Suwon District Court 2010Guhap3849 (Law No. 29, 2010)

It is confirmed that capital gains tax is calculated on the actual transaction price.

The final return of capital gains tax is delegated to the tax agent, and the capital gains tax is calculated based on the actual transaction price confirmed, and the brokerage commission, graveyard use equipment, access road construction cost, etc. shall not be deducted as necessary expenses, and the disposition of imposition is legitimate, since there is no justifiable reason to

2010Nu36284 Revocation of Disposition of Imposing capital gains tax

CHAPTER A

○ Head of tax office

Suwon District Court Decision 2010Guhap3849 Decided September 29, 2010

May 25, 2011

July 13, 201

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The transfer income tax reverted to the Plaintiff in January 4, 2010 that the Defendant transferred to the Plaintiff on January 4, 2010.

857,050,110 won shall be revoked.

1. Details of disposition;

The reason why this Court is to be used for this part of the reasoning of the judgment of the court of first instance is the corresponding part of the reason for the judgment of the court of first instance (the second half to the third third half). Pursuant to Article 8(2) of the Administrative Litigation Act, and the main sentence of Article 420 of the Civil Procedure Act, this Court shall

2. The assertion and judgment

A. The plaintiff's assertion

1) The Plaintiff delegated the final return of capital gains tax on the instant real estate to the Tax Accountants, and issued a sales contract that the Plaintiff actually purchased and sold to the Plaintiff according to the Party’s request, and notified the Plaintiff of necessary expenses, such as brokerage commission. In filing the final return according to the actual transaction price method, the Plaintiff forged and submitted documents necessary for calculating the transfer value and the necessary expenses. The report filed by the Party itself is contrary to the purport delegated by the Plaintiff, and thus does not affect the Plaintiff. The Plaintiff did not file a final return of capital gains tax on the transfer of the instant real estate. The instant disposition was made on the premise that the Plaintiff filed the final return of this case, which is different from

2) According to the former Income Tax Act (amended by Act No. 7837, Dec. 31, 2005; hereinafter the “former Income Tax Act”) which was enforced at the time of sale of the instant real estate, the transfer income tax is in principle calculated by applying the standard market price. The proviso of Article 114(4) of the former Income Tax Act provides that, in a case where a return was made based on the actual transaction price and where the returned price is confirmed to be different from the fact, the verified price shall be the transfer price or acquisition price, and the tax base and tax amount of transfer income shall be corrected. However, the above provision shall be interpreted only where the tax amount calculated by the actual transaction price does not exceed the amount of tax calculated by the standard market price, and thus, the transfer income tax against the Plaintiff shall be calculated by the standard market price, not

3) Even if capital gains tax is calculated based on the actual transaction price, the Defendant erred by failing to deduct the interest on the non-○○ brokerage commission, graveyard transfer equipment, access road construction cost, and purchase fund, which the Plaintiff incurred while acquiring and transferring the instant real estate as follows.

4) In light of the developments leading up to the final return of this case, it is unreasonable for the Defendant to impose additional tax when imposing capital gains tax on the Plaintiff.

B. Relevant statutes

Attached 'Related Acts and subordinate statutes' shall be as listed in the

C. Determination

1) As to the first argument

(a)a fact of recognition;

After the transfer of the instant real estate, the Plaintiff consulted about the issue of capital gains tax by introducing regular AAA certified tax accountants through the YellowB, which had a close relationship with the Plaintiff. According to the details of the transfer presented by the Plaintiff, the Plaintiff agreed that the Plaintiff would make a tax return if it pays KRW 50 million to the Plaintiff, while paying KRW 30 million to the Plaintiff as capital gains tax. The Plaintiff paid KRW 50 million to the Plaintiff, and issued the actual sales contract at the request of the Plaintiff, and notified the necessary expenses, such as brokerage fees.

Jeong made the final return of this case in accordance with the actual transaction price method based on each of the above documents after preparing the transfer value and necessary expenses calculation-related documents containing different details (any signature or unmanned signature in the name of the Plaintiff, etc. in each of the above documents was made by regular or employee). The Plaintiff paid all the transfer income tax according to the details reported on the date of the final return of this case.

