Changwon District Court 2007Guhap212 ( December 20, 2007)

National High Court Decision 2005Da1757 ( October 20, 2006)

Whether the capital gains tax agreed to be borne by the purchaser is included in the transfer value.

In calculating the tax base of capital gains, there is no evidence that the purchaser agreed to bear capital gains tax, and it is unreasonable to include capital gains tax on the purchaser's share in the transfer value.

The contents of the decision shall be the same as attached.

1.The judgment of the first instance shall be modified as follows:

A. The defendant on January 7, 2005;

(1) The portion exceeding KRW 157,728,415 out of the disposition of imposition of capital gains tax of KRW 1,889,847,59 over KRW 157,728,415 among the disposition of imposition of capital gains tax of KRW 1,604,60,084, and KRW 3,833,403,707 of the disposition of imposition of capital gains tax of KRW 440 for the year 2004, and the portion exceeding KRW 262,67,781 of the disposition of imposition of value-added tax of KRW 272,18,110 for the year 204 shall be revoked, respectively;

(2) The disposition of imposition of capital gains tax of KRW 1,149,121,110 for the year 2004 against Plaintiff JeongB, which exceeds KRW 957,60,926, shall be revoked.

B. All remaining claims of the plaintiffs are dismissed.

2. Of the total litigation costs, 70% of the portion arising between the plaintiff Jeong and the defendant shall be borne by the above plaintiff, the remainder by the defendant, and 20% of the portion arising between the plaintiff JeongB and the defendant shall be borne by the above plaintiff, and the remainder by the defendant, respectively.

1. Purport of claim

A. Plaintiff Jeong-A

The Defendant’s imposition of capital gains tax of KRW 1,889,847,59 for the year 2003 against the said Plaintiff on January 7, 2005; the imposition of capital gains tax of KRW 4,60,00,084,440 for the year 2004; the imposition of KRW 3,659,982,986 for the year 2004; the imposition of KRW 272,18,10 for the year 2004; and the imposition of KRW 536,363,137 for the year 203.

B. Plaintiff AB

The Defendant’s disposition of imposition of capital gains tax of KRW 1,149,121,110 against the said Plaintiff on January 7, 2005, which exceeds KRW 914,245,745, among the disposition of imposition of capital gains tax of KRW 1,149,121,110.

2. Purport of appeal

A. Plaintiff Jeong-A

Among the part of the judgment of the court of first instance against the plaintiff Jeong-A, the part against the plaintiff which ordered additional revocation shall be revoked as follows. The defendant revoked the part exceeding KRW 536,363,137 of the disposition of imposition of KRW 1,889,847,59 of the capital gains tax for the year 2003 for the above plaintiff on January 7, 2005, KRW 224,309,40 of the disposition of imposition of KRW 272,18,110 of the capital gains tax for the year 2004, KRW 224,309, and KRW 980,46,640 of the global income tax for the year 203.

B. Defendant

The part of the judgment of the court of first instance against the defendant shall be revoked, and all plaintiffs' claims corresponding to the revoked part shall be dismissed.

1. Scope of the judgment of this court;

A. As to the Plaintiff Jeong-A

In the first instance court on January 7, 2005, the Plaintiff Company sought revocation of the imposition of KRW 1,889,847,59 of the transfer income tax for the year 2003; ② the imposition of KRW 4,600,084,986 of the transfer income tax for the year 2004; ③ the imposition of KRW 272,18,110 of the value-added tax for the year 2004; ④ the imposition of KRW 536,363,137 of the imposition of KRW 98,640 of the global income tax for the year 2003.

The first instance court accepted the claim (2) and (3) dismissed all the remainder of the claim instead of partly citing the claim exceeding KRW 224,309,40. In this regard, the Plaintiff Company appealed against the losing part, namely, ① the entire claim, ③ the part of KRW 224,309,40, and the Defendant appealed against the entire claim.

Therefore, the scope of this Court’s adjudication against the Plaintiff Jeong-A is limited to ① (1) the appeal of the said Plaintiff was lodged only by the said Plaintiff, (3) the appeal was filed by both parties, and (2) the part against the Defendant during the appeal (the remainder exceeding KRW 3,659,982,986).

