Early High Court Decision 201J 0674 (Law No. 1011.29)

Since the profit earned by the sale in general has been reduced from the rebuilding cost of the union members, it shall be deemed that the income has accrued.

In the process of implementing a reconstruction project, the rebuilding cost to be borne by the members of the association has been reduced in proportion to the gains from general sale in the process of implementing the reconstruction project, it can be viewed that income was earned in the process of implementing the reconstruction project, and whether the amount of income was actually paid by the association

2011Guhap1649 (25. 2012.05)

IsaA

Head of Ansan Tax Office

April 13, 2012

May 25, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposing global income tax of KRW 000 (including additional dues) for the year 2008 against the Plaintiff on April 5, 2010 shall be revoked.

1. Details of the disposition;

A.CC reconstruction housing association (hereinafter referred to as the "CC reconstruction association of this case") is a reconstruction association established for the purpose of rebuilding the housing of O-dong unit in Mayang-gu, Anyang-si, and completed the establishment registration on July 30, 2003 with the authorization of establishment from the Ansan market on November 29, 2001, and the plaintiff is a member of the association of this case.

B. On July 31, 2008, the instant association obtained authorization for completion of re-building and confirmed the total amount of income for 2008 business years as KRW 00,000, and distributed the said amount to KRW 000 per each member of the association, and notified each member including the Plaintiff of the filing of a global income tax return on the said income individually around May 13, 2009.

C. However, the Plaintiff did not declare global income tax on the above income, and the Defendant, after the notice of the high taxation and the pre-assessment review, set and notified the Plaintiff’s comprehensive income tax for the year 2008 as KRW 000 on June 10, 2010, and the Plaintiff did not pay the said comprehensive income tax after the lapse of the payment deadline, the Plaintiff urged the Plaintiff to pay KRW 000 (including additional charges) of the global income tax in arrears until December 13, 2010 (hereinafter “instant disposition”).

D. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on June 29, 201, but the said claim was dismissed on June 29, 201.

[Reasons for Recognition] The facts without dispute, evidence A through 3, evidence 6 through 9, evidence 18 (including household numbers), and evidence B 1 to 3, and the purport of the entire pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff cannot be deemed to have received the income from the instant association since it was not fully paid the income from the reconstruction project, and the Plaintiff is liable to pay the said association tax with respect to the general sales profits, which are the business income of the instant association, and the tax base reported by the instant association with respect to the global income tax was wrong, but the Defendant’s disposition that imposed and collected the global income tax on the Plaintiff based on the above details was unlawful.

(b) relevant statutes;

It is as shown in the attached Form.

B. Determination

(1) First, we examine the Plaintiff’s assertion that the Plaintiff did not receive income from the instant association. According to the overall purport of the statements and arguments in the evidence Nos. 1 and 4 through 6, the instant association divided the apartment units of 62 households into general members who are not members of the association during the process of implementing the reconstruction project, and appropriated the earnings from the said general sale out of the reconstruction project as part of the reconstruction cost, and the total income from the said rebuilding project and the calculation of the expenses, which was 00 won and 500 won, was distributed to 53 members of the association. According to the above facts found, the amount of each association member’s income is 00 won. According to the above facts, the Plaintiff’s income from the said 00 won in the process of implementing the reconstruction project is reduced, and thus, the Plaintiff’s assertion that the Plaintiff actually received the said income from the instant association does not affect the income generated and reverted to the Plaintiff (see, e.g., Supreme Court Decision 90Nu36, Aug. 6, 1998).

(2) Next, the argument that the liability to pay the general profit from sale exists in the cooperative of this case. Article 104-7 (1) of the former Restriction of Special Taxation Act (amended by Act No. 9272 of Dec. 26, 2008, hereinafter the same shall apply) provides that the combination of reconstruction permitted before June 30, 2003 to establish an association under Article 44 (1) of the Housing Construction Promotion Act (amended by Act No. 6852), which is a partnership registered as a corporation under Article 18 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereafter in this Article, referred to as the “converted partnership”), shall apply the Income Tax Act by deeming the converted partnership members as joint business places and joint business places under the Income Tax Act, and since the converted partnership reports the tax base and tax amount of the income for the pertinent business year to the head of the district tax office having jurisdiction over the place of tax payment, the association of this case shall also be subject to the restriction on its establishment under Article 104 of the former Corporate Tax Act.

(3) Finally, with respect to the assertion that the tax base reported by the instant union was wrong, it is insufficient to recognize that the above tax base was wrong only by the descriptions of health stands and evidence Nos. 4, 5, and 11 through 17 (including household numbers), and the calculation of the tax base reported by the instant union is reasonable according to the evidence as seen earlier. Accordingly, the Plaintiff’s above assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.