2012west 5314 ( October 10, 2013)

It does not constitute one house non-taxation for one household as it does not fall under the circumstances of work requiring overseas residence.

In full view of the fact that it does not fall under the case of having one house as of the date of departure due to the circumstances of duties requiring overseas residence, it is difficult to see that the transfer of the house is subject to tax exemption for one household.

Article 154 of the Enforcement Decree of Income Tax Act

2013Guhap5435 Revocation of revocation of request for rectification

SAA

BB Director of the Tax Office

June 28, 2013

July 26, 2013

1. The plaintiff's claim is dismissed.

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

The defendant's rejection disposition against the plaintiff on September 7, 2012 is revoked.

1. Details of the disposition;

A. On April 7, 2005, the Plaintiff: (a) purchased OO-dong 35 CCC 311 Dong 402 (hereinafter “instant housing”) from OOO-O-dong 35 CCC 301; and (b) purchased the ownership of the instant housing on November 29, 2007, after departing from DD Hong Kong to work at DD Hong Kong branch from July 26, 2007.

B. On July 1, 2008, the Plaintiff married with Gao-E that owns 2/5 of the above ground housing No. 101-2, OO-dong 774-2, OO-dong, and transferred the instant housing to OOOE on June 22, 2009.

C. On May 31, 2010, the Plaintiff reported and paid OOO of the transfer income tax related to the transfer of the instant house to the Defendant, but on July 31, 2012, the transfer of the instant house on July 31, 2012 constitutes a case where all households depart from the Republic of Korea due to the circumstances of service as prescribed by Article 154(1)2(c) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034, Feb. 18, 2010; Presidential Decree hereinafter “Enforcement Decree”), and requested correction of the transfer income tax already paid.

D. The Defendant rejected the Plaintiff’s claim for correction on the ground that the Plaintiff’s transfer of a house acquired after departure from the Republic of Korea due to the circumstances of service that need continuous overseas residence for more than one year as the Plaintiff left Korea does not meet the non-taxation requirements under Article 154(1)2(c) of the Enforcement Decree (hereinafter “instant disposition”).

E. On November 22, 2012, the Plaintiff requested to the Tax Tribunal for an inquiry on the instant disposition, but was dismissed on April 10, 2013.

[Basis of Recognition] The non-contentious facts, Gap evidence Nos. 1 through 10, and the whole purport of the pleading

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The Plaintiff has one house and becomes two houses for one household by marriage with a person who possesses one house. Thus, the first transferred house within five years from the date of marriage pursuant to Article 155(5) of the Enforcement Decree shall be deemed one house for one household and shall be determined whether it is eligible for exemption from capital gains tax pursuant to Article 154(1) of the Enforcement Decree. However, according to the proviso of Article 154(1)2(c) of the Enforcement Decree, where all households depart from the Republic of Korea due to work circumstances, capital gains tax shall not be imposed regardless of the period of possession and residence, and even if the Plaintiff did not own the instant house for three or more years after acquiring the instant house, the transfer income tax on the transfer of the instant house may not be imposed

B. Relevant statutes

The actual tax rate shall be the former Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009).

Article 89 (Non-Taxable Transfer Income)

(1) Income tax on capital gains (hereinafter referred to as "capital gains tax") shall be levied on the following incomes:

3. Income accruing from the enhancement of one house for one household as prescribed by the Presidential Decree (excluding expensive houses whose prices exceed the standard prescribed by the Presidential Decree) and the appurtenant land within the area calculated by multiplying the area of the land on which the building is built by the ratio fixed by region under the Presidential Decree (hereafter in this Article, referred to as the “land annexed to the house”); and

The actual provisions of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034, Feb. 18, 2010)

Article 154 (Status of One House for One Household)

(1) The term “one house for one household prescribed by the Presidential Decree” in Article 89 (1) 3 of the Act means that a household comprised by a resident and his spouse together with the family members living together with the same address or same place of residence (hereinafter referred to as “one household”) in Korea as of the date of transfer, has one house as of the date of holding, and the holding period of the relevant house is not less than three years (in case of a house located in a district designated and publicly notified as a planned area for housing site development under the provisions of Article 3 of the Seoul Special Metropolitan City, Metropolitan City, and in case of a house located in a district designated and publicly notified as a district for housing site development under the provisions of Article 3 of the Housing Site Development Promotion Act, the holding period of the relevant house is not less than three years and a simple residing period is not less than two years during the holding period): Provided, That where one household has one house in Korea as of the date of religion and falls under any of the following subparagraphs, the

2. Cases falling under any of the following items. In such cases, the remaining house and its appurtenant land which are transferred within two years from the date of its enhancement or expropriation shall be deemed to be included in the cases of item (a):

(c) Where all members of a household depart from the Republic of Korea due to such conditions as study or work needing continuous overseas residence for not less than one year: Provided, That it shall be limited to cases where one house as of the date of departure is held, and an increase is made within two years from the date of departure;

Article 155 (Special Cases concerning One House for One Household)

(5) In cases where a person who possesses one house comes to own two houses by marrying a person who retains one house, or where a person who lives together with the lineal ascendant of 60 or more years old who retains one house comes to own two houses for one household as he/she marrys another person who possesses one house, the house which is first promoted within five years from the date of marriage shall be considered to be one house for one household, and Article 154 (1) shall be applicable.

D. Determination

(1) Article 154 (1) of the Enforcement Decree of the Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009) provides that "one house for one household as prescribed by the Presidential Decree" in Article 89 (1) 3 of the former Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009) provides that "one house for one household which the resident and his spouse together with the family members living together with the same address or same place of residence (hereinafter referred to as "one household") shall have one house in Korea as of the date of transfer and shall have three years or more, and it shall not be restricted in the retention period under each subparagraph of the proviso. Article 154 (1) of the Enforcement Decree provides that "one house for one household" shall be exempted from capital gains tax if the person possessing one house as of the date of departure and transfers it within 15 years after being married within 15 years or more, and it shall be applied to 15 years or more from the date of marriage house.

(2) According to the facts acknowledged above, the Plaintiff becomes a person holding two houses for one household due to marriage and transferred the instant house within five years from the date of marriage. Thus, the Plaintiff falls under the scope of Article 154(1) of the Enforcement Decree, but the Plaintiff did not fall under the scope of capital gains tax exemption under the main sentence of Article 154(1) of the Enforcement Decree, and the Plaintiff does not fall under the scope of capital gains tax exemption under Article 154(1) of the Enforcement Decree, and the Plaintiff’s acquisition of the instant house after the date of departure does not fall under the case of having one house as of the date of departure. Thus, the Plaintiff cannot be deemed a non-taxation of capital gains tax under Article

(3) Therefore, the Plaintiff’s assertion is without merit, and the instant disposition is lawful.

3. Conclusion

The plaintiff's claim is dismissed and the costs of lawsuit are assessed against the losing party.