B. As to Plaintiff AB

In the first instance court on January 7, 2005, the Plaintiff JeongB sought revocation of the part exceeding KRW 914,245,745 of the imposition of capital gains tax of KRW 1,149,121,110 for the said Plaintiff on January 7, 2004. The first instance court accepted all of the Plaintiff’s claims, and the Defendants appealed. Accordingly, the scope of this court’s adjudication against Plaintiff JungB is limited to KRW 234,875,365 of the remainder exceeding KRW 914,245 of the imposition of capital gains tax of KRW 1,149,121,112 for the year 204.

2. Details of the disposition;

The following facts are recognized in each entry of Gap evidence 1, 2, Eul evidence 1-1, 2, and Eul evidence 2-6 without dispute between the parties or by considering the whole purport of the pleadings.

A. Investigation of the plaintiffs of the Daejeon Regional Tax Office

(1) On September 23, 2004, from around November 26, 2004 to around November 26, 2004, the Daejeon Regional Tax Office conducted an investigation into the suspicion of evading capital gains tax by purchasing the apartment house site, etc. of the "Dic Science Industrial Complex" located in the Dap District of Chungcheongbuk-gun and paying the down payment only to others.

(2) Based on the above findings, the Director of the Daejeon Regional Tax Office notified the Defendant of the following purport.

(A) On September 11, 2002, 2002, the Plaintiff Ho-A agreed to invest 92% of the above Plaintiff EEtory Co., Ltd. (hereinafter “EEto”), and EEtory purchased 92,860,080 won for 9,92,860,000 won for the purchase of 1,621,212,660 won for the transfer income tax on March 7, 2003, and the buyer of NEtory Co., Ltd. (hereinafter “NEto”) did not file a return on the transfer income tax of NE Housing (hereinafter “the transfer income tax”) and the transfer tax of NE to NEtoty Co., Ltd. (hereinafter “NEto”), despite having filed a return on the transfer income tax of 1,621,212,60 won.

(B) On February 3, 2003, 10%, 10%, 10%, and 50%, YHH&C (hereinafter “HH&C”) invested in the intermediate payment, and 21,67,610,000 won, HHH&C purchased 2,167,761,000 won from the Korea Land Corporation and paid 2,167,761,00 won, and 205% of the transfer income tax and 40% of the transfer income tax (hereinafter “the transfer income tax and 50% of the transfer income tax”) did not acquire 1,319,891, 850, 450, 450, 203, 506, and 40% of the transfer income tax and 50% of the transfer income tax, 200, 40% of the transfer income tax and 50% of the transfer income tax, respectively.

(C) The Plaintiff Company entered into a real estate consulting agreement with the NewCC to receive 20% of the investment profit of the instant land. As seen earlier, the Plaintiff Company did not impose an amount of value-added tax equivalent to KRW 2,178,638,470 of the fee even after the provision of the service was completed on March 30, 2004.

(D) Of the details of Plaintiff 1’s global income return in 2003, the Plaintiff, a real operator of K real estate agent, included KRW 200,000,00 in the processing sales amount for HHHCD Co., Ltd. (hereinafter “HHHCD”), whereas the other party’s gross income tax was omitted. In addition, in the case of KK Licensed Real Estate Agent, the processing sales amount for HHHCD included KRW 100,000,000 in the sales amount for HHCD.

B. The defendant's disposition of this case

On January 7, 2005, based on the notification of the Director of Daejeon Regional Tax Office, the defendant issued each of the following dispositions against the plaintiffs.

(1) As to the Plaintiff Jeong-A

(A) Transfer income tax for 2003

The above plaintiffs (92%) impose capital gains tax of KRW 2,570,192,733 (including additional tax) for capital gains tax of KRW 6,127,081,163 in 203 (including additional tax) and notify the above plaintiffs (92%) of capital gains tax of KRW 2,570,192,73 for capital gains tax of KRW 6,127,081,163 (the amount of capital gains tax of KRW 27,889,847,59 was reduced or corrected in accordance with the decision of the National Tax Tribunal on October 20

(B) Transfer income tax for 2004

(2) The transfer income tax of KRW 4,600,084,440 shall be imposed and notified to the above plaintiff (40% of the equity ratio) in 2004 on the gains from transfer of land ownership of KRW 11,502,711,122.

(C) Value-added tax for the first term of 2004

(2) The value-added tax for the first term of January 2004 on the land consulting fee of KRW 2,178,638,470 on the Plaintiff’s NewCC (including additional tax) shall be imposed and notified.

