1. Whether the taxation of actual transaction price of three houses for one household deviates from the delegation of higher law

In the case of a 1-household 3 house, imposing capital gains tax on the actual transaction price is not contrary to the superior law, and it is not contrary to the principle of excessive prohibition, tax equality, and the principle of proportionality.

Article 89 of the Income Tax Act

Scope of housing for 1 household

[Seoul High Court Decision 2006Nu29784, 2007.12]

1. The plaintiff's appeal is dismissed.

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

In the first place, the disposition of imposition of capital gains tax of KRW 11,774,150 against the Plaintiff on December 1, 2004 is revoked. In the second place, it is confirmed that the above disposition is null and void (the date of the disposition is stated as December 16, 2004 seems to be erroneous).

1. Details of the disposition;

A. On November 22, 2003, the Plaintiff transferred 00 - 00 - 00 - 00 - 00 - 601 - 601 - 16 m2 m2 on its ground to KRW 180 million, and reported and paid capital gains tax of KRW 4,525,020 calculated on the basis of the standard market price to the Defendant.

B. On December 1, 2004, the Defendant increased KRW 11,774,150 of the transfer income tax for the year 2003 calculated by the actual transaction price to the Plaintiff on the ground that the Plaintiff owned three or more houses for one household at the time of transfer of the instant real estate (hereinafter “instant disposition”).

The house owned by the plaintiff and the plaintiff's wife at the time of the transfer of the house of this case

-1st floor of multi-household 00 00 dong 27-1, 101 47.42 square meters (00 square meters)

-00 00 Do-dong 23-678 Multi-household 101 101 35.6 square meters (Plaintiff-ownership)

-00 00 00 m20 m20 m2589 single house 69.1 m200 m2

(Ground for recognition: comply with the facts without dispute, Eul evidence 1 through 4, Eul evidence 2, Eul evidence 4-1, 2, Eul evidence 5-1 through 6, and with the purport of the whole pleadings.

2. Determination of legality of disposition

A. Judgment on the main claim

(1) The plaintiff's assertion

First, it is against the principle of no taxation without the law because one household's concept is arbitrarily interpreted even if the spouse has different addresses and imposed it as one household.

Second, Article 96 (1) 7 of the Income Tax Act delegates the case of taxation as actual transaction price considering the type, holding period, number of assets held, scale of transaction, transaction method, and transaction method of the relevant assets. Article 162 (5) of the Presidential Decree provides that only the number of assets held should be imposed as actual transaction price, which is in violation of the upper law.

Third, Article 96 (1) 7 of the Income Tax Act is too short of the grace period for two months, resulting in the deprivation of the rights of the people retroactively, and there is no exception provision for tax houses, etc., so it violates the principle of excessive prohibition and the principle of tax equality.

Fourth, even if the husband and wife have different addresses, deeming it as the same household is treated as discrimination against the husband and wife in de facto marital marriage or divorced couple, and thus, it is in violation of the principle of proportionality. If the provision on deeming a couple and wife as the same household under Article 154(1) of the Enforcement Decree is valid, it would result in undermining the neutrality of marriage in order to reduce the tax burden. Therefore, the above provision is null and void in violation of Article 36(1) of the Constitution.

(2) Relevant statutes

The Act is as shown in the attached Table (hereinafter referred to as the "Act", and the Enforcement Decree of the Income Tax Act is referred to as the "Enforcement Decree").

(3) Determination

First, Article 89 (1) and (3) of the Act, Article 154 (1) of the Enforcement Decree of the Act provides that "one house for one household" which is exempt from capital gains tax shall be defined as "one house for one household comprised of the resident and his/her spouse together with the family members living together with the same address or same place of residence as of the date of transfer where the resident and his/her spouse possess one house in the Republic of Korea as of the date of transfer." Article 89 (6) of the Act provides that "family" means the lineal ascendant or descendant (including his/her spouse) and his/her spouse of the resident and his/her spouse, and includes the person who temporarily leaves his/her original domicile or temporary domicile due to school attendance, medical care for diseases, situations of work or business, even if the resident's spouse temporarily leaves the resident's address and moves his/her resident registration to another place due to the use of the disease or the circumstances of business, the resident and his/her spouse shall still constitute one household.

