Transfer income tax shall be borne by the beneficial owner, and no additional tax shall be imposed by 40% unless it is not reported in an unjust manner.

Transfer income tax shall be borne by the beneficial owner, and no additional tax shall be imposed by 40% unless it is not reported in an unjust manner.

Article 14 (Real Taxation)

Article 47-2 (Additional Tax on Non-Filing)

2014Guhap4885 Revocation of Disposition of Imposing capital gains tax, etc.

AA, BB

O Head of tax office

2015.08.28

2015.18

1. On November 1, 2013, the part of the disposition rendered by the Defendant against Plaintiff A on November 1, 2013 regarding additional OO won and the part regarding additional OO won among the disposition rendered to Plaintiff BB on November 1, 2007 for the transfer income tax for the transfer income tax for the year 2007.

2. The plaintiffs' remaining claims are dismissed.

3. Of the costs of lawsuit, 1/2 are assessed against the Plaintiffs, and 1/2 are assessed against the Defendant, respectively.

Cheong-gu Office

The Defendant’s decision and notification of the capital gains tax for the year 2007, rendered to Plaintiff AA on November 1, 2013, and the decision and notification of the capital gains tax for the year 2007, issued to Plaintiff BB, respectively, shall be revoked.

1. Details of the disposition;

A. On January 30, 1969, the Network CCC (hereinafter referred to as the "CCC") acquired real estate Nos. 1, 4, 5, 6, 7, 10, and 11 (one, 4, 5, 6, and 7 among the real estate listed in the real estate list, such as OOOO-dong OOO site, on January 30, 196. The DD of Plaintiff BB acquired the real estate No. 2, 3 (2, 3 all of the real estate, 2, 21; hereinafter referred to as the "real estate") among the real estate listed in the real estate list, such as OOOO-dong OO site, and the real estate No. 2, 2, 21, 21, 2, and 2, 21, 2, 2, and 2, 2, 2,000.

B. On August 25, 2005, with respect to the 1/2 portion of the instant 1/2 portion of the real estate owned by CCC, the provisional registration of the right to claim partial transfer of ownership was made in the name of Plaintiff BB on August 25, 2005, and the provisional registration of the right to claim partial transfer of ownership was made in the name of Plaintiff AA on the same day with respect to the 1/2 portion of

C. On July 27, 2007, CCC, DD, Plaintiffs, and EE (Plaintiff BB’s wife), the owners of the real estate listed in the attached real estate list, transferred all of the real estate listed in the above attached real estate list to Nonparty FF (hereinafter “FF”), and CCC reported and paid the transfer value of the real estate of this case No. 1 as OO, while DD reported and paid each transfer income tax with the transfer value of the real estate of this case No. 2 as OO.

D. Upon the death of the CCC on February 1, 201, Plaintiff AA, the inheritor, reported inheritance tax. As a result of confirmation by the director of the regional tax office’s audit, the Defendant became aware that KRW 1/2 of the purchase price of the instant 1 real estate was paid to Plaintiff BB, and KRW 1/2 of the purchase price O of the instant 2 real estate was paid to Plaintiff AB.

E. On November 1, 2013, Plaintiff BB notified Plaintiff BB of the disposition of correction of the OOO(including penalty tax without filing an unfair report) of capital gains tax for the year 2007 and the disposition of correction to Plaintiff AA of the OO(including penalty tax without filing an unfair report) of the capital gains tax for the year 2007, on the ground that the Plaintiffs did not report the capital gains tax even though they held capital gains from transfer on July 27, 2007 from the transfer of the said 1 and 2 real estate, and that Plaintiff BB notified Plaintiff BB of the disposition of correction of the OO(including penalty tax without filing an unfair report) of the capital gains tax for the year 2007 (hereinafter “the disposition of this case”).

F. On November 20, 2013, the Plaintiffs were dissatisfied with the instant disposition and filed a request with the Tax Tribunal to revoke the said disposition. However, the Tax Tribunal rendered a decision to dismiss the Plaintiffs’ claim on August 20, 2014.

[Ground of recognition] The entry of Gap evidence Nos. 1 through 3, the entry of Eul evidence Nos. 1 through 8 (including each number), the absence of dispute, the purport of the whole pleadings

2. The plaintiffs' assertion

A. The real estate listed in the attached real estate list is not the property trusted by the Plaintiff BB to CCC (1 real estate), the Plaintiff AB, and the Plaintiff AB to DD (2 real estate), but the property of the Union where CCC, the Plaintiff BB, the Plaintiff BB, and the EEB jointly invested and operated the wedding hall. Thus, the legal principles on the transfer of the real estate in this case should apply to the transfer of the real estate in this case, and in the case of the transfer of the combined property, the transfer income tax should be paid by deeming the nominal owner on the registry as the transferor. Therefore, the disposition of this case imposing capital gains tax on the Plaintiffs is unlawful.

