Whether an asset transferred without paying part of the balance falls under unregistered transferred assets

Since it is reasonable to view that the entire price for the land before the transfer date was paid, it is not harsh to apply for the transfer of unregistered assets and to hold the registration impossible or to hold the responsibility not registered.

Article 88 (Definition of Transfer) of Income Tax Act

Article 168 (Scope, etc. of Assets Excluding Unregistered Transfer)

1. The appeal is dismissed.

2. The costs of appeal are assessed against the Plaintiff.

In comparison with the records of this case and the judgment of the court below, the allegation in the grounds of appeal by appellant is not accepted in accordance with Article 4 of the Act on Special Cases Concerning the Procedure for Appeal. Therefore, the appeal shall be dismissed in accordance with Article 5 of the Act, and the costs of appeal shall be borne by the losing party. It is so decided as per Disposition

[Maju High Court 2007Nu91 ( September 27, 2007)]

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant's disposition of imposition of capital gains tax of KRW 170,770,840 against the plaintiff on October 7, 2005 shall be revoked.

1. Details of the disposition;

A. On October 12, 1994, the Plaintiff and the ○○ City Corporation (hereinafter referred to as “○○ City Corporation”) set the sales price of KRW 756,654,00 for the total amount of KRW 75,762,00 for the commercial area of KRW 548.30 for the commercial area of KRW 548.30 (hereinafter referred to as “the site of this case”) from the ○○○ City Corporation (hereinafter referred to as “○○ City Corporation”) from the ○○○ City Corporation, respectively, as the total sales price of KRW 756,65,762,00 for the contract deposit, the intermediate payment of KRW 606,09,00 for the remainder, and the intermediate payment of KRW 74,796,00 for the remainder, from February 11, 1995 to October 11, 1996.

B. On December 15, 2001, the Plaintiff paid to the Urban Corporation a total of KRW 755,858,000 (i.e., KRW 756,654,00-75,858,000) and did not pay only the balance (i.e., KRW 756,654,00, KRW 755,858,000), and reported and paid KRW 3,204,00 of transfer income tax by treating the instant transfer as “transfer of the right to acquire land” on December 15, 201, and the Defendant reported and paid the acquisition value by treating the instant transfer as “transfer of the right to acquire land” as “transfer of the right to acquire land”.

C. On October 7, 2005, the Defendant: (a) considered the transfer of unregistered assets in this case as “transfer of unregistered assets”; and (b) rendered a disposition imposing capital gains tax of KRW 170,770,480 by applying the capital gains tax rate of KRW 194,227,80 calculated by the Defendant to the Plaintiff by applying 60% of the capital gains tax rate for the transfer of unregistered assets and the additional tax due to the nonperformance of report (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1, Gap evidence 2, Eul evidence 1-2, Eul evidence 1-2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The registration of acquisition of ownership is legally impossible if the amount is unpaid even in the case of a long-term installment of the land in this case. Since the Plaintiff was unable to register the ownership transfer of the land in this case as of February 15, 1998 as of the date of use of the land in this case as of February 15, 1998, because the Plaintiff failed to pay part of the remainder of the land in this case, and the registration of acquisition of the assets at the time of transfer of this case is legally impossible. Thus, the Defendant violated the principle of strict interpretation of the tax law, which regards the transfer of the right to acquire the land in this case as "transfer of the right to acquire the land" as "transfer of unregistered assets." According to the contract between the Plaintiff and the Urban Corporation, if the Plaintiff delayed the transfer of the part in this case or the balance for three months or longer, the contract can be cancelled by the Urban Corporation, but the Plaintiff did not pay the remainder in full for about 1,270,000 won due to the unpaid interest and the Plaintiff did not transfer the profits in this case to the Plaintiff under the name of 7505,05.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) According to Article 94(1), (1), and (2) of the Income Tax Act, capital gains subject to capital gains tax related to real estate refers to income arising from the transfer of ownership of land or a building or management of real estate. Here, ownership of land or a building includes not only the ownership completed registration but also the de facto ownership that is paid almost in full after the purchase. However, the fact that the purchaser of land paid only part of the down payment and the intermediate payment cannot be deemed to have acquired the de facto ownership of the land, not the transfer of de facto ownership, but also the right of the purchaser to acquire the right or real estate (see Supreme Court Decision 81Nu206, Jun. 14, 1983).

In addition to the whole purport of the oral argument in the statement of evidence Nos. 1, 1 and 4, the plaintiff paid the down payment and the intermediate payment within the payment period, and the plaintiff received a discount of KRW 15,931,800 by advance payment of the three to six installments of the intermediate payment before the payment period, and the remainder of KRW 75,762,00 from February 15, 1998 when one year elapsed from February 15, 1999 when the annual amount of KRW 74,00,00 for the remainder of KRW 74,00,000, and the remainder that the plaintiff finally paid to the urban construction before the date of the transfer of the instant land is only KRW 796,00,00. According to the above facts, it is reasonable to deem that the plaintiff actually acquired the land of this case by paying almost all of the instant land before the date of the transfer of unregistered property, and therefore, it constitutes the transfer of the right.

