Seoul Administrative Court 2013Gudan12174 ( December 13, 2013)

Seocho 2013west 0377 (Law No. 23, 2013)

The mere fact of title trust of real estate cannot be deemed to constitute fraud or other unlawful acts.

The title trust act alone cannot be deemed as a "Fraud or other unlawful act" if there was a deceptive scheme or other active act that makes it impossible or considerably difficult to impose and collect taxes, or it cannot be deemed as a "Fraud or other unlawful act as an unregistered resale."

The exclusion period of national tax imposition under Article 26-2 of the Framework Act on National Taxes

2014Nu40953 Revocation of Disposition of Imposing capital gains tax

KimA

Head of Seocho Tax Office

National Flag

July 8, 2014

August 19, 2014

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 decision that the disposition of imposition of OO(including additional OO) of capital gains tax for the year 2003 against the plaintiff on July 3, 2012 is revoked.

2. Purport of appeal

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

1. Details of the disposition;

A. On September 8, 2003, the Defendant rendered a disposition on July 3, 2012, imposing an additional tax on the capital gains tax (including the additional tax on the capital gains tax) for the year 2003 on the following grounds: (a) one half of the shares of the Plaintiff (hereinafter “instant land”) among the OOOOO-gun No. 240,198 square meters of forest land (hereinafter “instant land”) shall be awarded a successful bid together with OB, CC, and NAD; (b) on the sole name of 4 persons, the title was under the agreement of OB; (c) on October 30, 2003, on the ground that the Plaintiff did not file a return on capital gains tax for resale that was not registered with thisCC and did not return capital gains tax (hereinafter “instant disposition”).

B. On December 26, 2012, the Plaintiff was dissatisfied with the instant disposition and filed an objection with the Tax Tribunal.

Although the demand for the purchase was made, it was dismissed on April 23, 2013.

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 1, 5-1, 2, Eul evidence No. 1, and arguments

The purport of the whole

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful for the following reasons.

1) The absence of title trust

The Plaintiff invested funds necessary for the purchase of real estate to thisCC, but only received investment principal and profit distribution after the land was sold, and there was no fact that the Plaintiff purchased the shares of the instant land and held title trust with the ChoB. Therefore, the instant disposition based on the premise that the instant shares were nominal trust with the ChoB is unlawful.

(ii) the purpose of the exclusion period; and

If a taxpayer of capital gains tax fails to report the tax base of capital gains tax within one association member's relocation right, the exclusion period of capital gains tax is seven years from the date when the capital gains tax may be imposed, and the capital gains tax following the transfer of shares in the instant land was imposed on July 3, 2012 after seven years from the date when the exclusion period from imposition was seven years from October 30, 2003.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) The Plaintiff, at the auction conducted in connection with thisCC, ChoBB, and JeonD, agreed that the instant land was awarded a successful bid for the OB by investing only KRW 00,000 per capita in the exchange of the instant land, but the title was decided to be the sole name of ChoB. Accordingly, on September 8, 2003, ChoB completed the registration of ownership transfer on the instant land on the ground of "voluntary auction on August 20, 203."

2) ThisCC demanded that the land in this case be transferred to a third party and distributed gains from transfer in proportion to investment funds by transferring it to the Plaintiff, ChoB, and JeonD (hereinafter “Plaintiff, etc.”). While the land in this case was transferred to PE, the Plaintiff, etc. paid KRW 00,000 to the Plaintiff, etc. by October 30, 2003, it did not transfer the land in this case, but paid KRW 10,000 to the Plaintiff, etc., but the fact was not the transfer of the land in this case, but the ownership transfer right claim registration was completed on October 30, 2003 for the purchase and sale of the land in this case and the payment was made to the Plaintiff, etc. with the money borrowed therefrom.

3) When the issue of payment of acquisition tax, property tax, etc. was related to the successful bid of the instant land as one of the joint buyers, ChoB, a registered titleholder, the registration of ownership transfer on November 15, 2004, was demanded to thisCC several occasions to resolve the title of ownership, and thisCC completed the registration of ownership transfer on the instant land under its own name on August 17, 2007.

4) There is a conflict of opinion between the ChoB and thisCC on the settlement of the capital gains tax following the above transfer registration. During that process, the ChoB filed a criminal complaint against the CC that forged or exercised each sales contract as set forth below, and the CC was prosecuted for the crime of forging private documents and the crime of uttering of the above investigation document. The CC was convicted by the first instance court (Seoul Central District Court Decision 2008Da7169), but the judgment of innocence was rendered by the second instance (Seoul Central District Court Decision 2009No2712), and the judgment of innocence became final and conclusive as is.

5) On August 1, 2011, the Defendant determined and notified the transfer income tax of 2007 on August 17, 2007, the transfer value of OB on August 1, 201, who did not report the transfer income tax to CC after completing the registration of ownership transfer on the instant land. The acquisition value of OB as the sum of the successful bid price and the acquisition cost, and the transfer time as the transfer date of OB on August 17, 2007.

