Cheongju District Court-2017-Gu Partnership-2627 ( April 12, 2018)

Time of transfer of exchange assets;

In the case of assets acquired through exchange, the actual right to dispose of the assets subject to exchange is acquired at the time of transfer registration of ownership, so it shall be considered as the transfer date and applied.

Article 98 of the Transfer Income Tax Act (Time of Transfer or Acquisition)

Daejeon High Court (Cheongju) 2018Nu785

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○ Head of tax office

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August 29, 2018

October 31, 2018

1. The defendant's appeal is dismissed.

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

3. To correct "transfer income tax" in paragraph (1) of the decision of the court of first instance to "transfer income tax (including additional tax)".

1. Purport of claim

The Defendant’s imposition of capital gains tax (including additional tax) in KRW 202,946,200 against the Plaintiff on December 5, 2016 shall be revoked.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Details of the disposition;

A. On May 31, 2007, the Plaintiff acquired 209 square meters of road 209 square meters from AA to ○○○○○○○○ (hereinafter “Bri”) (hereinafter “Bri”) prior to the subdivision, 6,939 square meters of Bririland 6,939 square meters prior to the subdivision, BBri mountain 13-5 forest 476 square meters prior to the registration conversion, BBrisan 13-8 forest 13-8 forest 890 square meters, BBrisan 14-4 forest 163 square meters (hereinafter “instant land”), and completed the registration of ownership transfer in the Plaintiff’s name on June 7, 2007.

B. Around September 1, 2014, the Plaintiff entered into an exchange contract with D. 2, 200,000,000 won for 200,000 won for each of 200,000 won for sale and purchase of the instant land, and with D. 2,00,000 won for 20,000 won for E. 20,000 won for E. 20,000 won for E. 1,000 won for E. 20,000 won for E. 20,000 won for E. 20,000 won for E. 20,000 won for E. 20,000 won for E. 1,000 won for E. 20,000 won for E. 20,000 won for E. 20,000 won for E. 20,000 won for E.208,00 won for E.

D. Around October 7, 2015, DD entered into a sales contract with GG and the instant land for KRW 700 million, and completed the registration of ownership transfer with respect to the said land on October 16, 2015. However, DD did not actually receive KRW 700 million from GG, but rather completed the registration of ownership transfer with respect to the said land on October 16, 2015. However, DD’s registration of ownership transfer with respect to “HHHH” 3, which was located in ○○○○○○-gu, ○○○○○○○, a total of KRW 700 million, was the purchase price.

E. On November 9, 2015, the Plaintiff reported the transfer income tax of KRW 220 million to the Defendant on the actual purchase price of the instant land, and paid KRW 2,217,340 on December 29, 2015.

F. On December 5, 2016, the Defendant estimated the sales price of the instant land transferred to GG within three months after acquiring the instant land, and imposed capital gains tax of KRW 202,946,200 (including additional tax of KRW 33,810,271) on the Plaintiff on December 5, 2016 (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap 3 through 7 evidence, Eul 3 through 6, and 8 evidence (including provisional numbers; hereinafter the same shall apply), the testimony of witnesses of this court and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

As of October 28, 2014, which completed the registration of ownership transfer for EE-dong real estate pursuant to the instant exchange contract concluded with DD representing CCC, the transfer income tax should be calculated on the basis of the date of transfer of the instant land. However, since DD completed development activities on the instant land and increased its value, it shall be calculated on the basis of this. However, the instant disposition calculated on October 7, 2015 by deeming 70 million won, the sale price of the said land, as the transfer price of the said land, as the transfer price of the said land, after DD finished development activities on the instant land, and thereafter, DD transferred the said land to GGG, as the transfer price of the said land.

B. Relevant statutes

It is as shown in the attached Form.

C. Relevant legal principles

1) The meaning of actual transaction price

In calculating gains on transfer, the actual transaction price, which is the basis for the calculation of gains on transfer, refers to the actual amount agreed for the payment itself or at the time of transaction, rather than the general market price that reflects the objective exchange value (see, e.g., Supreme Court Decision 2011Du24286, Oct. 15, 2015).

2) Determination of the transfer value in the case of exchange

The actual transfer value of the relevant asset, which serves as the basis for calculating the amount of capital gains tax, refers to the value that the transferor transfers the asset at the time of the transaction and received as the price for the transfer and is objectively recognized by the sales contract or other documentary evidence. Therefore, in cases where the transaction is exchanged, if the transaction is an exchange of value based on the objective value of the object by following the procedure for appraisal of the difference in the appraised value, etc., the actual transfer value may be verified. However, in cases where the transaction is conducted simply by the method of determining only the difference in the value of the object to be exchanged by an agreement between the parties without such procedure and paying the difference, the actual transfer value may not be verified. This also applies to cases where the parties to the exchange contract have arbitrarily assessed the value of the object to be exchanged and then calculated the difference (see, e.g., Supreme Court Decision 2010Du27

(iii)in the case of exchange, determine the time of transfer;

Where an asset is transferred under a contract for the exchange of real estate, even before the transferor acquires the registration of transfer of ownership on the object of exchange to be acquired as a price for the transfer, if the parties to the exchange contract are obligated to complete the registration of transfer of ownership at any time at the request of the other party, and at least the above parties are deemed to have acquired the right to actually dispose of the said object, the liquidation of the price may be deemed to have been completed (see, e.g., Supreme Court Decision 95Nu7475, Jan. 23, 1996). Thus, the time when the assets are transferred due to the exchange should be deemed to have been the time when the actual right to dispose of the assets acquired through the exchange was acquired (see, e.g., Supreme Court Decision 2008Du5650, Jul.

