early 2013 Mine4319 ( December 13, 2013)

In a case where the time of acquisition of land and building is different from that of a newly-built house, the standard market price at the time of the division shall also be included in the standard market price

Article 40(1) of the former Restriction of Special Taxation Act only provides that the standard market price at the time of its acquisition shall be the standard market price at the time of the division, and unreasonable results may arise if the standard market price at the time of its acquisition does not apply to the standard market price at the time of the division. Thus, the standard market price at the time of the division

Article 40(1) of the Enforcement Decree of the Restriction of Special Taxation Act

2014Guhap10295 Revocation of Disposition of Imposing capital gains tax

○ Kim

Head of the North Mine District Tax Office

June 12, 2014

July 17, 2014

1. On June 13, 2013, the Defendant’s disposition of imposition of the capital gains tax of KRW 008 against the Plaintiff was revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Basic facts

A. The Plaintiff’s acquisition and transfer of real estate

On June 24, 2002, the Plaintiff acquired ○○○ Dong, ○○○○, 220.2 square meters (hereinafter referred to as “instant land”) on June 24, 2002. On February 6, 2003, the Plaintiff newly constructed a multi-household house with a total floor area of 479,27 square meters on the instant land (hereinafter referred to as “instant building”, and “the instant land and building” was referred to as “the instant housing”). On May 16, 2008, the Plaintiff transferred the instant housing to Hong○○○○○○○○. (b) On May 16, 2008, the Plaintiff’s preliminary return and payment of capital gains tax were made.

On July 31, 2008, the Plaintiff: (a) applied Article 99-3 of the former Restriction of Special Taxation Act (amended by Act No. 9272, Dec. 26, 2008; hereinafter the same shall apply) to the transfer income accrued for five years after the new construction of the building of this case as income from reduction or exemption of transfer income tax; and (b) paid the transfer income tax amount of 00 won calculated on the basis that the transfer income accrued for five years after the new construction of the building of this case was reduced or exempted from transfer income tax; (c) on June 13, 2013, the Defendant issued a preliminary return to increase or decrease the transfer income tax for the Plaintiff; (d) on the ground that the Plaintiff applied the difference between the land and the land that was calculated on the basis of the standard market price at the time of acquisition of the newly-built house under Articles 99-3(2) and 40(1) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 21307, Feb. 4, 2009). hereinafter the following).

On October 1, 2013, the Plaintiff dissatisfied with the instant disposition and filed a petition for an inquiry with the Tax Tribunal, but was dismissed on December 13, 2013.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, Eul evidence No. 1 (including branch numbers, if any) and the purport of the whole pleadings

2. The plaintiff's assertion and relevant Acts and subordinate statutes;

A. The plaintiff's assertion

In calculating capital gains accrued for five years from the date of acquisition of the relevant newly-built house which is deducted from the taxable amount of capital gains tax pursuant to Article 99-3(1) of the former Restriction of Special Taxation Act and Articles 99-3(2) and 40(1) of the Enforcement Decree of the same Act by the instant formula, the standard market price at the time of acquisition of the relevant land and buildings as well as the land in this case shall be applied to the standard market price at the time of acquisition. However, the Defendant erroneously calculated capital gains amount that is deducted only from the standard market price at the time of acquisition of the

(b) Related statutes;

It is as shown in the attached Table related statutes.

