Seoul High Court 2008Nu22565 (209.01.09)

Review Transfer 2007-0015 (2007.05.30)

propriety of a disposition determined based on the standard market price for reported actual transaction price without evidence

If the actual transfer and acquisition value is reported based on the actual transaction price without proving the actual transfer and acquisition value, the transfer margin shall be determined based on the standard market price, and if the transfer income tax is calculated based on the standard market price, the expenses other than necessary expenses deduction as prescribed

The contents of the decision shall be the same as attached.

Article 92 (Calculation of Tax Base of Transfer Income)

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

Although the lower judgment was examined in light of the records of this case, it is recognized that the assertion on the grounds of appeal falls under Article 4 of the Act on Special Cases Concerning Procedure

Therefore, the appeal is dismissed in accordance with Article 5 of the above Act. It is so decided as per Disposition by the assent of all participating Justices on the bench.

[Seoul High Court Decision 2008Nu22565, Jan. 09)]

1. All appeals filed by the plaintiffs are dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

The judgment of the first instance shall be revoked. The part of the Defendant’s imposition of capital gains tax of KRW 136,137,530 against the Plaintiff on August 1, 2006, which exceeds KRW 18,691,744, out of the imposition of capital gains tax of KRW 136,137,5

The court's explanation on this case is the same as the statement of the reasons for the decision of the court of first instance, and thus, it is accepted in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

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

[Gneung Branch 2007Guhap567 (2008.03)]

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 capital gains tax of KRW 136,137,530 for the Plaintiff on August 1, 2006, in excess of KRW 18,691,744, shall be revoked.

1. Circumstances of dispositions;

A. On July 29, 2005, the Plaintiff transferred the real estate listed in the separate sheet (hereinafter “the instant real estate”) to the ○○○○ on May 30, 2006 (hereinafter “the instant transfer”). On May 30, 2006, the Plaintiff filed a final tax return on the tax base of transfer acquisition tax based on the actual transaction value. However, in filing the said return, the Plaintiff did not submit the necessary documents, such as a sales contract, and the calculation statement of transfer income, and did not arbitrarily calculate the amount of tax (the Plaintiff voluntarily paid the transfer income tax of KRW 7,250,00 according to the said final return on the same day).

B. On June 7, 2006, the Defendant requested the Plaintiff to correct the said transfer income tax return by June 13, 2006, because it cannot be recorded electronically due to an error in calculating the amount of tax, but decided and notified KRW 136,137,530 of the transfer income tax on the instant real estate by calculating the transfer income tax as the standard market price on August 1, 2006 (hereinafter “disposition”).

C. On January 31, 2007, the Plaintiff dissatisfied with the instant disposition and filed a request for examination with the Commissioner of the National Tax Service. On May 30, 2007, the Commissioner of the National Tax Service rendered a decision to dismiss the said request.

Grounds for Recognition: Each entry of Gap evidence 1, 3, 16, Gap evidence 2-1, 2, 5-1 through 6, Gap evidence 8-1, 2, Eul evidence 1-1, 2, 2, 2 and 3, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff acquired the instant real estate in KRW 641,50,00, and thereafter transferred the instant real estate in KRW 1,009,550,000, totaling KRW 196,000,000, and KRW 98,550,000, and KRW 1,237,651,884, and the Defendant calculated the transfer value and necessary expenses based on the actual transaction value, and calculated the transfer income tax based on the standard market price, so the portion exceeding 18,691,744, which is a legitimate tax amount based on the actual transaction value among the instant disposition, is unlawful.

(b) Related statutes;

The entries in the attached statutes are as follows.

C. Determination

(1) According to Article 96 (1) 6 of the former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005), the transfer value of assets for calculating capital gains shall be based on the standard market price at the time of transfer of the relevant assets. However, where the transferor submits evidential documents by the deadline for filing a final return of tax base of capital gains tax and reports the actual transaction value at the time of transfer to the head of tax office having jurisdiction over the place of tax payment

(2) Meanwhile, in cases where a transferor of assets submits evidentiary documents to verify the actual transaction value in making a preliminary return of gains from transfer or a final return of tax base, gains from transfer shall be calculated based on the actual transfer and acquisition value. However, even if there is no report or a report, if there is no evidentiary document submitted, or if the actual transaction value of either of the acquisition value or transfer value submitted by such report is confirmed, gains from transfer shall be determined based on the standard market value, and even if the actual transaction value is confirmed after the final return of tax base expires (see Supreme Court Decision 97Nu271, Feb. 10, 1998). In cases of calculating gains from transfer based on the standard market value, the amount calculated by adding an amount under each subparagraph of Article 163(6) of the Enforcement Decree of the Income Tax Act to the standard market value at the time of acquisition shall be deducted from the transfer value as necessary expenses. Thus, even if a taxpayer proves necessary expenses actually required for any other purpose, such deduction may not be made as necessary expenses (see Supreme Court Decision 2002Du5944, Apr. 12, 2000

(3) In the instant case, there is no evidence to acknowledge that the Plaintiff had lawfully filed a final tax return on the transfer income tax base by May 31, 2006, which was based on the final return of the tax base of the transfer income tax. Thus, the computation of the transfer income tax on the transfer of this case should be based on the standard market price. Meanwhile, in calculating the transfer income tax based on the standard market price, even if the Plaintiff proves necessary expenses in addition to the necessary expenses deduction as prescribed by the law, it cannot be deducted from the transfer value as necessary expenses, and thus, the Plaintiff’s assertion that the transfer income tax should be calculated by deducting the necessary expenses actually spent from the actual transfer value, is without merit without any further determination. On the other hand, the Defendant’s disposition of this case, which calculated the transfer

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.