(a)whether Article 72 (3) 8 of the Regulations on the Management of Property Tax Investigations (No. 980 of the National Tax Service Directive of January 27, 1987) is effective (negative);

B. Whether Article 170 (4) 2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 12767 of Aug. 1, 1989) providing for one of the cases where it is possible to confirm the actual transaction price at the time of transfer or acquisition in a transaction designated by the Commissioner of the National Tax Service for the purpose of suppressing the speculative investment in real estate is valid (affirmative)

A. Article 72(3)8 of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 12767 of Aug. 1, 1989) provides that when the head of a tax office, etc. recognizes the transaction as an speculative transaction through consultation with the Fair Taxation Committee, the transaction falling under Article 170(4)2 of the former Enforcement Decree of the Income Tax Act shall be deemed to be a transaction and calculated based on the actual transaction price (amended by the Presidential Decree No. 980 of Jan. 26, 1987) shall be deemed to

B. Articles 23(4) and 45(1)1(a) of the Income Tax Act stipulate that “The acquisition value and transfer value, which form the basis for calculating gains on transfer, shall be based on the standard market price in principle, and in exceptional cases prescribed by the Presidential Decree, shall be based on the actual transaction price, and shall be based on the actual transaction price so that transfer margin can be calculated based on the actual transaction price.” Thus, where Article 170(4)2 of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 12767 of Aug. 1, 1989) applies to cases where the actual transaction price is applied, one of the cases where “the Commissioner of the National Tax Service can confirm the actual transaction price at the time of transfer or acquisition in a transaction designated by the Commissioner of the National Tax Service

Articles 23(4) and 45(1)1 of the Income Tax Act, Article 170(4)2(a) of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 12767 of Aug. 1, 1989), and Article 72(3)8 of the National Tax Service Directive (amended by the Presidential Decree No. 12767 of Jan. 26, 1987)

Supreme Court Decision 89Nu8149 delivered on May 8, 1990 (Gong1990, 1285) 89Nu803 delivered on May 25, 1990, Supreme Court Decision 90Nu426 delivered on August 10, 1990

Ma-dong Freeboard

The director of the tax office

Gwangju High Court Decision 89Gu571 delivered on March 27, 1990

The part of the judgment of the court below concerning the transfer income tax and defense tax belonging to the year 1988 shall be reversed, and the case concerning this part shall be remanded to the Gwangju High Court.

The remaining appeals by the plaintiff are dismissed.

The costs of appeal against the dismissed portion shall be assessed against the plaintiff.

1. Determination of the grounds of appeal on the transfer income tax and defense tax reverted to the year 1988

As to the income accrued from the Plaintiff’s transfer of land in 198, the lower court acknowledged the fact that the Defendant imposed the transfer income tax and the defense tax accordingly on the Plaintiff based on the actual transaction price by applying Article 23(4) proviso and Article 45(1)1 proviso of the Income Tax Act, Article 170(4)2 of the Enforcement Decree of the Income Tax Act before the amendment by Presidential Decree No. 12767, Aug. 1, 1989, and Article 72(3)8 of the Regulations on the Management of Property Tax (National Tax Service Directive No. 980, Jan. 26, 1987). The lower court determined that the Defendant’s tax disposition was legitimate in accordance with the above National Tax Service’s instructions, on the grounds that the Defendant’s taxation disposition based on the actual transaction price cannot be deemed null and void, on the ground that the above direction of the National Tax Service cannot be deemed null and void.

However, "......... the head of a tax office (or the head of a regional tax office) recognizes a speculative transaction after consultation with the Fair Trade Commission" is a transaction falling under Article 170 (4) 2 of the Enforcement Decree of the Income Tax Act, and thus, Article 72 (3) 8 of the Regulations on the Management of Property Tax (Article 980 of the National Tax Service Directive of January 26, 198) provides that "the provision on the invalidity of a transaction in violation of the principle of no taxation without law" is an invalid provision. It is obvious that the court below erred in the misapprehension of legal principles as to the taxation of capital gains on the premise that Article 72 (3) 8 of the above Directive of the National Tax Service is valid, and there is no error in the misapprehension of legal principles as to the calculation of capital gains.

2. Determination on the grounds of appeal on capital gains tax and defense tax belonging to the year 1985 and year 1986

The court below acknowledged the plaintiff's assertion that it is invalid since Article 170 (4) 2 of the Enforcement Decree of the Income Tax Act provides for a specific scope of the actual transaction price at the time of acquisition and at the time of transfer of each land that the plaintiff acquired between 1983 and 1986, the amount of the actual transaction price at the time of transfer, and the income accrued from the plaintiff's transfer of the land as above, pursuant to Article 170 (4) 2 of the Enforcement Decree of the Income Tax Act and Article 72 (3) 5 of the Regulations on the Investigation of Property Tax before Amendment by National Tax Service Directive No. 980 of Jan. 26, 1987, where the defendant recognized the plaintiff's land transaction as an speculative transaction through a special investigation into real estate transaction, and imposed transfer income tax and defense tax thereon on the plaintiff based on the actual transaction price at the time of acquisition and at the time of transfer confirmed according to the results of investigation, and determined that the transfer price can be determined by Presidential Decree No. 20 under the Enforcement Decree of the Income Tax Service's. 1.

In comparison with relevant evidence, it cannot be deemed that there was an error in violation of the law of evidence, such as a theory of lawsuit in the process of fact-finding that recognized the amount of the actual transaction price at the time of the acquisition of the transferred asset of this case and at the time of its transfer. Furthermore, it is reasonable that the Defendant recognized the Plaintiff’s land transaction as an speculative transaction in accordance with Article 72(3)5 of the above National Tax Service Directive. In addition, the judgment of the court below that the above Article 170(4)2 of the Enforcement Decree of the Income Tax Act is valid is just in light of the relevant laws and regulations. Ultimately, it is not acceptable to

3. Therefore, the part of the judgment of the court below regarding transfer income tax and defense tax for the year 1988 shall be reversed, and the case shall be remanded to the court below for a new trial and determination as to this part. The plaintiff's remaining grounds of appeal as to transfer income tax and defense tax for the year 1985 and year 1986 shall be dismissed, and the costs of appeal as to this part shall be borne by the plaintiff as the losing party. It is so decided as per Disposition by the assent of

Justices Lee Jae-sung (Presiding Justice)