Whether the fact of title trust is not proven

The burden of proof of title trust shall be borne by the claimant, and if it is not proven, the taxpayer shall not be changed.

Suwon District Court 2013Guhap20524

○ ○

Head of Ansan Tax Office

December 17, 2014

February 11, 2015

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff, including the part resulting from the supplementary participation.

Cheong-gu Office

The dismissal disposition against the Plaintiff on September 10, 2013 regarding the application for rectification of capital gains tax shall be revoked.

1. Details of the disposition;

A. On August 26, 2004, the Plaintiff completed the registration of ownership transfer on August 9, 2004 with respect to 1,539 square meters in ○○-dong, ○○-dong (hereinafter “instant land”).

B. On August 24, 2012, the Plaintiff completed the registration of ownership transfer on the ground of sale on August 1, 2012, 200, for the instant land. On October 31, 2012, the Plaintiff transferred the instant land and reported KRW 24,428,610 to the Defendant, but did not pay the transfer income tax by the payment deadline.

C. On July 12, 2013, the Plaintiff filed an application for rectification of transfer income tax with the Defendant to the effect that the actual owner of the instant land was not the Plaintiff but Kim○○, and thus, the obligor for capital gains tax on the instant land is also Kim○○, and thus, the Plaintiff should impose the said capital gains tax on the real owner and revise the capital gains tax on the Plaintiff

D. However, on September 10, 2013, the Defendant deemed that there is no specific ground to regard the actual owner of the instant land as Kim○○, and thus, dismissed the said request and notified the Plaintiff of the rejection thereof (hereinafter “instant disposition of refusal to rectify the capital gains tax”).

E. On September 30, 2013, the Plaintiff filed a tax appeal against the instant disposition, but the Tax Tribunal dismissed the said appeal on November 27, 2013.

F. Meanwhile, Kim○-○ died on October 14, 2012, and the Defendant’s Intervenor jointly succeeded to the Deceased.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 2, 3, 5, 6, 7, and 8, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant land was acquired by Kim ○ on August 26, 2004 from the former owner, but title trust was made to the Plaintiff on the ground that it did not meet the qualification for farmland acquisition. Kim ○ transferred the instant land to Park ○ on October 4, 2007, however, he continued to maintain the name of the owner for whom capital gains tax was reduced or exempted on a eight-year basis, while he completed the registration of ownership transfer to Park ○ on August 24, 2012. Under the substance over form principle, the capital gains tax following the transfer of the instant land should be imposed on Kim ○, not on the Plaintiff, and thus, the instant disposition rejecting the Plaintiff’s request for correction to Kim ○, not on the Plaintiff, is unlawful.

B. Determination

1) Article 14(1) of the Framework Act on National Taxes provides that "if the ownership of income, profit, property, act or transaction subject to taxation is nominal and there is another person to whom such income actually belongs, the person to whom such income actually belongs shall be liable for tax payment and the person to whom such income actually accrues shall be liable for tax payment," and the burden of proof exists for the claimant to whom such income actually accrues (see Supreme Court Decision 84Nu505, Dec. 11, 1984).

2) If the evidence of this case is set up at ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○’s testimony, taking into account the following circumstances, ① the Plaintiff’s sales contract for the instant land, which was submitted to the Defendant upon reporting the transfer income tax, is indicated as “the seller’s maximum ○○○,” “sale price 251,00,000,” and the Plaintiff’s assertion that the purchase price for the instant land would be KRW 251,00,00,000, which would not have been actually paid to the Plaintiff’s ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○’s real purchase price for the instant land. The Plaintiff’s assertion that the purchase price for the instant land would have been set at KRW 70,000,00.

Therefore, the plaintiff's above assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.