Suwon District Court-2016-Gu Group-6263 ( October 24, 2017)

Only the expenses for which the actual expenditure of the instant case was confirmed shall be deemed necessary expenses.

(See the judgment of the first instance court) The cost of confirming the fact that the Plaintiff paid to the broker by means of financial evidence, etc. may be deemed necessary expenses, but the remainder of the claims shall not be counted as necessary expenses because it is not objectively verified.

Article 97 (Calculation of Necessary Expenses for Transfer Income)

Seoul High Court 2017Nu43625 Revocation of Disposition of Imposing Capital Gains Tax

HasO et al.1

O Head of tax office

Suwon District Court 2016Gudan6263 Revocation of Disposition of Imposing Capital Gains Tax

September 14, 2017

99.28

1. The plaintiffs' appeal is dismissed.

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

The judgment of the first instance court is revoked. The defendant's imposition of capital gains tax of KRW 131,605,519 (including additional tax) accrued in 2007 on October 1, 2014, and the imposition of capital gains tax of KRW 11,336,979 (including additional tax) accrued in 2007 on the plaintiff www on May 6, 2015 shall be revoked (the plaintiff reduced his claim in the appellate court).

1. Details of the disposition;

A. On December 28, 2006, odo 00 00 odo 00 odo 00 odo 260 odo 2,893 m2 (hereinafter referred to as the “the forest of this case”) completed the registration of ownership transfer in the name of 12 persons, including the plaintiffs (the total amount of 51,250,000 won on November 20, 2006, the registration ground for the registration ground) (the total of 551,250,000 won) and then (the shares in 1487/7/72893, the co-ownership shares in 1819/72893) with respect to the whole shares of the co-owners, the registration of ownership transfer in the name of Triju Co., Ltd. (the trade on May 30, 2007, the transaction price of 80,000 won).

B. Around September 2007, the Plaintiffs reported and paid the transfer income tax on the Plaintiffs’ co-ownership shares among the forest of this case (the acquisition value and transfer value are the amount calculated by multiplying the transaction value on the above registry by the Plaintiffs’ co-ownership shares in relation to KRW 551,250,000 and KRW 800,000,000).

1) Plaintiff Jeongqq: Date of acquisition on December 28, 2006 / Date of June 26, 2007 / Acquisition price 162,494,461 won (actual transaction price) / Transfer price 235,819,626 won (actual transaction price) / Yang income65,230,165 won / Transfer income tax 37,638,099 won

2) Plaintiff www: The date of acquisition on December 28, 2006 / the date of transfer on June 26, 2007 / The acquisition price of 13,756,105 won (actual transaction price) / the transfer price of 19,963,508 won (actual transaction price) / The amount of small income 5,514,923 won / the transfer income tax of 3,308,953 won

C. After conducting a tax investigation of capital gains tax on the Plaintiffs, the Defendant under-reported and paid capital gains tax on the basis of KRW 800 million on the basis that the sum of the transfer value of the instant forest was KRW 1.3 billion, and thus, the Defendant recognized the amount equivalent to the Plaintiffs’ co-ownership shares out of KRW 170,00,000,000, which was paid by the intermediaries at the time of transfer of the instant forest to the necessary expenses, as necessary expenses. On October 1, 2014, with respect to Plaintiff Hoqq, the Defendant corrected and notified the amount of KRW 131,791,660 (including additional taxes) for the capital gains tax for the year 207, and on May 6, 2015, the Defendant corrected and notified the amount of KRW 11,514,770 (including additional taxes for the capital gains tax for 207 on the Plaintiff www.

D. On June 11, 2015, Plaintiff Jeongq, dissatisfied with the above disposition, filed a request for review with the Commissioner of the National Tax Service on December 29, 2014. On September 17, 2015, part of the purport that “5,00,000 won, including grave relocation expenses, are added to necessary expenses, and the tax base and tax amount are corrected” was partly accepted. The Plaintiff www’s request for review on November 12, 2015, following the objection on July 8, 2015, filed by the Commissioner of the National Tax Service, but dismissed on December 4, 2015.