(2) Meanwhile, the purport of the transfer income tax regarding unregistered transferred assets lies in: (a) transfer of assets without registering the acquisition thereof at the time of transfer; (b) transfer of assets to the purchaser; (c) control and prevention of speculation of real estate without paying transfer margin; (d) transfer income tax and acquisition tax; (e) transfer of assets to the transferor for the purpose of tax avoidance or resale; and (e) determination that holding the transferor liable for non-registration of the acquisition of the assets at the time of transfer is harsh; (e) transfer of 00 real estate under the name of the Plaintiff’s transfer agent’s title would be excluded from the transfer of 00,000,000 won; and (e) transfer of 00,000,000 won for non-transfer of assets under the name of the Plaintiff’s transfer agent; and (e) transfer of 70,000 won for non-transfer of assets under the name of the Plaintiff’s transfer agent; and (e) transfer of 14,000,000 won for non-transfer of real estate under the name of 7.

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and it is so decided as per Disposition by the plaintiff's appeal.

[Maju District Court 2006Guhap3254 ( December 14, 2006)]

The plaintiff's claim is dismissed.

Litigation costs shall be borne by the plaintiff.

The Defendant’s disposition of imposition of capital gains tax of KRW 170,770,840 against the Plaintiff on October 7, 2005 shall be revoked.

1. Details of the disposition;

A. On October 12, 1994, the Plaintiff and ○○ City Corporation (hereinafter referred to as the “Urban Corporation”) and ○○○○○○-dong Commercial Area 548.30 square meters (hereinafter referred to as the “instant land”) shall sell the total purchase price of KRW 756,654,00, down payment of KRW 75,762,00, intermediate payment of KRW 606,096,00, and the remainder of KRW 74,796,000, and the intermediate payment of KRW 74,796,000, respectively. The intermediate payment shall be paid in six installments from February 11, 1995 to October 11, 1996, the remainder was paid at the time of land use, and the contract was concluded for the purchase and sale of the land that was paid to the city on the date of the conclusion of the said contract.

B. On December 15, 2001, when the Plaintiff paid to the Urban Corporation a total of KRW 755,858,000 in total and part of the intermediate payments and the remainder, and transferred the land of this case to 796,000 out of the remainder to 15,00 won (hereinafter “transfer of this case”). Thereafter, the Plaintiff reported and paid KRW 3,204,000 in capital gains tax by deeming that the right to acquire the land of this case was transferred to 740,722,00,000, and the transfer value was KRW 75,000,000 in consideration of the transfer of the right to acquire the land.

C. On October 7, 2005, the Defendant considered the transfer of the instant right as the transfer of unregistered assets, and rendered a disposition imposing capital gains tax of KRW 170,770,480 by applying 60% of the transfer margin calculated by the Defendant to the Plaintiff and the additional tax due to the failure to report, etc. (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1, Gap evidence 2, Eul evidence 1-2, Eul evidence 1-2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The Plaintiff received a loan and the amount equivalent to KRW 755,858,00 from 75,858,000, from ○○○, etc., so the benefits acquired by the Plaintiff from the transfer of the instant case are not yet unregistered long-term resale gains. Furthermore, the Defendant’s disposition of this case was unlawful in view of different opinions, even though the Plaintiff could not complete the contract, if the Plaintiff delayed the intermediate payment or the remainder on at least three occasions, according to the Land Sale Contract between the Plaintiff and the Urban Corporation, even though the Plaintiff could have rescinded the contract, the Plaintiff did not have the purpose of tax avoidance in light of the circumstances in which the Plaintiff could not refund the remainder without taking all such disadvantages. Furthermore, in the case of long-term installment payment for real estate, if the unpaid amount is less than the amount, the registration of ownership acquisition is legally impossible, and even if the ownership transfer registration was impossible at the time of the transfer of this case.

(2) The Ministry of Construction and Transportation notified that a defective urban construction project would allow a temporary change of name until December 31, 2001 to the Plaintiff, with the purport that the title of the right to sell lots may be changed without any condition by sending an official door to the Urban Construction and Transportation, and that a person whose execution of the contract is difficult due to unavoidable circumstances by sending an official door to the Plaintiff for the execution of the contract for sale of lots. The Plaintiff’s transfer of land in accordance with the above administrative order is unlawful against the principle of trust protection.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Judgment on the Plaintiff’s first argument

According to the provision of Article 88 (1) of the Income Tax Act, since the sale and purchase of the same land in this case refers to the case where an asset is actually transferred for price, it can be viewed as a transfer for price if the payment of price to the extent that it can be deemed that the price was paid for the same land was actually made according to social norms (Supreme Court Decision 88Nu8609 delivered on July 11, 1989), and if the purport of the oral argument is added to the items in the evidence Nos. 1, 4, and 2, the balance that the plaintiff accrued to the Urban Corporation is merely 796,00 won. The time when the land in this case was used is from December 31, 1997, and the Urban Corporation demanded that the plaintiff acquire the above remaining amount of payment for the land in this case from February 15, 1998, and the plaintiff's ability to purchase the real estate in this case from March 11, 198 to June 30, 3008.