Therefore, the plaintiff's above assertion is without merit.

Second, Article 96(1)7 of the Act provides that the actual transaction value shall be the transfer value of assets in cases prescribed by the Presidential Decree in consideration of the type, holding period, number of assets held, size of transaction, transaction method, etc. of the relevant assets. Article 162-2(5) of the Enforcement Decree of the Act provides that "cases prescribed by the Presidential Decree" refers to cases where one household which owns three or more houses transfers the house (including the land appurtenant thereto). This means cases where it is necessary to impose capital gains tax on the same real transaction value as those of Article 96(1)1 through 6-2 of the Act, and Article 96(1)1 of the Act, Article 162-2(2)4 and 5 of the Enforcement Decree of the Act, Article 96-2(1)5 of the Act, Article 96(1) of the Act, Article 96(1)7 of the Act, Article 96(1)2(2)6 of the Act, Article 96(1)6(2)6) of the Act, Article 96(2) of the Act, etc.

It cannot be deemed that the infringement of the private interest arising from the real transaction price based on the number of houses owned by the Enforcement Decree without considering the size of the houses and the permanentity of the houses is significantly larger than the public interest, the legislative purpose of which is to restrain speculation, and thus, even if the Income Tax Act and the Enforcement Decree were amended on March 24, 2006, and the exception provisions on small houses were established, it shall be deemed that the real transaction is a tax policy consideration for the taxation of the real transaction, and it shall not be deemed that the above provision of the Enforcement Decree as mentioned above is invalid as an order that goes against the principle of proportionality immediately.

Therefore, the plaintiff's above assertion is without merit.

Third, Article 162-2(5) of the Enforcement Decree was newly established on October 1, 2002. Article 2 of the Addenda of the Enforcement Decree provides that the first transfer after the enforcement of this Enforcement Decree shall apply to the claim, and Article 4(2) of the Addenda of the Enforcement Decree provides that the previous provision shall apply to the transfer by the date on which two months have elapsed from the enforcement date of this Enforcement Decree, notwithstanding the amended provisions of this Enforcement Decree, if the transfer is made by the date on which two months have elapsed from the transfer date of the new Enforcement Decree. Since the revised Enforcement Decree provides a grace period of two months sufficient to dispose of the real estate, it does not go against the principle of retroactive legislative prohibition, the principle of excessive

However, in the case of transfer tax, it seems that the grace period for the imposition of real transactions is too short compared with the grace period of one woman in the Addenda of the Income Tax Act. However, in the case of transfer tax, the imposition of transfer tax based on the actual transaction price differs from the purpose of the transfer tax and the degree of the taxpayer's burden, so it cannot be simply compared with the grace period, and it cannot be viewed as a violation of the principle of proportionality immediately. In addition, in the case of delegation of the taxation standard under the Enforcement Decree, the grace period can be set in the Enforcement Decree itself, and even if the law itself does not specify the grace period, it cannot be deemed as invalid as a law contrary to the principle of

Therefore, the plaintiff's assertion on this part is without merit.

Fourth, Article 154(1) of the Enforcement Decree does not regard all the cases where a couple has different addresses, but regard it as one household only when one spouse leaves his/her original domicile or temporary domicile due to school attendance, quality, medical care, circumstances of work or business under Article 154(6) of the same Decree. In this case, even if the plaintiff and his/her spouse have different addresses, it appears that the case falls under cases prescribed in Article 154(6) of the same Decree. In light of these circumstances, the provision of Article 154(1) of the Enforcement Decree cannot be deemed as being treated as discrimination against the couple who is de facto marital marriage or divorced, and even if there is a possibility of a disguised divorce in order to avoid the application of the above provision, it is merely predicted that there is an abnormal situation where the above provision is evasion of law for tax evasion, and it cannot be deemed that the provision of the above Enforcement Decree is in violation of the principle of proportionality or neutrality by calculating the amount of tax-free taxation due to the increase in the amount of the property tax imposed by the couple or the spouse.

