Transfer date of voluntary auction and special surtax

Since special surtax is imposed on the gains from the transfer of land, etc. of a corporation, in the case of voluntary auction, it is insufficient to say that there was a decision of permission of auction, and that the bid price was paid to the auction court.

Article 59-2 of the former Corporate Tax Act

Attorney Go Jae-ho et al., Counsel for the defendant-appellant

Head of Dong Tax Office

Seoul High Court Decision 80Gu257 delivered on October 15, 1981

Of the judgment of the court below against the defendant, the part against the defendant is reversed in the amount of KRW 12,490,642 and the defense tax amount of KRW 1,784,373, and this part of the case is remanded to the Seoul High Court.

The remaining defendant's appeal shall be dismissed, and the costs of appeal for the part dismissed shall be borne by the defendant.

The grounds of appeal by the defendant litigant are examined.

1. Class A employment income tax and the defense tax amount corresponding thereto;

According to the reasoning of the judgment below, the court below held that the plaintiff corporation borrowed the money of this case to raise the operating fund of the plaintiff corporation, and all of the borrowed money was appropriated for the operating fund of the plaintiff corporation. Thus, the defendant recognized the borrowed money of this case as a bonus to the representative member, and that the tax of Class A earned income and the detailed and disposition of defense are illegal. In light of the records, it should be reviewed and viewed as a legitimate judgment based on lawful fact-finding, and there is no error of law such as the theory of lawsuit.

2. The portion of corporate tax, special surtax and defense tax on it; and

According to the reasoning of the judgment below, the court below acknowledged the fact that the auction price was paid to the mortgagee on December 23, 1976 and the auction price was paid to the mortgagee on January 14, 1977 by taking account of the following evidence after compiling the evidence at the time. However, the income accrued from the auction disposition as above is a non-taxable income under Article 59-3 subparagraph 9 of the former Corporate Tax Act (amended Act No. 2792, Dec. 22, 1975) and thus, the disposition of imposition of the corporate tax, special surtax and defense tax on the transfer margin by the defendant is unlawful and revoked.

However, according to the relevant provisions of the Corporate Tax Act, the special surtax is imposed on the gains from the transfer of land, etc. of a corporation (Article 59-2 and Paragraph (1) of the same Article). The "transfer" refers to the actual transfer of the ownership of the land, etc. for price due to sale, exchange, investment in kind in a corporation, etc. regardless of the registration of the land, etc. (Article 59-2 and Paragraph (2) of the same Article). However, in the case of voluntary auction such as this case, the transfer falls under the above transfer, but in this case, the actual transfer of the ownership of the land is insufficient merely because the decision to grant the successful bid was made, and

Therefore, the land of this case seems to have been transferred on January 14, 197, which is the date of the successful bid price for the approval of the court below for the first time (the date of the successful bid price is commonly paid) and on the other hand, Article 59-3 subparagraph 9 of the former Corporate Tax Act concerning the non-taxable income of special surtax was deleted by the amended Act (Act No. 2931) of the Corporate Tax Act (Act No. 2931) which was promulgated on December 22, 1976 and enforced from January 1, 1977. According to Article 5 of the Addenda of the same Act, the provisions of Articles 59-2 and 59-3 are applied from the first transfer of the land, etc. after the enforcement of this Act. Accordingly, the above amended Act shall apply to the special surtax on the transfer income of the land of this case. Accordingly, it is clear that it is subject to the special surtax.

Nevertheless, there is no error of misapprehending the legal principles on transfer in the special surtax or any error of affecting the conclusion of the judgment by erroneously applying the law, and there is a ground for appeal that the court below included the purport of pointing this out.

Therefore, among the part of the judgment below against the defendant, the part of the corporate tax special surtax amounting to KRW 12,490,642 and defense tax amounting to KRW 1,784,373 is reversed, and this part of the case is remanded to the Seoul High Court which is the court below. The remaining defendant's appeal is dismissed, and the costs of the appeal against the dismissal of appeal are assessed against the losing party and it is so decided as per Disposition by

Justices Shin Jong-young (Presiding Justice)