Seoul Administrative Court 2010Gudan1651 ( December 13, 2010)

Cho High Court Decision 2010Du0966 (2010.06.04)

Where a house is transferred due to unavoidable reasons such as overseas dispatch, it shall be subject to non-taxation for one household.

It is reasonable to view that the transfer income tax is exempt without being limited to the retention period and residence period to apply the non-taxation provision for one household since the former household's departure from Korea to a new workplace where it is impossible to commute to and from work due to the dispatch personnel order.

Article 154 of the Enforcement Decree of the Income Tax Act: Scope of One House for One Household

2011Nu1674 Revocation of Disposition of Imposing capital gains tax

United StatesA

Gangwon-gu Director of the District Office

Seoul Administrative Court Decision 2010Gudan11651 Decided December 13, 2010

July 22, 2011

January 6, 2012

1. The defendant's appeal is dismissed.

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

1. Purport of claim

The Defendant’s disposition of imposition of KRW 55,216,30 for the Plaintiff on January 4, 2010 shall be revoked.

2. Purport of appeal

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Quotation of judgment of the first instance;

The reasons to be stated in this judgment are as follows, and this is cited in the judgment of the first instance except for the supplement of the judgment of the first instance as follows.

2. Parts in supplement of judgment of the court of first instance;

The Defendant asserts that Article 71 (3) 2 of the former Enforcement Rule of the Income Tax Act (amended by Presidential Decree No. 2010, Jul. 21, 2011; hereinafter referred to as “instant main provision”) which is a single household-free Special Provision on Housing does not explicitly include “the case of leaving Korea to another Si/Gun,” and that applying it to the Plaintiff constitutes an interpretation that is prohibited under the principle of no taxation without the law without the law. In light of the following circumstances, it is reasonable to view that the Plaintiff’s departure from Korea constitutes an interpretation that is permitted under the principle of no taxation without the law, even if it is not allowed to expand or analogically interpret the tax laws without any reasonable reason under the principle of no taxation without the law. However, it does not violate the principle of no taxation without the law, considering legislative intent, etc. within the possible scope of the legal text (see, e.g., Supreme Court en banc Decision 2008Du150, Jul. 21, 2011).

A. The purport of Article 154(1) of the former Enforcement Decree of the Income Tax Act is to suppress a 3-year holding requirement under the Income Tax Act as a requirement of one house for one household. Thus, it is inevitable for speculation purpose, not for speculation purpose, or an exception to long-term holding. In particular, in the case of Article 154(3) of the former Enforcement Decree of the Income Tax Act and Article 154(1) of the same Act, moving a residence from the previous residence to a new workplace where it is impossible to commute to and from the previous residence due to the circumstances of work, etc. In addition, it seems reasonable to be due to the consideration that it is reasonable to exempt the Plaintiff from taxation by the requirement of residing in the previous residence for more than one year. However, the Plaintiff’s departure from the Republic of Korea to a new workplace where it is impossible to commute to and from work due to a

B. Although the expression of the key clause of this case is a case where the dwelling is transferred to another Si (including the Special Metropolitan City and a Metropolitan City) or Gun (including the case where the dwelling is transferred between the Gu and the Eup or Myeon area within the Metropolitan City area and the case where the dwelling is transferred between the Dong area and the Eup or Myeon area within the urban and rural complex complex city area established pursuant to Article 7(2) of the Local Autonomy Act), it may be interpreted as if Article 154(1)3 of the former Enforcement Decree of the Income Tax Act can be applied only when the dwelling is transferred to the Republic of Korea. However, in light of the legislative intent of the main clause of this case, there is no express expression that the relocation area is limited to the domestic area, and in light of the legislative intent of the above provision, there is no logical basis or reason to exclude the departure from the above key clause to work as the overseas branch.

C. As stated in the judgment of the court of first instance, the plaintiff is an officer or employee dispatched to the overseas place of business of a domestic corporation under Article 3 of the former Enforcement Decree of the Income Tax Act at the time of transfer of the apartment of this case, and the apartment of this case constitutes one house in which one household that constitutes the plaintiff has resided in Korea for not less than one year, and the remaining part of the plaintiff meets the uniform requirements and it is difficult to find the reason or necessity for the relocation of the apartment of this case to be treated differently from the other Si/Gun in Korea.

D. As stated in the judgment of the court of first instance, the purport of the instant provision is to ensure the stability of the residential life of the people and the freedom of their relocation of residence by failing to impose income tax on certain cases where it can be deemed that transferring one house in which one household has resided in Korea for not less than one year as the basis of the residential life of the people, which serves as the basis of the residential life of the people, to the extent that the transfer of the house is not transferred while temporarily residing or owning it for the purpose of speculation. It is evident that the Plaintiff did not transfer the instant apartment house while temporarily residing or owning it for the purpose of acquiring capital gains or speculation.

E. Under the premise that the proviso of Article 154(1)2-b and (c) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 2006, Feb. 9, 2006; hereinafter referred to as "transfer within 2 years from the date of departure"), the defendant asserts that when the owner of a domestic house emigrates or departs from Korea, the application of the proviso of the above Article 154(1)-2-b and (c) of the former Enforcement Decree of the Income Tax Act, is reduced within 2 years after the date of departure to resolve unlimited non-taxation without limitation on the transfer margin accruing during the period of ownership of the house after emigration, and that when subparagraph 3 of the proviso of the same Article does not restrict the transfer time of the house owned by the plaintiff, the above provision of subparagraph 2-2 and subparagraph 3 of the above Article need to be applied to the above domestic company's transfer of the house to another domestic company, the above provision of subparagraph 2-2 of the above Article does not apply to the above domestic company's transfer of the house to the above domestic company.

F. In addition, the Defendant asserts that, as alleged by the Plaintiff, the interpretation of the instant key provision would result in discrimination between the households that have resided in the domestic house for not less than one year and the households that have resided in the domestic house for less than one year, causing another inequality and discrimination. However, such a result may inevitably arise as the above subparagraph 3 requires a "resident in the house for not less than one year". Rather, the interpretation as alleged by the Defendant would result in a problem of equity between the resident in the Republic of Korea and the overseas resident who has the same remaining requirements as described in the above subparagraph 3, as seen earlier. The Defendant’s assertion is difficult to accept.

G. In interpreting the instant key provision, as alleged by the Defendant, the interpretation of the instant key provision would result in expanding the scope of taxable objects in a disadvantageous direction to taxpayers by adding a temporary requirement not delegated under the proviso of Article 154(1)3 of the former Enforcement Decree of the Income Tax Act, which is the basis law, to the extent that the said provision is unconstitutional or unlawful.

3. Conclusion

Therefore, the judgment of the first instance court is justifiable, and the defendant's appeal is dismissed, and it is so ordered as per Disposition.

partnership.