Whether the transfer constitutes a short-term transfer and the calculation of acquisition value are appropriate;

It is inevitable to prevent a third party from winning the gift tax, and to bear the expenses for marriage in person, and it is reasonable to calculate the transfer margin with the standard market price at the time of the transfer of short-term gift assets.

Article 96 of the Income Tax Act: Evaluation of Real Estate under Article 61 of the Inheritance Tax and Gift Tax Act, etc.

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The Defendant’s disposition of imposition of KRW 119,880,960 on June 7, 2005 against the Plaintiff was revoked.

1. Details of the disposition;

A. On July 26, 200, the Plaintiff: (a) donated 00-1 forest 000 square meters from ○○○○○○○-gun, ○○○○○○, 00 square meters from 00-1 forest , 00 square meters from 00-2 forest , 00 square meters from 00-3 forest 00 square meters from 1/2 shares in each of the same Ri, and 00-3 forest 00 square meters from 00 square meters in each of the same Ri (hereinafter “1 land”); and (b) donated 1/2 shares in each of the land and 000 square meters in the same Ri (hereinafter “2 land”); (c) on February 7, 2001, the Plaintiff reported the transfer income tax to the Defendant on February 4, 200; and (d) reported the transfer income tax to 00 square meters in calculating the transfer income tax base as the standard market price.

B. On June 7, 2005, the Defendant: (a) deemed that the Plaintiff’s transfer of the instant land falls under the case of transfer of real estate within one year after the acquisition under Article 96(1)4 of the former Income Tax Act (amended by Act No. 6429, Mar. 28, 2001; hereinafter “former Income Tax Act”); and (b) calculated gains on transfer by taking the transfer as the actual transaction value; (c) the acquisition value as the value assessed according to the standard market price at the time of donation (taxable value of gift tax) as the value assessed according to the standard market price at the time of donation; (d) determined and notified the Plaintiff of KRW 83,107,230 for the transfer of 1/2 shares in the land and KRW 36,773,730 for the transfer of 1/2 shares in the land (hereinafter “instant disposition”).

D. On January 10, 2006, the Plaintiff filed a request for an inquiry with the National Tax Tribunal, and received a decision of dismissal on April 27, 2006.

[Recognizing Facts] Evidence No. 1-1, 2, Evidence No. 2-1, 2-2, Evidence No. 7, Evidence No. 9-1, 2, and Evidence No. 1-3, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The Plaintiff’s transfer of the instant land within one year from the date of donation is not for the short-swing profit, but rather for the purpose of selling the instant land without any choice to prevent the mother’s housing, which had been in progress after the death of leap○○, from showing a successful bid to a third party and to bear his marriage expenses. This constitutes “where the instant land is transferred within one year from the date of acquisition due to unavoidable reasons” under Article 162-2(4) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 17158, Mar. 27, 2001; hereinafter “Enforcement Decree of the Income Tax Act”), and thus, the transfer value should be calculated based on the standard market price when calculating the transfer income tax of the instant land, but otherwise, the instant disposition of taxation, which is calculated by deeming the actual transaction

(2) Article 162-2(4) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 17825, Dec. 30, 2002; Article 162-2(4) of the Enforcement Decree of the Income Tax Act provides that the transfer value shall be calculated based on the standard market price even in the case where the real estate acquired by inheritance is transferred within one year after its acquisition. In light of the fact that Ma○○ was in the state of Ma○ at the time of the donation of the instant land to the Plaintiff, and that Ma○○ was deceased after the date of the actual donation, the transfer value shall be calculated based on the standard market price, because the substance does not differ from the inheritance. However, the instant disposition in which the transfer value is calculated based on the actual transaction price, not based on the standard market

(3) In calculating gains on transfer, Article 100(1) of the Income Tax Act provides that when the transfer value is based on the actual transaction value, the acquisition value shall be based on the actual transaction value, and when the transfer value is based on the standard market price, the acquisition value shall also be based on the standard market price. However, Article 163(9) of the Enforcement Decree of the Income Tax Act provides that the transfer value shall be based on the standard market price by setting a different evaluation method of the acquisition value and expanding the transfer margin excessively in accordance with Article 100 of the former Income Tax Act, which

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1) On July 26, 200, 000 square meters for the instant land and ○○○○○○ ○○○○○○○ 000 square meters for the Plaintiff, the Plaintiff’s penal leap○○○ 1/2 shares among the land in question, and the Plaintiff’s penal leap○ ○○ 00 square meters for each 1/2 shares among the land in question, the same 00 square meters for each 00 square meters for each 00 square meters for the same Ri, and the same 00 square meters for each 00 square meters for each 00 square meters for the same Ri, and died on August 7, 200.

