Appropriateness of the disposition imposed on the standard market price due to unclear sales price

It is reasonable to determine the standard market price on the ground that the actual transfer value of the apartment of this case cannot be confirmed as a result of the statement that it is impossible to present documentary evidence, such as a sales contract, and that the sales price is not accurately memory.

Article 100 of the Transfer Income Tax Act (Calculation of Gains from Transfer)

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of KRW 50,503,430 on January 6, 2006 against the Plaintiff shall be revoked.

1. Details of the disposition;

A. On November 10, 200, the Plaintiff transferred ○○○○○○, 408 ground 408, 1203, 1203 (hereinafter “the apartment of this case”) to Ansan on November 10, 2001, made a preliminary return of transfer income tax on December 10, 201 based on the actual transaction value of the apartment of this case, and made voluntary payment of transfer income tax of KRW 2,91,300,00,000,000,000,000 as the actual transaction value of the apartment of this case, and thereafter, made a preliminary return of transfer income tax of KRW 2,51,30,00,000,000,000 from September 29, 2005 to October 28, 2005; the Defendant imposed the real transfer value of the apartment of this case on the Plaintiff; the Plaintiff’s disposal of KRW 5,16,500,000,000 won for each of this case.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful for the following reasons.

(1) The Plaintiff entered into a sales contract to sell the instant apartment to KRW 520 million with Ansan at the first time, and immediately thereafter, agreed to be additionally paid KRW 75 million from the sales price of the instant apartment, which led to the transfer of the instant apartment to KRW 595 million, on the ground that the said transfer price does not fall short of the on-site investigation amount of the instant apartment at the time of the said transfer, the Plaintiff’s disposal of the instant apartment by applying the standard market price to the exclusion of the above actual transfer price of the instant apartment by applying the standard market price to the good faith.

(2) If it is recognized that the actual transfer value of the apartment of this case is 595 million won based on a written contract, etc. submitted by the Plaintiff, the disposition of this case imposing transfer income tax by applying the old and old standard market price even though it is required to impose transfer income tax calculated based on the above actual transfer value is in violation of the proviso of Article 114(4) of the Income Tax Act.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) Determination on the first argument

In full view of the statement 1-2 of the evidence No. 1-2 and the purport of the entire argument in the testimony of △△△, the defendant can be found that the disposition of this case was made on the ground that the plaintiff could not confirm the actual transfer value of the apartment of this case as the result of the tax investigation conducted against the plaintiff that the plaintiff could not present evidentiary documents, such as the sales contract, and that he could not accurately memory the sales price of the apartment of this case. Thus, this part of the plaintiff's assertion

(2) Judgment on the second argument

Article 96(1)6 of the former Income Tax Act, which applies to the calculation of capital gains tax (amended by Act No. 6781 of Dec. 18, 2002), provides that the transfer value and acquisition value as an exception to the principle of taxation on the standard market price, shall be based on the actual transaction value at the time of transfer and acquisition, and stipulates that the transferor shall report the actual transaction value at the time of transfer and acquisition to the head of the district tax office having jurisdiction over the place of tax payment along with evidential documents by the due date for final return. If there is no such report or if the actual transaction value at the time of submission of evidential documents is not verified, transfer margin shall be determined according to the standard market price, and even if the actual transaction value is confirmed after the expiration of the due date, transfer margin shall not be determined (see, e.g., Supreme Court Decision 2003Du5587, Mar. 26, 2004; Article 16(1)6 of the former Income Tax Act provides that the transfer value and transfer value shall be 500,50 million won or 14.

3. Conclusion

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

Related Acts and subordinate statutes

The actual tax amount of the former Income Tax Act (amended by Act No. 6781 of Dec. 18, 2002)

Article 96 (Transfer Price)

(1) The transfer value referred to in Article 94 (1) 1 and 2 shall be based on the standard market price at the time of transfer of the assets concerned: Provided, That where the assets concerned fall under any of the following subparagraphs, it shall be based on the actual transaction price:

6. Where a transferor reports the actual transaction price at the time of transfer and acquisition to the head of tax office having jurisdiction over the place of tax payment by the deadline for final return referred to in Article 110 (1).