6) On September 9, 201, the Seoul Regional Tax Office filed an objection against the imposition of capital gains tax for the year 2007 imposed on him, and accordingly, the Seoul Regional Tax Office asserted that the instant land was jointly acquired by four persons, but as a result, transferred it to CC and received investment profit distribution (transfer margin) OO won, and that the disposition imposing capital gains tax on the premise that the transfer proceeds are OO won was unlawful, and that the said disposition was revoked on the ground that the allegation was credibility.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 4, 6, 7, Eul evidence Nos. 2, 4, and 6, the purport of the whole pleadings

D. Determination by issue

1) Whether title trust exists

On the other hand, the following circumstances revealing the purport of the entire argument in the above facts. ① The plaintiff actually agreed to receive a successful bid with ChoBB, LeeCC, and JeonD, but the land in this case was transferred to a third party after completing the registration of transfer under the sole name of ChoBB for convenience, and immediately after completing the registration of transfer under the third party’s name, the transfer of the land in this case was transferred to a third party, and the settlement of the transfer price was made. ② The plaintiff et al. agreed to receive a distribution of an amount equivalent to his share. ② The plaintiff et al. agreed that the sale of the land in this case was transferred to a third party even though he et al. decided to directly purchase the land in this case. The plaintiff et al. did not accept the agreement that the transfer of the land in this case was transferred to the third party. ③ Since the ownership transfer registration of the land in this case was completed at the time of transfer registration under the name of the third party, the plaintiff et al. did not arbitrarily notify the third party about the transfer of the land in this case’s name.

Meanwhile, even if the Plaintiff paid only KRW 22,00,000 to 41 million investment per person, and the remaining money was paid to the Plaintiff as the Plaintiff’s share, there is no change in the Plaintiff’s transfer margin as OO won, and there is no reason to reverse the Plaintiff’s assertion on this issue.

2) Whether the exclusion period has lapsed

A) Whether the exclusion period is 10 years or more

Article 26-2(1) of the Framework Act on National Taxes provides for the exclusion period of the imposition of national taxes; for 10 years from the date on which the national taxes can be imposed if a taxpayer evades a national tax or obtains a deduction by fraud or other improper means (No. 1); for 7 years from the date on which the national taxes can be imposed if a taxpayer fails to file a tax base return within the statutory due date of return (No. 2); for 5 years from the date on which the national taxes can be imposed if a taxpayer does not fall under subparagraphs 1 and 2 (No. 3). The legislative intent of the above provision is, in principle, to ensure prompt determination of tax law relations, the exclusion period of the imposition of national taxes is five years, but it is difficult to find that the tax authority is not obliged to file a return of omission; for 10 years from the date on which the tax authority imposed a false title trust or other unlawful acts; for 20 years from the date on which the Plaintiff did not impose a false tax evasion or other unlawful acts; for 10 years from the date of sale of the relevant land.

Therefore, the exclusion period for the imposition of capital gains tax on the land share in this case is seven years.

Accordingly, the Defendant asserted that the Plaintiff’s act of title trust on the instant land constitutes “a case where a taxpayer evades national taxes or obtains refund or deduction by fraudulent or other unlawful act” under Article 26-2(1)1 of the Framework Act on National Taxes, and thus, the exclusion period of capital gains tax on the instant land should be ten years, which is the period prescribed in subparagraph 1 of the above Article. However, in this case, the Plaintiff’s act of title trust on the instant land constitutes a single registration under another person among co-owners, instead of a co-ownership registration, and thus, it cannot be seen as identical to the act of resale unregistered because it does not constitute evasion of capital gains tax. Therefore, the Defendant’s above assertion is difficult to accept.

B) Whether the exclusion period is expired

Article 26-2 (1) of the Framework Act on National Taxes provides that "national taxes shall not be imposed after the expiration of the period prescribed in the following subparagraphs," and subparagraph 2 of Article 26 provides that "if a taxpayer fails to file a tax base return within the statutory due date of return, for seven years from the date on which the national taxes are assessable," and Article 12-3 (1) of the Enforcement Decree of the Framework Act on National Taxes provides that "the date on which the national taxes may be levied under Article 26-2 (3) of the Act shall be any of the following days," and that "the date on which the due date of return or the due date of submission for the tax base

Meanwhile, Article 105 (1) of the Income Tax Act provides that "the resident who transfers the assets under any subparagraph of Article 94 (excluding the resident who has reported a real estate transfer under Article 165) shall report the transfer margin calculated under Article 95 (1) to the chief of the district tax office having jurisdiction over the place of tax payment within 2 months from the end of the month in which the transfer date belongs under the conditions as prescribed by the Presidential Decree, and Article 110 (1) provides that the resident who has any transfer income in the relevant year shall report the transfer income to the chief of the district tax office having jurisdiction over the place of tax payment from May 1 to 31 of the year following

According to the above provisions, the exclusion period of capital gains tax due to the transfer of assets shall expire after June 1 of the following year from the time of transfer of the assets in question, which is the next day at the time of the expiration of the final return period of tax base, and after seven years from the date.

Meanwhile, the fact that the Plaintiff transferred the instant land shares and settled the transfer proceeds is as seen earlier on October 30, 2003 is the same as the time for the transfer of the instant land shares. Accordingly, the exclusion period for the imposition of capital gains tax due to the transfer of the instant land shares ought to be deemed as the time for the transfer of the instant land shares. Ultimately, the exclusion period for the imposition of capital gains tax due to the transfer of the instant land shares shall expire on May 31, 2004, which is the date following the end of the final return period for the tax base of capital gains tax for the transfer income tax for the year 2003, from June 1, 20

Therefore, the instant disposition taken on July 3, 2012 is null and void since it was conducted after the expiration of the foregoing exclusion period, and is also allowed to seek revocation of the instant disposition, and thus, the Plaintiff’s claim seeking revocation of the instant disposition is well-grounded.

3. Conclusion

Therefore, the plaintiff's claim is accepted, and the judgment of the court of first instance with the same conclusion is just, and the defendant's appeal is dismissed. It is so decided as per Disposition.