(D) Global income tax for 2003

In addition to global income tax of KRW 573,860,50,508 for global income amount of KRW 2,244,516,436 of 203, 206,606,137, the imposition of global income tax of KRW 980,46,640 for the plaintiff, who is the actual operator of investment consulting △△△△△, KK Licensed Real Estate Agent, shall be increased or corrected as KRW 980,46,640

(2) As to Plaintiff AB

(2) The transfer income tax of 2004 shall be imposed and notified to the above plaintiffs (10%) of the transfer income tax of 1,149,121,110 won for the transfer income of 2,875,302,780 won from the transfer of land ownership.

(c) Judgment of the National Tax Tribunal;

(1) The Plaintiffs filed a petition with the National Tax Tribunal for an inquiry on each of the instant dispositions.

(2) On October 20, 2006, the National Tax Tribunal dismissed all of the above plaintiff's remaining appeal and plaintiff JungB's appeal on the ground that there is no evidence to deem that NEE had to bear capital gains tax of KRW 1,621,212,660 on the ground that NE acquired the land sale right of this case and there is no evidence to prove that NE had to pay capital gains tax of KRW 1,621,212,660 on the transfer value.

(3) Accordingly, on October 27, 2006, the Defendant reduced and corrected the transfer income tax for the year 2003 from KRW 2,570,192,73 to KRW 1,889,847,59 (the disposition imposing the transfer income tax for the year 2003 for the remaining portion after reduction or correction as above is the disposition imposing the transfer income tax for the year 2003. Specific imposition details are the same as attached Form 2).

(4) On October 24, 2006, the Plaintiffs received a notice of the decision on national tax adjudication, and filed the instant lawsuit on January 20, 2007.

3. Whether the instant disposition is lawful

The plaintiffs asserts to the effect that each of the dispositions of this case should be revoked on the following grounds.

A. The plaintiffs' common assertion (related to imposition of capital gains tax for 2004)

(1) The plaintiffs transferred the right to sell the land of this case to HHW and transferred a human life change on March 30, 2004, and thus, the tax base of capital gains pursuant to Article 110 (1) of the Income Tax Act (amended by Act No. 7335 of Jan. 14, 2005) is able to be expressed when a final tax return is filed and paid between May 1 and 31 of the following year (2005). Nevertheless, the defendant issued the disposition of this case on January 7, 2005, prior to the expiration of the period for filing the capital gains tax return.

(2) The plaintiffs paid the down payment of KRW 2,167,761,00 in full upon purchasing the instant land. Since HH&C, the purchaser, did not have agreed to bear it, the total down payment should be included in the acquisition value. In addition, HHH&C bears overdue interest of KRW 450,203,670, but this is again paid to the Korea Land Corporation, which should be included in the cost for acquisition.

(3) The Plaintiffs did not agree to bear KRW 4,312,204,171 equivalent to 50% of the transfer income tax when concluding the instant purchase and sale contract for the instant land. Therefore, the Plaintiffs shall not be included in the transfer value.

(4) As seen earlier, HH&C completed a change in the purchaser’s name on March 30, 2004 on the land sale ledger. However, the Plaintiffs did not receive full payment of the purchase price of the instant land from HH&C, etc., and thus, the date of transfer did not actually arrive.

B. Plaintiff U.A’s assertion

(1) Regarding the transfer income tax on 2003

The land of this case was purchased by jointly investing funds in the proportion of 10% of each of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 10% of the 2003 portion of the 192% of the 10% of the 100s of the land of this case by the 1,889,847,599.

(2) With respect to global income tax for the year 2003

(A) As seen earlier, the offer of the instant land services was completed on March 30, 2004. Therefore, even if such offer is imposed on global income in the year 2004, it is unlawful to impose the tax by deeming it as global income in the year 2003.

(B) The Plaintiff Jeong-A was not engaged in the real estate consulting business continuously and repeatedly, and the real estate brokerage business should be deemed as the annual management consulting business, and at least the rate of estimated income from management consulting business by the National Tax Service should be applied to the investment consulting business.

(3) The value-added tax related to 1 year 2004

(A) As seen earlier, insofar as the NewCC was not fully paid the purchase price of the instant land from HH&C, etc., it cannot be deemed that the provision of its services was completed on March 30, 2004, and thus, it cannot be deemed that it was subject to the assessment of value-added tax for the first period portion of January 2004.

