Daegu District Court 2009Guhap12 (No. 12, 2009)

early 2009Gu066 ( December 15, 2008)

In case of acquiring profit from the transfer of the house, the house can be transferred even if the building was removed before the balance settlement date.

Even if the housing was removed before the remainder payment date, as long as the Plaintiff received full payment from the non-party company, the transfer income tax should be calculated by deeming it as the owner of high-priced houses and three houses per household.

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

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The imposition of capital gains tax of KRW 2,646,243,00 against the Plaintiff on December 11, 2008 shall be revoked.

1. Circumstances of the disposition;

A. On January 27, 2002, the Plaintiff purchased a multi-family house on the fourth floor of reinforced concrete structure chain roof (hereinafter “the instant house”) located on the land, and completed the registration of ownership transfer on March 5, 2002, by purchasing from the largestCC the apartment house of 552-2 large 338 square meters, 552-14 square meters, and 37 square meters in the same 552-14 square meters (hereinafter “the instant land”).

(B) On June 14, 2005, the Plaintiff, a company implementing a reconstruction project, transferred the instant land to DDDD (hereinafter referred to as "non-party company") at the price of KRW 4 billion, and reported and paid capital gains tax of KRW 15,210,570 on March 17, 2006, after calculating gains from transfer based on the standard market price of the instant land. The Defendant conducted an investigation on capital gains tax reported by the Plaintiff, and then transferred all the instant land to the non-party company as well as the instant housing. The Defendant determined that the Plaintiff’s transfer of the instant land and the instant land owned three or more houses for one household, and thus, the said transfer constitutes a case where the Plaintiff transferred the instant high-priced house to one household at the time of the transfer of the instant land at the price of KRW 3 billion, which is calculated by applying the transfer income tax rate of KRW 15,210,206 and KRW 206,206 to the Plaintiff on December 11, 2008.

D. Meanwhile, the Plaintiff filed an appeal with the Tax Tribunal against the instant disposition, but the Tax Tribunal rendered a decision to dismiss the Plaintiff’s appeal on February 17, 2009.

[Reasons for Recognition] Facts without dispute, Gap evidence 1 to 14, Eul evidence 1, Eul evidence 2-1 to 9, Eul evidence 7, the purport of the whole pleadings

2. Whether the dispositions of the instant case are legal.

A. The plaintiff's principal

(1) A statement that the subject matter of sale is limited to the land

The Plaintiff entered into a sales contract with the Nonparty Company to sell only the instant land on the condition of removing the instant housing, and accordingly, the Plaintiff sold only the instant land after removing the instant housing through the Nonparty Company. As such, the instant disposition that imposed capital gains tax by deeming the Plaintiff as the owner of a high-priced house under Article 96(1)1 of the Income Tax Act, which applies the actual transaction price on the premise that the Plaintiff transferred the instant housing outside of the instant land (where the total actual transaction price of the housing and the land appurtenant thereto is at least 60 million won), and the actual transaction price and heavy taxation, under Article 96(1)7 of the Income Tax Act, to which Article 96(1)7 of the Income Tax Act

(2) The argument that whether the Plaintiff is a high-priced person or a single household housing owner should be determined based on the time of transfer.

Even if the Plaintiff included the instant house in the subject matter of a sales contract concluded between the Nonparty Company, the instant house was destroyed before the remainder payment date, which is the time of transfer as stipulated in Article 162 of the Enforcement Decree of the Income Tax Act (the date of settlement of the price of the relevant asset), and the Plaintiff was not the owner of a high-priced house and three houses per household at the time of transfer, and thus, the instant disposition that calculated capital gains tax was unlawful by deeming the Plaintiff as the owner of a high-priced house or three or more houses per household and the owner of a high-priced house.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1) The instant house is a building newly built on or around January 2002, and the Plaintiff purchased the instant house from the largestCC, and conducted a remodeling by bringing more than KRW 400 million, and at the time of the instant sales contract, the leased profit was equivalent to KRW 500,000 to KRW 7 million per month.

(2) On June 14, 2005, the Plaintiff entered into a sales contract with a non-party company (hereinafter referred to as “instant sales contract”). The sales contract (Evidence A7; hereinafter referred to as “instant sales contract”) contains the following (as follows, the parts written by cutting with a cutting system from the following, and the remainder is printed with a fluence letter, and the Plaintiff’s seal was affixed on the side of the fluence letter.

(3) At the time of concluding the instant sales contract, the Plaintiff owned three or more houses for one household, including the instant housing.

(4) The Plaintiff received respectively down payment of KRW 400 million on June 22, 2005, the intermediate payment of KRW 2.4 billion on October 19, 2005, and the remainder of KRW 1.2 billion on December 29, 2005, respectively, from the Nonparty Company.

(5) On December 28, 2005, the day immediately before the remainder payment date, the non-party company removed the instant housing at the expense of the non-party company through the removal agent company Taesan Development Co., Ltd., and completed the registration of destruction of the instant housing on the same day.

(6) At the expense of the non-party company, the non-party company directly paid KRW 25 million to the tenants of the instant housing in the name of moving expenses, etc., and the Plaintiff paid the rental deposit to the tenants at the Plaintiff’s expense.