4) According to Article 114(7) of the former Income Tax Act and Article 176-2(1) and (3) of the Enforcement Decree of the same Act, even in cases where the transferor is required to report the actual transaction value, where there is no evidentiary document such as account books or other documents, or where it is impossible to recognize or confirm the actual transaction value due to the lack of important parts, the transfer value or acquisition value may not be deemed the actual transaction value. The method of an estimate investigation shall be applied in sequence, appraisal value, and conversion value

D. Determination

1) Method of calculating the transfer value

In this case, where the market price appraisal of the object to be exchanged did not undergo a settlement procedure for the difference in the appraisal value, etc., and the value exchange based on the objective monetary value of the object is not conducted, in light of the legal principles as seen earlier, the method of estimating the actual transaction value should be applied since the land in this case cannot be confirmed (Therefore, the plaintiff's assertion that the actual transaction value of the land in this case is KRW 220 million or that such actual transaction value should be applied is without merit).

2) Time of transfer of the instant land

A) Comprehensively taking account of the overall purport of Gap evidence 3 through 91 and arguments, it is reasonable to view that the plaintiff completed the registration of ownership transfer with respect to EEdong real estate subject to exchange on October 28, 2014 in the name of the plaintiff. Since it is reasonable to view that the plaintiff acquired the real right to dispose of EE real estate from the date when the price of the land in this case was settled on October 28, 2014, the time of the transfer of the land in this case is the date of liquidation (On the other hand, according to the statement of evidence No. 8 and witness DD's testimony of this court, about KRW 20,20,000,000,000,000,0000 won paid for EEdong real estate as collateral debt of the right to collateral security, etc. established on the EEdong real estate, regardless of the fact that the plaintiff had already acquired the right to dispose of the real estate in this case from DD before October 8, 2015.

B) Judgment on the defendant's argument

The defendant asserts that the liquidation process of the price under the exchange contract of this case is unclear due to the relationship between CCC and DD with claims and obligations, and that DD had no right to dispose of the land of this case before October 8, 2015, when the registration of ownership transfer was completed with respect to the land of this case from the plaintiff, DD had no right to dispose of the land of this case. Thus, the defendant asserts that October 8, 2015, which is the date of receipt of the registration of ownership transfer, should be viewed as the transfer time.

However, in full view of the statements in Eul evidence 6 and the overall purport of testimony and arguments by the witness CCC of this court and DDD, it can be acknowledged that DD entered into the instant exchange contract, etc. in the name of CCC as DD et al. were living together with CCC for more than 10 years and entered into the instant exchange contract due to DD's credit problems. Thus, it cannot be viewed that it is unclear in the process of settling the price between CCC and DD with regard to the instant exchange contract. According to the above legal principles, if DD acquired the actual right to dispose of the instant land, it does not constitute one basis for determining the time of transfer, and it cannot be said that DD acquired the actual right to dispose of the instant land (On the other hand, it can not be recognized that DD was subject to the Plaintiff's transfer registration on the premise that DD acquired the right to dispose of the instant land under the premise that DD's real right to dispose of the instant land, as seen earlier.

3) The illegality of the instant disposition

Article 114 (7) of the former Income Tax Act and Article 176-2 (3) 1 of the Enforcement Decree of the same Act provide that "the sales case of assets with the identity or similarity of the relevant assets within three months before or after the date of transfer" in order to determine the transfer value by estimation. The above provision and the above provision are applied in light of the transfer period of the land in this case.

First, the transfer date of the instant land is October 28, 2014. The transaction date that the Defendant applied as a transaction example of the instant land is DD with GG and the purchase price of the instant land at KRW 700 million, which was October 7, 2015, or October 16, 2015, which was the date of the registration of transfer of ownership. Thus, the instant transaction case did not occur within three months from the transfer date of the instant land.

Furthermore, in full view of the evidence No. 13-1 and 2 of the evidence No. 13-2 and the purport of the testimony and pleading of the witness witness of this court, since DNA, representing the Plaintiff and CCC, entered into the instant exchange contract by evaluating the respective value of the instant land and EE-dong real estate, it may be recognized that DNA, carrying around approximately KRW 15 million of the instant land, and it is difficult to recognize the identity or similarity of the instant land before the rise in the value subject to the instant disposition and the instant land, which are the subject of the instant disposition. (On the other hand, since DD did not actually receive KRW 70 million of the instant purchase price from GG, the total purchase price of the instant land was KRW 70 million, and the transfer registration of the instant land was made to the ○○○○○○-dong, where the sum of the sale price was equivalent to KRW 300,000,000,0000,000,000,000).

3. Conclusion

Thus, the plaintiff's claim of this case shall be accepted on the ground of its reason. The decision of the court of first instance is justified on the basis of its conclusion, and the defendant's appeal is dismissed on the ground of its reason. Since it is obvious that "transfer income tax" is a clerical error in the "transfer income tax (including additional tax)" in Article 1 of the