(B) Even if not, in Busan High Court Decision 2007Na18607, HHC, etc. adjusted the sales proceeds of the instant land to be reduced to KRW 41,367,980,000. The sales proceeds equivalent to the shares of the NewCC (50%) based on the sales proceeds adjusted to be reduced to be reduced to KRW 9,845,185,000 among them shall be KRW 1,969,037,000, which was paid to the Plaintiff Company by the Plaintiff Company (20%). Accordingly, the part that affected KRW 196,903,700 for value-added tax amount on January 2004 shall be revoked.

B. Relevant statutes

Attached Form 1 is as shown in the attached Table 1.

(c) Fact of recognition;

The following facts are not disputed between the parties, or found to be the whole purport of the pleadings in each of the evidence Nos. 6-2, 7 through 11, 13 through 16, Eul evidence No. 7, 8, Eul evidence No. 11-1, 2, 3, Eul evidence No. 15 through 18, Eul evidence No. 19-2, 2, Eul evidence No. 20, Eul evidence No. 21-2, 3, 4, Eul evidence No. 24, 25, 26, and each of the evidence No. 9, Eul evidence No. 10, 28, 29, 30, and 32 is insufficient to reverse this.

(1) The details of the instant land purchase and sale

(가) 원고 정AA은 백QQ 명의로 ☆☆☆ 투자컨설팅을 운영하면서 투자자인 김RR, 신SS, 최TT, EE토건(이하 '원고 정AA 등'이라 한다)과 함께 2002. 9. 11. EE토건 명의로 논산시장으로부터 이 사건 ① 토지를 매매대금 9,928,600,800원에 매수하고 같은 날 계약보증금 992,860,080원을 지급하였다.

(B) At the time, the investment shares were set at 40% of the KimR, 30% of the newCC, 10% of the largest TT, EEtory, and the Plaintiff Jeong-A (△△ investment consulting), respectively. The Plaintiff Jung-A decided to take charge of the purchase, disposal, etc. of the instant land, and the remaining investors paid the fee to the said Plaintiff.

(C) On January 28, 2003, the Plaintiff Jeong et al. decided to sell the instant land purchase price of KRW 6,000,000,000 to N Houses, and received respectively KRW 500,000,000, out of the purchase price on the same day, and KRW 500,000,000 from the following day.

(D) In preparing a sales contract as of January 28, 2003 with regard to the above sales contract, the Plaintiff Jeong Jong-A et al. and N Houses entered the sales price in KRW 1,000,000,000, not for KRW 6,000,000, not for KRW 6,000,000, and entered into a special agreement that “if there are taxes and public charges (corporate tax, acquisition tax, and registration tax) to be borne by the seller, the entire purchaser shall be borne.

(E) On the other hand, there has not been a conflict of opinion regarding the attribution and treatment of taxes between the Plaintiff Jeong et al. and N Houses, the N Housing reported the actual purchase price at KRW 6,000,000 by declaring the tax base of corporate tax in early 2004. EEtos also reported the tax base of corporate tax at KRW 5,000,000 (=6,000,000 (sale price) - KRW 1,000,000 (paid down payment) - KRW 400,000,000 (paid down payment) pursuant to 8% among capital gains.

(F) On August 2004, the plaintiff Jeong Jong-A prepared and accepted the agreement on behalf of the other investors on behalf of the police officer in the middle of August 2004, 200 that "the share of the EE Party in the land purchase and the new apartment construction project of this case (i) 92% of the shares in the EEtop investment consulting, 8% of the shares in the EEtop investment, and 8% of the profits and the taxes and public charges, and the share shall be borne according to the above ratio)" as of September 9, 2002, and then prepared and received a "tax return" and "tax return of transfer income tax" in accordance with the actual purchase price under the name of the EEtop investment consulting (i.e., the 5,000,000,000 won multiplied by 92% of the shares in the above agreement as transfer income) and the "tax return of transfer income tax".

(2) The instant land sales circumstances, etc.

(A) On February 3, 2003, the Plaintiff Company and NewCC entered into a sales contract with the Korea Land Corporation in the name of the Plaintiff Company and the Korea Land Corporation, with the purchase price of KRW 21,677,61,00,00, and paid KRW 2,167,761,00 as the contract deposit on the day, and the remainder KRW 19,509,849,00 as the contract deposit shall be paid in six installments during the period from August 3, 2003 to February 3, 2006. Meanwhile, the Plaintiff Company and the NewCC agreed to have the share of KRW 40 and 30% as to the above sales contract, but the share of KRW 10,00 as the Plaintiff Company and the U.S. shall have the share of KRW 20% as the contract deposit.

