Examination-transfer-2015-011 ( November 03, 2015)

not borrowed, but at the cost of the transfer of real property

The total amount of income generated from the transfer of assets is defined as the transfer value. The term "total amount of income" means all income acquired in return for the transfer of the assets, and whether it constitutes a consideration shall be determined by whether the economic substance is in a quid pro quo relationship with the transfer of the assets regardless of the title under the principle of substantial taxation.

Article 94 of the Income Tax Act: Scope of Transfer Income

2016Guhap5086 Revocation of Disposition of Imposing capital gains tax

Ansan ○

○ Head of tax office

2017.04.05

- 2017.05.10

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of KRW 00,000,000 on January 2, 2015 against the Plaintiff was revoked.

1. Details of the disposition;

가. 원고는 2005. 2. 16. ◇◇시 ◇동 ×××-× 전 OOO㎡, 같은 동 ×××-× 전 OOO㎡, 같은 동 ×××-× 대 OOO㎡, 같은 동 ×××-× 대 OOO㎡를 매수한 후 2006. 12. 26. 위 ×××-× 및 ×××-× 토지 지상에 건물(OOO㎡)을 신축하였다(이하 위 4필지 토지와 위 건물을 통칭하여 '이 사건 부동산'이라 한다).

B. On April 30, 2012, the Plaintiff sold the instant real estate to Kim Jong-tae, and the Plaintiff reported and paid the transfer income tax on the sale of the instant real estate to the Defendant, the Plaintiff made a preliminary return of transfer income tax by making the transfer value of the instant real estate KRW 00 million and the tax amount payable accordingly KRW 0.

C. As a result of the Defendant’s investigation of capital gains tax on the Plaintiff from October 13, 2014 to October 31, 2014, the Defendant confirmed the deposit of KRW 000,000,000 cashier’s checks in the name of the Plaintiff on December 29, 201, and requested an explanation thereon. The Plaintiff submitted a written confirmation to the effect that the Plaintiff is a part of KRW 00,000,000 borrowed from Kim △△△△ (hereinafter “instant issues amount”).

D. However, on October 30, 2014, the Plaintiff submitted a written confirmation to the effect that “The key issue amount of the instant case is to receive as the purpose of resolving all claims and debt relations related to the instant real estate, such as penalty following the termination of the sales contract with AA,” with the Plaintiff.

E. Accordingly, on December 10, 2014, the Defendant deemed the instant key amount as part of the transfer price of the instant real estate and deemed the transfer value thereof as KRW 0 billion, and issued a disposition imposing capital gains tax of KRW 000,000 (hereinafter “instant disposition”) accordingly (hereinafter “instant disposition”).

F. On July 20, 2015, the Plaintiff appealed to the Tax Tribunal for the instant disposition, but the claim was dismissed on November 3, 2015.

Facts having no dispute over recognition, entry of Eul Nos. 1, 2, and 10 (including branch numbers, if any; hereinafter the same shall apply), the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The key issue amount of the instant case is not the transfer price of the instant real estate, which is the money borrowed from the father, Kim △△△△△ of Kim Jong-tae. Therefore, the instant disposition based on this premise is unlawful

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) Around October 201, the Plaintiff entered into a sales contract with EA to transfer the instant real estate in KRW 3 billion, and received KRW 000 million from EA as the down payment on October 26, 2011. ThisA, on January 9, 2012, applied for provisional attachment of the claim against the Plaintiff’s deposit claim in the name of the Plaintiff on the ground that the claim for the return of down payment amounting to KRW 00 million against the Plaintiff as the preserved right, and on January 12, 2012, ○○ District Court decided to accept the said application for provisional attachment on January 12, 2012 (○○ District Court 2012khap x x 2012). Meanwhile, thisA withdrawn the said application for provisional attachment on January 18, 2012.

2) On January 2, 2012, the Plaintiff paid KRW 00,000,000 in national taxes in arrears until January 2, 2012. On May 25, 2012, the Plaintiff transferred each of the instant real estate to the relevantB, which mediated the sale and purchase of the instant real estate, KRW 0,000,000,000 in total (= KRW 00,000,000 + KRW 00,000 in total).

3) On November 14, 2014, Kim △△△△△△, against the Plaintiff on December 27, 201, filed a lawsuit claiming that the Plaintiff would not pay the above loan, stating that, although the △△△△△△△ decided on December 30, 201 on the date on which the Plaintiff was due on December 30, 201, it would have leased KRW 0 billion (payment of KRW 000,000,000,000,000 calculated interest for the three year period) and that the Plaintiff appears to have acted.” The △△△△△△△△ brought a lawsuit claiming the payment of KRW 000,000,000 and the delayed payment damages therefor (Article 2014 x x x 6014).

4) The loan lawsuit was brought before the conciliation, and the Plaintiff and the Kim △△△△△ on July 7, 2015 paid KRW 000,000 to Kim △△△△△ on December 28, 2016. In the event of arrears, the Plaintiff paid KRW 200,000,000 to Kim △△△△△△△△△ on a yearly basis at the rate of 20% per annum from the day following the date of delinquency in paying the unpaid amount until the day of full payment. ② The Plaintiff created a collateral security with the consent of Kim △△△△△ for the security of paragraph (1) and changed the interest rate of paragraph (1) to 5% per annum. ③ The Kim △△△△△△△△ and the Plaintiff confirmed that the interest rate of KRW 00,000 has been paid from December 27, 2016.”