E. On August 24, 2017, the Defendant recognized that the amount corresponding to the Plaintiffs’ co-ownership shares out of KRW 5,500,000, including the cost of moving a grave, was added to the necessary expenses, and issued a revised notice of the capital gains tax for the year 2007 as KRW 131,605,519 (including additional tax) on the Plaintiff’s www, and the capital gains tax for the year 2007 as to the Plaintiff’s www was reduced to KRW 11,336,979 (including additional tax) (hereinafter “instant disposition”).

Facts without any dispute over recognition, Gap evidence 3-4, 5, 6-1, 2, Gap evidence 7-1, 2, 3, 4, 11, and Eul evidence 3, the purport of the whole pleadings, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

1) The instant disposition was unlawful since it was conducted after the lapse of five years from the exclusion period of imposition.

2) When the instant forest land is purchased in KRW 551,250,000, the amount of KRW 150,000,000, the purchase price of the instant forest land purchased separately, and KRW 90,000,000, the work cost of the access road spent at the time of the purchase of the instant forest land, and KRW 315,50,000,000, which included the transfer cost of the instant forest land, paid to YY YY YY that had been the broker at the time of the transfer of the instant forest land, should be recognized as necessary expenses, excluding the total of KRW 175,50,000,000, excluding the remainder of KRW 140,000,000, + KRW 90,000,000 + KRW 140,000,000,000 shares of the Plaintiffs’ co-ownership shares.

B. Determination

1) As to whether the exclusion period has expired

A) Comprehensively taking account of Article 26-2(1)1 and 3 of the Framework Act on National Taxes and Articles 12-2(1) and 12-3(1)1 of the Enforcement Decree of the same Act, the starting date of the exclusion period for imposition of the transfer income tax for the fiscal year 2007 includes: (a) June 1, 2008, which is the day following the tax base return deadline (from May 1, 2008 to May 31, 2008), and (b) the exclusion period is five years in principle; (c) it is difficult for the tax authority to find that the taxpayer is not liable to pay taxes, and thus it is difficult to expect the exercise of the imposition right; (d) 10 years in consideration of the fact that it is difficult for the tax authority to determine that the taxpayer is not liable to pay taxes; and (e) 10 years in addition to the fraudulent or other unlawful act that significantly makes it difficult to impose and collect taxes or other unlawful acts; and (e) it does not constitute a false or unlawful act without any other tax return.

B) Considering the following circumstances: (a) the aforementioned evidence and evidence No. 3-1, No. 500, and No. 2-1, the sale price of which is 500 million won by taking account of the overall purport of pleadings No. 1; (b) the sale contract of the forest in this case does not seem to have any value to be regarded as an economic object separate from the forest land; (c) the co-ownership right holders, including the plaintiffs, make an agreement on May 7, 2007 that the forest will be sold for 80 million won; and (d) the plaintiffs reported the sale price of KRW 1.5 billion to 80 billion on the register; (e) the sale price of the forest in this case was 1.5 billion won for the above 1 billion won for the purpose of the sale; and (e) the sale price of the forest in this case was 1.5 billion won for the purpose of calculating the sale price of the plaintiffs; and (e) the plaintiffs' 200 billion won for the purpose of calculating the sale price of the forest in this case was 1.5 billion won.5 billion won.

C) The Plaintiffs, upon requesting their trade mediation to the e-mail, also have the duty to report capital gains tax.

The court below's decision that the transfer value was reduced to maximize its brokerage commission from the difference between 1.3 billion won and 800 million won of the price to be paid to the plaintiffs, and that the change of e in accordance with the sale price does not change the amount to 800 million won, although the change of e actually did not change to the brokerage commission, even if the change of e did not intend to receive the plaintiffs, the plaintiffs did not participate in such unlawful act and did not intend to evade tax. Thus, the court below's testimony of e's witness does not have any other evidence to acknowledge the above argument, and even according to the above argument, 1.3 billion won was determined to change the sale price to 300 million won, and 300 million won was not known to e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e's e'.

