National Tax Service Review Division 2011-0124 (2012.03.02)

Since the act of selling and selling real estate is shown as part of the business activity aimed at profit, it shall be viewed as business income.

Since the plaintiff's act of selling and selling real estate is judged to be conducted with continuity and repetition to the extent that it can be seen as part of the business activity for profit, the disposition imposing global income tax on business income is legitimate.

201Guhap3591 Revocation of global income, disposition, etc.

xAA

Head of Changwon Tax Office et al.

May 3, 2012

July 5, 2012

1. The plaintiff's claim is dismissed.

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

On January 17, 201, the head of the defendant Kimhae Tax Office revokes each disposition imposing 00 won of value-added tax for the second term of 2005, and 000 won of value-added tax for the first term of 2006 as of February 1, 201, and the head of the defendant Changwon Tax Office imposes 00 won of global income tax for the first term of 2005 as of February 1, 201, and 00 won of resident tax for the first term of 2005, and 000 won of global income tax for the first term of 2006, and 200 won of resident tax for the second term of 206.

1. Details of the disposition;

A. The Plaintiff, like the details of real estate transactions as indicated in the separate sheet, determined that the Plaintiff’s above real estate transactions were real estate transactions subject to business income, and the Defendants determined that the Plaintiff’s above real estate transactions were 4 items at least 1 to 4 items in the transaction number 2005 and 2006 among the above real estate transactions (hereinafter referred to as “the instant transaction,” and “the pertinent real estate”), and Defendant Sea Tax Office notified Defendant on January 17, 201 that the value-added tax for the second term in 2005 and the value-added tax for the first term in 1, 2006 was 00 won for the global income tax for the year 205 and 000 won for the global income tax for the year 200 and 2000 won for the global income tax for the year 200 and 000 won for the global income tax (hereinafter referred to as “resident tax”).

B. On March 9, 2011, the Plaintiff dissatisfied with the above disposition, filed an objection with the Busan Regional Tax Office, but received a dismissal decision, and on June 22, 201, received a dismissal decision again from the National Tax Service (the Plaintiff was served on September 16, 201 by the National Tax Service’s rejection decision).

[Reasons for Recognition] The non-sured facts, Gap evidence 1 to 4, Eul evidence 1 and 2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The defendants judged that the plaintiff's real estate transactions were real estate sales business, but the plaintiff did not develop, divide, or construct real estate, and the plaintiff's act did not fall under the real estate sales business, and the plaintiff's act did not fall under the real estate sales business, and the plaintiff's act did not fall under the real estate sales business, and the plaintiff's act did not fall under 1) continuously and repeatedly, and 2) the plaintiff had real estate for at least one year in the transaction in this case, and 3) the plaintiff did not develop the real estate in this case. The profits the plaintiff acquired from the transaction in this case are natural prices increase only, and 4) the plaintiff did not have the appearance of the non-real estate sales business by opening an office or using an employee in the transaction in this case. In full view of these circumstances, income from the transaction in this case

B. The defendants' assertion

① The Plaintiff owns companies engaged in real estate sales, construction, and construction. ② The Plaintiff acquired 65 parcels from 2001 to 2006 on 8 occasions, transferred them over 11 occasions, and the period of possession was 1 to 3 years, and ③ Article 1(2) of the Enforcement Rule of the Value-Added Tax Act is merely an exemplary one, and ④ Article 1(2) of the Enforcement Rule of the Value-Added Tax Act shows the appearance of the Plaintiff as real estate sales business entity in the transaction of non-real estate of this case. The Plaintiff’s real estate transaction should be seen as real estate sales business entity.

C. Relevant statutes

Paper in the Appendix

D. Determination

1) Whether the Plaintiff’s act does not constitute a real estate business

The real estate supply business (Classification No. 7012) under the former Korean Standard Industrial Classification includes "a resale without leasing or operating any purchased real estate", and this part of the plaintiff's assertion is without merit.

