Suwon District Court 2010Guhap3973, 2011.05

early 2010 Heavy108 (Law No. 12, 2010)

In accordance with the standard market price, the transfer margin should be calculated according to the exchange transaction whose actual transaction price is unknown.

It cannot be deemed that the value of the exchanged real estate subject to exchange at the time of the exchange contract is settled, and the sales contract submitted at the time of the report of transfer income tax constitutes a contract different from the fact, and thus, it shall be calculated based on the standard market price

Article 96 of the Income Tax Act

2011Nu2600 The revocation of the disposition to impose capital gains tax

XX

Head of the Office of Government

Suwon District Court Decision 2010Guhap3973 Decided July 5, 2011

February 22, 2012

March 28, 2012

1. The part of the judgment of the court of first instance against the plaintiff falling under the order to revoke the below shall be revoked. The part of the disposition imposing capital gains tax of KRW 000 on the plaintiff on December 1, 2009 which the defendant imposed on the plaintiff on December 1, 2009 exceeds KRW 00.

2. The remaining appeal filed by the Plaintiff is dismissed.

3. 10% of the total costs of litigation shall be borne by the Plaintiff, and the remainder by the Defendant.

The judgment of the first instance shall be revoked. The defendant's disposition of imposition of capital gains tax of KRW 000 on December 1, 2009 against the plaintiff on December 1, 2009 shall be revoked.

1. Details of disposition;

A. On March 28, 2005, the Plaintiff entered into a contract (hereinafter referred to as “exchange contract”) with EA on the exchange of the Bluan-ri 00-0 square meters and buildings on its ground (hereinafter referred to as “the instant real property” together with the above land and buildings) owned by EA-A-si in Ycheon-si, Macheon-si, where the Plaintiff owned, 163 square meters and 163 square meters and 468 square meters and 1,349.8 square meters and buildings on its ground (hereinafter referred to as “exchange real property by combining each land and buildings). At the time, the instant real property was speculative in accordance with Article 66(1)6 of the former Income Tax Act (amended by Act No. 7837, Dec. 31, 2005; hereinafter the same shall apply).

B. On April 20, 2005, this case’s real estate was transferred to the rightB, who is a person known by thisA, and the exchanged real estate was transferred to HaCC, who was the Plaintiff’s wife on April 22, 2005.

C. On June 2, 2005, the Plaintiff reported and paid KRW 000 of the transfer income tax for the year 2005 to the Defendant with the acquisition price of the instant real estate as KRW 000 and the transfer price as 000 pursuant to Article 96(1)6-2 of the former Income Tax Act.

D. On December 1, 2009, the Defendant considered the Plaintiff as underreporting the transfer value at the time of reporting the transfer income tax on the instant real estate, and assessed the actual transfer value at KRW 000, and issued the instant disposition that corrected and imposed the transfer income tax of KRW 000 for the year 2005.

[Ground for Recognition: Facts without dispute, Gap evidence Nos. 1 and 2, Eul evidence Nos. 1, 2, 11 and 12, purport of the whole pleadings]

2. Whether the disposition is lawful;

A. The plaintiff's assertion

Although the Defendant calculated the transfer value of the instant real estate at KRW 000, the said money is not the actual transaction value under Article 96 of the former Income Tax Act. Since the instant real estate transfer is a transfer by exchange and it is impossible to confirm the actual transaction value, the transfer value should be determined based on the standard market price. The instant disposition is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) The actual transaction value, which is the basis for calculating gains on transfer, is not the general market value that reflects the objective exchange value, but the actual transaction value itself or at the time of the transaction. As such, where a transaction subject to capital gains tax is a simple exchange, such actual transaction value may not be verified, but where the exchange is a value exchange based on the value of an object, such as following a settlement procedure for the difference in the appraisal value, based on the market price appraisal of the object to be exchanged, the actual transaction value may be verified. In such cases, the monetary value of the object to be acquired through the exchange and the cash paid, etc. of the object to be transferred through the exchange (see, e.g., Supreme Court Decision 2009Du19456, Feb. 10, 201).

2) In connection with the exchange of the instant real estate, the Defendant: (a) determined the value of the instant real estate at KRW 00,00, which is the standard market price; (b) thisA or the rightB acquired KRW 00,000, out of the secured debt established in the instant real estate; (c) was paid KRW 00,000, out of the secured debt established in the exchange real estate; and (b) was paid from thisA or the rightB; (b) ultimately, the actual transaction price was KRW 00,000, + ② the difference between the acquisition amount of the obligation secured in both real estate + KRW 00,000, + ③00).

However, considering whether the Plaintiff and thisA settled the value of the exchanged real estate at the time of the instant exchange contract with KRW 000, there is insufficient evidence to acknowledge it only with the entries in the evidence Nos. 2, 5, and 7, and there is no evidence to acknowledge it otherwise, and the evidence Nos. 6 of this Court does not believe that the evidence No. 6 of this case, which appears to be consistent with the above, is in view of the testimony of ICD.

Rather, in full view of the evidence No. 1 and No. 8, and the purport of the entire argument in the testimony of Doddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddddd,

3) Therefore, the part of the instant disposition, which was based on the premise that the actual transaction price of the instant real estate was 000, is illegal.

In light of the above facts, the Plaintiff asserts that the transfer price difference should be calculated based on the standard market price in cases where the actual transaction price cannot be confirmed, and in light of the above facts, the sales contract (Evidence No. 3) submitted by the Plaintiff at the time of filing a transfer income tax return constitutes a contract different from the fact, and thus, the transfer price difference in the real estate of this case shall be calculated based on the standard market price under Article 114(5) of

4) If the difference in the transfer of the instant real estate is calculated based on the standard market price, the reasonable amount of tax is as indicated in the column for “justifiable tax amount of tax” on the calculation of the transfer income tax belonging to year 2005. The instant disposition is lawful within the reasonable scope of tax.

3. Conclusion

The part of the judgment of the court of first instance against the plaintiff regarding the scope exceeding the reasonable tax amount shall be revoked, and the disposition corresponding to the revoked part shall be revoked. The remaining appeal filed by the plaintiff shall