In calculating necessary expenses for capital gains tax, it is difficult to recognize the retroactive appraisal value as acquisition value after six months from the date of commencing the inheritance.

It is difficult to view that the appraisal value retroactively made after ten years or more from the commencement date of the inheritance reflects the objective value, taking into account the passage of time and sudden changes in the surrounding environment, etc.

Article 97 (Calculation of Necessary Expenses in Transfer Income)

2019Guhap56043 Revocation of Disposition rejecting capital gains tax rectification

ZO

O Head of tax office

July 5, 2019

August 23, 2019

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

On September 10, 2018, the part of the disposition rejecting capital gains tax correction filed by the Defendant against the Plaintiff which exceeds the OO won shall be revoked.

1. Details of the disposition;

A. On May 21, 2008, the Plaintiff acquired an OOO-dong OOOOO-dong OOOOO-dong building and its ground buildings (hereinafter “the instant real estate by adding the above land and buildings”) by inheritance by agreement or division.

B. On June 19, 2017, the Plaintiff entered into a sales contract with AA for the instant real estate as OO for the purchase price, and completed the registration of ownership transfer with AA for the instant real estate on September 1, 2017.

C. On November 30, 2017, the Plaintiff reported and paid KRW 334,728,934 of the capital gains tax calculated by evaluating the acquisition value of the instant real estate as the standard market price at the time of May 21, 2008, which was the date commencing the inheritance (=land 414,407,00 + building 27,868,424 won).

(d) After June 2018, the Plaintiff requested the appraisal corporation at the place of the instant real estate to calculate the appraisal value as of May 21, 2008, which was the date of commencing the inheritance on the basis of the period from May 21, 2008, and the appraisal results*,**,**,***,******,***,*******,***,*****,***) and**,******************************************?****?***?*******??**?****???**??

E. The Plaintiff: (a) deemed the market price at the time of commencing the inheritance of the instant real estate as at the date of commencing the inheritance; (b) again calculated capital gains tax on July 12, 2018; and (c) requested reduction or correction of the content that the amount of capital gains tax already reported and paid was to be reduced to KRW 8,429,014 on the ground that the amount of capital gains tax was reduced to KRW 8,429,014.

F. On September 10, 2018, the Defendant rejected the Plaintiff’s request for correction on the ground that the instant appraisal value does not fall under the appraised value within six months before or after the appraisal base date, and thus cannot be seen as acquisition value (hereinafter “instant disposition”).

G. The Plaintiff dissatisfied with the instant disposition and filed a request for review with the Commissioner of the National Tax Service on October 12, 2018, but the Commissioner of the National Tax Service dismissed the request on January 23, 2019.

2. Summary of the plaintiff's assertion

In calculating capital gains tax, the acquisition value of the assets acquired by inheritance shall be calculated as the market price at the time of acquisition. In cases where there exists the appraisal value by a reliable appraisal institution, it shall be included in the market price recognized as the market price even rather than the appraisal value within the evaluation period. Therefore, the instant disposition made on the grounds that it cannot be deemed as the acquisition value is unlawful

3. Relevant statutes;

It is as shown in the attached Form.

4. Determination

A. Relevant legal principles

1) According to Article 97(1)1(a) of the former Income Tax Act (amended by Act No. 15225, Dec. 19, 2017; hereinafter the same) and the main sentence of Article 163(9) of the Enforcement Decree of the Income Tax Act, the acquisition value that is deducted as necessary expenses in the calculation of gains on transfer refers to the actual transaction value at the time of acquisition of the assets. In the case of inherited assets, the value appraised under Articles 60 through 66 of the Inheritance Tax and Gift Tax Act as of the commencement date of inheritance is deemed as the actual transaction value at the

2) According to Article 60(1) and (2) of the former Inheritance Tax and Gift Tax Act (amended by Act No. 15224, Dec. 19, 2017), the value of the property on which inheritance tax is imposed shall be the market value as of the commencement date of inheritance, and such market value includes the value deemed to be normal in cases of free transactions between many and unspecified persons, and the value deemed to be the market value as prescribed by Presidential Decree, such as the expropriation and public sale price, and the appraisal price. Article 49(1)2 (a) and (b) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 28638, Feb. 13, 2018) is one of the “value recognized as the market value as prescribed by Presidential Decree” in Article 49(1)2 (a) and (b) of the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Act No. 15224, Dec. 19, 2017).

3) However, Article 97 (1) 1 (b) of the former Income Tax Act provides that "where it is impossible to confirm the actual transaction value at the time of acquisition, it shall be based on the transaction example value, appraisal value or conversion value as prescribed by the Presidential Decree." Article 163 (12) of the Enforcement Decree of the Income Tax Act delegated by him provides that "the value of transaction example, appraisal value or conversion value as prescribed by the Presidential Decree" means the value under Article 176-2 (2) 1 (b) of the former Income Tax Act. The main sentence of Article 176-2 (3) of the former Income Tax Act provides that "where the transfer value or acquisition value is estimated or revised by applying the following method in the order of priority, it shall be based on the value calculated by applying the following method in order." Article 97-2 (2) 2 (b) of the former Income Tax Act provides that "if there is an appraisal value which is evaluated by two or more appraisal business entities within three months before and after the date of transfer or acquisition (limited to the appraisal value within three months after the date or acquisition date).