Meanwhile, the purport that the transfer income tax on unregistered transferred assets is excessive is that the person who acquired the assets without registering the acquisition at the time of transfer intends to evade taxes, such as transfer income tax and acquisition tax, or to restrain or prevent the speculative investment in real estate, etc. in the sale and purchase of the assets without paying any residual gains, etc. Accordingly, in the acquisition of the assets at the beginning, it is recognized that there is no speculative purpose, such as tax avoidance purpose through the transfer of assets or the acquisition of resale gains, and that it is harsh to hold the transferor liable for not registering the acquisition of the assets at the time of transfer, i.e., the transfer income tax should be excluded from the unregistered transferred assets whose transfer income tax is heavy pursuant to the proviso of Article 104(3) of the Income Tax Act and each subparagraph of Article 168(1) of the Enforcement Decree of the same Act. In addition, the term "property which cannot be registered at the time of transfer by the provisions of the Income Tax Act and the Enforcement Decree of the same Act, one of those excluded from the unregistered transferred assets, and thus, it does not constitute a relative acquisition of 190.

In light of the above facts and facts, if the Plaintiff added the statement No. 1-1-1-1 to 10 of the evidence as mentioned above, it can be acknowledged that the gains from the transfer of this case amounting to KRW 740,722,200 after deducting the advance payment discount amount from the sale price, and the Plaintiff’s acquisition price is KRW 950,72,200,000. The Plaintiff’s gains from the transfer of this case is more than 200 million. In full view of these facts and the facts acknowledged earlier, it cannot be said that the registration of the acquisition of the land of this case was impossible under the provisions of law at the time of the transfer of this case, or that it was harsh to enforce the Plaintiff’s liability for failing to register the acquisition thereof. Rather, the Plaintiff’s assertion that the transfer of this case’s land of this case would not be acquired by paying the remaining amount at any time prior to the transfer of this case’s transfer of real estate in his name, even if it was impossible to acquire the ownership transfer registration tax.

(2) Judgment on the second argument by the Plaintiff

On September 6, 2001, the statement of opinion asserted by the Plaintiff is that the Urban Corporation urged the Plaintiff to perform the contract (payment in subrogation) as soon as possible, and if it is difficult for the Plaintiff to perform the contract due to unavoidable circumstances, it is notified that it would allow the change of name for a limited period until December 31, 2001 under the condition that it succeeds to the rights and obligations under the original contract (payment in subrogation). In the event that the Defendant changes the purchaser's name, it does not indicate that the transfer income tax is not imposed on the transfer margin accruing from the process. Therefore, the Defendant cannot be deemed to have expressed the public opinion that is the object of trust to the Plaintiff. Accordingly, the Plaintiff'

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

[Related Acts]

Income Tax Act (amended by Act No. 6852 of Dec. 30, 2002)

Article 88 (Definition of Transfer)

(1) "Transfer" in subparagraphs 3 and this Chapter means that assets are actually transferred for price due to sale, exchange, investment in kind in a corporation, etc., regardless of any registration or enrollment of such assets.

Article 94 (Scope of Transfer Income)

(1) Transfer income shall be the following incomes generated in the concerned year:

1. Income accruing from transfer of land (referring to a lot of land subject to registration of land category in the cadastral record under the Cadastral Act) or buildings (including the facilities and structures annexed to such buildings);

2. Income accruing from transfer of any right to the real estate falling under any of the following items:

(a) Right to acquire real estate (including the right to acquire a building upon completion of its construction and its appurtenant land);

Article 140 (Rate of Transfer Income Tax)

(1) The amount (hereinafter referred to as "calculated amount of capital gains tax") calculated by applying the following tax rates to the tax base of capital gains in the current year:

3. Unregistered transferred assets:

60/100 of the tax base of transfer income;

(3) "Unregistered transferred assets" in paragraph (1) 3 means that a person who has acquired assets under Article 94 (1) 1 and 2 transfers such assets without making a registration for acquisition thereof: Provided, That assets as prescribed by Presidential Decree shall be excluded.

Enforcement Decree of the Income Tax

Article 168 (Scope, etc. of Assets Excluding Unregistered Transfer)

(1) "Assets prescribed by Presidential Decree" in the proviso to Article 104 (3) of the Act means those under each of the following subparagraphs:

1. Assets acquired under a long-term installment, whose registration for an acquisition of such assets at the time of transfer is impossible under the term of such contract;