Seocho 2016west 4236 (No. 02, 2017)

A family childcare center shall be a house under the Income Tax Act.

The structure, function, facility, etc. has a form of independent dwelling by providing a space and facility that can solve meals, excreta, waters, etc. which are human physiological desire, and can be used for residential purposes at any time without any change in use or structure, and even in case of transfer to a third party, it is anticipated that a house should be transferred as a residential building (multi-unit).

Article 89 (Non-Taxable Capital Gains)

Enforcement Decree of the Income Tax Act Article 154 (Scope of One House for One Household)

2017Gudan5686 Revocation of Disposition of Imposing capital gains tax

○ ○

AA Head of the Tax Office

April 18, 2017

May 16, 2017

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 capital gains tax of KRW 187,076,520 for the Plaintiff on September 12, 2016 shall be revoked.

1. Details of the disposition;

A. On April 19, 1988, the Plaintiff acquired a house located in ○○-dong, Seoul, 285-36 (hereinafter “instant house”), but on February 24, 2016, the Plaintiff reported and paid KRW 687,037,037 on the premise that the said house falls under one house for one household (high-priced house) after transferring it to KRW 1 billion.

B. On May 2, 2011, the Defendant confirmed that ○○○○○○○○○○○○○○○○○○○ 1352, 103 Dong 102 (hereinafter “instant apartment”) as a member of the Plaintiff’s household acquired and operated a family childcare center, and notified the Plaintiff of KRW 187,076,520 for the reason that it does not constitute one house for one household (high-priced house) on September 12, 2016 (hereinafter “instant disposition”).

C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on November 4, 2016, but was dismissed on January 2, 2017.

Facts without any dispute, Gap's No. 1, 2, 3, and Eul's No. 1, the purport of the whole pleadings, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The issue of whether an apartment falls under a house under the Income Tax Act shall be determined not by the purpose or structure in the public record but by the practical purpose of the apartment. Since the apartment of this case is used for the play room, that is, for the business, it cannot be deemed as a house under the Income Tax Act even if it maintains the basic structure of the housing. Therefore, the disposition of this case made on a different premise is unlawful.

2) Article 167-3 of the Enforcement Decree of the Income Tax Act shall also apply to cases falling under two houses per household in light of the purpose of legislation and the principle of substantial taxation.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) In a case where a transferor of a house owns another building, whether the other building constitutes a "house" under Article 89 (1) 3 of the former Income Tax Act (amended by Act No. 14389, Dec. 20, 2016) and Article 154 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 27829, Feb. 3, 2017) shall be determined by whether the building actually used for a house regardless of the usage classification of an official injury in the building. Even if the building is temporarily used for a non-residential purpose, its structure, function, or facility is suitable for a residence as its original residential purpose and its residential function is maintained and managed as it is, and therefore, it shall be deemed a house in a case of a building where the principal or a third party is able to use as a house at any time.

With respect to this case, the apartment house of this case is used as play facilities (family childcare facilities) under the name of '○○ Child Care Center' since it was acquired by ○○○○, which is the plaintiff's child. However, according to the above relevant statutes, a home childcare center is a childcare center established and operated by an individual at home or in a similar place. The building in which a home childcare center is established is classified as a house (self-house or multi-family housing) other than neighborhood living facilities or welfare facilities (child childcare facilities) under the Building Act. The structure, function, facilities, etc. of the apartment of this case consists of a bedroom, kitchen and restaurant, toilet and bathing room, etc., and it has the form of independent dwelling by providing a space and facility that can solve human physiological needs, and at any time, it is anticipated that the above ○○○○○○ is used as a residential building without changing the purpose or structure, and it is anticipated that it will be transferred as a residential building (multi-family housing) under the former Income Tax Act.

2) In light of the principle of no taxation without the law, the interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, barring any special circumstance, and it shall not be extensively interpreted or analogically interpreted without any justifiable reason. In particular, it is consistent with the principle of fair taxation with the principle of fair taxation (see, e.g., Supreme Court Decision 2003Du7392, May 28, 2004). Article 167-3(1) of the former Enforcement Decree of the Income Tax Act provides that “a house falling under three or more houses for one household prescribed by Presidential Decree” under Article 104(4)1 of the former Enforcement Decree of the Income Tax Act means a house owned by one household (a house falling under subparagraph 1 shall not be included in calculating the number of houses), which is owned by three or more houses in Korea (a house falling under subparagraph 1 shall not be included in calculating the number of houses), which is premised on three or more houses for one household by providing that “a house falling under any of the following subparagraphs is owned by one household:

3) Therefore, the instant disposition that reported by the instant apartment constitutes a house under the former Income Tax Act is lawful.

3. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.