Whether special deduction from long-term possession is possible when calculating necessary expenses for capital gains;

When calculating necessary expenses for capital gains, LPG parking lots are not subject to special deduction for long-term possession.

Article 104-3 of the Income Tax Act

2014Gudan15101 Revocation of Disposition of Imposing capital gains tax

AA

BB Director of the Tax Office

Seoul Administrative Court Decision 2014Guhap3990 decided October 23, 2014

July 30, 2015

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of KRW 100,764,940, among the disposition of imposition of KRW 158,55,160, the capital gains tax for the year 2010 imposed on the Plaintiff on August 6, 2013, is revoked.

1. Details of the disposition;

A. On February 26, 2001, the Plaintiff acquired OO-O-O miscellaneous land, and operated a LPG gas charging station at a place, and transferred the instant land and its ground buildings (hereinafter “instant building”) to CC Co., Ltd. on or around October 31, 201.

B. On December 31, 2010, the Plaintiff filed a preliminary return on the tax base of capital gains by applying the special deduction for long-term holding on the premise that the entire land of this case constitutes the land for business use.

C. On August 6, 2013, the Defendant: (a) on the Plaintiff, the part of the instant land, the size of OO.O.O.O.O.O.M. portion (hereinafter “instant land”) of which is seven times the floor area of the instant building is considered as the land for business; (b) on the ground that the part of O,O.O.O.O.M. portion (hereinafter “the instant land”) in excess is the land for non-business use; (c) thus, the Defendant corrected and notified OO,OO, andOO(the amount calculated by deducting the already paid tax amount) of capital gains tax calculated by excluding the application of the special deduction provision for long-term possession of the instant land.

D. The Plaintiff filed an appeal with the Tax Tribunal on November 7, 2013, but the said appeal was dismissed on July 29, 2014.

[Reasons for Recognition] Facts without dispute, Gap 1, 2 evidence, Eul 1 evidence (including paper numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff, from the high-sea market, operated POG gas charging business on the instant land with the permission for the LPG gas charging business. LPG gas charging stations ought to maintain safety distance as hazardous materials facilities, and the minimum area necessary for maintaining safety distance is the permitted area. The Plaintiff was imposed an integrated taxation on the entire land of the instant case. Accordingly, the O orOOOOM size legally permitted among the instant land was actually used as a business site, and if all citizens are not aware of it as land for business, it should be recognized as land for business even if it is not prescribed as land for business under the Income Tax Act.

B. Determination

In light of the principle of no taxation without law, or the requirements for tax exemption or tax exemption, the interpretation of tax laws shall be interpreted as the text of the law, barring any special circumstance, and it shall not be extensively interpreted or analogically interpreted without reasonable grounds. In particular, it accords with the principle of fair taxation to strictly interpret that the provision that is clearly considered as a preferential provision among the requirements for tax exemption or exemption accords with the principle of fair taxation (see, e.g., Supreme Court Decisions 97Nu2090, Mar. 27, 1998; 2002Du9537, Jan. 24, 2003).

Article 104-3 (1) 4 (c) of the former Income Tax Act (amended by Act No. 10408, Dec. 27, 2010; hereinafter referred to as the "Income Tax Act") provides that "the land prescribed by Presidential Decree as having considerable grounds for deeming that it has direct relations with residence or business considering the situation of the use of the land, whether the obligation under the relevant Act was fulfilled, and the amount of income, etc. shall be excluded from the land for non-business." Accordingly, Article 168-11 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 26302, Jun. 1, 2015) lists the scope of the land excluded from the non-business land. Since the business site of the LPG gas filling station like the instant land is not defined as one of the land excluded from the non-business land, the land of this case including the instant land has been used as the business site of the LPG gas filling station, and it is difficult to interpret the concept of the land as the land within 20.

Article 182(1)2 and 3 of the Act provides that the land subject to the separate aggregate taxation of property tax or the separate taxation of property tax shall be excluded from the land for non-business use. In light of the purport of the whole argument in the statement in Eul evidence No. 2, the land at issue at issue at issue at issue at issue at issue at issue in this case is not the land subject to the separate taxation of property tax or the separate taxation of property tax, and the land at issue at issue at issue at issue in this case cannot be seen as the land excluded from the land for non-business use under the Income Tax Act. Accordingly, the issue at issue at issue at issue in this case is deemed as the land for non-business use, and the defendant's disposition at issue

3. Conclusion

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