5) 원고는 김△△과의 위 조정에 따라 2017. 2. 3. 원고 소유의 ◇◇시 ◇동 ×××토지와 원고와 그의 아들 공동소유의 ◇◇시 ◇동 ×××, ×××-× 토지에 채권최고액 00억 원의 근저당권을 설정하여 주었다.

Evidence Nos. 10, Nos. 4 through 8, and 11 of the Grounds for Recognition, and the purport of the whole pleadings

D. Determination

1) Relevant legal principles

(A) Article 95(1) of the Income Tax Act provides that the total amount of income generated from the transfer of assets shall be the transfer value of the assets. Here, “total amount of income” shall not refer to the objective value of the assets concerned, but to all the income acquired by the transferor as a consideration for the transfer of the assets in a specific transaction. Whether the assets fall under the consideration shall be determined by whether the economic substance is in a quid pro quo relationship with the transfer of the assets in question, regardless of the pretext under the principle of substantial taxation (see Supreme Court Decision 92Nu2967 delivered on July 14, 192).

(B) Generally, the burden of proving the fact of taxation requirements in a lawsuit seeking revocation of tax disposition is a taxable person, but if it is revealed that the fact of taxation requirements has been presumed in light of the empirical rule in the specific litigation process, it cannot be readily concluded that the other party is an unlawful disposition that failed to meet the taxation requirements, unless the other party proves that the pertinent fact was inappropriate in the application of the empirical rule (see, e.g., Supreme Court Decision 97Nu13894, Jul. 10, 1998). Furthermore, barring any special circumstance, such as where the tax authority received a written confirmation of the fact of taxation from a taxpayer in the course of conducting a tax investigation, it cannot be readily denied the evidence of the written confirmation, unless there are special circumstances, such as where the written confirmation was forced against the intent of the originator, or where it is difficult to take it as evidentiary materials for the specific fact due to lack of the content (see, e.g., Supreme Court Decision 2001Du2

2) Determination

In light of the above facts and the overall purport of the evidence and arguments as to this case, the issue amount of this case is whether the economic substance is in a quid pro quo relationship with the transfer of the real estate of this case, and it is not considered as the loan of the plaintiff's assertion. Thus, the disposition of this case imposed including the transfer value of the real estate of this case is justifiable. Accordingly, the plaintiff's assertion is without merit.

① As seen earlier, on October 30, 2014, the Plaintiff prepared and submitted a written confirmation to the Defendant that “The key amount of the instant case will be received to the Defendant for the purpose of resolving the relationship of obligations and claims related to the instant real estate, such as penalty following the termination of the sales contract with AA,” and there is no circumstance to deem that the said written confirmation was prepared against the will of the originator or its content is incomplete.

② While entering into a contract to sell the instant real estate to thisA and receiving the down payment from the Plaintiff, the Plaintiff was obliged to pay KRW 00,000,000,000,000, which is an amount equivalent to the down payment received by entering into a sales contract for the instant real estate with Kim Il-young. In addition, the Plaintiff paid KRW 00,000,000 in national tax in arrears on January 2, 2012, and wired KRW 00,000,000 in total to the relevantB, which arranged the instant real estate, to the formerB, on May 25, 2012 and May 29, 2012. Each of the above expenses is the obligation to be borne by the Plaintiff related to the instant real estate, and the sum of each of the expenses is 00,000,000,0000 + the amount equivalent to the said confirmation document.

③ According to the Plaintiff’s assertion, Kim △△△’s lending of KRW 0 billion to the Plaintiff (payment of KRW 000,000,000 after deduction of KRW 00,000,000,000) with no physical collateral for three years after the due date for payment without any physical collateral. It is extremely exceptional for the Plaintiff to set and lend the said money at 1% per annum without any physical collateral and 3 years after the due date. In light of the relationship between the Plaintiff and Kim △△△△△△△ without any blood relation, it is difficult to gain a formal payment.

④ Around November 14, 2014, the Plaintiff submitted a written confirmation with the above content to the Defendant, and Kim △△△△ brought a lawsuit against the Plaintiff seeking reimbursement of the loan amount of KRW 000 million and damages for delay. Meanwhile, the said lawsuit was brought before the conciliation without going through a pleading, and the conciliation was concluded as seen earlier on July 7, 2015. In addition, according to Article 2 of the aforementioned conciliation protocol, the Plaintiff provided that the Plaintiff shall set up a collateral security right for securing the above loan obligation. However, the Plaintiff created a collateral security right with the maximum debt amount of KRW 00 million on the Plaintiff and his/her own real estate owned by the Plaintiff and △△△△△△△△△△△△△△△△△△△△△△△, which was more than one year and seven months after the said conciliation was established, and the Plaintiff did not obtain any reasonable repayment from the above △△△△△△△△△ before the formation of the conciliation.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.