(B) On September 26, 2003, the Plaintiff Jeong, etc. entered into a sales contract on the instant land with HHCD on the condition that only the contract deposit was paid. In connection with this, on September 26, 2003, the sales contract was entered into with the seller as follows, with the Plaintiff JungB, U, and HHCD with the buyer as HHCD. (hereinafter “instant one contract”).

○ Sales Price: KRW 44,108,550,000 (Seoul 1,500,000)

- down payment: 2,167,610,00 won, remainder: 41,940,789,000 won;

○ The remaining payment date: December 20, 2003

○ Matters Special Agreement: ① The unpaid amount payable to the Land Corporation (the first intermediate payment to the sixth intermediate payment and the interest on installments) shall be replaced by any balance. ② This Agreement is a condition under which the sale contract for land ownership is jointly implemented by both parties at the end of the remaining pay pursuant to the mutual agreement, and the purchaser and seller succeed to the rights and obligations at 50:50 equity interest. ③ All enforcement bills (including the right of sale) are to be made by HHCD. ④ The seller and buyer bear KRW 1,083,880,50, respectively. ⑤ The seller’s interest on the first intermediate payment to be paid to the Korea Land Corporation, overdue interest on the first intermediate payment, and the transfer income tax on the sale.

(C) On October 1, 2003, 200, KRW 500,000, and KRW 583,880,000, and KRW 583,880,000 on October 10, 2003, are remitted to the WW bank passbook passbook of YV, an employee of the NewCC, HHC, and paid all the down payment equivalent to KRW 1,083,880,50, out of the down payment to be borne by HHCD under the above sales contract.

(D) On October 23, 2003, the Plaintiff Jeong-A, NewCC, and HHCD’s representative director, the director KimY entered into the instant trade agreement (hereinafter “instant trade agreement”).

In relation to the promotion of apartment construction projects in the Y, KimY, Plaintiff JeongA, and NewCC, Chungcheongnam-do, Chungcheongnam-do, the following basic matters are set forth and promised to implement them in good faith and sincerity as follows:

○ The project shall be undertaken by establishing a new corporation, and the shares of the project shall be determined in XX, KimY, Plaintiff AA, and NewCC each by 25%, and the representative director shall be in XX.

The right of implementation and sale of the project has a representative director in depth XX.

○ KRW 2,167,761,00 already paid as down payment to the Korea Land Corporation in connection with the project at ○○, shall bear KRW 541,940,250 each, respectively.

○ The unpaid wage (from the first intermediate to the sixth intermediate and interest on installments) 19,509,849,000 won, which shall be paid to the land corporation, shall be replaced by the balance and shall be replaced by the sale funds.

O Taxes, public charges, transfer taxes, and corporate tax imposed according to the project implementation shall be borne by 25% each according to the equity in the project, and the sales income tax shall be 25% each.

○ All the costs of this project shall be borne by 25% each according to their shares.

○ Matters not stipulated in this Agreement shall be determined by mutual consultation.

(E) Pursuant to the instant business agreement, the Plaintiff P, KimY, and JungA NewCC established HHWC as a new corporation that implements the said apartment construction project on December 26, 2003 and took office as its representative director on December 26, 2003. HHHWC’s shares were in depth 26%, KimY25% (However, her mother took the name of the ZW), Plaintiff PAA25% (However, her mother took the name of Kim JJ), and NewCC 24%.

(F) On January 5, 2004, Plaintiff Jeong et al. filed an application for change of the name of the purchaser of the instant land with the Korea Land Corporation (hereinafter “Korea Land Corporation”) to add Plaintiff Jeong and NewCC from the original UU and the Plaintiff JeongB, and around that time, the purchaser’s name was changed.

“(G) On February 2, 2004, the date on which the instant trade agreement was concluded and the buyer’s name was changed, and on February 2, 2004, the sales contract (hereinafter referred to as the “instant second contract”) was prepared with the Plaintiffs, newCC, defenseU, and buyer as HH&C as follows.” ○○ sales contract: KRW 44,108,550,000 (Seoul KRW 1,500,000)

- down payment: 2,167,760,00 won, remainder: 41,940,790,000 won;

○ The balance payment date: 2004. (No monthly date is written)

○ Matters Special Agreement: (1) The unpaid amount (from the first part to the sixth part), which is to be paid to the land corporation, shall be replaced by the balance, and the balance shall be paid with the project financing for the financial institution. (2) The unpaid amount of the Korea Land Corporation after succession to the rights and obligations, shall be paid by the buyer. (3) The buyer may not sell it to a third party without the consent of the seller.

