Suwon District Court 2008Guhap3079 ( August 25, 2009)

Where a return on actual transaction price is filed to the standard market price after the due date expires;

In a case where a final return on a tax base of transfer income was made at the time of the final return, and the tax authority made a disposition by correcting the tax base of transfer income and the amount of tax according to the actual transaction price confirmed by the defendant, because the actual transaction price is different from the fact, even if the plaintiff made a revised return based on the

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

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The Defendant’s disposition of correction of KRW 90,400,190 for the transfer income tax belonging to the year 2004 that reverts to the Plaintiff on November 9, 2007 shall be revoked.

2. Purport of appeal

It is the same as the disposition.

1. Circumstances of the disposition;

A. On May 1989, the Plaintiff acquired three parcels of land outside 465-1 2,681 m2,000 m2,000 m2,000 m2 (hereinafter “instant land”) and transferred the land to JungB on August 23, 2004.

B. On October 31, 2004, the Plaintiff reported and paid KRW 477,900 of the capital gains tax calculated based on the actual transaction price (transfer value of 144,000,000 and acquisition value of 132,00,000,000) of the above land pursuant to Article 96(1)6 of the former Income Tax Act (wholly amended by Act No. 7837, Dec. 31, 2005; hereinafter the same) by filing a preliminary return on the tax base of capital gains on the instant land to the Defendant on October 31, 2004.

C. Upon examining the actual transaction value of the instant land, the Defendant confirmed that the transfer value is KRW 509,00,000, and notified the Plaintiff of the tax investigation result that the said transfer value would correct the tax base and tax amount of capital gains tax with the transfer value on October 2, 2007.

D. Accordingly, on October 31, 2007, the Plaintiff filed a revised return and paid KRW 21,139,037 of the capital gains tax calculated according to the standard market price of the land of this case (transfer value of KRW 143,94,00, acquisition value of KRW 30,902,048) pursuant to the main sentence of Article 96(1) of the Income Tax Act (hereinafter “the revised return of this case”).

E. On November 9, 2007, the Defendant considered the above revised return as unlawful, and determined and notified the transfer income tax amount of KRW 90,400,190 (the amount after deducting the already paid tax amount) calculated according to the actual transaction price (transfer value of KRW 509,00,000, acquisition value of KRW 132,00,000) confirmed as a result of tax investigation pursuant to the proviso of Article 114(4) of the Income Tax Act (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1, 2, 4, Gap evidence 7-1 to 4, Eul evidence 1, 2, Eul evidence 3-1 to 3, the purport of the whole pleadings

2. Whether the disposition is proper; and

(a) a master of the Party;

(1) The plaintiff's principal

The Plaintiff paid KRW 21,139,037 of the capital gains tax calculated according to the standard market price on October 31, 2007 pursuant to Article 45(1)1 of the Framework Act on National Taxes and the main sentence of Article 96(1) of the Income Tax Act. In such a case, the Defendant cannot correct the amount of the purchase tax due to the actual transaction price confirmed by applying Article 114(2) and (4) of the former Income Tax Act. Since the Defendant neglected the above revised return and corrected and imposed the capital gains tax according to the actual transaction price, the instant disposition was unlawful.

(2) Defendant’s principal

Even in the case of this case where the Plaintiff reported the modification of the method of calculating transfer margin to the standard market price after having known that capital gains tax will be imposed more than the amount initially scheduled after underreporting the actual transaction and amount for the purpose of reducing the tax burden, if the revised return is deemed legitimate, it would not only be deemed that Article 96 (1) 6 of the Income Tax Act, which stipulates that capital gains tax can be determined as the actual transaction price, is a private culture, but also undermine legal stability. Therefore, the revised return of this case cannot be accepted as illegal and illegal. Thus, the disposition of this case under the proviso of Article 114

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

Articles 96 (1) and 97 (1) 1 (a) of the former Income Tax Act provide that the transfer value and acquisition value of assets under Article 94 (1) 1 and 2 of the same Act shall be based on the standard market price in principle, and exceptionally, one of the cases where the actual transaction price is based on the actual transaction price is determined based on the actual transaction price, and in the proviso of Article 96 (1) 6 and Article 97 (1) 1 (a) of the same Act, one of the cases where the transferor reports the actual transaction price at the time of transfer and acquisition to the chief of the district tax office having jurisdiction over the place of tax payment by the due date for the final return of tax base of transfer income, along with evidential documents, and Article 114 (4) of the same Act (hereinafter referred to as the "proviso of this case") provides that "if a resident makes a preliminary return or a final return of tax base of transfer income pursuant to Article 96 (1) 6 and Article 97 (1) 1 (a) of the same Act, it shall be corrected as the confirmed transfer value or acquisition value."

In light of the purport that the proviso of Article 96 (1) 6 and Article 97 (1) 1 (a) of the former Income Tax Act stipulates the closing period to be reported based on the actual market price as an exception to the principle of taxation of the standard market price within the deadline of the final return of capital gains, and the relation between the preliminary return of tax base of capital gains and the final return of tax base, it is reasonable to view that the "case where a preliminary return of tax base of capital gains or a final return has been made under Articles 96 (1) 6 and 97 (1) 1 (a) of the provisions of the proviso of this case" means the case where the effect of the preliminary return of tax base of capital gains or the final return based on the actual market price is maintained by the deadline of the final return of tax base of capital gains is maintained by the date of the final return of tax base, so long as the final return of tax base of capital gains has elapsed by the transferor based on the actual market price other than the fact, the chief of the competent tax office, etc. can correct the tax base price and tax amount based on the standard market price.

As seen earlier, the period of final return expired after the Plaintiff’s preliminary return on the tax base of transfer income accrued to the instant land. As long as the Plaintiff revised the tax base of transfer income and the amount of tax according to the actual transaction price confirmed by the Defendant, who is the tax authority, different from the actual transaction price initially reported, and subsequently rendered the instant disposition, even if the Plaintiff filed a revised return based on the

Therefore, there is no reason for the plaintiff's claim for objection case.

3. Conclusion

The judgment of the court of first instance is unfair and the defendant's appeal is justified. It is so decided as per Disposition by the assent of all participating Justices.