4) As seen earlier, as regards inherited property, Article 163(9) of the Enforcement Decree of the Income Tax Act provides that “The value assessed under Articles 60 through 66 of the Inheritance Tax and Gift Tax Act shall be deemed as acquisition value.” Thus, Article 97(1)1(b) of the former Income Tax Act and Article 163(12) of the Enforcement Decree of the Income Tax Act shall not be deemed to apply. However, the “actual transaction value”, which serves as the basis for calculating gains on transfer, means the actual transaction price itself or the price for the benefit at the time of the transaction, and it is not always the same as the general market value that reflects objective exchange values at all times (see, e.g., Supreme Court Decision 2009Du19465, Feb. 10, 201). As such, since it is impossible to verify the actual transaction value in the original meaning of “acquisition value”, it is necessary to apply the criteria for the evaluation of credibility and credibility beyond the strict period for the evaluation of inherited property.

B. Whether the appraisal value of the instant case can be viewed as acquisition value

1) In light of the following facts and circumstances acknowledged by comprehensively taking account of the purport of the entire pleadings, it is difficult to view the appraisal value of the instant real estate as the acquisition value of the instant real estate.

① The instant appraisal value is not the average value of the appraisal value assessed by two or more reliable appraisal institutions within six months before and after the date of commencing the inheritance, but is merely one of the appraisal values assessed retroactively after the lapse of at least ten years from the date of commencing the inheritance. However, considering the passage of time and rapid change in the surrounding environment, etc., it is difficult to view that the instant appraisal value reflects the objective value generally established when a transaction is freely made between many and unspecified persons at the time of commencing the inheritance.

② 원고가 이 사건 부동산을 상속받은 데 대한 상속세 부과제척기간은 그 법정신고기한(상속개시일이 속하는 달의 말일로부터 6개월)의 다음날부터 10년이므로, 피고는 상속개시일인 2008. 5. 말로부터 6개월이 되는 날의 다음날인 2008. 12. 1.부터 2018.11. 30.까지 원고에게 상속세를 부과할 수 있다. 그런데 원고는 당초 기준시가를 기준으로 이 사건 부동산에 대한 상속세를 신고・납부한 뒤, 상속세 부과제척기간에 거의 근접한 시기인 2018. 6.경에서야 두 곳의 감정평가기관에 이 사건 부동산에 대하여 상속개시일을 평가기준일로 한 감정평가를 의뢰하였고, 그에 따른 두 개의 감정가액의 평균값을 기준으로 이 사건 부동산의 취득가액을 재계산하여 양도소득세 경정청구를 하였다. 이와 같은 사정을 고려하면 원고는 상속세 부과제척기간이 도과될 무렵 양도소득세 감액을 목적으로 위 각 감정평가를 의뢰한 것으로 보여, 그에 따른 감정이 객관적으로 이루어진 신빙성 있는 것이라고 보기 어렵다. 또한 두 곳의 감정평가기관은 이 사건 부동산에 대한 감정가액을 산정함에 있어 모두 동일하게 비교표준지를 'OOO동 1-**'로 선정하고, 거래사례의 경우 역시 동일하게 'OOO동 1-##'로 선정한 것으로 보이는데, 위와 같은 비교표준지 및 거래사례 선정이 과연 적절한지 여부에 대해서도 의문이다.

(3) Where inherited property becomes an object of transfer of inheritance later, it is logical reasonable that the original return value of inheritance tax becomes the acquisition value of transfer income tax. For this reason, Article 97(1)1 (a) of the former Income Tax Act and Article 163(9) of the Enforcement Decree of the Income Tax Act shall apply mutatis mutandis to the calculation of the acquisition value of inherited property under Article 97(1)1 (a) of the former Income Tax Act and Article 163(9) of the Enforcement Decree of the Income Tax Act. Considering this, it is difficult to view that the appraisal value acquired through retroactive appraisal for the purpose of reducing transfer income

④ In cases where inherited property is transferred, the value corresponding to the tax base of inheritance tax may be recognized as necessary expenses for the calculation of transfer margin and the imposition of transfer income tax may prevent tax evasion or double taxation only when the transfer value exceeds the above value. As such, the acquisition value, which is necessary expenses to be deducted from the value of inherited property and the transfer value, should be the same. However, even if the Plaintiff reported and paid the inheritance tax based on the standard market price of the real estate of this case, even if the Plaintiff reported and paid the inheritance tax based on the standard market price of the real estate of this case, at the time when the exclusion period for imposition of inheritance tax expires, the acquisition value of the real estate of this case calculated by retroactive appraisal, which is much higher than the above standard market price, as the acquisition value of the real estate at the request for reduction and correction of inheritance tax, most of the exclusion period for imposition of inheritance tax cannot be imposed on the same Do and the acquisition value, which is necessary expenses to be deducted from the value of inherited property and the transfer value, cannot be prevented. In fact, the exclusion period for imposition of inheritance tax

2) Therefore, the Plaintiff’s rejection of the Plaintiff’s request for correction by deeming the instant appraisal value as acquisition value.

The defendant's disposition of this case is legitimate.

[On the other hand, while Article 163 (9) of the Enforcement Decree of the Income Tax Act, which is a provision on the legal fiction of acquisition value of inherited assets, is deemed as acquisition value under the provisions of Articles 60 through 66 of the Inheritance Tax and Gift Tax Act, the plaintiff excluded the conversion value under the provisions of Article 97 (1) 1 (b) of the former Income Tax Act, which is contrary to the parent law, and there is no ground to delegate the parent law, and thus is unlawful and null and void, and the disposition of this case based on the premise that the above provision of the Enforcement Decree is applicable also illegal. However, the above provision of the Enforcement Decree cannot be deemed as a provision on the legal basis of Article 97 (5) of the former Income Tax Act, which delegates necessary matters such as "the scope of actual transaction value required for acquisition" so that it can be determined by the Presidential Decree, and it cannot be deemed as an invalid provision without delegation of the mother law (see the above Supreme Court Decision 200Du1660, May 26, 201).

5. Conclusion

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