National Tax Service Review and Transfer 2012-003 (2012.03.02)

Disposal that calculates gains on transfer by adding land and housing shall be illegal;

Where the transfer margin is calculated by using the actual transaction value after acquiring land and a house together, and the transfer margin is calculated by using the conversion value as the actual transaction value, it shall be calculated by distinguishing the transfer margin, and where the classification of land and a house is unclear, it shall be calculated by taking into account the standard market

2013Gudan1274 Revocation of Disposition of Imposing capital gains tax

GongAAAA

Head of Suwon Tax Office

April 24, 2013

May 15, 2013

1. The Defendant’s disposition of imposing capital gains tax of KRW 000 on the Plaintiff in August 1, 2011 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On March 25, 1995, the Plaintiff acquired and owned the land in this case and the two-story housing (hereinafter referred to as the “instant housing”) in Suwon-si OO 000 large scale 126 square meters and above that ground, and transferred the instant land to the Korea Land and Housing Corporation on November 16, 2010, respectively, at KRW 000, and at KRW 0000.

B. On January 31, 2011, the Plaintiff calculated gains from transfer by dividing the instant land and the instant housing into gains from transfer, and then filed a preliminary return of capital gains tax base. However, without recognizing the Plaintiff’s aforementioned calculation method, the Defendant calculated gains from transfer by combining the instant land and the instant housing, and determined and notified the Plaintiff of capital gains tax, such as the written order, on August 1, 201 (hereinafter “instant disposition”).

D. The Plaintiff dissatisfied with the instant disposition and filed a request for examination with the Commissioner of the National Tax Service on January 5, 2012, and the Commissioner of the National Tax Service dismissed the Plaintiff’s request for examination on March 2, 2012.

[Ground of Recognition] Facts without dispute, Gap evidence 1, Eul evidence 2 through 4, Eul evidence 5, Eul evidence 6-1, 2, and Eul evidence 1.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In this case, where the transfer value or acquisition value is calculated based on the actual transaction value and where land and buildings are acquired or transferred along with each other, it is necessary to separate the transfer margin pursuant to Article 100(2) of the Income Tax Act, and the defendant calculated the transfer margin by combining the land and the housing of this case without any legal basis without violating it, and the disposition of this case against the plaintiff by the defendant is unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

The respective provisions and purport of the above-related Acts and subordinate statutes are in violation of Article 100(2) of the Income Tax Act (amended by Act No. 10408, Dec. 27, 2010; hereinafter the same) that the Defendant calculated gains from transfer after aggregating the instant land and the instant land and the instant housing, and that the instant disposition against the Plaintiff based on which the Defendant did so is unlawful.

1) Land and housing are separate real estate subject to imposition disposition of capital gains tax, respectively.

2) In the instant case, in cases where gains on transfer are calculated by dividing the transfer value by the price at which the actual transaction took place after acquiring the land and a house together with the transfer value, as described in the instant case, and by converting the acquisition value into the conversion value, the gains on transfer shall be calculated separately pursuant to Article 100(2) of the Income Tax Act, and, however, where the distinction between the value of the land and a house is unclear, Article 166(6) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22395, Sept. 20, 2010; hereinafter the same shall apply) and Article 48-2(4) proviso to the Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 22395, Sept. 20,

3) Article 164(7) of the Enforcement Decree of the Income Tax Act, where the Defendant, based on the instant disposition, is merely a provision regarding the method of calculating the standard market price at the time of acquiring a house acquired before the individual housing price under the Public Notice of Values and Appraisal of Real Estate Act is publicly notified or publicly notified, and where the Defendant acquired a house together with the land in this case and transferred it, it is not a ground provision for calculating the transfer margin at once by adding the land and the

4) On May 2012, the capital gains tax report published by the National Tax Service stated that “where the individual house price announced together with the land attached thereto is transferred, the actual transaction price for each asset shall be based on the separately classified value, and where the price of the land and the house concerned is unclear, each actual transaction price shall be calculated in proportion to the standard market price, etc.” and the criteria for enforcement of the Income Tax Act that is published by the National Tax Service in the information system of national tax statutes also includes the same purport.

3. Conclusion

The plaintiff's claim of this case is justified and accepted.