Review Transfer 2018-0053 (Law No. 16, 2018)

The scope of expenses to be included in necessary expenses in calculating gains on transfer;

The disposition of this case, which calculated gains on transfer, is legitimate, except for the expenses not falling under such provisions, since those which may be included in the necessary expenses in calculating gains on transfer are listed in the statutes.

Article 97 of the former Income Tax Act (Calculation of Necessary Transfer Income)

2018-Gu Partnership-1528 Revocation of Disposition of Imposing capital gains tax

AA

o Head of the tax office

October 17, 2018

November 07, 2018

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s imposition of KRW 2,205,550 against the Plaintiff on April 2, 2018 shall be revoked.

1. Details of the disposition;

A. On January 13, 2017, the Plaintiff acquired the instant land at KRW 108,890,000 by winning the bid for KRW 108,890,000 (hereinafter “instant land”). On October 31, 2017, the Plaintiff sold the instant land to BB real estate Co., Ltd. at KRW 147,80,000.

B. After deducting KRW 30,440,80 from the gains on transfer of the instant land, the Plaintiff reported and paid KRW 2,984,600 to the necessary expenses.

C. On April 2, 2018, the Defendant deemed that KRW 3,947,660, such as loan interest expense, among the expenses that the Plaintiff deducted as necessary expenses, did not constitute necessary expenses subject to deduction, and subsequently deducted only KRW 26,493,140 as necessary expenses, and corrected and notified the Plaintiff of KRW 2,205,550 as capital gains tax (hereinafter “instant disposition”).

D. The Plaintiff dissatisfied with the instant disposition and filed a request for examination with the Commissioner of the National Tax Service, but the Commissioner of the National Tax Service dismissed the Plaintiff’s request for examination on July 16, 2018.

[Reasons for Recognition] Unsatisfy, Gap evidence 1, 2, 7, Eul evidence 1, the purport of the whole pleadings

2. Relevant statutes;

The entries in the attached statutes are as follows.

3. Summary of the plaintiff's assertion

The sum of KRW 2,407,722, KRW 878,70, KRW 50,000, property tax, KRW 287,680, and KRW 3,624,102 shall be deducted as necessary expenses.

4. The legality of disposition.

Article 97 (1) of the former Income Tax Act (amended by Act No. 15225, Dec. 19, 2017) limits necessary expenses to "acquisition value," "capital expenditure, etc. prescribed by Presidential Decree," "transfer expense, etc. prescribed by Presidential Decree," and Article 163 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 28637, Feb. 13, 2018) stipulates that "acquisition value, such as actual transaction value, "capital expenditure, etc. prescribed by Presidential Decree", "transfer expense, etc. prescribed by Presidential Decree," and "transfer expense, etc. prescribed by Presidential Decree" are included in the following provisions: (a) lending interest on loans for acquiring the land in this case; (b) redemption fee; (c) cancellation cost; (d) acquisition of assets with loans does not fall under any of the necessary expenses enumerated in the above Act; and (e) transfer expense is deducted; and (e) transfer expense is deducted to a person who acquires the assets from loans; and (e) transfer expense is calculated to acquire the land in this case as necessary expenses.

5. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so ordered as per Disposition.

shall be ruled.