B. Determination on the conjunctive claim

(i)the master;

Since the defendant did not deliver the notice of taxation of this case to the plaintiff, the disposition of this case is null and void.

(ii)judgments

In full view of the purport of Gap evidence Nos. 7-1 through 3-3 and the whole arguments, the defendant sent the tax notice of this case by registered mail at the plaintiff's request of 000 children who reported the transfer income tax of the real estate of this case on behalf of the plaintiff to 00:0 :00 :00 Do 8500 Do 85000 Do 60000 Do 16000 Ga 16, 2004. The above apartment security guards received registered mail and delivered the registered mail to the resident on the 16th of the same month, and the fact that the above apartment security guards reside in the above domicile until the date. According to the above facts of recognition, it is reasonable to deem that the above apartment security guards implicitly delegated the right to receive registered mail at least, so the tax notice of this case was lawfully served on December 16, 2004.

Therefore, the plaintiff's above assertion is without merit.

3. Conclusion

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

Related statutes

/ Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005)

Article 89 (Non-Taxable Transfer Income)

(1) No income tax on capital gains (hereinafter referred to as the "capital gains tax") shall be levied on the following incomes:

3. Income accruing from a transfer of one house for one household as prescribed by the Presidential Decree (excluding expensive houses whose prices exceed the standard prescribed by the Presidential Decree) and the land appurtenant thereto, which is within the area calculated by multiplying the area on which the building is built by the ratio as determined by region by the Presidential Decree (hereafter in this Article, referred to as the “land annexed to the house”); and

Article 96 (Transfer Price)

(1) The transfer value of assets as prescribed in Article 94 (1) 1 and 2 shall be based on the standard market price at the time of the transfer of the relevant assets: Provided, That where the relevant assets fall under any of the following subparagraphs, it shall be based on the actual transaction price between the transferor and transferee (hereinafter referred to as the “actual transaction price”):

1. Where the relevant assets fall under the standard for expensive houses under the provisions of subparagraph 3 of Article 89 (including the land appurtenant thereto);

2. Where the relevant assets are rights to acquire real estates under the provisions of Article 94 (1) 2 (a);

3. In the case of unregistered transferred assets under the provisions of Article 104 (3);

4. In the case of the real estate within one year after its acquisition;

5. Where real estate is acquired or transferred by illegal means, such as preparation of a false contract or a false transfer of resident registration, which meets the standards as prescribed by the Presidential Decree;

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

6-2. Where the rate of increase of real estate prices in the relevant area is higher than the national consumer price inflation rate, which falls under the real estate stipulated by the Presidential Decree from among the real estate located in the area designated by the Minister of Finance and Economy according to the standards and methods prescribed by the Presidential Decree, as the real estate prices

7. Other cases prescribed by Presidential Decree in consideration of types, holding period, holding number, scale of transaction, transaction methods, etc. of the relevant assets (amended on December 18, 2002).

Addenda (Law No. 6781, December 18, 2002)

Article 3 (General Application of Transfer Income Tax) The amended provisions of this Act concerning transfer income tax shall apply to the first transfer after the enforcement of this Act.

(1) Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 18173, Dec. 30, 2003)

Article 154 (Scope of “One House for One Household”)

(1) The term “one house for one household as prescribed by the Presidential Decree” in subparagraph 3 of Article 89 of the Act means the case where a household comprised by a resident and his spouse together with the family members living together with him in the same address or same residence as of the date of transfer has one house in Korea as of the relevant date, and where the relevant house has been held for three years or more (in the case of a house located in the subdivision, day, square village, mountain village, mountain village, and new urban area designated and publicly notified as a planned area for housing site development under Article 3 of the Seoul Special Metropolitan City, Metropolitan City, Si, and Si, and Si, and Si, and Do newly located under Article 3 of the Housing Site Development Promotion Act, the retention period of the relevant house is three years or more and the residing period is two years or more during the retention period): Provided, That in case where one household possesses one house in Korea as of the date of transfer and

(2) The cases where the transfer value of assets is based on the actual transaction value under Article 96 (1) 5 of the Act shall be the cases falling under any of the following subparagraphs, where real estate is acquired or transferred by unlawful means, such as preparation of a false contract or a false transfer of resident registration:

