Seocho 208west 3965 ( November 18, 2009)

In respect of onerous donation, the transfer value shall be the standard market price.

In the case of onerous donation, the transfer value shall not be calculated based on the standard market price because there is no data by which the transaction example, appraisal value, conversion value, etc. can be known.

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

Park ○

head of Sung Dong Tax Office

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

The defendant's rejection disposition of correction of capital gains tax against the plaintiff on October 23, 2008 shall be revoked.

1. Circumstances of dispositions;

A. On Apr. 15, 1997, the Plaintiff acquired ○○○○-dong 1570 square meters and 427.6 square meters of neighborhood living facilities with six floors above, and 2,400.22 square meters of neighborhood living facilities with six floors above (hereinafter “the instant real estate”), and donated 1/2 shares of the instant real estate among the instant real estate under the condition that the Plaintiff, an infant of the Plaintiff, takes over 16,50,000 won and 370,500,000 won and the obligation of 486,50,000 won and the obligation of 370,000 won with respect to the instant real estate.

B. On February 29, 2008, the Plaintiff: (a) the transfer value of the portion to be deemed a transfer from an onerous donation is KRW 968,393,90, which is the standard market price at the time of transfer; (b) KRW 486,50,00,00 multiplied by the ratio of the amount of debt ( KRW 486,50,000, 968, 968, 93,900) among the amount of debt at the time of transfer; and (c) the acquisition value is KRW 557,685,438, which is the standard market price at the time of acquisition, calculated as KRW 280,169,015, and reported and paid capital gains tax

C. Meanwhile, on March 31, 2008, the ConciliationA assessed the value of donated property as KRW 968,393,900, which is the standard market price, and reported and paid KRW 72,340,90,00, which is the amount subtracting the amount of debts.

D. On April 18, 2008, the Plaintiff filed a claim for correction to the effect that the transfer value of the portion deemed a transfer from the onerous donation is KRW 486,50,00,00, and the acquisition value is KRW 1,314,113,04, which is the actual transaction price at the time of acquisition, and KRW 660,181,766, which is calculated by multiplying the amount of debt by the ratio of the amount of debt, and there is no tax amount to be calculated and paid at KRW 660,181,766, and thus, the transfer income tax originally paid was refunded. However, the Defendant rejected the claim for correction on October 23, 200

[Ground of recognition] Facts without a dispute, Gap evidence 1, Eul evidence 1, Eul evidence 1, 2 and 3, the purport of the whole pleading

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In the case of onerous donation, the amount of debt, which is deemed the transfer value, is itself the transaction price corresponding to the part to be deemed a transfer among the relevant assets, and thus, not only falls under the actual transaction price, but also the transfer value and the acquisition value shall be determined based on the actual transaction price as to the transaction after January 1, 2007, which was entirely converted into the real transaction taxation principle. Therefore, the disposition of this case where the acquisition value is not assessed as the actual transaction price should be revoked.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

The transfer value for calculating capital gains shall be based on the actual transaction value pursuant to Article 96(1) of the Income Tax Act. However, the actual transaction value, which is the basis for calculating gains on transfer of the portion to be deemed a transfer in onerous donation, refers to the actual transaction value rather than the general market value that reflects the objective exchange value, and the actual amount actually agreed for the consideration of benefits at the time of transaction itself or at the time of transaction. In cases of onerous donation in which a donee takes over a donor’s obligation, the amount of such obligation cannot be deemed as the transaction value corresponding to the portion to be deemed a transfer among the relevant donated assets or all donated assets (see Supreme Court Decision 2006Du7171, Apr. 26, 2007

Therefore, in this case’s onerous donation, the actual transfer value of the portion to be deemed a transfer cannot be deemed as KRW 486,50,000, because it is difficult to recognize or confirm the actual transaction value at the time of transfer of the relevant asset. Thus, the transfer value should be calculated by multiplying the standard market value by the ratio of the amount of the debt out of the standard market value at the time of acquisition pursuant to Article 10(1) of the Income Tax Act, inasmuch as there is no evidence to know the transaction example, appraisal value, conversion value, etc.

Ultimately, the instant disposition, based on the premise that both the transfer value and acquisition value of the portion to be deemed a transfer should be calculated on the basis of the standard market price, is lawful, and the Plaintiff’s assertion is without merit.

3.In conclusion

Thus, the plaintiff's claim of this case is dismissed as it is without merit.