Appropriateness of the assertion that the year to which the individual land price belongs was wrong when applying the individual land price

Even if the officially assessed individual land price in 2005 has increased more than the officially assessed individual land price in 2004, the transfer value should be calculated based on the officially assessed individual land price in 2005, which is the immediately preceding standard market price.

Article 88 (Definition of Transfer)

Article 164 of the Enforcement Decree of the Income Tax Act (Assessment of Standard Market Price of Land and Buildings)

1. The plaintiff's claim is dismissed.

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

The defendant's rejection of a request for correction as to capital gains tax of 35,204,980 won belonging to the year 2006 against the plaintiff on November 13, 2006 shall be revoked, respectively.

1. Details of the disposition;

The following facts are not disputed between the parties, or may be acknowledged by taking into account the whole purport of the pleadings in each entry of evidence Nos. 1, 2, and 4-1, 2, 1, 2, 3, and 22:

A. On January 12, 2006, the Plaintiff transferred 00-0 square meters to the Korea Land Corporation ○○○○○, 000-0 square meters (hereinafter “instant land”) and received payment around that time.

B. The Plaintiff calculated the transfer value of the instant land by applying the officially assessed land price (149,000 won per square meter) in 2005, which was determined and publicly announced on May 31, 2005. Accordingly, the Plaintiff made a preliminary return of the transfer income tax standard return on February 27, 2006 and voluntarily paid the tax amount by using the amount of KRW 46,216,180, which is calculated accordingly, as the transfer income tax on the transfer of the instant land.

C. On October 16, 2006, the Plaintiff filed a claim for correction with the Defendant to refund KRW 35,204,980, which is the remainder of the amount exceeding the legitimate capital gains of the instant land calculated by applying the officially assessed individual land price in 2004, instead of the officially assessed individual land price in 2004, under the premise that the transfer value of the instant land should be calculated based on the officially assessed individual land price in 2004.

D. Accordingly, the defendant, on November 13, 2006, rejected the plaintiff's request for correction (hereinafter referred to as "disposition of this case") on the ground that the standard market price of land is based on the publicly notified individual land price as of the date of transfer under Article 1 (1) 1 (a) of the Enforcement Decree of the Income Tax Act, and the publicly notified individual land price refers to the publicly notified individual land price as of the date of transfer, and it is reasonable to apply the officially notified individual land price as of January 1, 2005, which is publicly notified at the time of transfer of the land of this case.

E. The Plaintiff, who is dissatisfied with the instant disposition, filed a request for examination with the Commissioner of the National Tax Service on February 2, 2007, but was dismissed on March 21, 2007.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The officially assessed individual land price in 2005, which was the basis for calculating the transfer income tax amount of the land of this case, shall be calculated on February 15, 2004, in a arbitrary height by predicting subsequent increase in land prices, notwithstanding that there was almost no land price increase due to trade, etc. since the designation as a housing site development zone on February 15, 2004. (However, since the plaintiff did not take a problem of land characteristics survey, etc. in calculating the error of the selection of reference land or price distribution rate, it seems that the plaintiff asserted as above on the premise that the officially assessed land price of reference land of this case was determined high without any particular ground.) The transfer income from the transfer of the land of this case is not the officially assessed individual land price in 2005, but the transfer income tax

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) Article 96 (2) of the Income Tax Act provides that when the assets subject to capital gains tax are transferred by December 31, 2006, the standard market price at the time of transfer shall be based on the "standard market price at the time of transfer of the assets," but such standard market price shall be based on the "official land price under the Public Notice of Values and Appraisal of Real Estate Act". Thus, in order to calculate the transfer price of the land of this case transferred before December 31, 2006, the officially assessed individual land price in 2006 at the time of transfer of the land of this case ( January 2, 2006 and February 2, 2006) shall be based on the officially assessed individual land price in 206. However, according to Article 20 of the Enforcement Decree of the Public Notice of Values and Appraisal of Real Estate Act, the standard market price shall be calculated based on the officially assessed individual land price in 205, which is the immediately preceding standard market price under Article 164 (4) of the Income Tax Act.

