[1] Whether high-class houses under Article 89 subparagraph 3 of the former Income Tax Act are invalid because they violate the principle of no taxation without law (negative)

[2] Whether Article 156 of the former Enforcement Decree of the Income Tax Act is unconstitutional (negative)

[1] Article 89 of the former Income Tax Act (amended by Act No. 5580 of Dec. 28, 1998) provides that income tax (e.g., income tax) shall not be imposed on capital gains for the following, and subparagraph 3 provides that "one house for one household (excluding high-class houses prescribed by the Presidential Decree) prescribed by the Presidential Decree and the appurtenant land within the area calculated by multiplying the size of the building by the rate prescribed by the Presidential Decree by the area of the land on which the building is constructed." The purport of not imposing income tax on the income accruing from the transfer of one house for one household is to form the basis for the life of a house. Therefore, in certain cases where it can be deemed that the transfer of one house owned in Korea is not a temporary residence or ownership for the purpose of acquiring capital gains tax or speculation, it is difficult to interpret the above income tax on capital gains to ensure the freedom of residential stability of the citizens and the transfer of a house without taxation, and thus, in light of the legislative purport of the above high-class transfer value of a house, it can be easily excluded from the above residential area or facility.

[2] Article 156 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15191 of Dec. 31, 1996) provides the scope of high-class houses subject to imposition of capital gains tax by being excluded from one house for one household. However, this is based on delegation under Article 89 subparagraph 3 of the former Income Tax Act (amended by Act No. 5580 of Dec. 28, 1998) under Article 75 of the Constitution. Thus, Article 156 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15191 of Dec. 31, 1996) does not constitute a violation of the Constitution by restricting the rights of the people, not by law.

[1] Article 89 subparagraph 3 of the former Income Tax Act (amended by Act No. 5580 of Dec. 28, 1998), Article 156 of the former Enforcement Decree of Income Tax Act (amended by Presidential Decree No. 15191 of Dec. 31, 1996), Article 59 of the Constitution / [2] Article 89 subparagraph 3 of the former Income Tax Act (amended by Act No. 5580 of Dec. 28, 1998), Article 156 of the former Income Tax Act (amended by Presidential Decree No. 15191 of Dec. 31, 1996), Articles 59 and 75 of the Constitution

[1] Supreme Court en banc Order 92Nu12988 delivered on January 19, 1993 (Gong1993Sang, 763) Decision 95Hun-Ba27 delivered on February 20, 197 (Hun-Ba20, 70), Constitutional Court Order 96Hun-Ba52, 97Hun-Ba40 delivered on July 16, 1998, 52, 53, 86, 87, 98Hun-Ba23 delivered on February 24, 200 (Hun-Ba29, 99Hun-Ba38, 499, 56, 57, 78, 80, 200Hun-Ba23 delivered on July 16, 1998 (Hun-Ba29, 94), Constitutional Court Order 98Hun-Ba94 delivered on February 24, 2000.

Plaintiff

Head of Sungnam Tax Office

Seoul High Court Decision 2000Nu9801 delivered on November 29, 2000

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

1. As to the unconstitutionality of Article 89 subparagraph 3 of the former Income Tax Act (amended by Act No. 5580 of Dec. 28, 1998; hereinafter the same)

Article 89 of the former Income Tax Act provides that no income tax (i.e., income tax on capital gains from the transfer of a house for the first generation prescribed by the Presidential Decree (excluding high-class houses 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 prescribed by the Presidential Decree by area. The purport of not imposing income tax on the income accruing from the transfer of one house for one household is that the transfer of a house owned by one household in Korea is the basis for citizen's life. Thus, in certain cases where it can be deemed that the transfer of a house owned by one household is not a transfer of a house for the purpose of acquiring capital gains or speculation, or temporarily residing or owning a house for the purpose of acquiring capital gains from the transfer of a house, thereby guaranteeing the freedom of residence stability and residence of the citizens by not imposing income tax on the capital gains (see Supreme Court en banc Decision 92Nu12988, Jan. 193; 2000Du12988, Jan. 19, 1999).

The judgment of the court below to the same purport is just, and there is no violation of the principle of no taxation without law.

The grounds of appeal are rejected.

2. As to the recommendation of Article 156 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15191 of Dec. 31, 1996; hereinafter the same applies)

A. Article 156 of the former Enforcement Decree of the Income Tax Act provides for the scope of high-class houses subject to imposition of capital gains tax, which are excluded from one house for one household, but this is based on delegation under Article 89 subparagraph 3 of the former Income Tax Act pursuant to Article 75 of the Constitution. Thus, Article 156 of the former Enforcement Decree of the Income Tax Act does not constitute a violation of the Constitution by

The judgment of the court below to the same purport is just, and there is no violation of the principle of no taxation without law.

We cannot accept this part of the grounds of appeal.

B. We examine the reasoning of the judgment below in light of relevant Acts and subordinate statutes and records. Since the court below should determine whether transferred assets meet the taxation requirements and tax exemption requirements based on the time of transfer, it should be determined based on the time of transfer. As long as the real estate in this case constitutes a high-class house at the time of transfer, it is reasonable to hold that the defendant's disposition of imposing transfer income tax is legitimate in view of the high-class house as long as it constitutes a high-class house at the time of transfer, and there is no violation of the principle of deprivation of property rights and the principle of tax non-payment due to retroactive legislation as otherwise alleged in the ground of appeal.

This part of the grounds of appeal is also rejected.

3. As to the argument regarding the scope of application of Article 156 of the former Enforcement Decree of the Income Tax Act

The court below is just in holding that since the real estate of this case constitutes a high-class house under the laws and regulations at the time of its transfer, it shall be subject to the transfer income tax by separating only the area exceeding the corresponding size of high-class house due to the amendment of Article 156 of the former Enforcement Decree of the Income Tax Act as alleged by the plaintiff, and there is no violation of law as to the scope of application of Article 156

This part of the grounds of appeal is rejected.

4. Conclusion

Therefore, the plaintiff's appeal is dismissed, and all costs of appeal are assessed against the plaintiff. It is so decided as per Disposition by the assent of all participating Justices.

Justices Shin Shin-chul (Presiding Justice)