Early High Court Decision 2014J 2512 (Law No. 108.04)

The amount received as the delayed cost of the transfer of ownership from the transferee of real estate shall be equivalent to the honorarium.

It is reasonable to deem that the amount received as a cost for delaying the transfer of ownership from the transferee of real estate falls under the honorarium, and part of it cannot be deemed necessary expenses.

Article 21 (Other Incomes)

Article 33 of the Income Tax Act (Non-Inclusion of Necessary Expenses)

2014Guhap9191 global income and revocation of disposition

TO

O Head of tax office

2016.03.22

2016.04.9

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The imposition of the global income tax OOO on February 1, 2014 (the effective date of February 12, 2014, written in the written complaint) issued by the Defendant against the Plaintiff shall be revoked.

1. Details of the disposition;

A. On April 4, 2005, the Plaintiff sold OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOM, and OOOOOOOOOOOOOOOOOOOOOOOM (hereinafter “instant land”) in the aggregate to AAA, and received full payment from AAA on July 31, 2005.

B. AA has concluded on July 31, 2005 that the portion incurred until July 31, 2005, among the transfer income tax to be incurred from the transfer of the land of the Plaintiff, BB, and the transfer of the land of the instant case, the Plaintiff shall be borne by the Plaintiff, and the OO additionally generated shall be jointly and severally borne by AA and BB (hereinafter referred to as the “Agreement of July 25, 2007”).

C. On July 1, 2008, at the request of AAA and BB, the Plaintiff directly completed the registration of ownership transfer in the name of the OOO Co., Ltd. on the OO-type O-type O-type O-type O-type O-use land after the division and registration conversion among the instant land.

D. around 2009, AA filed a lawsuit against the Plaintiff for the registration of ownership transfer concerning the remaining land except for the above OOO land among the instant land (OO district court OOOOOOOOOOOO). On June 10, 2010, during the lawsuit, AA had been pending, land transaction permission was granted for the remaining land, and the Plaintiff’s simultaneous performance pursuant to the agreement entered into on July 25, 2007 was accepted. On October 14, 2010, AA rendered a judgment with the main contents that the Plaintiff would receive OOO won from AA and implement the procedure for the registration of ownership transfer on the remaining land.

E. On September 9, 2011, AA deposited OO(hereinafter “the instant money”) in the Plaintiff’s future on September 9, 201, and the Defendant seized the said money on September 16, 201, and appropriated it to the Plaintiff’s delinquent tax amount.

F. On November 30, 201, the Plaintiff reported and paid OOO on the transfer of the instant land in 2005, and the Defendant deemed the instant money as an honorarium under Article 21(1)17 of the Income Tax Act, and rendered the instant disposition imposing OOO on the Plaintiff on February 1, 2014, regarding it as an honorarium under Article 21(1)17 of the Income Tax Act.

[Ground of recognition] Unsatisfy, Gap evidence 1 to 5 (including evidence attached with a serial number), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

1) Since the instant money was paid by the agreement on July 25, 2007 between the Plaintiff and AA on July 25, 2007, it cannot be deemed as falling under the “compensation” under Article 21(1)17 of the Income Tax Act.

2) Even if there is room for the instant amount to be an honorarium under the Income Tax Act, among the instant amount, the amount of the OO (the amount to be borne by the actual return and payment on July 31, 2005, which was the date of prohibition of remaining payment less the amount to be borne by the actual return and payment on November 30, 201) out of the instant amount constitutes the penalty tax, etc. for capital gains tax, which was incurred during the period in which AA had delayed the receipt of the ownership transfer registration, which was based on the agreement made on July 25, 2007, and thus, is not an honorarium nor the necessary expenses to be deducted when calculating the amount of tax, and thus, the remainder of the OOO shall be deemed the tax base.

B. Relevant statutes

○ Income Tax Act

Article 21 (Other Incomes)

(1) Other incomes are interest income, dividend income, business income, labor income, annuity income, retirement income and income other than capital gains, which are prescribed in the following subparagraphs:

17. An honorarium;

Article 33 (Non-Inclusion of Necessary Expenses)

(1) The following, among the amounts paid or to be paid by a resident in the relevant taxable period, shall not be included in necessary expenses when calculating the amount of business income:

4. Tax (including penalty tax) paid or payable due to nonperformance of the liability for collection under tax-related Acts;

Article 37 (Calculation of Necessary Expenses of Other Incomes)

(4) Article 33 shall apply mutatis mutandis to the amount not to be included in necessary expenses in calculating other income amount.

C. Determination

Article 21 (1) 17 of the Income Tax Act refers to money and valuables provided as a means of a case in connection with administrative affairs or provision of services, etc., and whether it constitutes such money and valuables should be determined by comprehensively considering the motive and purpose of receiving the money and valuables, relationship with the other party, amount, etc. (see, e.g., Supreme Court Decision 97Nu20304, Jan. 15, 1999).

The following circumstances, which are acknowledged through the above evidence, i.e., AAA is the transferee of the land of this case, and there was no obligation to pay the transfer income tax on the land of this case to the Plaintiff on July 25, 2007. 2) The agreement of July 25, 2007 was an agreement that the Plaintiff cooperates with the procedures for land transaction permission and ownership transfer registration on the land of this case under the condition that AA and BB share the transfer income tax on the land of this case. 3) The amount of this case cannot be deemed to be included in the transfer value of the land of this case, not in the purchase price of the land of this case, but in a quid pro quo relationship with the transfer of the land of this case. 4) The transfer income tax to be borne by the Plaintiff cannot be deemed to be included in the transfer value of the land of this case due to the fact that the Plaintiff did not have any obligation to pay the transfer income tax on the land of this case under the agreement on July 25, 2007.

3. Conclusion

Thus, the plaintiff's claim is dismissed as there is no ground.