Seoul Administrative Court 2008Gudan14510 ( October 12, 2009)

National High Court Decision 2007west4537 (Law No. 8.14, 2008)

Land owners at the time of transfer are subject to special taxation only when project implementation authorization is granted.

With respect to an urban environment rearrangement project implemented by the owners of land, etc., special taxation provisions may apply only where real estate has been transferred to the owners of land, etc. who have received authorization for project implementation, and where no authorization for project implementation has been obtained at the time

209Nu35049 Revocation of disposition rejecting capital gains tax rectification

XX

Head of Geumcheon Tax Office

Seoul Administrative Court Decision 2008Gudan14510 decided October 12, 2009

June 14, 2011

July 19, 2011

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The defendant's rejection of correction of KRW 193,95,376 of the transfer income tax belonging to the year 2006 against the plaintiff on August 2, 2007 (the "statement on July 30, 2007" seems to be a clerical error) shall be revoked.

2. Purport of appeal

The same shall apply to the order.

1. Quotation of judgment of the first instance;

The court's reasoning for this case is as follows: "No. 6 of the first instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's June 30, 206', "No. 30 of July 2, 2007", "No. 19 of the first instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's second instance court's first instance court's second instance court's second instance court's second instance court's second instance court's second instance court's first instance court's second instance court's second instance court's second instance court's second instance judgment's second judgment's second court's second court's appeal.

2. Parts in height:

“4. Determination

A. Article 85 subparag. 5 of the former Restriction of Special Taxation Act (amended by Act No. 8146 of Dec. 30, 2006) and Article 79-2(1) [Attachment 7] subparag. 9 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 1988 of Feb. 28, 2007) provide for a resident to calculate the transfer price and acquisition price of real estate within the designated area under Article 104-2(1) of the former Income Tax Act (amended by Act No. 8852 of Feb. 29, 2008; hereinafter the same shall apply) in cases where the resident acquires the real estate within the designated area under Article 104-2(1) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Act No. 8785 of Dec. 21, 2007; hereinafter referred to as the “former Enforcement Decree of the Restriction of Special Taxation Act”).

Meanwhile, Article 8(3) and (4) of the Urban Improvement Act provides that an urban environment improvement project may be implemented by the owners of an association or land, etc. consisting of landowners, etc., and the Mayor and the head of a Gun may designate the owners of land, etc. as the project implementer and have them implement the rearrangement project. Article 28(1) provides that where a project implementer intends to implement a rearrangement project, he/she shall submit a project implementation plan, etc. to the head of the Si/Gun and obtain authorization for the project implementation, and Article 38 provides that the project implementer may expropriate or use the land, goods, or other rights if necessary to implement the rearrangement project. Article 85(7) of the Urban Improvement Act provides that a person who implements the rearrangement project without obtaining authorization for the project implementation shall be punished by imprisonment

The text and purport of the above provisions, especially the Act on the Maintenance and Improvement of Urban Areas, recognize the right to expropriate real estate necessary for the implementation of a rearrangement project, and even if the transferor transfers real estate to the project implementer, the transferor’s right to decide on the transfer value cannot be considerably limited, so the transfer value and acquisition value can be applied to the standard market price, thereby relaxing the burden of capital gains tax, and promoting the smooth implementation of a rearrangement project at the same time. In principle, the special provisions on taxation cannot be implemented without authorization for the implementation of a rearrangement project under Article 28 of the Urban Improvement Act. If the landowner wishes to become the project implementer, the project implementer is specifically determined only when the project implementer is designated as the project implementer under Article 8(4) of the Urban Improvement Act, unless there are special circumstances, such as the designation of the project implementer under Article 8(4) of the said Act, and it is difficult to specify the project implementer until the project implementation authorization until the project implementation authorization is granted, and the right to expropriate the project implementer cannot be seen as being granted authorization after the project implementation authorization is unclear when the Special provisions on the project implementation authorization are applied.

B. However, at the time of the transfer of this case, although the non-party company was preparing for the urban environmental improvement project as the owner of land, etc., the transfer of this case was not subject to the special taxation regulation (the plaintiff was notified by the head of Mapo-gu Seoul Metropolitan Government Office prior to the transfer of this case of measures to preserve cultural properties related to the urban environment improvement project and the deliberation result by the Construction Committee of Seoul Metropolitan Government, and it was subject to conditional decision on traffic impact assessment by the Traffic Impact Deliberation Committee of Seoul Metropolitan Government. The non-party company asserted that the non-party company falls under the project implementer under the Urban Improvement Act because it was partially implemented the project implementation approval under the Urban Improvement Act after being notified of the results of prohibited acts and removal of facilities in the school environmental sanitation and cleanup zone. However, in the urban environment improvement project implemented by the owner of land, etc., the special taxation regulation of this case can not be applied only to the transfer of real property, such as land designated in advance as the project implementer. Therefore, the plaintiff's above assertion cannot be accepted).

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance is unfair with different conclusions, so the defendant's appeal is accepted, and the plaintiff's claim is revoked and dismissed. It is so decided as per Disposition.