2) As to whether necessary expenses are additionally recognized

A) The purchase price for forest trees

At the time of the purchase of the forest land of this case, the plaintiffs had a sales contract of April 1, 2006, which was composed of KRW 551,250,000 for the purchase price of forest land at the time of the purchase of the forest land of this case, and KRW 44,00,000 for the purchase price of forest land in addition to the sales contract of November 20, 2006 for KRW 150,000 for the purchase price of forest land in April 1, 2006. However, in the register, there is a sales contract of April 1, 2006 for KRW 51,250,00 for the purchase price of forest land, and the seller has sold the forest separately. However, the plaintiffs' assertion that the purchase price of forest land of this case was 00,000,000 for the purchase price of forest land is difficult to be considered separately from the sale price of forest land of this case, and the plaintiffs' assertion that the purchase price was 000,00,000, and0,00, etc.

B) Part of the cost of access road construction

The plaintiffs' assertion that Gap evidence 9-3 (Written Statement), Gap evidence 10-1 (Agreement), Eul evidence 10-2 (Receipt), Gap evidence 10-3 and 4-4 (Written Evidence), and testimony of the witness at the appellate trial witness at the time of purchase of the forest of this case is insufficient to acknowledge the facts that the defendant paid 90 million won of the access road construction cost at the time of purchase of the forest of this case, and there is no other evidence to acknowledge this otherwise. This part of the plaintiffs' assertion is without merit.

C) The portion of brokerage commission, including the cost of relocation of graves

According to Gap evidence No. 9-1 (Receipt), Gap evidence No. 9-2 (Verification of Transaction Facts), and Gap evidence No. 9-3 (Certificate), "No. 9-5 (Written Confirmation of Transaction)" stated that "No. 170,000 won shall be the funeral expenses of the forest of this case and the land-to-land-to-land-to-land-to-land-to-land-to-land-to-land-to-land-to-land-to-land-to-land-sale expenses shall be 30,00,000 won, and 315,00,000,000 won out of the forest sale price of this case as brokerage fees, and 05,00 won in the statement made on June 30, 2014, the cashier's checks received as brokerage fees, 00,000 won in cash-to-land-resale expenses, 00,005 won in the statement made on May 7, 2007, 2007

Meanwhile, comprehensively taking account of the purport of Gap evidence 7-2 and 3 as a whole, in the case of a request for review filed by the Commissioner of the National Tax Service, the facts that 115,500,000 won was paid from the financial account of the plaintiff Jeongq to e.g., the above facts were the same as the transaction confirmation of June 30, 2014. The plaintiff JeongF claimed that e.g., paid 200,000,000 won to e., the intermediary charges of 140,000,000 won and 60,000,000,000 won and 50,000 won and 60,000,000 won and 50,000 won and 60,000,000 won and 50,000 won and 50,000 won and 5,00,000 won and 5,005,07,07,00.

As alleged by the plaintiffs, e is required to pay 80 million won to the plaintiffs, so e is 1.3 billion won.

Of KRW 80,00,000, the remaining amount paid for various expenses out of KRW 500,000,000, which is the difference between KRW 800,000,000, was the shares of e.g., KRW 1.3 billion deposited in the Plaintiff JeongF’s deposit account in the Plaintiff JeongFq. Under the circumstances where the payee of KRW 140,000,000 issued on June 22, 2007, uUF’s cashier’s check issued on May 29, 2007, and the statement of March 3, 2014, only with the testimony of e.g., a witness at e., the appellate court verifying the payment by the financial data, it is difficult to recognize that the payment was made to e.g., KRW 175,50,000,000,000, which includes the funeral expenses. This part of the Plaintiffs’ assertion is without merit.

3. Conclusion

If so, all of the plaintiffs' claims are dismissed due to the lack of reason, and the judgment of the court of first instance is just in conclusion, and the plaintiffs' appeal is dismissed as all of the grounds for appeal.

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