(7) At the time, a newB, who was in charge of purchasing a business site as an employee of the non-party company, was investigated by the Defendant in relation to the instant case and made a statement to the following effect:

(A) The purchase price principle for the business site of the non-party company is higher than 2.8 times the officially announced price in the case of land, and in the case of a building, it is the amount set at a differential level according to the construction year. The plaintiff is important to the housing of this case, and thus, the plaintiff was required to purchase the land of this case or 5 billion won. The non-party company purchased the land of this case and 4 billion won from the plaintiff.

(B) The non-party company, at the expense of the non-party company, directly took charge of moving and surrendering the tenants of the instant housing by paying moving and surrendering expenses to the tenants of the instant housing.

(C) The non-party company, as an executor, imposed capital gains tax on behalf of the props. However, in the case of the plaintiff, the non-party company is liable for capital gains tax calculated based on the actual transaction price when the land was transferred to the non-party company while the non-party company becomes liable for the transfer income tax calculated based on the standard market price when the land was transferred to the non-party company in the state where the house was destroyed. In addition, since 2006, the transfer income tax was calculated based on the actual transaction price as well under the amended Income Tax Act. Accordingly, the non-party company immediately removed the house of this case on December 28, 2005, which is the day immediately before the outstanding payment date, and completed the registration of destruction or destruction of the building.

(8) The Plaintiff received a tax investigation from the Defendant and made a statement of the following purport.

(A) The Plaintiff intended not sell the instant house because the instant house purchased a new building with a lot of rent revenue as an old-age measure. However, the newB was almost every day and the newB was found, and the transfer income tax was fully responsible for the non-party company. The purchase price of KRW 4 billion is the amount reflecting the value of the instant land and the building of the instant house.

(B) The plaintiff shall not be informed of the contents, as the moving expenses for the tenant of the instant house and the surrender expenses have been paid directly by the company outside the country.

(C) Since the removal of the instant house was directly treated by the non-party company, the Plaintiff was not well aware of its content.

(9) The hydro-dong E-dong land protocol (No. 5-1) prepared by the non-party company was divided into the part of the land and the part of the building that the non-party company decided to compensate for the props at the beginning. However, even in the case of the plaintiff, the part of the land in this case (compensation amounting to KRW 496,860,00) and the part of the housing in this case (compensation amounting to KRW 366,569,500) were divided into the part of the land in this case and the part of the housing (compensation amounting to KRW 366,569,500.

[Reasons for Recognition] Unsatisfy, Gap evidence 3 through 8, Eul evidence 4, Eul evidence 5-1, 2, 3, Eul evidence 6-1, 6-1, 6-1, 5-2, and 5-3, part of testimony, and the purport of the whole pleadings by the witness of the party.

D. Determination

(1) Whether the subject matter of the contract of this case includes the house of this case

(A) In a case where a parcel of land on which a house is constructed is sold, whether only the parcel of land is sold or sold with the exception of a house between the parties to the sale or purchase should be determined reasonably by comprehensively taking into account the intent between the parties to the sale or purchase and the necessity of such sale, details of the sales

(B) The following circumstances are acknowledged by the above fact that Article 1 of the sales contract of this case includes only the land of this case as the subject matter of sale, but the following part of the sale contract includes buildings and underground structures of this case, etc., and the plaintiff's seal is affixed thereto (it is difficult to see that the plaintiff's seal is merely an example, but it is not a simple example in light of the fact that the plaintiff puts his seal on the above attached section, etc.) The plaintiff's sales contract of this case's house includes the land of this case to the extent that the building of this case can not be used as a house when it sells the house of this case. The plaintiff's house of this case, which is the land of this case, is worth being sold to the non-party 4 as well as the building of this case, and it is difficult for the plaintiff to purchase and sell the house of this case to the non-party 1 as well as to purchase and sell the house of this case to the non-party 1 as the newly constructed land of this case.

(2) Whether the instant housing should exist as of the remaining payment date as a taxation requirement

The purpose of the Income Tax Act and its Enforcement Decree is to prevent speculation in advance and to promote stability of real estate prices by limiting excessive profits from the transfer of a house by one person who owns three or more households and then owns three or more households. Therefore, even if the transferor gains substantial profits from the transfer of a house by transferring a high-priced house or three houses for one household, it is consistent with the purpose of calculating capital gains tax accordingly by deeming the transfer of a high-priced house, the transfer of a house, and the transfer of a three houses for one household as transfer of a house under Article 162 of the Enforcement Decree of the Income Tax Act, as long as the transferor gains substantial profits from the transfer of a house.

Therefore, even if the instant house was removed before the remainder payment date, so long as the Plaintiff received full payment of the instant purchase price from the Nonparty Company, the transfer income tax should be calculated accordingly by deeming it as the owner of expensive houses and three houses per household. Ultimately, the Plaintiff’s assertion on this portion is without merit.

3. Conclusion

The judgment of the court of the first instance which dismissed the plaintiff's claim is just, and the plaintiff's appeal is dismissed.