[1] In a case where the capital gains tax and the global income tax are imposed respectively on the income accruing from the transfer of real estate, the method of distinguishing which disposition is unlawful, and whether the double taxation is invalid or unlawful as a double taxation (negative)

[2] The case holding that where the tax authority imposed capital gains tax, etc. on the income accruing from the transfer of real estate but found the fact that the income was already subject to imposition, such as global income tax, and then determined and notified the amount of additional tax reduced by deducting the amount of capital gains tax from the global income tax, even if the tax authority can be deemed to have revoked the disposition of imposition, such as global income tax, even though it did not affect any disposition of imposition, such as global income tax, on the grounds that the tax authority imposed a disposition of imposition on the income accruing from the transfer of real estate, but imposed a disposition of imposition, including global income tax, again knowing the fact that the income was subject to imposition, and then determined and notified the amount of capital gains tax, etc. reduced by deducting the amount of capital gains tax paid from the global income tax

[3] Criteria for determining whether the income from the transfer of real estate is business income or capital gains under the Income Tax Act

[4] In a case where a disposition such as transfer income tax was rendered without knowing the fact that land transfer income constitutes business income, whether it violates the good faith principle to recognize and impose income from land transfer as income from real estate sale business (negative)

[5] The requirements for the application of non-taxable practices

[1] Income from the transfer of real estate by a resident constitutes only one of business income subject to global income tax or transfer income subject to transfer income tax under the Income Tax Act depending on whether the transfer was made as a part of the business, and the global income and transfer income are different from the taxable unit. Thus, in cases where the transfer income tax and global income tax are imposed on the income from the transfer of real estate respectively, it is necessary to determine whether the imposition of tax by either party is unlawful or not, regardless of whether the disposition of taxation made later is a double taxation.

[2] The case holding that where the tax authority imposed capital gains tax, etc. on the income accruing from the transfer of real estate but found the fact that the income was already subject to imposition, such as global income tax, and then determined and notified the amount of additional tax reduced by deducting the amount of capital gains tax from the amount of global income tax, even if the tax authority can be deemed to have revoked the disposition of imposition, such as global income tax, even though it did not affect any disposition of imposition, such as global income tax, and it does not affect the determination of the amount of additional tax reduced by deducting the amount of capital gains tax from the amount of global income tax, thereby notifying the reduced amount of additional tax, which was reduced by deducting the amount of capital gains tax, etc. after the disposition of imposition, such as global income tax, etc. was imposed by the tax authority, and

[3] Whether the income from the transfer of real estate is business income or capital gains under the Income Tax Act shall be determined according to social norms, considering the transferor’s acquisition and holding of real estate, whether the transfer is made, whether the transfer is made, the scale and frequency of the transfer, how the transfer is made, whether the transfer aims at profit, and whether the transfer is made to the extent of continuity and repetition of business activities. In such judgment, not only about the transfer of real estate, but also about the transfer of real estate owned by the transferor, but also about all the circumstances before and after the transfer of the real estate in question

[4] In a case where a tax authority imposed capital gains tax, etc. without knowing the fact that land gains from the transfer constitute business income, such disposition cannot be deemed to have publicly expressed the view that no comprehensive income tax should be imposed by such disposition. Thus, it cannot be said that the tax authority later recognized and imposed income from the transfer of land as income from real estate trading business, thereby violating the good faith principle.

[5] A non-taxable practice is applicable in cases where the indication of the public opinion of the tax authority or the practices of national tax administration is accepted by an unspecified general taxpayer, not a specific taxpayer, without any objection, and the taxpayer’s trust is deemed unreasonable.

[1] Article 51 of the Framework Act on National Taxes, Article 20 (1) 8 (see current Article 19 (1) 12), Article 23 (1) 1 (see current Article 94 subparagraph 1) of the former Income Tax Act (amended by Act No. 4803, Dec. 22, 1994) / [2] Article 51 of the Framework Act on National Taxes, Article 20 (1) 8 (see current Article 19 (1) 12) of the former Income Tax Act (amended by Act No. 4803, Dec. 22, 1994); Article 23 (1) 1 (see current Article 94 subparagraph 1) of the former Income Tax Act (amended by Act No. 4803, Dec. 12, 1994); Article 131 (1) (see current Article 85) of the former Framework Act on National Taxes / [3] Article 19 (2) 10 (former Article 48 (2) of the former Income Tax Act (amended by Act No. / [see current Article 480 (1) 2) of the former Article 9 (3) of the Act) of the Framework Act)

[3] [4] Supreme Court Decision 94Nu14025 delivered on November 7, 1995 (Gong1995Ha, 3939) / [3] Supreme Court Decision 83Nu66 delivered on September 11, 1984 (Gong1984, 1657) Supreme Court Decision 94Nu6352 delivered on September 23, 1994 (Gong1994Ha, 285), Supreme Court Decision 94Nu16021 delivered on September 15, 1995 (Gong195Ha, 344) / [4] Supreme Court Decision 94Nu4523 delivered on October 28, 1994 (Gong194, 3150) / [5] Supreme Court Decision 94Nu631939 delivered on September 23, 1993 (Gong194, 1959) / [193Nu19639493959 decided September 19695949395.