1. Where real estate is traded in violation of the Act on the Registration of Real Estate under Actual Titleholder’s Name;

2. Where a broker under the Real Estate Brokerage Act transfers the real estate which he has directly acquired in violation of the same Act;

3. Where a real estate has been transferred or acquired three times or more within a year retroactive from the date of transferring a real estate under a minor’s name, and the total sum of actual transaction values is 300 million won

4. Where a member of a household has transferred or acquired a real estate three times or more within a year retroactive from the date of transfer, and where the total sum of actual transaction values is 300 million won or more; and

5. Where the transfer margin based on the standard market price by trade unit is not less than 100 million won.

(5) "Cases prescribed by Presidential Decree" in Article 96 (1) 7 of the Act means where one household possessing three or more houses transfers the house (including the land appurtenant thereto).

(6) The term "family" in paragraph (1) means the lineal ascendants and descendants (including their spouses) and siblings of the resident and his/her spouse, and includes those who temporarily leaves the original domicile or temporary domicile to enter school, receive medical treatment for diseases, or under any circumstances of service or business.

Addenda (Presidential Decree No. 17751, Oct. 1, 2002)

Article 2 (General Application) This Decree shall apply to the first transfer after the enforcement of this Decree.

Article 4 (Transitional Measures, etc. concerning Scope of High-class Housing) (1) Where a sales contract for a house was concluded before this Decree enters into force and it is transferred within two months from the enforcement date of this Decree, the previous provisions shall apply notwithstanding the provisions of subparagraph 2 of Article 156.

(2) Where one household which has three or more houses before this Decree enters into force, enters into a sales contract and transfers it by the date two months have elapsed from the enforcement date of this Decree, notwithstanding the amended provisions of Article 162-2, the previous provisions shall apply.

[Insuwon District Court 2005Guhap10065 ( November 8, 2006)]

1. The plaintiff's claim is dismissed.

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

1. Circumstances of dispositions;

A. On November 22, 2003, the Plaintiff transferred 116 square meters of ○○○○○○○○○-dong, ○○○○○○○○-dong, and 62 square meters of a house on its ground to KRW 180 million, and reported and paid capital gains tax of KRW 4,525,020 calculated based on the standard market price to the Defendant.

B. On December 1, 2004, the Defendant imposed an increase in capital gains tax of KRW 11,774,150 for the year 2003 calculated based on the actual transaction price on the ground that the Plaintiff owned three or more houses for one household at the time of transfer of the instant real estate (hereinafter “instant disposition”).

At the time of the transfer of the instant house, the house owned by the Plaintiff and the Plaintiff’s wife ○○○.

- ○○○○○○○-dong ○○-dong ○-○ multi-household 1st floor ○○○○○○ 47.42 square meters (ownership of ○○○)

- ○○○○○○-dong ○○-dong ○○ detached house 23.1 square meters (○○ ownership)

- ○○○○○○○○-dong ○○ multi-household ○○○○○○○○○○○○○○○○○○○○○○○ 35.6 square meters (Plaintiffs owned

- ○○○○○○○○○○ Housing 69.1 square meter (ownership by ○○○)

[Reasons for Recognition: Facts without dispute, 4/1 to 1/2 of Eul evidence, 4/1 to 2 of Eul evidence, 4-1, 2-1 to 5/1 of Eul evidence, and the purport of the whole pleadings]

2. Determination of legality of a disposition

(i)The plaintiff's assertion

First, it is against the principle of no taxation without the law because one household's concept is arbitrarily interpreted even if the spouse has different addresses and imposed it as one household.

Second, Article 96 (1) 7 of the Income Tax Act delegates the case of taxation as actual transaction price considering the type, holding period, number of possession, scale of transaction, and transaction method of the relevant assets. Article 162-2 (5) of the Presidential Decree stipulates that only the number of possession is imposed as actual transaction price, which is in violation of the upper law.

