Whether the proviso of Article 170(1) of the Enforcement Decree of the Income Tax Act violates the parent law

In addition to the provisions of Article 23(2) and (4), Article 45(1)1, and Article 60 of the Income Tax Act, in case of calculating gains on transfer of assets, the interpretation that all the transfer and acquisition value must be determined either at least at the standard market price or at one of the actual transaction prices shall be applied differently from each other in determining transfer value and acquisition value. In other words, in calculating gains on transfer, one of the provisions that make it possible for the other to determine the acquisition value and transfer value based on the standard market price in the calculation of gains on transfer, and thus, the proviso of Article 170(1) of the Enforcement Decree of the Income Tax Act cannot be said to be a provision that does not meet the above mother law or the invalid provision that does not have any grounds for delegation.

Article 170 (1) of the Enforcement Decree of the Income Tax Act

Supreme Court Decision 82Nu221 Decided November 23, 1982, 83Nu593 Decided February 26, 1985

Plaintiff 1 et al., Counsel for the defendant-appellant

The Director of Gangnam District Office

Seoul High Court Decision 84Gu770 delivered on February 22, 1985

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal by the defendant litigant are examined.

1. According to the reasoning of the judgment below, the court below found that the plaintiffs acquired each land in the judgment of the plaintiffs and transferred it to the National Bank of Korea 251,260,000 won on January 6, 1983, and paid each transfer income tax and defense tax as indicated in the judgment by making the marginal profit from the transfer of each of the above land according to the standard market price of each taxation. The defendant is confirmed the actual transfer value of each of the above land, but the actual transfer value is not verifiable, and the actual transfer value is not confirmed, so the defendant shall be deemed to be the case and the proviso of Article 170 (1), Article 115 (1) 1 (c) of the Enforcement Decree of the Income Tax Act, Article 56-5 (5) 1 of the Enforcement Decree of the Income Tax Act, and the plaintiff's voluntary payment after deducting the prescribed tax amount. However, the provisions of the proviso of Article 170 (1) of the Enforcement Decree of the Income Tax Act as the mother corporation did not comply with the provisions of Articles 23 (4) and 45 (1) 1)1)1) of the Enforcement Decree.

2. However, examining the related provisions of the Income Tax Act at the time of transfer of assets at the time of the original adjudication, Article 23 (2) of the Income Tax Act (amended by Act No. 3576, Dec. 21, 1982; hereinafter the same shall apply) provides that the transfer income shall be calculated by deducting the necessary expenses, the amount of special deduction for transfer income, and the amount of transfer income under Article 45 from the total income accruing from the transfer of the relevant assets in sequential order. Article 45 (4) of the same Act provides that “The transfer value shall be calculated based on the standard market price at the time of transfer of the relevant assets: Provided, That if the Presidential Decree prescribes, “The necessary expenses to be deducted from the transfer value of the resident shall be calculated on the basis of the standard market price at the time of transfer,” and Article 45 (1) of the same Act provides that “The transfer value shall be calculated on any different basis from the standard market price at the time of transfer value from the standard market price at the time of acquisition.”

Article 170 (1) (proviso) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 1982, Dec. 31, 1982; hereinafter "the former Enforcement Decree of the Income Tax Act") provides that if a member is unable to investigate any actual transaction value at the time of transfer or acquisition even though it is obvious that the above provision refers to the actual transfer or acquisition value of assets in light of its nature, it is not consistent with the provisions on actual transaction value under the Income Tax Act, and it is not consistent with the provisions on actual transaction value under the Income Tax Act, and the concept of delegation under the Income Tax Act is expanded to the Enforcement Decree without any basis. The provisions of the Income Tax Act on the calculation of transfer margin on the calculation of transfer margin are based on the actual transaction value and the other is prohibited from being determined based on the standard market value, and thus, the interpretation of the proviso of Article 170 (1) of the former Enforcement Decree of the Income Tax Act, which is applicable to any of the parties or the proviso of Article 170 (1) of the former Enforcement Decree of the Income Tax Act, cannot be interpreted as invalid.

Unlike the opinion of the court below, the provision of the proviso of Article 170 (1) of the Enforcement Decree of the Income Tax Act, which was enforced from January 1, 1983, is not consistent with the provisions of the Income Tax Act, and the defendant's taxation disposition based on this provision is deemed invalid without any grounds for delegation, and it is reasonable to mislead the contents of the provision or apply the interpretation and application. Therefore,

3. Therefore, the judgment of the court below is reversed, and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee B-soo (Presiding Justice)