Whether it is possible to file a revised return to the standard market price after reporting the transfer margin at the actual transaction price.

The content of the revised return is that the transfer income tax is determined by the standard market price, not by the change of the actual transaction price originally reported, and it is merely a change in the taxation method, so it cannot be considered as the object of

Article 96 of the Income Tax Act

1. The plaintiff's claim is dismissed.

2. Litigation costs shall be borne by the plaintiff.

The Defendant’s disposition of imposition of capital gains tax of KRW 137,267,970 for the Plaintiff on December 12, 2005 shall be revoked.

1. Details of the disposition;

A. On July 6, 2001, the Plaintiff acquired 333,50,000 square meters of land allotted by the authorities in recompense of development outlay for development outlay for 723.2 square meters in ○○○○○-dong, ○○○○○○○-dong (hereinafter “instant land”) and transferred the land to ○○ and ○○○○○ on November 7, 2003.

B. On January 31, 2004, the Plaintiff: (a) filed a preliminary return on capital gains on transfer of assets with the Defendant; and (b) at that time, the Plaintiff, along with documentary evidence, such as a sales contract, filed a statement that the actual transaction price of the land allotted by the authorities in recompense for development outlay was KRW 363,40,000, acquisition price of KRW 33,500,000; and (c) paid capital gains tax calculated accordingly.

C. As a result of a tax investigation, the Defendant notified the Plaintiff of the result of the tax investigation on October 18, 2005 that the Plaintiff would rectify the transfer income tax base and tax amount with the transfer amount confirmed on June 23, 2003 and August 19, 2003.

D. On November 30, 2005, the Plaintiff filed a revised return on the transfer value and acquisition value of the land allotted by the authorities in recompense for development outlay (hereinafter referred to as “the revised return of this case”) based on the standard market price of November 30, 2005, and additionally paid KRW 13,966,98 of the capital gains tax calculated accordingly.

E. As to this, the Defendant issued the instant disposition that imposed capital gains tax for 203,267,976 won (the acquisition value was the same as the reported value) on the Plaintiff on December 12, 2005, on the basis of the actual transaction value confirmed as a result of the tax investigation under the proviso of Article 114(4) of the former Income Tax Act (amended by Act No. 7837, Dec. 31, 2005) by deeming that the transfer value of the land allotted by the authorities in recompense for development outlay was not KRW 363,40,000, not KRW 660,000 originally reported by the Plaintiff (the acquisition value was the same as the reported value).

[Ground for Recognition: Facts without dispute, Gap evidence 1, Gap evidence 2, Eul evidence 1, 2, 3-1, 2, 1, 4-1, 2, 5-1, 2, 3, 6-1 through 5, Eul evidence 1, 2-2, 3 through 9, 10-1, 12, 11 of Eul evidence 10-2, 11 of Eul evidence 10]

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The transfer of the land allotted by the authorities in recompense for development outlay is a transfer of the land, which is the principle of the standard market price, or the Plaintiff’s right to acquire real estate due to mistake, and the transfer value should be calculated based on the standard market price with the knowledge that the transfer value should be calculated based on the standard market price at the time of later transfer. The disposition of this case where the Defendant imposed the transfer income tax calculated on the basis of the actual transaction price confirmed by the Defendant, disregarding the above revised return,

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) Whether transfer margin can be calculated based on the actual transaction price

The proviso of Article 114 (4) of the former Income Tax Act provides that "if a resident makes a preliminary or final return on the tax base of transfer income pursuant to Article 96 (1) 6 and the proviso of subparagraph 1 (a) of Article 97, if the returned value is different from the fact and confirmed by the chief of the district tax office or the director of the regional tax office having jurisdiction over the place of tax payment, the confirmed value shall be the transfer

In this case, as provided in Article 96 (1) 6 of the former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005), the Plaintiff reported to the Defendant on January 31, 2004, which was before the due date for the final return under Article 110 (1) of the Income Tax Act, along with evidential documents, the actual transaction price at the time of the transfer and the time of the acquisition of the land allotted by the development recompense for development outlay for development outlay for development outlay for the Republic of Korea, which was before the due date for the final return under Article 110 (1) of the Income Tax Act. After doing so, the Defendant confirmed the transfer price of the land allotted by the development recompense for development outlay for development outlay for development outlay for the Republic of Korea as KRW 343,40,000, not KRW 660,000 which was initially reported by the Plaintiff, and issued the disposition in this case with the confirmed value as the transfer price. Accordingly, the disposition in this case is lawful

(2) Whether the revised report of this case is legitimate

In general, if a revised tax return is filed for the national tax that adopts the return system, the tax liability is determined by the original return, and the revised tax amount should be determined without the decision filing of a separate tax authority even at the time of the revised tax return

In this case, the plaintiff's revised return was legitimate, and the plaintiff filed a revised return on the tax base of transfer income and the tax amount of the land allotted by the authorities in recompense for development outlay on January 31, 2004 as the actual transaction price. After that, the revised return was not filed from May 1, 2004 to 31, which is the period for filing the tax base of transfer income and the final return of tax amount pursuant to Article 110 (1) of the Income Tax Act. The defendant sent a notice of tax investigation as a result of the actual transfer confirmed by the tax investigation after the expiration of the above final return period, and then changed the method of calculating transfer margin to the standard market price, knowing that the transfer income tax would be much more than the amount initially scheduled, as the defendant sent the notice of tax investigation as the result of the actual transfer confirmed by the tax investigation. Thus, even in such a case, if the revised return is deemed legitimate, the revised return of this case is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case seeking revocation on the premise that the disposition of this case is unlawful is dismissed as it is without merit. It is so decided as per Disposition.

[Seoul High Court Decision 2007Nu12332, Dec. 04, 2007]

1. The plaintiff's claim is dismissed.

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

The judgment of the first instance shall be revoked. The defendant's disposition of imposition of capital gains tax of KRW 137,267,970 against the plaintiff of December 12, 2005 shall be revoked.

The court's explanation on the instant case is identical to the reasoning of the first instance court's judgment, and thus, citing it as it is in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil

Therefore, the judgment of the first instance is just, and the plaintiff's appeal is dismissed as it is without merit, and it is so decided as per Disposition.