Third, Article 96 (1) 7 of the Income Tax Act is too short of the grace period for two months, resulting in the deprivation of the rights of the people retroactively, and there is no exception provision for tax houses, etc., so it violates the principle of excessive prohibition and the principle of tax equality.

(ii)related Acts and subordinate statutes;

The actual provisions of the Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005) shall apply.

Article 89 (Non-Taxable Capital Gains)

(1) No income tax on transfer income (hereinafter referred to as "transfer income tax") shall be levied on the following incomes:

3. Income accruing from transfer of such one house for one household as prescribed by the Presidential Decree (excluding expensive houses whose prices exceed the standard prescribed by the Presidential Decree) and the appurtenant land within the area calculated by multiplying the area of the land on which the building is built by the ratio as determined by region under the Presidential Decree (hereafter in this Article, referred to as the “land annexed to the house”);

Article 96 (Transfer Price)

(1) The transfer value of assets as prescribed in each subparagraph of Article 94 (1) shall be the actual transaction value between the transferor and transferee at the time of transfer of the relevant assets (hereinafter referred to as the “actual transaction value”).

1. Where the relevant assets fall under the standard for expensive houses under the provisions of Article 89 (1) 3 (including the land annexed thereto);

2. Where assets are rights to acquire real estates under the provisions of Article 94 (1) 2 (a);

3. Where assets are transferred without registration under the provisions of Article 104 (3);

4. Where assets are real estate within one year after acquisition;

5. Where real estate is acquired or transferred by illegal means, such as preparation of a false contract or a false transfer of resident registration, which meets the standards as prescribed by the Presidential Decree;

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

7. Other cases prescribed by Presidential Decree in consideration of the size, holding period, holding number, scale of transaction, transaction methods, etc. of the relevant assets (amended on December 18, 2002).

Addenda (Law No. 6781, December 18, 2002)

Article 3 (General Application of Transfer Income Tax) The amended provisions of this Act concerning transfer income tax shall apply to the portion transferred after this Act enters into force.

The actual tax rate shall be the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 18173, Dec. 30, 2003).

§ 154. Scope of one house for each household

(1) The term “one house for one household as prescribed by the Presidential Decree” in subparagraph 3 of Article 89 of the Act means the case where a household comprised by a resident and his spouse together with the family members living together with him at the same address or same residence (hereinafter referred to as “one household”) in Korea as of the date of transfer, and where the relevant house is held for not less than 3 years (in the case of a house located in a subdivision, day, mountain village, mountain village, mountain village, mountain village, or new urban area designated and publicly notified as a planned area for housing site development under Article 3 of the Seoul Special Metropolitan City, Metropolitan City, Si, and Housing Site Development Promotion Act, the relevant house whose retention period is not less than 3 years and whose retention period is not less than 2 years during the relevant retention period): Provided, That where one household possesses one house in Korea as of the date of transfer and falls under any of the following subparagraphs,

Article 162-2 (Transfer Price)

(2) The case where the transfer value of assets is based on the actual transaction value under Article 96 (1) 5 of the Act shall be the case falling under any of the following subparagraphs, where real estate is acquired or transferred by unlawful means, such as preparation of a false contract or a false transfer of resident registration

1. Where real estate is traded in violation of the Act on the Registration of Real Estate under Actual Titleholder’s Name;

2. Where a broker under the Real Estate Brokerage Act transfers the real estate which he has directly acquired in violation of the same Act;

3. Where a real estate has been acquired under a minor’s title (excluding the acquisition by an inheritance or donation), and transferred thereafter;

4. Where a member of a household has transferred or acquired a real estate three times or more within a year retroactive from the date of transfer, and where the total sum of actual transaction values is 300 million won or more; and

5. Where the transfer margin based on the standard market price by transaction unit is one hundred million won or more.

(5) The term “cases prescribed by the Presidential Decree” in Article 96 (1) 7 of the Act means the case where one household possessing three or more houses transfers a house (including the land appurtenant thereto). In this case, the provisions of Article 155 (15) shall apply mutatis mutandis to the calculation of the number of houses in a multi-family house (limited to the case where residents select), and the provisions of Article 154 (9) shall apply mutatis mutandis to the method of determining a transfer house in case where two or more houses

Addenda (Presidential Decree No. 17751, October 1, 2002)

Article 2 (General Application) This Decree shall apply from the first transfer after this Decree enters into force.