Plaintiff (Attorney Lee Young-soo et al., Counsel for the plaintiff-appellant)

Deputy Director of the Tax Office

Seoul High Court Decision 96Gu28099 delivered on March 26, 1999

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the legitimacy of the service of tax payment notice

Examining the relevant evidence in light of the records, the court below is just in holding that the plaintiff's business place is the plaintiff's employee and the non-party is the non-party's employee, and then the public official in charge of the tax payment of global income tax and defense tax of this case against the plaintiff was legally served by delivering it to the non-party from the public official in charge, and there is no error in the misapprehension of legal principles as to mistake of facts and the service of tax payment due to the violation of the rules of evidence as alleged in the ground of appeal

2. As to double taxation disposition

The income from the transfer of real estate by a resident constitutes only one of the business income subject to global income tax or the transfer income subject to transfer income tax under the Income Tax Act depending on whether the transfer was made as a part of the business, and the global income and the transfer income are different from the taxable unit. Thus, in cases where the transfer income tax and the global income tax are imposed on the income from the transfer of real estate respectively, it is necessary to determine whether the disposition of imposition by either party is unlawful or not, regardless of the substantive illegality, the disposition of imposition made later is not invalid or unlawful on the ground of double taxation.

According to the facts established by the court below, the plaintiff paid a prescribed transfer income tax and defense tax on the land Nos. 1 and 2 (hereinafter referred to as "land of this case") as stated in the judgment of the court below that was transferred in 1989. On December 16, 1989 and December 31, 1992, the plaintiff was notified by the chief of the competent tax office of imposition of transfer income tax and defense tax (hereinafter referred to as "disposition for imposition of transfer income tax, etc.") of the same amount as the payable tax amount. On May 16, 1995, the defendant issued a notice of imposition of transfer income tax and defense tax of this case on May 24 of the same year on the ground that the plaintiff's income from the transfer of the land of this case constitutes business income and issued a notice of imposition of transfer income tax of this case as mentioned above, and thus, the above global income tax and defense tax (hereinafter referred to as "disposition for imposition of transfer income tax of this case") were either unlawful or invalid after deducting the amount of transfer income tax of this case from 94.

In addition, the legal principle that if the tax authority imposed capital gains tax on the income from the transfer of real estate and then notified the fact that the amount of the payable capital gains tax was deducted in the tax notice while imposing global income tax again, the disposition imposing capital gains tax may be deemed revoked. Thus, even if the defendant in this case can be deemed to have revoked the initial disposition of capital gains tax by notifying the reduced amount of the payable capital gains tax after deducting the amount of the global income tax from the amount of the payable capital gains tax, the determination of whether the disposition of capital gains tax was revoked or not, and whether the revocation was made after the expiration of the exclusion period of the imposition right is limited to the validity of the disposition of capital gains tax such as the above transfer income tax. The imposition disposition of capital gains tax, etc. in this case does not affect the validity of the revocation of the disposition. The defendant notified the reduced amount of the calculated capital gains tax after deducting the amount of the payable capital gains tax from the amount of the payable capital gains tax after the imposition disposition of global income tax including global income tax, but merely collects the remaining amount after deducting the already paid tax amount from the amount

Although the reasoning of the court below is inappropriate, it is just to conclude that the imposition disposition, such as the global income tax, of this case, is not illegal as double taxation, and there is no error in the misapprehension of legal principles as to the revocation disposition of imposition after the expiration of the exclusion period of imposition, as otherwise alleged in the ground of appeal

Since the Supreme Court precedents pointed out in the ground of appeal are different from the case and they are inappropriate to be invoked in this case, there is no violation of the law of violation of the Supreme Court precedents in the judgment below. We cannot accept all the grounds of appeal on this point.

3. As to business income:

Whether the income from the transfer of real estate is business income or capital gains under the Income Tax Act shall be determined according to the ordinary social norms, considering the transferor's acquisition and holding status, creation, existence of transfer, size and frequency of transfer, mode, and existence of continuity and repetition to the extent that it can be seen as business activities in light of the transferor's real estate acquisition and holding status, and in making such determination, it shall take into account not only the transfer of real estate concerned but also all the circumstances surrounding the transfer of real estate held by the transferor throughout the entire real estate held by the transferor at the time before and after the transfer (see Supreme Court Decision 94Nu16021, Sept. 15, 1995). In light of the records, the court below is just in holding that the Plaintiff's income from the transfer of land in this case constitutes business income under the Income Tax Act, and there is no error in the misapprehension of legal principles as otherwise alleged in the grounds for appeal.

4. As to the violation of the good faith principle or non-taxable practice

Examining the relevant evidence in light of the records, the court below's finding that the defendant was liable to impose capital gains tax, etc. on the land of this case without knowing the fact that the income accrued from the transfer of the land of this case was the business income by the evidence employed by the court below. If the facts are so true, it cannot be deemed that the defendant expressed public opinion that the comprehensive income tax should not be imposed by the disposition. Thus, it cannot be deemed that the defendant's finding the income from the transfer of the land of this case as the income from the real estate sale business and imposing the income from the transfer of the land of this case violates the good faith principle (see Supreme Court Decision 94Nu4523, Oct.

In addition, the non-taxable practice is applicable in cases where the indication of the public opinion of the tax authority or the practices of the national tax administration is accepted by unspecified general taxpayers who are not a specific taxpayer without any objection, and the taxpayer's trust is recognized as not unreasonable (see Supreme Court Decision 91Nu9893, May 25, 1993). In this case where there is no proof that the practice of no global income tax is generally accepted by the taxpayer when the transfer income tax is imposed, there is no room to apply the theory of non-taxable practice in this case.

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of the legal principles as to misconception of facts due to the violation of the rules of evidence, the good faith principle, or non-taxable practice.

5. Therefore, the appeal shall be dismissed, and all costs of appeal shall be assessed against the plaintiff who has lost. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Yong-woo (Presiding Justice)