(2) However, in principle, the determination of the officially assessed individual land price is based on whether it was made in accordance with the procedure and method stipulated in the Public Notice of Values and Appraisal of Real Estate Act and the guidelines for investigation and calculation of the officially assessed individual land price, and it is not directly related to the market price of the pertinent land. Thus, even if the price of the individual land is different from the market price or is determined differently from the change, the determination of the price cannot be deemed unlawful merely on such ground (see, e.g., Supreme Court Decision 93Nu13056, Jul. 12, 1996). Thus, insofar as it is difficult to deem that there was any error in the process of determining the comparative standard and the price factor of the pertinent land, the determination of the officially assessed individual land price is unlawful on the ground that there was no increase in the land price

In addition, as seen earlier, the Plaintiff did not claim that the officially assessed individual land price was unfairly calculated due to errors such as the method of determining the officially assessed individual land price, but merely asserted that the officially assessed individual land price was unfairly calculated on the premise that the price itself was excessively high, and accordingly, the illegality of the officially assessed individual land price is in fact disputed. In order to raise an objection to the officially assessed land price of the land selected as the standard land, whether to file an administrative lawsuit seeking revocation of the officially assessed land price through the procedure of objection under Article 8(1) of the Public Notice of Values and Appraisal of Real Estate Act, and the illegality of the officially assessed individual land price in a tax lawsuit without following such procedure cannot be asserted (see Supreme Court Decision 93Nu1648, Nov. 10, 195). Thus, even if there is a defect in the officially assessed land price of the standard land, as alleged by the Plaintiff, such

(3) Ultimately, the Plaintiff’s assertion is without merit, and the Defendant’s instant disposition that calculated the transfer income tax of the instant land based on the officially assessed individual land price in 2005 is lawful.

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.

Related Acts and subordinate statutes

Income Tax Act

Article 88 Definition of Assignment

(1) "Transfer" in Article 4 (1) 3 and this Chapter means that any assets are actually transferred for price due to sale, exchange, investment in kind in a corporation, etc., regardless of any registration or enrollment concerning such assets. In such cases, where a donee takes over any obligation of a donor of an onerous donation (excluding cases falling under the main sentence of Article 47 (3) of the Inheritance Tax and Gift Tax Act), the portion equivalent to the amount of such obligation in the donation amount shall be deemed as the

Article 96 (Transfer Value)

(1) The transfer value of assets as prescribed in each subparagraph of Article 94 (1) shall be the actual transaction value between the transferor and transferee at the time of transfer of the relevant assets (hereinafter referred to as the "actual transaction value").

(2) Notwithstanding the provisions of paragraph (1), where assets provided for in Article 94 (1) 1 and 2 are transferred not later than December 31, 2006, their transfer value shall be based on the standard market price at the time of the transfer of relevant assets except for the case falling under any of the following subparagraphs:

1. Where the relevant assets fall under the standard for expensive houses under the provisions of Article 89 (1) 3 (including the land annexed thereto);

2. Where assets are rights to acquire real estates under the provisions of Article 94 (1) 2 (a);

3. Where assets are transferred without registration under the provisions of Article 104 (3);

4. Where assets are real estate within one year after acquisition;

5. Where real estate is acquired or transferred by illegal means, such as preparation of a false contract or a false transfer of resident registration, which meets the standards as prescribed by the Presidential Decree;

6. Where the transferor reports the actual transaction price at the time of transfer and at the time of acquisition to the head of tax office having jurisdiction over the place of tax payment by the deadline for final return under Article 110

7. Cases of real estates located within the designated area under the provisions of Article 104-2 (2);

8. Where it is a land for non-business use under the provisions of Article 104-3; and

9. Other cases prescribed by Presidential Decree in consideration of the type, holding period, number of assets held, scale of transaction, transaction method, etc. of the relevant assets.

In calculating gains on transfer of assets from transfer under Article 98, the time and time of such transfer shall be determined by Presidential Decree.

Article 99. Calculation of Standard Market Price

(1) The standard market price pursuant to the provisions of Article 96 (2), the proviso to Article 97 (1) 1 (a), Articles 100 and 114 (7) shall be as follows:

1. Land or buildings as provided in Article 94 (1) 1:

(a) Land;

The officially assessed individual land price under the Public Notice of Values and Appraisal of Real Estate Act (hereinafter referred to as the "officially assessed individual land price"): Provided, That the price of the land on which no officially assessed individual land price exists shall be the amount appraised by the method as determined by the Presidential Decree in consideration of the officially assessed individual land price of neighboring similar land, and in the area prescribed by the Presidential Decree where the land price sharply rise, the price assessed by the multiple factors in the area (amended by Act No. 7837, Mar.

