A. Whether Article 72(3)8 of the Regulations on the Management of Property Tax Investigation (No. 980 of the National Tax Service’s Directive on January 26, 1987) is valid (negative)

B. Whether a transferor’s share in the transferred land falls short of the scale provided for in Article 72(3)6 of the preceding paragraph can be deemed an speculative transaction (negative)

A. The provisions of Article 72(3)8 of the Regulations on the Management of Property Tax Investigation, which stipulates a specific type of transaction designated by the Commissioner of the National Tax Service as deemed necessary to restrain the speculation of real estate, which is a type of transaction that calculates the transfer or acquisition value based on the actual transaction price, allow arbitrary discretion of the tax authority by failing to specify the criteria for identifying whether the person is a speculative trader. On the other hand, the said person liable for tax payment is a provision which makes it impossible to entirely estimate the excess amount to be imposed on himself before the disposition of transfer income tax is imposed, and thus, violates the principle of no taxation without law.

B. As long as capital gains tax is imposed on an individual person who transfers assets, such as land, as long as the scale of the transaction falls under the grounds of Article 72(3)6 of the previous Directive, it should be determined on the basis of the scale of each transferor’s individual subject matter of transfer. Therefore, if the share of co-owner with respect to the transferred land falls short of the scale stipulated in the above provision, there is no room for the application of the above provision to regard it as an speculative transaction.

Articles 23 and 45 of the Income Tax Act, Article 170(4)2(a) of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 12767, Aug. 1, 1989); Articles 38 and 59 of the Constitution; Article 72(3)8(b) of the Regulations on the Management of Property Tax Investigation (amended by the National Tax Service Directive No. 980, Jan. 26, 1987); Article 72(3)6 of the Regulations on the Management of Property Tax Investigation (amended by the National Tax Service Directive No. 980, Jan. 26, 1987)

A. Supreme Court Decision 90Nu3768 delivered on July 27, 1990 (Gong1990, 1824) 90Nu6699 delivered on January 11, 1991 (dong) 90Nu7364 delivered on January 11, 1991

Attorney Park Jae-gu, Counsel for the defendant-appellant

Ansan-gu Office of Tax Affairs

Seoul High Court Decision 90Gu2897 delivered on August 24, 1990

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

Article 170 (4) 2 of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 12767 of Aug. 1, 1989; hereinafter the same) provides for specific types of transactions designated by the Commissioner of the National Tax Service, as it is deemed necessary to restrain real estate speculation, which is a transaction type in which transfer or acquisition value is calculated based on the actual transaction price, under Article 170 (4) 2 of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 12767 of Aug. 1, 1989; hereinafter the same), and Article 72 (3) of the Regulations on the Management of Property Tax Investigation by the National Tax Service (amended by the National Tax Service Directive No. 980 of Jan. 26, 1987; hereinafter the same shall apply), which provides for specific types of transactions, subparagraph 8 of Article 72 (3) of the former Enforcement Decree of the Income Tax Act grants arbitrary discretion to the tax authority, on the contrary basis of the defendant's grounds that the above provision is invalid.

In addition, as long as capital gains tax is imposed on an individual person who transfers assets, such as land, the scale of the transaction shall be determined on the basis of the scale of the object of transfer by the individual transferor. Therefore, insofar as the ownership size of the Plaintiff’s land transferred in this case falls short of the scale stipulated in the above provision, it is obvious that the ownership size of the Plaintiff’s land transferred in this case falls short of the scale stipulated in the above provision, there is no room for the application of the above provision to regard the transaction as an speculative transaction. Therefore, the judgment below to the same purport is correct, and there is no reason to hold that the judgment of the court below should be determined on the basis of the size of the entire land by combining all shares of the other persons

Therefore, the appeal is dismissed and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Yong-dong (Presiding Justice)