Early High Court Decision 2008Du3730 ( December 24, 2008)

In case where a false transfer contract is prepared and reported, the exclusion period for imposition shall apply to 10 years.

In order to grant credibility to the false declaration of transfer value when reporting the transfer value and to conceal the actual transfer value, it is recognized that there is a circumstance in which false transaction agreement in which the purchase price is excessively written and a written confirmation of transaction is prepared and submitted. As the plaintiff evades the transfer income tax by fraudulent or other unlawful means, the exclusion period for imposing the transfer income tax shall

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

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of capital gains tax of KRW 24,875,110 for the Plaintiff on August 4, 2008 shall be revoked.

1. Circumstances of the disposition;

A. On June 14, 200, the Plaintiff acquired 28.8/313 shares among the real estate listed in the separate sheet (hereinafter “the instant real estate”), but transferred the instant real estate in the purchase price of 108,00,000 won on January 19, 2001. On January 20, 2001, the Plaintiff made a preliminary return on the tax base of transfer income by using the transfer price and the acquisition price as the actual transaction price, unlike the actual transfer price, the transfer price was 78,00,000, the acquisition price was 73,20,000,000, and the transfer price was 554,40,000, and the calculated tax amount was 0,000 won, and submitted a certificate of the certificate of the personal seal impression of △△△△, which was prepared in conformity with the above content, with the sale price and sale price of the real estate in the form of 78,000,000 won.

B. After the transfer of the instant real estate on March 4, 2005, Yellow-si, Seoul Special Metropolitan City reported the transfer income tax on the actual transaction price of KRW 108,00,000. The Defendant determined the transfer value as KRW 108,00,00 through the investigation of the transfer value of the instant real estate between the Plaintiff and Yellow-si, Seoul Special Metropolitan City, and calculated the amount of the transfer value as KRW 11,221,760 with the amount of the transfer value as KRW 30,54,40, and calculated the amount of the transfer value as KRW 11,221,760 with the amount of the transfer value as KRW 30,575,110 with the amount of the transfer value as well as KRW 1,101,81,538 with respect to the additional tax of the bad return and the additional tax of KRW 12,51,538 with respect to the Plaintiff on August 4, 2008.

[Ground of recognition] Evidence Nos. 1, 2, 3-1, 2, 4, 5, 6-1, 2, 1, 2-2, 2-1 through 4 of Evidence Nos. 2-1, 3, and 3, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The instant disposition was unlawful since it was conducted after the lapse of the exclusion period of national tax from June 1, 2002, when the date on which the transfer income tax on the transfer of the instant real estate was imposed.

(2) Since the instant disposition is more than the principal tax, it violates the principle of excessive prohibition, thereby infringing on the Plaintiff’s property right, and as well as the Plaintiff’s property right, given that the purchaser, the purchaser, reported the actual transaction price, not the standard market price, and thus, the instant disposition was conducted by the purchaser. Therefore, in light of equity with the case where a tax imposition disposition is not made by reporting it as the standard market price, the Plaintiff should be deemed to have justifiable grounds

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) Article 26-2(1)1 and 3 of the Framework Act on National Taxes can not be imposed after the expiry of the five-year period from the date on which the national tax can be imposed. However, in cases where a taxpayer evades a national tax by fraudulent or other unlawful means, the exclusion period of the imposition of the national tax shall be ten years. Here, the "Fraud and other unlawful acts" refers to deceptive schemes or other active acts which make it impossible or considerably difficult to impose and collect taxes.

However, according to the above facts, when filing a preliminary return on the tax base of capital gains on the transfer of the real estate of this case, the plaintiff reported the false transfer value of KRW 108,00,000, not the actual transfer value of KRW 78,000,000, and made and submitted a false transaction agreement and a written confirmation of transaction in which the amount of the purchase price is under 78,000,000 in order to grant credibility in the actual transfer value and conceal the actual transfer value. Thus, the plaintiff's act constitutes a fraudulent or other active act that significantly makes it difficult to impose and collect taxes, and therefore, it constitutes "Fraud or other unlawful act" under the above provision.

Therefore, since the Plaintiff evaded capital gains tax by fraud or other unlawful acts, the exclusion period of imposition of capital gains tax on the transfer of the instant real estate shall be ten years. The instant disposition was conducted within a period of ten years from June 1, 2002, on which the transfer income tax on the transfer of the said real estate can be imposed. Thus, it cannot be deemed that the exclusion period of imposition was imposed after the lapse of the exclusion period.

(2) Article 115(1) and (2) of the Income Tax Act provides for the penalty tax for failure to file a return and the penalty tax for failure to file a return, while inducing a taxpayer to file a return on good faith and to prevent any waste of human resources and budget by the tax authorities resulting therefrom, the legislative purpose of which is justifiable, and to additionally pay an amount equivalent to a certain percentage of the amount of tax is an effective means to achieve the above legislative purpose. In light of the method of calculating additional tax under the above provision and the rate of additional tax, it is balanced with the degree of a taxpayer's breach of duty and its sanctions, and it is an appropriate level to ensure the effectiveness of the regulation on return and payment in good faith. Thus, the instant disposition on which an additional tax was imposed pursuant to the above provision violates the principle of excessive prohibition, thereby infringing the Plaintiff

In addition, insofar as the Plaintiff did not pay the transfer income tax by underreporting the tax base of transfer income, it cannot be deemed that there was any error in the instant disposition imposing the additional tax pursuant to the above provision, and the grounds alleged by the Plaintiff do not constitute justifiable grounds for exemption of the additional tax.

3. Conclusion

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