Seoul Administrative Court 2008Gudan8966 ( April 10, 2009)

National High Court Decision 2007west 5101 ( October 13, 2008)

Where assets subject to reporting the standard market price are reported as actual transaction values.

Although it is alleged that the assets subject to the standard market price were reported as the actual transaction price by mistake, if the actual transaction price reported and paid is confirmed to be different from the fact, the tax authority may correct the transfer income tax according to the actual transaction price confirmed.

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

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The Defendant’s imposition of capital gains tax of KRW 161,87,350 as of September 3, 2007 against the Plaintiff and KRW 31,270,360 as of November 1, 2007 shall be revoked.

2. Purport of appeal

It is the same as the disposition.

1. Details of the disposition;

가. 원고는 2002. 5. 30. 천안시 ☆☆동 375-1 과수원 3,206㎡ 중 1/2 지분(이하 '이 사건 토지'라고 한다)을 최★★에게 6억 100만 원에 매도한 다음, 2002. 6. 3. 실지거래가액에 의한 양도소득과세표준 및 세액을 신고하면서 양도가액 2억 5,000만원, 취득가액 2억 3,250만 원, 양도차액 913만 원으로 신고하여 그에 따른 양도소득세 507,190원을 납부하였다.

B. Around September 2007, the Defendant confirmed that the actual transaction value of the instant real estate was caused by 61 billion won, and then re-calculated the tax base of transfer income and the tax amount based thereon, and notified the Plaintiff of the correction of KRW 161,877,350 for the transfer income tax belonging to September 3, 2007. On November 1, 2007, the Defendant issued an additional notice of KRW 31,270,360 for the transfer income tax belonging to the year 202 on the ground that the penalty tax was erroneously imposed on November 1, 2007 (hereinafter “instant disposition”).

[Ground of recognition] Evidence No. 1, Evidence Nos. 3 through 10, Evidence Nos. 1 and 2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

According to the Income Tax Act, which was enforced at the time of the sale of the instant land, the transfer income tax was paid by applying the standard market price, and when calculating the standard market price, the Plaintiff did not have any obligation to pay the transfer income tax in connection with the transfer of the instant land. However, the Plaintiff reported the transfer income tax as the actual transaction price due to an error caused by the accounting company’s wrong guidance. Since the Plaintiff did not have the purpose of tax avoidance, the disposition of this case, which was made by applying the proviso of Article 114(4) of the former Income Tax Act (amended by Act No. 6781, Dec. 18, 20

(b) Related statutes;

It shall be as shown in the attached Form.

C. Determination

(1) There is no dispute between the parties that the transfer income tax related to the transfer of the instant land is zero won when calculating the standard market price, and the fact that the Plaintiff reported and paid the transfer income tax and the tax amount by claiming the actual transaction price different from the fact is acknowledged as above.

(2) However, Article 96 (1) of the former Income Tax Act, which was applied at the time of the transfer of the land in this case, provides that the transfer value to calculate the transfer income tax base and the tax amount shall be based on the standard market price at the time of the transfer of the relevant asset in principle. However, the proviso provides that "any exception that can determine the transfer value according to the actual transaction value shall be provided for in the proviso and one of them shall be reported to the head of the district tax office having jurisdiction over the place of tax payment by the deadline for final return under Article 110 (1) along with the evidential documents." Article 114 (4) proviso provides that "Where a preliminary return or final return is made on the transfer income tax base or the tax return is confirmed differently from the facts, the verified value shall be the transfer value or the acquisition value and shall be corrected

(3) Therefore, the key issue of the instant case is whether capital gains tax may be imposed on the basis of the actual transaction price confirmed under the proviso to Article 114(4) of the former Income Tax Act in a case where the Plaintiff reported and paid capital gains tax by applying the standard market price pursuant to Article 96(1) of the former Income Tax Act, which was applied at the time of the transfer of the instant land, even if the tax amount was zero.

In light of the legislative intent of the proviso of Article 114 (4) of the former Income Tax Act (amended by Act No. 653, Jul. 26, 2002; Act No. 6554, Jan. 26, 2002; Act No. 6554, Jan. 28, 2008; Act No. 6554, Jan. 28, 2008; Act No. 6555, Jan. 28, 2008; Act No. 6554, Jan. 28, 2008; Act No. 6554, Jan. 29, 2008; Act No. 6554, Jan. 28, 2008; Act No. 6683, Jan. 28, 2008; Act No. 66813, Jan. 28, 2007).

(4) Ultimately, the instant disposition taken pursuant to the proviso of Article 114(4) of the former Income Tax Act is lawful, and the Plaintiff’s assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed due to the lack of reason, and the judgment of the court of first instance is unfair with different conclusions, so the judgment of the court of first instance is revoked and the plaintiff's claim is dismissed. It is so decided as per Disposition