(h) On March 30, 2004, the Plaintiffs, NewCC, and U.S. concluded a contract on the succession of rights and obligations with respect to the instant land with HH&C, and then changed the purchaser’s name on the same day to HH&C, and completed the registration of ownership transfer on May 10 of the same year. Meanwhile, HHH&C, while changing the purchaser’s name, paid KRW 450,203,670 in total the overdue interest to be paid by the Plaintiffs, etc. to the land construction.

(i) The Plaintiff Jeong, NewCC, etc. filed a lawsuit against Changwon District Court 2004Gahap6016 against HH&C, HHHHCD, in-depth, and KimY, and was rendered a judgment in favor of some of the parties concerned on October 4, 2007. However, as a result of the appeal by HHH&C, etc., the Busan High Court (No. 2007Na18607) decided on November 24, 2009 on the following grounds: (a) although there is no evidence to deem that the transfer income tax was agreed to bear the purchase price of the instant land as KRW 44,108,50,00 (Seoul High Court 1,50,000) on November 24, 2009; (b) however, it was determined that there was no evidence to deem that HH&C agreed to pay the transfer income tax as the purchase price and the amount of transfer income tax, and the creditor’s general tax collection order as well as national tax collection order as local tax collection order.

(j) Meanwhile, in the above appellate trial on September 24, 2009, the NewCC and HHH&C agreed to the effect that “The sales price of the instant land shall be reduced to KRW 41,167,980,000 (per square year 1,400,000)” was reduced.

(3) A real estate consulting agreement between the Plaintiff and the NewCC

(A) On February 3, 2003, the Plaintiff Company agreed to collect 20% of the profits earned by NewCC as real estate consulting fees after jointly purchasing the instant land with the NewCC.

(B) However, the Plaintiff Company did not report this.

(4) Plaintiff Jeong-A’s investment consulting and operation of K Licensed Real Estate Agent

(A) The Plaintiff Jeong-A actually operated the investment consulting of △△△△, 71-1 NAF, 111 in the area of Kimhae-si, Kimhae-si, and the K Licensed Real Estate Agent in the area of 281-8 101 in the same Ri, but the name of the representative was registered as Plaintiff JungB, and KK Licensed Real Estate Agent in the area of the principal business (the principal business is registered as the real estate brokerage business).

(B) As between May 30, 2004 and May 31, 2003, Plaintiff Jeong-A reported the total income of 111,461,363 won, the total income of K Licensed Real Estate Agent was reported as KRW 3,960,00,00, and the total income of K Licensed Real Estate Agent was reported as KRW 111,461,363.

(C) The sales revenue of HHCD included KRW 200,000,000,000, and the other party’s global income tax of KRW 276,784,960 is omitted. In addition, the sales revenue of HHCD included KRW 100,00,000,00 in the sales revenue of HHCD.

(D) On January 7, 2005, the Defendant: (a) deemed that the Plaintiff Jeong-A, an actual business operator, was operating real estate brokerage business; and (b) increased and corrected the global income tax for 2003, including the penalty tax to KRW 980,466,645.

D. Determination

(1) Determination as to the common assertion of the plaintiffs (2)

(A) As to the assertion regarding the failure to report capital gains tax

In light of the provisions of Articles 105(1)1 and 114 of the Income Tax Act, a person who transfers assets subject to taxation other than capital gains tax shall file a preliminary return on the tax base of capital gains tax with the head of the competent tax office having jurisdiction over the place of tax payment within two months from the last day of the father to whom the date of transfer belongs, and if a person who is obligated to file a preliminary return fails to file a preliminary return, the head of the competent tax office shall determine the tax base of capital gains and the amount of tax. Meanwhile, according to Article 98 of the Income Tax Act and Article 162 of the Enforcement Decree of the same Act, the time of transfer is the date of liquidation

As seen earlier, HH&C changed the purchaser’s name on March 30, 2004, and completed the registration of ownership transfer on May 10 of the same year. As such, the Plaintiffs shall file a preliminary return of capital gains tax by the end of July 2004 at the latest. Therefore, as long as the Plaintiffs did not file a preliminary return of capital gains tax by the end of July 2004, the Defendant may determine the tax base and tax amount of capital gains, the instant disposition made on January 7, 2005 is lawful. The Plaintiffs’ assertion on this part is without merit.

