In determining the non-taxation of one house for one household, whether it may be excluded from the number of houses owned on the ground that the association member's relocation right was registered as a rental business operator for another house.

Where an association member's relocation right under the main sentence of Article 89 (2) of the Income Tax Act is transferred, it shall be determined pursuant to Article 155 (17) of the Enforcement Decree of the same Act as to whether one household is exempt from taxation, and long-term rental houses are included in the number of houses owned (the same purport, real estate transaction management department-488, Sep. 13,

Article 97 (1) of the Restriction of Special Taxation Act, Article 155 (19) of the Enforcement Decree of the Income Tax Act

F Administrative Court-2018-Gu -1483

AA

AA Head of the Tax Office

June 20, 2018

July 4, 2018

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 12,059,590 on December 30, 2016 by the defendant of the Gu office against the plaintiff on December 30, 2016 shall be revoked.

1. Details of the disposition;

A. Acquisition and transfer of the right to move into a cooperative of this case

1) On April 20, 2009, the Plaintiff acquired FDB Dong 2, FDB Dong 2, 306, 201 (hereinafter referred to as “B Dong house”) among multi-household houses with 306 ground multi-household houses.

2) After that, BB-dong housing site is incorporated into BB-13 housing redevelopment project zone, and the management and disposal plan was approved on March 11, 201, and the Plaintiff acquired the status of occupant on the same day (hereinafter “instant member’s occupancy right”).

3) On September 23, 2014, the Plaintiff transferred the instant association member’s relocation right (hereinafter “instant transfer”).

(b) Lease ofCC-dong housing;

On the other hand, on November 22, 2006, the Plaintiff acquired 401 of FDDCC-dong 265-312 (hereinafter “CC-dong housing”) from among FDD-dong 265-312, and on October 19, 2012, the Plaintiff registered a rental business operator with the head of FF-specific Si/Gun/Gu pursuant to the Rental Housing Act, completed business registration with the head of the DD office under the Income Tax Act, and leased the CC-dong housing to a third party from that time until the transfer of this case.

C. Disposition of this case and procedure of the previous trial

1) On June 2015, the Plaintiff reported to the Defendant that the income from the transfer of this case constituted one house non-taxable subject to one household. However, on December 30, 2016, the Defendant determined and notified the Plaintiff of KRW 12,059,59,590 (including additional tax) for the transfer income tax belonging to the year 2014 (hereinafter “instant disposition”).

2) The Plaintiff appealed and filed an appeal with the Tax Tribunal on March 23, 2017, but the Tax Tribunal dismissed the appeal on October 19, 2017.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 5, 6, 7, Eul evidence Nos. 1, 2, 4, and 5, and the purport of the whole pleadings

2. Relevant statutes and relevant legal principles

(a) Related Acts and subordinate statutes;

The relevant provisions of the former Income Tax Act (amended by Act No. 14389, Dec. 20, 2016; hereinafter the same shall apply), the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 27829, Feb. 2, 2017; hereinafter the same shall apply), the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 27829, Dec. 1, 2017); and the Restriction of Special Taxation Act, which were enforced at

The burden of proving the non-taxation requirement for one house per household (see, e.g., Supreme Court Decision 2005Du8443, Dec. 23, 2005). The principle of no taxation without the law without the law is to be interpreted in accordance with the legal text, barring any special circumstances, and the interpretation of tax laws and regulations is not permissible either extensively or analogically without a reasonable reason. In particular, it accords with the principle of fair taxation (see, e.g., Supreme Court Decision 2009Du18325, Apr. 29, 2010). In imposing capital gains tax, the transfer margin is calculated at the time of the transfer of assets, and thus, whether the assets in question meet the taxation requirement or the tax exemption requirement should be determined as at the time of transfer (see, e.g., Supreme Court Decision 97Nu28163, Jul. 10, 198). 208.