B. Even if the obligation to pay capital gains tax is recognized to the Plaintiffs, in light of the ownership relationship, details of the transfer, and details of the report of capital gains tax, the Plaintiffs’ failure to report capital gains tax following the transfer of the instant real estate does not constitute the failure to report by fraud or other unlawful means. Therefore, the exclusion period of five years is applied, and the instant disposition is unlawful.

C. In addition, even if the Plaintiffs deemed to have failed to report capital gains tax, it cannot be deemed that they have failed to report by improper means, and thus, the instant disposition that applied 40% of the unfair non-reported penalty tax is unlawful.

3. Related statutes;

As shown in the attached Form.

4. Determination

(a) Facts of recognition;

1) On February 6, 1969, CCC acquired land Nos. 1, 4, 5, 6, and 7 among the real estate listed in the annexed real estate list. On October 28, 1974, it newly constructed a store building (No. 11) on the ground of the land No. 5 on October 28, 1974. Plaintiff BB newly constructed a store building (No. 12 on the first order) on the land No. 6, which is owned by CCC on October 19, 1976. Thereafter, CCC constructed a building on the land No. 1, 4, 7 on January 15, 1980 and on the land No. 1, 4, and 4, 7, and OOO-dong land (No. 3, hereinafter referred to as “O-dong O-owned land”).

2) From October 3, 1983, Plaintiff AA had a business operator registered in its name in the above CCC’s name in the above CCC’s building No. 10th of October, 1983. Plaintiff BBD, while participating in the above CCC’s above CCC’s wedding project, acquired OO-dong O-dong OOO(O-dong No. 2) on June 30, 1986, and provided it as a wedding parking lot. Thereafter, Plaintiff BB’s EE, the wife of Plaintiff BB, was newly constructed a building (No. 8) on the above O-dong O-owned O-owned O-owned premises on September 29, 1989, and Plaintiff AAAA and DD leased the above O-owned building from EE to the above O-style building, and thereafter, Plaintiff BBD newly constructed it under its name and used it as the POO-owned premises.

3) DDR changed the name of the business operator of the above wedding hall in 1994 in the name of the Plaintiff AA in its name, and on October 15, 1995, acquired OO-dong OO land (O-dong No. 3 land) that was the site of the wedding hall and provided it to the wedding hall business.

4) On August 25, 2005, under the agreement of CCC, Plaintiff BB, Plaintiff AA, DD, and EE, the wedding project jointly operated by Plaintiff AA and DD had been in a de facto discontinuance of business around 2004, and on August 25, 2005, CCC made a provisional registration on August 25, 2005 with respect to Plaintiff BB’s 1/2 share of the instant 1/2 share of the instant 1 real estate under its own name, for which Plaintiff BB made a provisional registration on August 25, 2005. DD made a provisional registration on August 25, 2005 with respect to Plaintiff AA’s 1/2 share of the instant 2 real estate under its own name.

5) After that, on May 16, 2007, CCC, Plaintiff BB, Plaintiff AA, DD, and EE completed the registration of ownership transfer in FF each of the following FF on July 27, 2007: (a) the provisional registration of Plaintiff BB and AA was cancelled by the due date of the remainder payment; and (b) the provisional registration of each of the rights transfer registration claims in the name of Plaintiff BB and AA was cancelled in accordance with the special agreement on the same day.

6) The sales value of real estate No. 1 was an OO member. CCC paid 1/2 of them to Plaintiff BB. The sales value of real estate No. 2 was an OO member, but DD paid 1/2 of them to Plaintiff AA.

7) The CCC and DD reported and paid each transfer income tax using each sales price as the transfer price in connection with the transfer of the instant real estate.

[Reasons for Recognition] Each entry (including a serial number) in Eul evidence Nos. 1 to 8, the purport of the whole pleadings

B. Determination

1) The Defendant sought revocation of the determination and notification of the capital gains tax for the principal tax for the year 2007 imposed on the Plaintiff AB, and the determination and notification of the capital gains tax for the year 2007 belonging to the Plaintiff BB, while the capital gains tax for the Plaintiff AA is the same as those for the first time for the first time for the first time for the first time for the first time for the first time for the first time for the first time for the second time for the second time for the first time for the second time for the second time for the second time for the second time for the second time for the second time for the first time for the second time for the second time for the first time for the second time for the second time for the first time for the second time for the first time for the second time for the first time for the second time for the first time for the second time for the first time for the second time for the first time for the second time for the first time for the second time for the first time for the second time for the first time for the second time for the second time for the first time for the second time for the second time for the second time for the first time for the second time for the second time for the first time for the second time for the first time for the second time for the second time for the second time for the first time for the first time for the second time for the second time for the second time.