(B) Whether the total amount of the contract bond is an industry

According to the above, the plaintiffs and the purchaser agreed to bear 1/2 of the contract guarantee level at the time when the contract of this case was prepared. Accordingly, the plaintiffs received KRW 1,083,880,500 from HHCD on October 1, 2003, which corresponds to 1/2 of the contract deposit. After entering into the partnership agreement of this case on October 23, 2003, the plaintiffs Jung-A et al. contributed 1/2 of the contract deposit of this case to the Dong company with the plaintiff Jeong-A et al., who was not paid the contract deposit of this case, as well as KRW 1/167,761,00 among the contract deposit of this case and KRW 2,167,761,00,000, as well as KRW 1/2 of the contract contract of this case, and there is no stipulation as to the payment of the contract deposit of this case between the plaintiff Jeong-A et al. and H&C.

(C) Whether the acquisition cost of overdue interest is included

Article 163(1)3 of the Enforcement Decree of the Income Tax Act explicitly provides that "in calculating the acquisition price by the actual transaction price, the amount equivalent to the interest additionally incurred due to the delay in the due date of the payment of the transaction price under the original agreement shall not be included in the cost for acquisition." In addition, as seen earlier, as long as the actual obligor of the overdue interest of KRW 450,203,670 is recognized as HH&C, this part of the plaintiffs' assertion based on the different premise is groundless.

(D) Whether a capital gains tax burden agreement exists

According to the above, on September 26, 2003, the purchaser agreed to bear the transfer income tax to be borne by the Plaintiff Jeong et al. under the contract of this case. However, on February 2, 2004, preparing the contract of this case No. 2 (the seller was entered into the Plaintiffs, NewCC, and U.S.) on February 2, 2004, it is recognized that the contract of this case No. 1 was invalidated. There is no evidence to deem that the purchaser agreed to bear the transfer income tax to be borne by the Plaintiffs except for part of the evidence No. 7, which is not accepted by the court.

Therefore, the Defendant’s imposition of transfer income tax for the year 2004 is unlawful on the premise that the purchaser of the instant land agreed to bear the transfer income tax to be borne by the Plaintiffs due to the transfer of rights.

(e) Whether the time of transfer due to the default of payment has expired;

As seen earlier, as long as HH&C changed the purchaser’s name of the instant land on March 30, 2004 and completed the registration of ownership transfer on May 10 of the same year, it shall be deemed that the transfer time has arrived pursuant to Article 98 of the Income Tax Act and Article 162 of the Enforcement Decree of the same Act. Accordingly, the Plaintiffs’ assertion on this part out of a different premise is without merit.

(2) As to the Plaintiff’s assertion

(A) The Plaintiff’s share (the transfer income tax reverted to year 2003) in the instant land purchase and sale

(1) As seen earlier, the Plaintiff’s share in the instant land purchase and sale was 10%, and the Plaintiff’s share in the instant land was 10%, but the Plaintiff’s share in the Plaintiff’s Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party Party

Therefore, the Defendant’s imposition of transfer income tax for the year 2003, which was based on the entire fact that the Plaintiff’s shares in the land of this case reach 92%, is unlawful.

(B) Regarding imposition of global income tax for the year 2003

As seen earlier, the Defendant does not impose a comprehensive income tax on the real estate consulting fees that Plaintiff Jeong paid from NewCC, but imposes a comprehensive income tax on the income accrued while the Plaintiff Jeong runs the real estate brokerage business in the name of Plaintiff JungB and StateO. Therefore, this part of the Plaintiff Jeong Jeong’s assertion based on a different premise is without merit.

In addition, the fact that the plaintiff Jung-A actually operated investment consulting and K Licensed Real Estate Agent, the fact that the principal type of business is registered as real estate brokerage business at the competent tax office (the code of business is also registered as 70,2001 that refers to the real estate brokerage business) is as seen earlier, and the real estate brokerage business refers to the business that conducts real estate arbitration or agency services related to the purchase or sale of all kinds of real estate under a fee or a contract, and the business and management consulting business refers to the business that provides business management consultation or arbitration and the business that provides public relations services, it is reasonable to view that the real estate consulting business is included in the real estate brokerage business, not the management consulting business. Accordingly, the imposition disposition of global income tax for the year 2003 of this case on which the plaintiff Jung-A reported that the defendant is engaged in the real estate brokerage business is legitimate. This part of the plaintiff Jung-A's assertion is without merit.

