2014. 528

In the case of transfer of co-owned land, transfer value

Where a co-owned land is registered in the name of one of the owners, and such land is transferred, the transfer value of another co-owner who is not a registered titleholder.

Article 96 of the Income Tax Act

Revocation of imposition of capital gains tax

A Kim a

Head of Pyeongtaek Tax Office

2015.03.27

15.05.08

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 84,652,600 on February 5, 2013 against the Plaintiff was revoked.

1. Details of the disposition;

A. On May 16, 2002, Kima acquired 382,377,000 parcels of Pyeongtaek-si and 16 (hereinafter “instant land”) from a successful bid for KRW 382,37,00 in the real estate auction process, and reported the transfer income tax on October 30, 202 with the transfer value of KRW 400 million on October 30, 2002 after transferring it to Cho-a and Seoa.

B. However, while investigating the land of this case as the transferee of the land of this case, the Defendant did not solely acquire and transfer the land of this case, but jointly acquired the land of this case by investing 1/4 each of the Plaintiff and Kima, Kima, Park Ga, Kimbbbb, and 4, respectively, under the name of Kima who is eligible for farmland acquisition, and the actual transfer value of Choa and Seoa is not 40 million won originally reported, but 726 million won, and its transfer value is 726 million won, and the above 4 persons equally distribute its transfer margin. On February 5, 2013, the Defendant imposed the disposition of this case on the Plaintiff of KRW 181,50,000, the above KRW 726 million as the Plaintiff’s transfer value and imposed the transfer income tax of 84,652,600,000 won for the year 202 as the Plaintiff’s transfer value.

C. On January 9, 2014, the Plaintiff filed an appeal with the Tax Tribunal, but was dismissed on April 3, 2014.

[Reasons for Recognition] Uncontentious Facts, Gap evidence No. 1, Eul evidence No. 1, and the purport of the whole pleadings

A. The plaintiff's assertion

1) While Kima transferred the instant land in KRW 726 million, the Plaintiff and other three investors, including the Plaintiff, deceptioned more than KRW 300 million, and the Plaintiff merely received KRW 7.8 million as gains from transfer on the premise that Kima transferred the instant land in KRW 400 million. However, the Plaintiff’s right to claim for the return of profit or the right to claim for damages against Kima constitutes a case where it is apparent that the Plaintiff’s right to claim for return of profit or the right to claim damages against Kima has already become impossible to recover due to extinctive prescription, and the portion exceeding KRW 400 million has been reverted to Kima finally and conclusively. Accordingly, the instant disposition imposing capital gains tax on the Plaintiff is unlawful as it violates the principle of substantial taxation with which the rights and obligations are established.

2) The Plaintiff was unaware of the fact that the actual transfer value exceeds KRW 72,600,000,000,000 that was originally reported by Kima. Therefore, the Plaintiff’s failure to report and pay capital gains tax on the portion exceeding KRW 400,000,000 shall be deemed to have justifiable grounds. Therefore, the part on the penalty tax of this case is unlawful.

B. Determination

1) Comprehensively taking into account the statements in Gap evidence Nos. 11, 13 and Eul evidence Nos. 2, 5, 6, 7, and 8 and the purport of the entire pleadings in the testimony of witness Kimb, the plaintiff et al. made joint investments and the land of this case was awarded a successful bid by four persons including the plaintiff et al., and Kima takes the steps of acquiring the land of this case and transferring 72,600,000,000 won to Choa and Seoa, and the plaintiff Kima, Kima, Park Ga, Kimba, Kimbbbb, four persons, who purchased the land of this case at the time of the acquisition of the land of this case at the auction and participated in a certified judicial scrivener office at the time of the transfer of the land at the auction, and the remaining balance was equally distributed at the tea house of the certified judicial scrivener office at the time of the plaintiff's assertion, and Parka received a share of KRW 780,000,000,00.

In full view of the above facts, it is difficult to view that Kima, as alleged by the Plaintiff, was individually taking out not less than 300 million won out of the transfer price, and the remaining amount excluding 300 million won of loans out of 726 million won of the actual transfer price of the land of this case, was equally distributed by the Plaintiff and Kima, Park Ga, Kimba, Kimb4, and thus, the transfer price belonging to the Plaintiff is 181,50,000 won which is 726 million won and 181,50,000 won which is the transfer price belonging to the Plaintiff, cannot be deemed as violating the principle of substantial taxation. Accordingly, this part of the Plaintiff’s assertion is without merit.

2) According to the above facts, it is difficult to view that the Plaintiff was unaware of the actual transfer value at the time of the instant land, and it is deemed that the Plaintiff was liable to report capital gains tax as one of the transferor.

Therefore, this part of the plaintiff's assertion is without merit, since there is no justifiable reason for neglecting the obligation to report and pay capital gains tax.

3. Conclusion

Thus, the plaintiff's claim shall be dismissed as it is without merit.