Article 4 (Transitional Measures, etc. concerning Multi-Family Housing) (1) Where a sales contract for a house is concluded before this Decree enters into force, and transfers it by the date two months have elapsed from the enforcement date of this Decree, notwithstanding Article 156 (2), the previous provisions shall apply.

(2) Where one household which has three or more houses before the enforcement of this Decree concludes a sales contract and transfers it by the date on which two months have elapsed from the enforcement date of this Decree, the previous provisions, notwithstanding the amended provisions of Article 162-2, shall apply.

(iii)judgments

First, Article 89 (1) 3 of the Act, Article 154 (1) of the Enforcement Decree of the Act provides that "one house for one household" which is subject to non-taxation of capital gains tax means that the resident and his/her spouse have one house in Korea as of the date of transfer, which is composed of the family members living together with the family members living together with the same address or same place of residence, and its holding period is not less than three years. According to the above provision, the spouse of the resident shall be regarded as the same household even if he/she forms a separate household, and the meaning of one household shall be regarded as the same household unless otherwise provided for in the income tax law.

Therefore, the plaintiff's above assertion is without merit.

Second, Article 96(1)7 of the Act provides that the actual transaction value shall be the transfer value of assets in cases prescribed by the Presidential Decree in consideration of the type, holding period, number of assets held, size of transaction, method of transaction, etc. of the relevant assets. Article 162-2(5) of the Enforcement Decree of the Act provides that "cases prescribed by the Presidential Decree" refers to cases where one household which owns three or more houses transfers the house (including its appurtenant land). This provision provides that "where it is necessary to impose capital gains tax on the same real transaction value as those of Article 96(1)1 through 6-2 of the Act, cases where it is necessary to impose capital gains tax on the person who owns three or more houses can be efficiently stipulated in the delegation order." Article 96(1)1 through 6-2 of the Act, Article 162-2(2) of the Enforcement Decree of the Act provides that "the amount of real transaction value (Article 96(1)1 of the Act, Article 162-2(4) and 5 of the Enforcement Decree, Article 96(1)2) of the Act.6 of the Act.

Therefore, the plaintiff's above assertion is without merit.

Third, Article 162-2(5) of the Enforcement Decree was newly established on October 1, 2002. Article 2 of the Addenda of the Enforcement Decree provides that the first transfer of 3 or more houses prior to the enforcement of this Enforcement Decree shall apply to the claim. Article 4(2) of the Addenda of the Enforcement Decree provides that the previous provision shall apply to the case where one household which owns 3 or more houses prior to the enforcement of this Enforcement Decree concludes a sales contract and transfers it by the date two months have elapsed from the enforcement date of this Enforcement Decree, notwithstanding the provision of the Enforcement Decree, since the Enforcement Decree shall be applied from the transfer to the future and the grace period of 2 months has been granted, it does not go against the principle of retroactive legislative prohibition, the principle of excessive prohibition, and the principle of tax equality.

Therefore, the plaintiff's assertion on this part is without merit.

B. Determination on the conjunctive claim

(i)the master;

Since the defendant did not deliver the notice of taxation of this case to the plaintiff, the disposition of this case is null and void.

(ii)judgments

In full view of the purport of 1 to 3 statements and arguments in Eul evidence Nos. 7-1 and 7-3, the defendant sent the tax notice of this case to ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ apartment-dong, ○○○○○○○○○○○○○○○○○○○, a domicile of the plaintiff on behalf of the plaintiff, on December 14, 2004, by registered mail. On the 16th of the same month, the above tax notice was received by the security guard working in the above apartment management office. The above apartment security guard received registered mail and delivered it to the resident, and according to the above facts of recognition, it is reasonable to deem that ○○○○○ was implicitly delegated to the above security guard at least the right to receive the registered mail. Thus, the tax notice of this case was lawfully served on December 16, 204.

Therefore, the plaintiff's above assertion is without merit.

3. Conclusion

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