Where a land transaction contract becomes conclusive and conclusive after the purchase price for a land transaction contract within the area permitted for land transaction has been settled, the initial date in calculating the exclusion period for imposing capital gains tax;

In principle, the exclusion period of imposition of capital gains tax on the transfer of assets shall commence from June 1 of the year following the date of transfer of assets, which is the day following the end of the deadline for the final return on the tax base. However, if a land transaction contract within a land transaction permission area is invalid due to the lack of permission, even if the purchase price is paid first and the transferor keeps it in custody, it cannot be deemed that there was any income from the transfer of assets subject to capital gains tax or the transfer of assets. Thus, in such a case, the transferor is not a resident of the relevant year under Article 110 (1) of the former Income Tax Act (amended by Act No. 6051 of Dec. 28, 1999), and there is no obligation to make a final return on the tax base because the transferor does not have any income from the transfer of assets, and the transferor has only income from the transfer when the land transaction contract becomes final and conclusive due to such reasons as cancellation of designation of the land transaction permission area. Thus, the transferor shall exclude the final return on tax base as provided in Article 110 (1) of the following year.

Article 26-2(1) and (3) of the former Framework Act on National Taxes (amended by Act No. 6070 of Dec. 31, 1999) (see current Article 26-2(4)), Article 12-3(1)1 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 17830 of Dec. 30, 2002), Article 110(1) of the former Income Tax Act (amended by Act No. 6051 of Dec. 28, 199)

Supreme Court en banc Decision 96Nu8901 Decided January 21, 1997 (Gong1997Sang, 673), Supreme Court Decision 95Nu18383 Decided March 20, 1997 (Gong1997Sang, 105), Supreme Court Decision 99Du3140 Decided June 22, 199 (Gong199Ha, 1538), Supreme Court Decision 98Du5811 Decided June 13, 200 (Gong200Ha, 1683), Supreme Court Decision 98Du39260 Decided October 27, 2000 (Gong200Ha, 1683)

[Defendant-Appellant]

Director of the District Office

Seoul High Court Decision 2000Nu14513 delivered on October 24, 2001

The judgment below is reversed and the case is remanded to Seoul High Court.

1. The court below is just in holding that the sale contract for the instant land within the land transaction permission area under the Act on the Utilization and Management of the National Territory is a contract premised on obtaining the permission, not a contract excluding or diving the land transaction permission, and the price was settled after the designation of the land transaction permission area was cancelled, and the transfer time, which serves as the basis for calculating the transfer income, becomes retroactively effective after the designation of the land transaction permission area was cancelled, and that the transfer time, which serves as the basis for calculating the transfer income, was September 29, 190

2. The lower court determined that the instant sales contract was retroactively effective due to the cancellation of the designation of the land transaction permission area on January 1, 1998, and the time of transfer, which serves as the basis for calculating capital gains, was September 29, 1990, which is the date of settlement, and thus, the exclusion period of imposition of capital gains tax on the Plaintiff’s co-ownership among the instant land was expired on the date following the expiration of the final return period of capital gains tax for the year 1990, which is the date following the expiration of the period from June 1, 1991 to May 31, 1996, and thus, the Defendant’s disposition of this case was null and void after the expiration of the exclusion period.

However, according to Article 26-2(1) and (3) of the former Framework Act on National Taxes and Article 12-3(1)1 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 17830, Dec. 30, 2002), when filing a return on the tax base and tax amount, the exclusion period of imposition of national taxes shall run from the day following the due date of filing the return or the due date of submission of the return on the tax base and tax amount of the national tax. Article 110(1) of the former Income Tax Act (amended by Act No. 6051, Dec. 28, 1999; hereinafter the same shall apply) provides that a resident who has the tax base of capital gains for the pertinent year shall file a return on the final return on the tax base of capital gains for the transfer of assets with the head of the competent tax office from May 1 to 31 of the following year, and thus, the transferor shall not be obliged to first file the said return on the tax base return on transfer income for the transfer.

Nevertheless, the court below erred by misapprehending the legal principles as to the exclusion period of imposition of capital gains tax on land within the land transaction permission zone, which affected the conclusion of the judgment.

3. Therefore, the judgment of the court below is reversed and the case is remanded to the court below.

Justices Zwon (Presiding Justice)