Enforcement Decree of the Income Tax

§ 162. Time of transfer or acquisition

(1) The time of acquisition and transfer under Article 98 of the Act shall be the date of liquidation of the price of relevant assets (if the transferee agrees to bear the capital gains tax and additional tax of capital gains tax on the transfer of relevant assets, excluding such capital gains tax and additional tax of capital gains tax) except in the following cases:

Article 164

(3) In the application of Article 99 (1) 1 (a) of the Act, where the acquisition or transfer is made before the new standard market price is publicly announced, the immediately preceding standard market price

The Public Notice of Values and Appraisal of Real Estate Act

Article 3 Inspection, Evaluation and Public Notice of the officially announced price of reference land

(1) The Minister of Land, Transport and Maritime Affairs shall investigate and assess the reasonable price as of the basic date every year for reference land selected from among lands deemed generally similar to the land utilization or surrounding environment and other natural and social conditions, and publicly announce it after deliberation by the Central Real Estate Assessment Committee pursuant to Article 19.

(2) Necessary matters concerning the date and procedure for the selection and publication of the reference land referred to in paragraph (1) shall be prescribed by Presidential Decree.

(3) The Government shall submit a report on important matters in the publication of land price to the National Assembly each year before the opening of the regular session of the National Assembly (amended by Act No. 8852, Feb. 29, 2008).

Article 8. Filing objections to the officially announced price of reference land

(1) Any person who has an objection to the officially announced price of reference land may file an objection with the Minister of Land, Transport and Maritime Affairs in writing within 30 days from the date of public announcement.

(2) The Minister of Land, Transport and Maritime Affairs shall examine an objection within 30 days from the expiration of the period for raising an objection under paragraph (1) and notify the applicant of the result in writing. In such cases, the Minister of Land, Transport and Maritime Affairs shall adjust the officially announced price of the relevant reference land and make

(3) Except as otherwise expressly provided for in paragraphs (1) and (2), matters necessary for procedures for filing and handling an objection shall be prescribed by Presidential Decree (amended by Act No. 8852, Feb. 29, 2008).

Article 11 (Determination, Public Notice, etc. of Individual Land Price

(1) In order to impose development charges under the Restitution of Development Gains Act and use them for the calculation of land prices for purposes prescribed by other Acts and subordinate statutes, the head of a Si/Gun/Gu shall, after deliberation by the Si/Gun/Gu Real Estate Assessment Committee under Article 20, determine and publicly announce the prices per unit area of individual land (hereinafter referred to as "individually announced land prices") within his/her jurisdiction as of the basic date of the officially announced land prices every year, and provide them to the relevant administrative agencies, etc.: Provided, That in such cases, the officially announced land prices may not be determined and publicly announced on land which is not subject to the imposition of land, taxes or charges, and other land prescribed by Presidential Decree, which

(2) The head of a Si/Gun/Gu shall determine and publicly announce the officially assessed individual land price for land, for which division, consolidation, etc. has occurred after the basic date.

(3) Where the head of a Si/Gun/Gu determines and publicly announces the officially assessed individual land price, he/she shall calculate the land price by using the land price ratification table on the basis of the officially announced land price of one or more reference land deemed to have similar usefulness to the relevant land, but shall ensure that the price of the relevant land

Article 12 Filing Objections against the officially assessed individual land price

(1) Any person who has an objection against the officially assessed individual land price may file a written objection with the head of a Si/Gun/Gu within thirty days from the date of determination and public announcement of the officially assessed individual land price.

(2) The head of a Si/Gun/Gu shall review an objection and notify the applicant of the result in writing within 30 days from the expiration of the period for filing an objection under paragraph (1). In such cases, where the head of a Si/Gun/Gu deems the details of the objection appropriate, he/she shall adjust the officially assessed individual land price and re-

(3) Except as provided for in paragraphs (1) and (2), matters necessary for the application and procedures for dealing with such objection shall be prescribed by Presidential Decree.

Enforcement Decree of the Public Notice of Values and Appraisal of Real Estate Act

Article 20 Determination and Public Notice of Individual Land Price

(1) The head of a Si/Gun/Gu shall determine and publicly announce the officially assessed individual land price by May 31 each year (in cases falling under Article 15 (2), the date prescribed in each subparagraph of the same paragraph).