(2) On September 27, 200, the Plaintiff and ○○○ entered into a contract with four persons, including Hong○, etc. on the sale of KRW 1,2, and 00 square meters in the real estate under the above paragraph (1), which sell KRW 39,150,000 square meters in the purchase price of KRW 1,2, and 00 square meters in the ○○○-gun, ○○○○-gun, ○○○-gun, and 000 square meters in the same Ri. On March 9, 2001, the Plaintiff and ○○ transferred the ownership of the above real estate.

(3) The Plaintiff’s mother ○○○○○-dong 00-00 ○○○○○○○○○○-dong 00 0, and 19-4 19-4 Gabbbbbeon 13, 1974, which was the real estate purchased on December 13, 1974. When the auction procedure was conducted by filing an application for a voluntary auction on July 23, 1999, the Plaintiff acquired the said real estate at a successful bid and acquired ownership on April 2, 2001, but on March 11, 2002.

(4) On March 5, 2001, the Plaintiff leased ○○○○○○○-dong 000 ○○○○ apartment 0000, and then married with stuffed goods on April 1 of the same year.

[Ground of recognition] Gap evidence 1-1-6, Gap evidence 2-1-2, Gap evidence 4-8, Eul evidence 4-4, the purport of the whole pleadings

D. Determination

(1) Judgment on the Plaintiff’s first argument

Article 96 (4) of the Income Tax Act and Article 162-2 (4) of the Enforcement Decree of the Income Tax Act provide that "in case where the real estate is transferred within one year after its acquisition due to inevitable reasons such as expropriation (including purchase by consultation) under the Land Expropriation Act, the Act on Special Cases concerning the Acquisition of Land for Public Use and the Compensation for Loss, or other Acts, and where it is deemed that the person who acquired the real estate does not have traded for the purpose of short-swing profits in light of the details of the acquisition or transfer and the actual conditions of its use, etc., he may do so." This provision provides that "The transfer value of the real estate shall be based on the standard market price at the time of its transfer only in cases where there are unavoidable reasons that the person

The plaintiff's assertion in this part is groundless.

(2) Judgment on the second argument by the Plaintiff

The purport of Article 162-2(4) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 17825, Dec. 30, 2002; Presidential Decree No. 1682, Article 162-2(4) of the Enforcement Decree of the Income Tax Act) provides that the transfer value shall be calculated based on the standard market price even in cases where a single house owner becomes two or more houses due to inheritance, the transfer value shall be calculated based on the standard market price, not based on the actual transaction price, for the purpose of reducing tax burden

In light of the purport of the amendment of the Enforcement Decree of the Income Tax Act, compared to the fact that the inheritance succeeds to ownership under the provisions of law regardless of the intention of the parties concerned, the gift is clearly distinguishable from that of both parties that the ownership is succeeded to by the donor and the donee. However, even if Ma○○ donated the land in this case to the Plaintiff at the end of Ma○○, and died thereafter, the Plaintiff’s donation of the land in this case cannot be deemed as being identical to inheritance or subject to the application of Article 162-2(4) of the Enforcement Decree of the Income Tax Act, because the donation of the

The plaintiff's assertion on this part is without merit.

(3) Judgment on the third assertion by the Plaintiff

(A) The actual transaction price at the time of acquisition under Article 100(1) of the Income Tax Act includes the price determined by an estimated investigation based on the transaction example, appraisal price, conversion price, or standard market price, where it is not possible to confirm the actual transaction price pursuant to Article 114(5) of the Income Tax Act.

In general, in cases where the actual transaction value cannot be confirmed, the acquisition value shall be calculated by applying Article 163(12) of the Enforcement Decree of the Income Tax Act, but this is merely a single example provision presented in the parent law, and in cases where Article 163(9) of the Enforcement Decree of the Income Tax Act provides for the calculation criteria of acquisition value that can be seen the same as the actual transaction value only for specific cases of acquisition such as inheritance or donation, such special provision under delegation under Article 97(1)1 of the Income Tax Act shall be applied preferentially to Article 163(12) of the Enforcement Decree of the Income Tax Act. Such special provision is interpreted as a just and reasonable subordinate norm to faithfully comply with the

(B) Therefore, in this case where the actual transaction value at the time of donation of the instant land cannot be confirmed, the acquisition value of the instant land shall be calculated based on the value assessed according to the standard market price at the time of donation pursuant to Article 163(9) of the Enforcement Decree of the Income Tax Act.

The plaintiff's assertion on this part is without merit.

3. Conclusion

The plaintiff's claim is without merit.