3. Determination

Article 99-3 (1) of the former Restriction of Special Taxation Act provides that the transfer income accrued for five years from the date of acquisition of the newly-built house shall be subtracted from the income amount subject to the transfer income tax in cases where the newly-built house (including the land attached to the house less than twice the total floor area of the relevant building) is acquired and transferred after the lapse of five years from the date of acquisition. According to Articles 99-3 (2) and 40 (1) of the former Enforcement Decree of the Restriction of Special Taxation Act, the "transfer income accrued for five years from the date of acquisition of the newly-built house" means the amount calculated by the instant formula as the transfer income amount deducted from the income amount subject to the transfer income tax (hereinafter referred

On the other hand, a newly-built house subject to special taxation under Article 99-3 (1) of the former Restriction of Special Taxation Act refers to the land attached to the house and consisting of not more than twice the total floor area of the building. In this case, the deducted income amount refers to the land and the transfer income amount of the building accrued for five years from the date of acquisition of the newly-built house. Thus, in calculating the deducted income amount by the instant formula, the calculation result should be able to reflect the transfer income amount

However, in light of the following circumstances revealed by comprehensively taking account of the content and form of the relevant Acts and subordinate statutes as well as the meaning of the amount of deducted income, if the amount of income calculated by applying only the standard market price at the time of the acquisition of the land in this case to the standard market price at the time of the acquisition of the land in this case among the instant formula, the calculation result cannot be properly reflected in the transfer income amount of the land and buildings in this case that occurred for five years from the acquisition date of newly-built house

① The instant formula means the amount of capital gains from the date of acquisition to the date of five years from the date of acquisition in proportion to the ratio of “the increase in the standard market price from the date of acquisition” to the date of transfer, whichever is five years from the date of acquisition (see Supreme Court Decision 2012Du8588, Jan. 31, 2013). Since the instant formula means the total amount of capital gains from the instant land and buildings, in order to recognize feasibility as the amount of capital gains from the instant land and buildings that have occurred five years from the date of acquisition of the instant building, the amount of income calculated by the instant formula shall be reflected in the amount of capital gains from the date of acquisition to the date of transfer, corresponding to the total amount of capital gains from the instant land and buildings, and the amount of capital gains from the instant land and buildings that have occurred five years from the date of acquisition to the date of transfer.

② However, in the instant formula, if only the standard market price at the time of transfer applies to the standard market price at the time of the acquisition of the instant land to the standard market price at the time of the occurrence, and only the standard market price at the time of the acquisition of the instant land, calculated the amount of income by deducting only the standard market price at the time of the transfer from the standard market price at the time of the acquisition of the instant land and building, this cannot be deemed as the increase in the standard market price from the acquisition date of the instant land and building until the time of the transfer, and even though the Plaintiff paid expenses for the acquisition of the instant building, such circumstances are not reflected at all. As a result, the amount of income less than the amount of income by deducting the amount

③ Even if the standard market price at the time of the acquisition of the building, among the instant formula, is applied to the standard market price at the time of the acquisition of the building, the standard market price of the land applied at the same time is based on the time of the acquisition of the land, not at the time of the acquisition of the building. As such, among the total transfer income, the part corresponding to the period from the acquisition date of the instant land to the time of the acquisition of the building

④ In the instant formula, the standard market price at the time of the acquisition of land and a building only where land and a building are simultaneously acquired at the same time after the acquisition of land and a building as in this case, according to the Defendant’s calculation method applying only the standard market price at the time of the acquisition of land and a building where capital gains have occurred before the acquisition of a building as in this case, even though the interval between the time of the acquisition of land and a building becomes narrow, and the difference between the time of the acquisition of land and the total capital gains is rarely nonexistent, in calculating the standard market price at the time of the acquisition of the building, the amount to be deducted would result in an unreasonable result in the computation of the amount to be deducted. Fifth, in light of the principle of no taxation without the law, the interpretation of the tax law shall be interpreted in accordance with the legal text, barring any special circumstances. Thus, it is not allowed to expand or analogically interpret the tax law without reasonable grounds (see, e.g., Supreme Court Decision 2006Du8969, Feb. 15, 2008).

Therefore, in interpreting Articles 99-3(1) and 40(1) of the Enforcement Decree of the former Restriction of Special Taxation Act, which provide for the preferential provision that deducts transfer income in a certain case, notwithstanding the occurrence of income from the transfer of newly-built house, and stipulate the calculation method of transfer income amount by delegation under Article 99-3(2) and (4) of the same Act, it is not permissible to expand, analogically or analogically interpret it without reasonable grounds.

