Seocho 208west 1773 (Law No. 9, 2008)

Appropriateness of the assertion that the imposition of additional tax is improper on justifiable grounds

The penalty tax for failure to report shall be the penalty tax for failure to report as long as one house for one household is non-taxable even if the requirements for residence for two years are not satisfied.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition imposing capital gains tax exceeding KRW 2,624,224 of the imposition of capital gains tax of KRW 14,864,630, which was imposed on the Plaintiff on March 1, 2008, shall be revoked.

1. Circumstances of the disposition;

A. On September 20, 1996, the Plaintiff acquired 305 apartment units of ○○○○○○○○-dong 104-1, 104-1, but owned 1004 apartment units of 1004 (hereinafter “the apartment units of this case”) on January 12, 1999 by implementing a reconstruction project for the said housing, and transferred the instant apartment units of this case to KRW 775 million on July 6, 2006.

B. After the preliminary return on September 21, 2006, the Plaintiff calculated gains from transfer by deducting the transfer value of the apartment of this case 775 million won from the transfer value of the apartment of this case, 214,874,591 won, and other necessary expenses, while making the preliminary return on the transfer income, and then the Plaintiff did not pay the transfer income tax as a result of classifying the transfer income tax of this case under Article 99(1)3 of the former Income Tax Act (amended by Act No. 8144 of Dec. 30, 2006) and Article 154 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 19890 of Feb. 28, 2007) by deeming that the transfer income tax of this case constituted the non-taxation requirement for one house of one household under Article 89(1)3 of the former Income Tax Act and the transfer income tax of this case as 600,000 won from the transfer value of high-priced house.

C. However, on March 1, 2008, the Defendant calculated the transfer income tax amount of 15,629,414 won by calculating the transfer income tax by treating the entire transfer margin of the apartment of this case as subject to taxation, on the ground that the period during which the Plaintiff resided in the apartment of this case is merely one year and three months, and did not meet the requirements for non-taxation on one house for one household under Article 154(1) of the former Enforcement Decree of the Income Tax Act. The Defendant determined the remainder of 2,624,224 won after subtracting the reduced or exempted tax amount of 153,005.191 won under Article 99(1) of the Restriction of Special Taxation Act as transfer income tax related to the transfer of the apartment of this case. The Defendant imposed the disposition imposing the transfer income tax for the additional tax of 361,061,304 won calculated by adding the transfer income amount from the original report of this case and the transfer income amount calculated by the Defendant to the transfer income tax amount of this case (hereinafter referred to 3608.4.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, Eul evidence 1 (including natural disaster) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The Plaintiff filed a preliminary return within the final return period after the transfer of the instant apartment, but the Plaintiff calculated and under-reported the transfer income tax due to differences in opinions as to whether the Plaintiff is exempt from one house for one household, and did not have any intention to file a false return. As a result, the Plaintiff’s transfer margin falls under the income subject to reduction or exemption under the Restriction of Special Taxation Act, and thus, there is any justifiable reason that is not attributable to the Plaintiff’s failure to fulfill his duty to report the transfer income tax, but the instant disposition against the Plaintiff is unlawful

(2) Even if the Plaintiff did not qualify as one house-free object for one household, the Plaintiff’s calculation and imposition of additional tax on negligent tax returns including the capital gains subject to reduction and exemption under the Restriction of Special Taxation Act is unlawful, even though the Plaintiff’s transfer income amount falls under 2,624,223 won, and thus, exceeds the standard for tax interpretation or discretion.

(b) Related statutes;

The entries in the attached statutes are as follows.

C. Determination

(1) Determination as to whether there are justifiable grounds

In cases where a taxpayer did not report and pay all or part of his/her legitimate capital gains tax at the time of filing a preliminary return on gains from transfer of assets, and did not file a final return on the tax base for the legitimate tax amount by the deadline for filing the final return on the tax base, the imposition of capital gains tax may be levied on the legitimate tax amount exceeding the tax amount by the deadline for filing the final return on the tax base. Meanwhile, in order to facilitate the exercise of the right to taxation and the realization of the tax claim, the additional tax under the tax law is an administrative sanction imposed by the taxpayer as prescribed by the Act in cases where the taxpayer violates the tax return and the tax liability without justifiable grounds, and the taxpayer’s intentional negligence is not considered as a justifiable reason (see, e.g., Supreme Court Decision 200Du5944, Apr. 1

However, in full view of the facts that there is no dispute between the parties concerned, the plaintiff acquired the above house of Do-won in Do-won in Seoul Special Metropolitan City on September 20, 1996 and resided until December 12 of the same year after the acquisition of the house of Do-won in Seoul Special Metropolitan City on September 20, 196, and thereafter, the rebuilding business was conducted on January 12, 1999, but the apartment of this case was sold out on December 26, 2005, but the actual residing in the apartment of this case was transferred on July 6, 2006 and transferred the apartment of this case, and the period of actual residing in the apartment of this case has not been one year. Nevertheless, the fact that the preliminary return on tax base of transfer income related to the transfer of the apartment of this case was made by the preliminary return on tax base of transfer income, as seen earlier, did not have any transfer income tax, can be acknowledged

As above, even if the Plaintiff did not meet the requirements for the residence period of two years under Article 89 (1) 3 of the former Income Tax Act and Article 154 (1) of the Enforcement Decree thereof, and thus, if calculated, the Plaintiff’s failure to pay the transfer income tax within the final return period, the Plaintiff’s failure to pay the transfer income tax shall be subject to the penalty tax on unfaithful return unless the transfer income tax is paid within the final return period. The Plaintiff’s failure to pay the transfer income tax within the final return period is due to the legal sites or mistake on the requirements for non-taxation, and there was no intention or negligence to evade the transfer income tax, and as seen earlier, even if a significant portion of the transfer income tax falls under the reduction or exemption of the transfer income tax under the Restriction of Special Taxation Act, the above circumstance alone does not constitute a justifiable reason that does not cause the Plaintiff’s failure to perform his duty due to a conflict

(2) Whether there is illegality in the calculation of the penalty tax

As seen earlier, Article 115(1) of the former Income Tax Act provides for an amount equivalent to 10/100 of the amount calculated by multiplying the calculated tax amount by the ratio of the non-reported income or short of the amount to be returned, if a final return is not made or a return is made below the income amount to be returned, as the Plaintiff’s most of the capital gains amount falls under reduction of capital gains tax pursuant to Article 99(1) of the Restriction of Special Taxation Act. Article 178(1) of the Enforcement Decree provides that the amount to be reported pursuant to Article 115(1) of the Act shall be the amount of income determined or adjusted by the head of a tax office, etc. In calculating the calculated tax amount, the Defendant shall not be deemed to have any error in the calculation of the amount of capital gains tax of the apartment house of this case, the amount of which was corrected originally reported by the Plaintiff and the amount of capital gains tax of this case, the difference between KRW 467,303,92 and KRW 3610,364.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed, and it is so decided as per Disposition.