(a) Claims and judgments that it falls under cases where one household without another house transfers the association member's relocation right;

1) Summary of the Plaintiff’s assertion

Article 97 (2) of the Restriction of Special Taxation Act provides that "a rental house shall not be deemed a house owned by the relevant resident for the purpose of Article 89 (1) 3 of the Income Tax Act," andCC-dong house shall be deemed not a house owned by the Plaintiff because it falls under the "rental house" as provided by Article 97 (2) of the Restriction of Special Taxation Act. Therefore, the transfer of this case constitutes a non-taxation object as provided by Article 89 (1) 3 (a) of the former Income Tax Act and Article 155 (17) 1 of the former Enforcement Decree of the Income Tax Act, where one household possessing one association member's relocation right transfers the relevant association member'

2) Determination

CC-dong Housing cannot be seen as “lease Housing” under Article 97(2) of the Restriction of Special Taxation Act for the following reasons. Therefore, there is no other argument by the Plaintiff on a different premise.

A) Article 97(1) of the Restriction of Special Taxation Act provides that “Where a resident prescribed by Presidential Decree transfers a rental house under paragraph (2) of the same Article (including land appurtenant thereto within twice the total floor area of the relevant building) that falls under any of the following subparagraphs (including land appurtenant thereto) after starting lease before December 31, 200 and renting it for not less than five years, the relevant house (hereinafter referred to as “rental house”).”

B) In a case where a resident transfers .... National housing ...... under Article 97(1) of the Restriction of Special Taxation Act, in order to constitute a “rental housing” in the literal part of the “rental housing” portion, the said housing should first be the object of the transfer. However, the object of the transfer in this case is not the “CC-dong housing,” which the Plaintiff claims that it constitutes a “rental housing,” but the occupation right

C) In addition, in light of the part of Article 97(1) of the Restriction of Special Taxation Act, “the case of a lease commenced on or before December 31, 2000 and the case of transfer after lease for not less than five years,” it should also be recognized that in order to constitute a “rental house,” the Plaintiff leased the said house before December 31, 200 and thereafter leased it for not less than five years. However, as seen earlier, as seen earlier, the Plaintiff was merely leased the CCC house from October 19, 201, and the term of lease at the time of the instant transfer falls short of five years.

B. The assertion and determination that the case constitutes the transfer of a residential house while having a long-term rental house or a residential house

1) Summary of the Plaintiff’s assertion

The main text of Article 155(19) of the former Enforcement Decree of the Income Tax Act provides that "where a household which owns a house under Article 167-3 (1) 2 (hereafter in this Article, referred to as a "house for long-term lease") and another house in Korea meets the requirements of the following subparagraphs and transfers the relevant one house (hereafter in this Article, referred to as a "house for residence"), it shall be deemed that it owns one house in Korea, and Article 154(1) shall apply to the house for long-term lease," and the instant association member's relocation right constitutes "house for long-term lease" and "house for residence", the transfer of this case constitutes cases where one household owns a house for long-term lease and a house for residence and transfers

2) Determination

In light of the following points,CC-dong Housing cannot be seen as a "long-term rental house". Thus, the plaintiff's assertion on this part on different premise is without reason to further examine whether the association member's relocation right in this case constitutes a "resident house".

A) Article 167-3 (1) 2 (a) of the former Enforcement Decree of the Income Tax Act provides that "a house leased for at least five years by a resident who leases at least one private rental house under subparagraph 3 of Article 2 of the Special Act on Private Rental Housing, for which the total sum of standard market prices of the relevant house and land appurtenant thereto does not exceed 600 million won at the commencement date of lease of the relevant house (300 million won in cases of an area outside the Seoul Metropolitan area)" and Article 167-3 (3) of the same Enforcement Decree of the Income Tax Act shall apply mutatis mutandis to the calculation of the lease period of a long-term rental house under paragraph (1) 2. In such cases, it shall be deemed that the lease has commenced from the date of lease after

B) Therefore, in order to constitute a housing for long-term rental, the transferor should first have registered the housing and have leased the housing for at least five years starting from the date when the housing was registered as a rental house.

C) However, as seen earlier, on October 19, 2012, the Plaintiff registered its business, etc. on the lease of theCC-dong Housing, and on September 23, 2014, before five years elapsed thereafter, transferred the instant housing.

4. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.