Related Acts and subordinate statutes

(1) Income Tax Act (amended by Act No. 6429 of March 28, 2001)

Article 94 (Scope of Transfer Income)

(1) Transfer income shall be the following income generated in the current year:

1. The phrase “land” means a land category to be registered in the cadastral record under the Cadastral Act;

Income accruing from the transfer of buildings or facilities or structures (including facilities or structures annexed to such buildings).

Article 96 (Transfer Price)

(1) The transfer value of assets as prescribed in Article 94 (1) 1 and 2 shall be based on the standard market value at the time of the transfer of the relevant assets: Provided, That where the relevant assets fall under any of the following subparagraphs, it shall be based on the actual transaction value between the transferor and transferee (hereinafter referred to as the "actual transaction value"):

4. In the case of the real estate within one year after its acquisition;

(4) In applying the provisions of paragraph (1) 4, where the transfer is made within one year from its acquisition due to inevitable causes, such as the Land Expropriation Act, the public compensation for losses, and expropriation (including purchase by consultation) under other Acts, the standard market price may be made pursuant

Article 97 (Calculation of Necessary Expenses in Transfer Income)

(1) In the calculation of gains on transfer of a resident, the necessary expenses to be deducted from the transfer value shall be as follows:

1. Acquisition value:

(a) In the case of assets under Article 94 (1) 1 and 2, the relevant person;

The standard market price at the time of acquisition of the assets: Provided, That in case where the assets concerned fall under any of subparagraphs of Article 96 (1), it shall be based on the actual transaction price required for the acquisition of such assets.

(b) In case of assets listed in Article 94 (1) 3 and 4, the actual transaction price required for the acquisition of the relevant assets;

(c) In the case of the proviso of item (a) or (b), where it is impossible to confirm the actual transaction price at the time of acquisition, the value as determined by the Presidential Decree taking into account the value under

Article 100 (Calculation of Gains on Transfer)

(1) In calculating the gains on transfer, if the transfer value is based on the actual transaction value (including the value provided for in Article 96 (3) and the value provided for in Article 114 (5) in cases where the transaction example value, appraisal value, and conversion value are applied, and the relevant transaction example value, appraisal value, appraisal value and conversion value, etc. are included), the acquisition value shall also be based on the actual transaction value (including the value provided for in Article 97 (7) and the value provided for in Article 114 (5) in cases where the transaction example, appraisal value, appraisal value and conversion value are applied), and if the transfer value is based on the standard market price, the acquisition

Article 114 (Determination, Revision and Notification of Tax Base for Transfer Income and Amount of Tax)

(5) In the application of the provisions of paragraph (4), in case where the transfer value or acquisition value is based on the actual transaction value, and where it is impossible to recognize or confirm the actual transaction value at the time of transfer or acquisition of the relevant assets by the account books or other documentary evidence on the grounds as determined by the Presidential Decree, the transfer value or acquisition value may be determined or corrected by the estimated survey based on the transaction example value, appraisal value, conversion value (referring to the acquisition value converted by the actual transaction value, transaction example value

(1) The Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 17158, Mar. 27, 2001)

Article 162-2 (Transfer Price)

(4) In applying the provisions of Article 96 (4) of the Act, where the real estate is transferred within one year from its acquisition due to inevitable causes such as the public land expropriation for losses and expropriation (including purchase by consultation) under the Land Expropriation Act, and other Acts, and where it is deemed that there is no transaction for the purpose of short-swing profits in view of the details of acquisition or transfer of real estate and the actual conditions of its use, etc., it may be based on the standard market price through consultation under Article 17

director Inheritance and Gift Tax Act (amended by Act No. 6780 of Dec. 18, 2002)

Article 60 (General Rules, etc. of Appraisal)

(1) The value of property on which an inheritance tax or a gift tax is levied under this Act shall be the market price as of the date the inheritance commences or the date of donation (hereinafter referred to as the "date of appraisal"). In such cases, the value appraised by the method of appraisal stipulated in Article 63 (1) 1 (a) and (b) (excluding cases falling under the provisions of Article 6

(3) In the application of paragraph (1), where it is difficult to compute the market price, the value assessed by the methods prescribed in Articles 61 through 65 in consideration of the type, size, transaction status, etc. of the relevant property.

Article 61 (Appraisal of Real Estate, etc.)

(1) Real estate shall be appraised by the methods prescribed in one of the following subparagraphs:

1. Land:

The individual officially assessed land price under the Public Notice of Values and Appraisal of Lands, etc. Act (hereinafter referred to as the “individual assessed land price”): Provided, That the value of the land for which no officially assessed individual land price exists, shall be the amount assessed by the superintendent of the competent tax office by such a method as determined by the Presidential Decree, taking into consideration the officially assessed individual land