax Act at the time of establishing the requirements for this case’s taxation / [Definition of Transfer] Article 88(1) of the Income Tax Act provides that “The actual transfer of any assets shall be made at a price due to sale, exchange, investment in kind in a corporation, etc., regardless of the registration or enrollment of such assets. In such cases, where a donee takes over any obligation of a donor of an onerous donation (excluding cases falling under the main sentence of Article 47(3) of the Inheritance Tax and Gift Tax Act), the portion equivalent to the amount of such obligation in the donation amount shall be considered as the actual transfer

Article 14 (1) of the Framework Act on National Taxes provides that "If the ownership of income, profit, property, act, or transaction subject to taxation is nominal and there is another person to whom it actually belongs, the person to whom it actually belongs shall be liable for tax payment." Article 14 (2) provides that "The provisions on the calculation of tax base in the tax-related Acts shall apply according to the substance, regardless of the name or form of income, profit, property, act, or transaction."

On the other hand, Article 32 (Support for Special Disaster Areas) of the Disaster Management Act provides that "Any area declared as a special disaster area pursuant to the provisions of Article 31 (Declaration of Special Disaster Areas) may provide special support in administration, finance, finance and taxation necessary for emergency measures and for disaster relief and restoration."

C. Facts and determination

(1) The reason for transfer of ownership in the registration of the key real estate is confirmed to be a sale and purchase, and the sales and sale contract for the key real estate is confirmed to have been prepared by the claimant as the seller, and the agent as the successful bidder according to the sale and purchase contract of the Seoul Special Metropolitan City (the head of the headquarters for countermeasures against Oaccident), as the purchaser.

(2) The claimant is confirmed to have submitted a letter of delegation of property management and disposal to Seoul Metropolitan Government so that he/she can use the real estate at issue in March 19, 1996 for compensation for damages and recovery expenses for OO cases. It is confirmed that the O department store accident area was declared as a special disaster area under Article 31 of the Disaster Management Act.

(3) The Seoul Special Metropolitan City (the head of the headquarters for countermeasures against accidents) is confirmed by the public notice of sale (the Seoul Special Metropolitan City public notice No. 1996-326, August 26, 1996), which is the agent for the management of property owned by the claimant, to have been directly disposed of the real estate, and the sales price of the real estate at issue is confirmed by the passbook under the name of the Seoul Special Metropolitan City (OOOOOOOO).

(4) According to the documents sent by the Mayor of Seoul Special Metropolitan City to the agency in relation to this case taxation (disaster prevention 1320-312, March 29, 2000), "The key real estate was confirmed as being used as compensation financial resources by receiving a letter of delegation from the claimant for the disposition of property management from the claimant on March 19, 1996 due to the urgency in dealing with the situation and shortage of compensation financial resources."

It is confirmed that this case's O-O case compensation fund is interpreted that the property of a corporation (O-construction corporation) that was entrusted to the Seoul Metropolitan Government for the management and disposal and sold and disposed of by delegation of the management and disposal plan shall not be regarded as a commercial transfer (property of the established rules of the Ministry of Finance and Economy, January 23, 1998).

5) In full view of the above facts, the fact that the price of the sale of the real estate at issue is the compensation to be paid by the claimant to the victim of the collapse accident at OO department stores and is merely the substitute payment by the Seoul Metropolitan Government. However, in light of the claim of the disposition agency and the content of the letter of delegation of the management and disposal of the property submitted by the claimant to the Seoul Metropolitan Government on March 19, 196, the claimant, without any condition, donated the real estate to Seoul Metropolitan Government to use it as compensation and recovery expenses for the accident at OO department stores collapse, which shall be deemed to have been actually transferred to the Seoul Metropolitan Government.

In addition, in light of the fact that the claimant did not receive the transfer proceeds in connection with the transfer of the disputed real estate, and the transfer proceeds were reverted to the Seoul Metropolitan Government and used entirely under the supervision of the Seoul Metropolitan Government, it is reasonable to view that the Seoul Metropolitan Government registered the transfer of ownership by omitting the transfer registration procedure and borrowing the form of sale between the claimant and the successful bidder, even if the direct successful bidder was transferred from the claimant on the registry, it is reasonable to view that the Seoul Metropolitan Government registered the transfer of ownership by borrowing the form of sale between the claimant and the successful bidder.

D. Conclusion

This case's request for a trial is reasonable as a result of the review, so it is decided as ordered in accordance with Articles 81 and 65(1)3 of the Framework Act on National Taxes.