On January 2, 2008, the Defendant deemed that the actual owner of the instant real estate was YB, and thus issued a disposition imposing capital gains tax on the YB on January 2, 2008. The Party testified to the effect that in the case of the claim against the Defendant for cancellation of the disposition imposing capital gains tax (U.S. District Court 2008Guhap11601) against the Defendant, the Defendant was present as a witness and made all the amounts recorded in the relevant documents as the Plaintiff or YB did not appear.

[Ground of Recognition] Unsatisfy, Party A’s 5-9 Evidence, and Party B’s testimony at the trial

B)Judgment

In light of the details of the Plaintiff’s commission of tax agent services, remuneration amount, details of the instant final return and relevant documents, etc., the Plaintiff is deemed to have delegated the Plaintiff to make a final return of capital gains tax by applying the real transaction method in order to reduce capital gains tax burden. Even if signature or unmanneds, such as the Plaintiff, etc., were made by the Plaintiff, etc., the final return of capital gains tax was made on behalf of the Plaintiff according to delegation made by the Plaintiff, and thus, the final return was made on behalf of the Plaintiff. The final return was made on the grounds that the Plaintiff’s final return of capital gains tax was made on behalf of the Plaintiff according to delegation made by the Plaintiff. Even if the Plaintiff’s preparation and use of

2) As to the second argument

The reasons why this Court shall be used for this part of the reasons for the judgment of the court of first instance are the corresponding part of the reasons for the judgment (the fourth to the fourth to the fourth (the seventh to the fourth). The reasons shall be cited in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure

3) As to the third argument

(a)a fact of recognition;

① In the sales contract submitted by Jeong at the time of the final return of this case, the term “a pair of agreements” is written as the broker column, and in Chapter 3 of the deposit sheet, the term “E” means that the GuE receives KRW 180,000,000 as the graveyard equipment, KRW 75,000,000 as the access road opening cost, and KimD received KRW 50,000,000 as the deforestation and removal cost.

② YellowB asserted that, in a lawsuit claiming revocation of the disposition imposing capital gains tax prior to the purchase (the same agent was selected and appointed), KRW 50 million of brokerage commission at the time of purchase, KRW 130 million of brokerage commission at the time of sale, KRW 17 million of graveyard facilities, KRW 100 million of access roads, and KRW 165 million of investment profits, and KRW 462 billion of investment profits, should be deducted as necessary expenses.

③ Part 2 of the actual purchase contract submitted by the Plaintiff in this case states that “AA Licensed Real Estate Agent Park Ga, old real estate EE, Gabro Gao Gao, ○○○○○○○○, 234m2, 198m2, 46-2, 9,038m2, 175-1m2, 2,735m2, 175m2, 175-1, 2,735m2, etc., are included in ○○○, ○○, ○○○, ○○○, ○○○, ○○○, ○○, ○○, ○5m2, and 735m2, etc., which is included in the instant real purchase contract.” All of the above sales contract is written as “BB real estate H” in the column of the special terms and conditions, and is written as “BB real estate H” in the actual sale contract. Both of the above sales contract is paid by both parties.

[Ground of recognition] Unsatisfy, Gap 5-10 Evidence, the whole purport of the pleading

B)Judgment

(1) According to Articles 97(1) and (3), and 100(1) of the former Income Tax Act, necessary expenses to be deducted from the transfer value based on the actual transaction value from the calculation of gains on transfer are ① acquisition value (actual transaction price required for asset acquisition), ② Capital expenditure, etc. as determined by the Presidential Decree, ③ Transfer expenses as determined by the Presidential Decree.

(1) The acquisition value of assets purchased from a third person is the amount of purchase price plus acquisition tax, registration tax, and other incidental expenses (Article 163(1)1 and Article 89(1)1 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 19254, Dec. 31, 2005; hereinafter referred to as the "former Enforcement Decree").

(2) Capital expenditure, etc. prescribed by the Presidential Decree is determined by the Ordinance of the Ministry of Finance and Economy (Article 163(3) of the former Enforcement Decree of the Income Tax Act). Article 79(1) of the former Enforcement Rule of the Income Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 476 of Dec. 31, 2005) provides that capital expenditure [including repair expenses disbursed to extend the service life of depreciable assets owned by a business operator or to effectively increase the value of the relevant asset, which are similar to those under subparagraphs 1 through 4, such as renovation to change the original purpose of use, improvement, expansion, enlargement, etc. (Article 163(1) (Article 163(3) of the former Enforcement Decree of the Income Tax Act). This corresponds to the expenses under Article 79(1) of the former Enforcement Rule of the Income Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 476 of Dec. 31, 2005).

