Calculation of Tax Base for capital gains, such as land;

In calculating capital gains on the transfer of land, etc., only the book value as at the time of transfer shall be deducted from the transfer value, and other expenses incurred in directly paying for the transfer of the relevant land shall not be deducted.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposing corporate tax of KRW 1,597,317,390 against the Plaintiff on November 1, 2008 shall be revoked.

1. Circumstances of the disposition;

A. The Plaintiff was established on February 27, 2004 for the purpose of real estate development business, real estate sale and lease business, etc., and was engaged in real estate sale and purchase business after completing business registration on March 3, 2004.

B. With respect to the land for non-business of the corporation transferred during the business year 2007, the Plaintiff reported and paid the total amount of KRW 13,90,198,510 less the book value of KRW 13,909,344,497 and sales commission of KRW 4,557,704,636 for the sale of the pertinent real estate as capital gains, and KRW 4,423,149,377 as corporate tax, and KRW 1,31,97,736 to the Defendant.

C. However, the Defendant, as the tax base of corporate tax under Article 55-2 of the Corporate Tax Act, should be calculated by subtracting the book value at the time of transfer from the transfer value of land, etc., so it seems that the transfer expenses such as sales commission cannot be deducted here. Accordingly, on November 1, 2008, the Defendant additionally imposed corporate tax of KRW 1,597,317,390 (the corporate tax of KRW 5,083,278 based on the business year’s income + corporate tax of KRW 1,592,234,114, and less than KRW 1,55-2 of corporate tax on capital gains such as land, etc. (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 3, Eul evidence No. 1 to 8, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Article 55-2 of the Corporate Tax Act provides that capital gains, such as a corporation’s land, shall be imposed on capital gains. Article 55-2 (6) of the Corporate Tax Act provides that only the book value at the time of transfer shall be deducted from the transfer value in calculating capital gains, and that other expenses such as sales commission directly paid for the transfer of the relevant land shall be deducted from the transfer value. As a result, it is against the essential part of the property right, and as a result, it does not discriminate against an individual without reasonable grounds, and the amount equivalent to actual expenses shall be regarded as income and the corporate tax shall be imposed unfairly on such income. Thus, this is unconstitutional against the constitutional guarantee of property

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

The following facts are acknowledged according to the relevant Acts and subordinate statutes, the evidence mentioned above, and the purport of the whole pleadings.

(1) According to Article 19(1) of the Corporate Tax Act and Article 19 of the Enforcement Decree of the Corporate Tax Act, which provides for the scope of deductible expenses to be deducted when calculating income for each business year, the book value at the time of transfer of the transferred asset and other expenses related to sales incurred at the time of transfer are completely different in its nature and stipulated as separate provisions. The book value is the amount calculated by adding or adding the amount of capital expenditure or depreciation under tax law to the acquisition value included in the book at the time of the acquisition of the tangible asset by a corporation as the tax book value.

(2) In the past, Articles 99 through 108 of the Corporate Tax Act provide that "special surtax shall be imposed uniformly on capital gains from the transfer of a corporation's land, etc., other than basic corporate tax, and Article 99 (3) provides that "the transfer value shall be calculated by deducting the acquisition value (No. 1) and the expenses directly paid to transfer the land, etc. from the transfer value (no. 2). However, upon the amendment of the Corporate Tax Act by Act No. 6558 of Dec. 31, 2001, the special surtax was abolished and instead the special surtax was newly established and the provisions of Article 5-2 of the Corporate Tax Act newly established to additionally pay corporate tax in cases where the land, building, etc. is transferred. In this case, Article 99 (3) provides that capital gains, such as land, etc. shall be the amount obtained by deducting only the book value

(3) Article 55-2 of the Corporate Tax Act, newly established as above, when the land price is likely to rise in future speculation (the land and building located in the area that is determined by the Presidential Decree, where the average land price for the immediately preceding quarter conducted by the Minister of Construction and Transportation in accordance with Article 28 of the Act on the Utilization and Management of the National Territory increases by more than 3/100 compared to that for the immediately preceding quarter or higher than 10/100 compared to that for the preceding quarter) is transferred, a tax amount calculated by multiplying the transfer income by 10/100 (20/100 in the case of unregistered land) shall be imposed, but when the Corporate Tax Act was amended as Act No. 7005 on December 30, 2003, the specific house was added to the taxable object, and the Corporate Tax Act was amended as of December 31, 2005, thereby adding the non-business land (from January 1, 2007) subject to taxation.

D. Determination

(1) In light of the provisions of the Corporate Tax Act and the legislative intent of Article 55-2 of the Corporate Tax Act, it is reasonable to view that Article 55-2 (6) of the Corporate Tax Act provides that the book value at the time of transfer shall be deducted from the transfer amount of the land, etc. when calculating the tax base for capital gains on the land, etc., and further, the expenses incurred in selling such land, such as sales commission, shall not be deducted from here.

(2) Furthermore, the abolition of the special surtax on capital gains from the transfer of a corporation’s land, etc. on December 31, 2001 and the establishment of the provisions of Article 55-2 of the Corporate Tax Act (Special Taxation on Capital Gains from Transfer of Land, etc.) was intended to flexibly cope with changes in the real estate market such as speculation recurrence. On December 31, 2005, the addition of non-business land under Article 55-2(1)3 of the Corporate Tax Act was intended to be subject to taxation on December 31, 2005, by putting the corporate tax on the corporation using land as a means of property increase, rather than using land for production purposes, on the corporate tax, it appears to be aimed at stabilizing the real estate market and recovering speculative gains by suppressing the demand for real estate speculation. The Corporate Tax Act does not apply mutatis mutandis to the criteria for determining non-business land, and it is difficult to view the transfer of a corporation and an individual as being subject to taxation on the same basis, and thus, it is difficult to view it as unreasonable or unreasonable by taking into account the legislative policy and policy issues.

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.