2) According to the facts of recognition, since CCC, Plaintiff BB, Plaintiff AA, DD, and EE (hereinafter “Plaintiffs”) appears to have jointly invested each of the acquired real estate and operated a wedding business, it is reasonable to view that the Plaintiffs were in a cooperative relationship, and that the real estate list provided for the above wedding business was an association’s property, but the title was in a title trust with each of the union members. However, around August 25, 2005, the Plaintiffs committed a title trust with respect to the real estate in the name of CCC on the real estate in the name of the union property in this case. Since the 1/2 shares of DB were in a real estate in the name of DB, and 1/2 shares of DB were in a real estate under the name of D1B to Plaintiff BB, and each of the owners of D1/2 shares was dissolved under the agreement on the transfer of the real estate in this case and thus, it seems reasonable that the Plaintiffs were dissolved under the agreement on the transfer of the real estate in this case’s title trust property in the Association property in 201/B.

3) Even if the partnership was not dissolved at the time of transferring the real estate listed in the attached real estate list as alleged by the plaintiffs, if the property of the partnership was transferred, the person who actually takes gains from the transfer of the partnership's property, i.e., the partners, would be liable for capital gains tax according to their profit distribution rate. As seen earlier, on August 25, 2005, the first real estate between the partners was determined on August 25, 2005 by Plaintiff BB and CCC, respectively, and the second real estate was owned by Plaintiff AA and DD, respectively, by 1/2 shares, and the second real estate was determined by profit distribution rate. Accordingly, the plaintiffs are liable for capital gains tax following the transfer of the pertinent real estate.

4) The legislative purport of Article 26-2(1) of the former Framework Act on National Taxes (amended by Act No. 830, Dec. 31, 207; hereinafter the same) is to extend the exclusion period of taxation on the national tax to 10 years because it is difficult to find out that there was any unlawful act, such as: (a) the transfer of real estate under the name of the owner of the pertinent real estate for 7 years, and (b) the transfer of the pertinent real estate under the name of the owner of the pertinent real estate for 10 years; and (c) the transfer of the pertinent real estate under the name of the owner of the instant real estate for 10 years after the date of the transfer of the pertinent real estate; (b) the transfer of the pertinent real estate under the name of the owner of the instant real estate for 10 years, including the transfer of the pertinent real estate under the name of the owner of the instant real estate; and (d) the transfer of the pertinent real estate under the name of the owner of the instant real estate for 2 years after the transfer of the transfer thereof.

5) Article 47-2 of the Framework Act on National Taxes provides that where a taxpayer fails to file a tax base return within the statutory due date of return pursuant to the tax-related Acts, an amount equivalent to 20/100 of the calculated tax under the Act shall be added to the amount equivalent to 40/100 of the calculated tax amount. Article 47-2 of the Framework Act on National Taxes provides that "additional tax on the tax base without filing a tax return in an unjust manner" shall be added to the amount equivalent to 40/100 of the calculated tax amount. "Unreported tax return" refers to a case where a taxpayer fails to file a tax base return unfairly for the purpose of evading tax (see, e.g., Supreme Court Decision 2013Du1236

However, as seen earlier, it is difficult to recognize that Plaintiff BB and AA made a tax base report of each transfer income tax on the transfer of the instant real estate for the purpose of tax evasion. As such, the act of each of the instant real estate held by Plaintiff BB, AAA, and DD with each of the instant real estate held in title trust and the act of not making a tax base report of transfer income tax on the transfer of real estate thereafter constitutes “an act of not making a tax base report in an unjust manner” under the former Framework Act on National Taxes. Accordingly, the imposition of each of the instant additional taxes by adding an amount equivalent to 40% of the calculated tax amount to Plaintiff BB and AA is unlawful.

C. Sub-committee

As Plaintiff BB and AA assume the obligation to pay capital gains tax from the transfer of the instant real estate, the Defendant’s imposition disposition of the instant principal tax is legitimate. However, although Plaintiff BB and AA did not constitute “an act of failing to file a tax base return on capital gains tax from the transfer of the instant real estate by improper means” under the former Framework Act on National Taxes, the imposition of the instant penalty tax equivalent to 40% of the calculated tax amount under Article 47-2(2)1 of the former Framework Act on National Taxes should be revoked.

5. Conclusion

Therefore, the plaintiffs' claims against the imposition of additional tax among the dispositions of this case shall be accepted on the grounds of merit, and the remaining claims of the plaintiffs shall be dismissed on the grounds of merit. It is so decided as per Disposition.