Article 100 (Calculation of Gains on Transfer)

(1) In calculating the gains from transfer, if the transfer value is based on the actual transaction value (including the value provided in Article 96 (3) and the amount of transaction example or appraised value, etc. provided in Article 114 (5) in cases where the value of transaction example or appraised value is applicable), the acquisition value shall also be based on the actual transaction value (including the value provided in Article 97 (7) and the amount of transaction example, appraisal value, conversion value, etc. provided in Article 114 (5) in cases where the transaction example, appraisal value, conversion value, etc. is applicable), and if the transfer value

(3) Matters necessary for calculating the gains on transfer shall be prescribed by the Presidential Decree.

Article 110 (Final Return on Tax Base of Transfer Income)

(1) Any resident having any transfer income amount in the current year shall make a return on the tax base of transfer income to the chief of the tax office having jurisdiction over the place of tax payment from May 1 to 31 of the year following the current year (from May 1 to 31 of the year following the year to which the date of permission for land transaction contract belongs, in cases falling under the proviso of Article 105 (1) 1 belongs),

(2) The provisions of paragraph (1) shall also apply even when there is no tax base in the current year or there is a deficit amount.

(4) Notwithstanding the provisions of paragraph (1), any person who has made the preliminary return may not make the final return on such income: Provided, That the same shall not apply to cases as prescribed by the Presidential Decree, such as where the preliminary return on assets subject to progressive rates is made twice or more in the current year

(5) A final return shall be submitted to the chief of the district tax office having jurisdiction over the place of tax payment the documents necessary for the calculation of the transfer value and necessary expenses, as prescribed by the Presidential Decree.

(6) Where there are deficiencies or errors in the return and other documents submitted under paragraph (5), the chief of the district tax office having jurisdiction over the place of tax payment may request them to correct

Article 114 (Determination, Revision and Notification of Tax Base for Transfer Income and Amount of Tax)

(1) If a person who is liable to make a preliminary return under Article 105, or who is liable to make a final return under Article 110, fails to make such return, the chief of the district tax office having jurisdiction over the place of tax payment or the director of the regional tax office shall determine

(2) If any omission or error is found in the details reported by a person who makes a preliminary return under Article 105 or a person who makes a final return under Article 110, the chief of the district tax office or the director of the regional tax office having jurisdiction over

(3) If any omission or error is found in the decision or rectification of the tax base of transfer income and the tax amount, the superintendent of the regional tax office having jurisdiction over the place of tax payment shall immediately correct it again.

(4) The chief of the regional tax office having jurisdiction over the place of tax payment or the director of the regional tax office shall, where he decides or revises the tax base for transfer income and the tax amount under paragraphs (1) through (3), follow the values under Articles 96

The actual provisions of the former Income Tax Act (amended by Act No. 6557 of Dec. 31, 2001, and amended by Act No. 7837 of Dec. 31, 2005)

Article 114 (Determination, Revision and Notification of Tax Base for Transfer Income and Amount of Tax)

(4) If the chief of the district tax office or the director of the regional tax office having jurisdiction over the place of tax payment determines or revises the tax base of transfer income and the amount of tax under paragraphs (1) through (3), he shall determine or correct the tax base of transfer income and the amount of tax under Articles 96 and 97: Provided, That in case where the resident makes the preliminary return or the final return on the tax base of transfer income under Article 90 (1) 6 and the proviso of Article 97 (1) 1 (a), if such returned amount is different from

Addenda (No. 6557, Dec. 31, 2001)

Article 1 (Enforcement Date)

이 법은 2002년 1뭘 1일부터 시행한다

Article 13 (Application Cases of Transfer Income Tax)

(1) The amended provisions of Article 114 (4) shall apply to the first report after this Act enters into force.