2) Whether the Plaintiff’s act satisfies the external appearance of the real estate sales business

A) Whether the income from the transfer of real estate is business income or capital gains under the Income Tax Act shall be determined according to social norms, taking into account the transferor’s acquisition and possession of real estate, the existence of the transferor’s acquisition and creation, the size and frequency of the transfer, the other party, etc., as well as the continuity and repetition of business activities to the extent that the transfer aims at profit. In making such determination, not only about the relevant transferred real estate but also about the entire real estate owned by the transferor, and all circumstances surrounding the time when the transfer took place throughout the entire real estate owned by the transferor should be taken into account (see Supreme Court Decision 2008Du21768, Jul. 22, 2010).

B) In full view of the following circumstances, the plaintiff's transaction in this case is considered to have been conducted with continuity and repetition to the extent that it can be seen as part of the business activity for profit purposes, and the income which the transaction in this case was conducted through the transaction in this case constitutes business income.

(1) The plaintiff is involved in the real estate trade, construction, and construction as follows. The plaintiff, and (1)BB construction was established on April 21, 2004, after the purchase of the real estate substitute part in the separate sheet, and (2) BB construction andCC construction (State) major types of business are not real estate sales, and (3) DoD development, and (ju) EE industry are merely the investment company of the plaintiff, and it is not unrelated to the plaintiff. However, the facts that the transaction in this case was made after the establishment of the BB construction are described above, and that the entries in Gap 15 through 29 alone are not related to real estate sales, and that it is difficult for the plaintiff to see that (B)B construction andCC construction (State) were established on April 21, 204, and that there is no other abstract evidence that the plaintiff's testimony and the witness in this part are not available to the above plaintiff, or that the plaintiff's testimony and the witness in this case are not available to it.

(2) The Plaintiff acquired 65 parcels of real estate over 8 occasions from 2001 to 2006 as indicated in the separate sheet, and transferred them over 11 times, and the period of possession was from 1 to 3 years, and the purchaser of 4 real estate as indicated in the separate sheet also received value-added tax at the time of selling 4 real estate as indicated in the separate sheet. As to this, the Plaintiff asserted that (i) the Plaintiff sold 9 to 15 parcels of real estate to the development of the golf practice range industry (state) in order to carry out the initial golf practice range project, and (ii) the purchaser of the above real estate had difficulty in carrying out the original golf practice range project, and (iii) the purchaser of the above real estate had acquired 5 parcels of real estate at Kim Sea, and (iv) the other real estate purchaser had no ownership registration number 7 and 8.12 to 15 of real estate at the time of sale, and (iii) the Plaintiff had no ownership registration number 208 to 200, 2014.

살피건대，(1) 주장은 이를 입증할 만한 증거가 부족하고(오히려 갑 6호증의 기재에 의하면 원고는 김해시 주촌면 OO리 000， 000 2필지를 QQ산업개발(주)， 백RR， 이SS에게 분할매각한 것으로 보이며， 가사 위 (1)， (2) 주장과 같은 사정이 존재한다 하더라도， 그러한 사정만으로 원고가 별지 기재 거래내역과 같이 길지 않은 기간 동안 수십 필지의 부동산을 매수 및 매각하여 상당한 시세차익을 얻은 이상 원고의 부동산 매매행위의 계속성， 반복성이 탄핵된다고 보기 어렵다)， ② 주장의 경우 을 4호증의 기재에 의하면 원고와 황진판 사이에는 부가가치세를 별도 지급받기로 하는 약정이 있었 음을 인정할 수 있는바， 증인 조FF의 증언만으로는 그 반증으로 부족하고 달리 증거 가 없는바， 이를 종합할 때 원고의 이 부분 주장은 받아들이지 아니한다.

C) Determination on other allegations

In addition, the plaintiff asserts that the instant transaction does not fall under General Rule 19-7 of the Income Tax Act, and that there is no room for the plaintiff to advocate the appearance of real estate sales business in a way such as the opening of the office, employment, etc., but the General Rule 19-7 of the Income Tax Act is only one of the reference elements in determining the business feasibility of the plaintiff, and the plaintiff's office, establishment of the plaintiff's office, and employment of employees, etc. are not accepted.

3) Accordingly, the instant disposition is lawful.

3. Conclusion

Then, the plaintiff's claim of this case is dismissed for reasons.