(3) Transfer expenses, etc. prescribed by Presidential Decree are expenses directly paid to transfer assets (Article 163 (5) of the former Enforcement Decree).

On the other hand, the burden of proof of the tax base that serves as the basis of taxation is imposed on the tax authority in a lawsuit seeking revocation of transfer income tax disposition, and the tax base is deducted from necessary expenses, so the tax authority bears the burden of transfer value and the burden of proof as a matter of principle. However, since necessary expenses are more favorable for the taxpayer, and most of the facts generating necessary expenses are located within the area controlled by the taxpayer, and it is difficult for the tax authority to prove as necessary. Thus, if it is reasonable to allow the taxpayer to prove in consideration of difficulty in proof, equity between the parties, etc., it accords with the concept of fairness (see, e.g., Supreme Court Decision 2007Du2

(2) The Plaintiff asserted that the Plaintiff paid KRW 50 million and KRW 1.3 million at the time of the purchase of the instant real estate as brokerage commission. However, each of the statements in the evidence Nos. 15-18 and 23-25, and each of the statements in the evidence Nos. 15-18 and 23-25, which appears to conform to the Plaintiff’s assertion, is difficult to believe as it is in light of the following circumstances, and there is no other material to confirm the amount of brokerage commission actually paid.

① A. On behalf of the Plaintiff, A.A., who filed the instant final return on behalf of the Plaintiff, prepared a sales contract as if the sales contract was concluded by mutual agreement without a broker. It is difficult to understand that A.A., under the circumstances where A.A. written a reduced sales price in order to lower gains on transfer, omitted entry related to KRW 1.3 million or brokerage commission.

② Under attached Table 1(2) of the Gyeonggi-do Ordinance on the Fees for Real Estate Brokerage, the Plaintiff’s payment of brokerage commission exceeds the statutory ceiling [the ceiling of brokerage commission is 10,402,434 won at the time of purchase, and 32,40,00 won at the time of sale] that the object of brokerage except general housing is subject to a separate contract between the client and the broker within the limit of brokerage commission (0.2-0.9%).

③ Both the Plaintiff and the broker do not present any financial data about the payment of brokerage commission or the place of use.

(3) The Plaintiff asserts that the Plaintiff paid KRW 100 million to the Gu KK as cemetery equipment when purchasing the instant real estate. In light of the contents stated in the special agreement, the Plaintiff demanded a graveyard transfer under the terms of sale and purchase, and thus, the Plaintiff appears to have agreed to transfer the graveyard before the seller or the former KK, one of which is the broker, pays the remainder of the obligation. There is no reason for the Plaintiff, the buyer, to pay the former KK a graveyard transfer equipment (such as brokerage commission, there is no objective evidence to acknowledge the payment).

(4) The Plaintiff asserted that, at the time of the purchase of the instant real estate, the GJ, etc. took part of the purchase fund from the GJ, etc., paid a total of KRW 265,00,000 as interest, after selling the instant real estate. However, this does not run counter to the necessary expenses that are deducted from the transfer value under each subparagraph of Article 97(1) of the former Income Tax Act (i.e., brokerage commission).

(5) The Plaintiff asserted that the instant real estate was paid KRW 17 million as the access road opening cost at the time of purchase, but there is no evidence to acknowledge this.

The necessary expenses for which the plaintiff asserts mutual aid do not constitute necessary expenses prescribed by the Income Tax Act or subordinate statutes.

4) On the fourth argument

Under the tax law, in order to facilitate the exercise of the right to impose taxes and the realization of tax claims, where a taxpayer violates a tax return, duty to pay taxes, etc. as prescribed by the law without justifiable grounds, administrative sanctions imposed pursuant to the law may not be imposed in cases where there are justifiable grounds for not being negligent in performing his/her duties, such as where it is unreasonable to expect the taxpayer to perform his/her duties due to the reason that it is unreasonable to do so (see, e.g., Supreme Court Decision 2004Du930, Nov. 25, 2005).

3. Conclusion

The appeal is dismissed.