(C) Value-added tax for the first term of 2004

Article 9(2) of the Value-Added Tax Act provides that "the time when the service is supplied shall be when the service is supplied or when the provision of the service is completed," Article 22 subparag. 1 of the Enforcement Decree of the same Act provides that "the time when the provision of the service is completed in the case of ordinary supply" and Article 22 subparag. 3 of the same Act provides that "if the provision of subparagraphs 1 and 2 is not applicable, the time when the provision of the service is completed and the price of the service is finalized." However, HHH&C completes the procedure for changing the buyer's name on March 30, 204 with respect to the land of this case and completed the registration of ownership transfer on May 10 of the same year. Therefore, the real estate consulting service provided to NewCC is determined at the latest on May 10, 200 after the transfer of ownership is completed and the supply price of the service becomes final and conclusive, and the real estate consulting service's fee of Plaintiff PH&C is without merit.

However, the fact that mediation was completed between the NewCC and HHH&C, which agreed to receive a real estate consulting fee equivalent to 20% of the net profit of the Plaintiff PHA in Busan High Court, to reduce the purchase price of the instant land to KRW 41,167,980,000 is as seen earlier. In imposing transfer income tax, where gains from transfer are calculated based on the actual transaction price of the assets, the actual transaction price refers to the whole amount agreed to be paid for the benefits at the time of the transaction. In light of the above, it is reasonable to view that the NewCC is the total amount of KRW 41,167,980,000, which is the adjusted amount.

Therefore, under the premise that the purchase price of the instant land reaches KRW 44,108,50,000, the imposition of value-added tax on the Plaintiff Jeong for the period of 2004 is unlawful.

E. Sub-committee

Therefore, the imposition of capital gains tax for the year 2004 against the plaintiffs, the imposition of capital gains tax for the year 2003 against the plaintiffs Jeong, and the imposition of capital gains tax for the year 2004 is unlawful, respectively.

4. The tax amount that the plaintiffs bear;

A. Plaintiff Jeong-A

(1) Transfer income tax for 2003

The transfer income tax for the year 2003, which the Plaintiff Company must comply, shall be KRW 157,728,415, as stated in the “justifiable amount of transfer income tax” column in attached Form 2-1 of the transfer income tax for the Plaintiff Company. Therefore, the portion exceeding KRW 157,728,415 of the Defendant’s imposition of transfer income tax for the year 2003 on the said Plaintiff should be revoked.

(2) Transfer income tax for 2004

The transfer income tax for the year 2004, to be borne by the Plaintiff Company, shall be KRW 3,833,403,707, as stated in the “justifiable amount of transfer income tax” column, among the details of tax calculation for the Plaintiff Company, as shown in the “justifiable amount of transfer income tax” column. Therefore, the Defendant’s imposition disposition of KRW 4,600,084,440 for the year 2004 against the said Plaintiff should be revoked.

(3) Value-added tax for the first term of 2004

The value-added tax for the first period of January 2004 to be borne by the Plaintiff Jeong-A shall be KRW 262,67,781 as indicated in the “justifiable value-added tax” column in attached Table 2-3. Therefore, the part exceeding KRW 262,667,781 of the Defendant’s imposition of value-added tax for the first period of January 2004 against the said Plaintiff should be revoked.

B. The capital gains tax of 2004 on the Plaintiff PartyB

The transfer income tax for the year 2004, to be borne by the Plaintiff JeongB, shall be KRW 957,60,926, as stated in the “justifiable amount of transfer income tax” column, among the details of tax calculation for Plaintiff JungB. Therefore, the portion exceeding KRW 957,60,926, out of the imposition disposition of KRW 1,149,121,110 against the said Plaintiff shall be revoked.

5. Conclusion

If so, the plaintiffs' claims of this case are justified within the above scope of recognition, and the remaining claims are dismissed as it is without merit. Since the judgment of the court of first instance is unfair by partially changing the conclusion, it is so decided as per Disposition by the assent of all participating Justices on the appeal of the plaintiff Jeong-A and the appeal of the defendant against the plaintiffs.