However, Articles 99-3(2) and 40(1) of the former Enforcement Decree of the Restriction of Special Taxation Act only provide that the standard market price at the time of acquisition, such as the statement in the case where the transfer income is calculated, among the instant formula, shall be the standard market price at the time of acquisition, and where the time of acquisition of land and a building differs from the time of acquisition, such as the Defendant’s calculation method, the only standard market price at the time of acquisition of the land shall be applied. As seen above, in the instant formula, unreasonable results may arise in a case where the standard market price at the time of the acquisition of the building at the time of occurrence of a

4. Conclusion

Therefore, the plaintiff's claim of this case shall be accepted on the grounds of its reasoning, and it is so decided as per Disposition.

Related Acts and subordinate statutes

Article 99-3 of the former Restriction of Special Taxation Act (amended by Act No. 9272 of Dec. 26, 2008) (Special Taxation for Capital Gains Tax for Purchasers of Newly-built Houses)

(1) With respect to the income accruing from the transfer of a newly-built house (including land attached to a house, which is less than twice the total floor area of the relevant building; hereafter in this Article, the same shall apply) falling under any of the following subparagraphs located in an area other than the area prescribed by the Presidential Decree, in which a resident (excluding a housing construction business operator) increases or is likely to increase rapidly in real estate prices in consideration of the national consumer price inflation rate and the inflation rate of national house trade prices, within five years from the date of its acquisition, the tax amount equivalent to 100/100 of transfer income tax shall be reduced or exempted, and where the relevant newly-built house is transferred after the lapse of five years from its acquisition date, the transfer income accruing for five years from the date of acquisition of the relevant newly-built house shall be subtracted from its income

1. In cases of newly-built house acquired from a housing developer:

A newly-built house that has been acquired by a person who first concludes a sales contract and pays a down payment with a housing constructor during the period from May 23, 2001 to June 30, 2003 (hereafter in this Article, the newly-built house acquisition period), shall be a newly-built house (including a house that is acquired through a housing association under the Housing Act or a maintenance and improvement project association under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, which is prescribed by the Presidential Decree): Provided, That a house that has been occupied as of the date of a sales contract or falling under any of the causes prescribed by the Presidential Decree during the newly-built house acquisition period shall be excluded;

(3) Any person who intends to be subjected to paragraph (1) shall apply for tax abatement or exemption as prescribed by the Presidential Decree.

(4) In applying paragraph (1), the calculation of transfer income accruing for five years from the date of acquisition of newly-built house and other necessary matters shall be prescribed by Presidential Decree

Article 40 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 21307, Feb. 4, 2009);

(1) For the purpose of Article 43 (1) of the Act, the term “transfer income amount accruing for 5 years from the date of acquisition of relevant real estate subject to restructuring” means the amount calculated by the following formula from among the transfer income under Article 95 (1) of the Income Tax Act or transfer margin under Article 99 (1) of the Corporate Tax Act (hereafter in this paragraph, the transfer income amount):

(1) The term "area prescribed by Presidential Decree" in the main sentence of Article 99-3 (1) of the Act means the powder, day, square village, mountain village, and middle-dong new urban area designated and publicly notified as a planned area for housing site development under the provisions of Article 3 of the Housing Site Development Promotion Act.

(2) In applying the text of Article 99-3 (1) of the Act, any transfer income accruing for five years from the date of acquisition of the newly-built house shall be the amount computed by applying mutatis mutandisArticle 40 (1).

(5) The term "members prescribed by Presidential Decree" in Article 99-3 (1) 2 of the Act means the members as of the date of authorization for management and disposal plans under Article 48 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents or the date of approval for the project plan under Article

(6) Article 99 (4) shall apply mutatis mutandis to an application for reduction or exemption of capital gains tax under Article 99-3 (3) of the Act.