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Even if a false real estate sales contract was prepared through an agent, the exclusion period of national tax is 10 years since it constitutes fraud and other illegal acts.

Since illegal means include not only the taxpayer himself/herself but also his/her agent who has entrusted his/her business affairs, reporting transfer income tax after preparing a false real estate sales contract through his/her agent constitutes fraudulent or other unlawful acts, the exclusion period for national tax imposition is ten years, and the actual transaction contract is stated in the real transaction contract as KRW 00 million, and thus does not

2014Gudan52803 Revocation of Disposition of Imposing capital gains tax

AA

head of Dongjak-gu Tax Office

December 2, 2014

January 16, 2015

1. The plaintiff's appeal is dismissed.

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

The Defendant’s disposition of imposition of capital gains tax of KRW 000 for the year 2002 against the Plaintiff on April 8, 2013 is revoked.

1. Details of the disposition;

A. On April 30, 2002, the Plaintiff acquired a forest land of 1-11, 00,000,000,000,000,000 (hereinafter “instant land”) from Non-Party BB and transferred his/her share to CCC and DD (hereinafter “CCC, etc.”) on October 15, 2002, and subsequently scheduled transfer income tax return was made on November 22, 2002 with the Defendant’s transfer value of KRW 000,000,000,000.

B. From March 20, 2013 to April 8, 2013, the head of the Gangseo District Tax Office: (a) conducted an on-the-spot survey on the Plaintiff’s transfer of the instant land. As a result, the Plaintiff and net BB (hereinafter referred to as “Plaintiff, etc.”) notified that the Plaintiff transferred the instant land at KRW 00 million; (b) Accordingly, the Defendant: (c) reported the Plaintiff’s reduction of the transfer value through the preparation, etc. of double contract constituted “Fraud and other unlawful acts” under Article 26-2 of the Framework Act on National Taxes; (d) applied the exclusion period of national tax imposition to KRW 10 million to the Plaintiff on April 8, 2013; and (e) imposed the Plaintiff KRW 000 (including penalty tax for failure to file a report, KRW 00,000, and penalty tax for failure to pay due diligence) of capital gains tax for the year 2002.

C. On July 5, 2013, the Plaintiff filed an appeal with the Tax Tribunal on the instant disposition, but was dismissed on March 19, 2014.

Facts that there is no dispute over recognition, each entry in the evidence Nos. 1 and 2, and the purport of the whole pleadings.

2. Summary of the plaintiff's assertion

(a) The period of exclusion from, and claim on, national tax imposition;

The Plaintiff, as a non-school elderly who did not properly graduate from elementary schools, was aware of Korean language and used only his name. The Plaintiff was recommended to purchase the instant land from the non-party EE, who was known as real estate broker, and the EE entered into a sales contract and entered into a transfer registration of the instant land on behalf of the Plaintiff, with seals and identification cards attached thereto. Furthermore, EE did not purchase and sell the instant land, while EE intended to purchase the instant land, the Plaintiff would substitute for the report of capital gains tax, with the acquisition price of KRW 1 million. According to the on-site investigation of capital gains tax, EE did not use the instant land as collateral by the bank, including the Plaintiff, and did not take into account the fact that the Plaintiff acquired the instant land from the purchaser of the instant land, but did not take into account the fact that the Plaintiff acquired the instant land from the purchaser of the instant land during the exclusion period of imposition of capital gains tax by dividing the instant land by 1,000,000 won and the remaining E-1,000,000 won,00 won.

B. The assertion that the substance over form principle is illegal

EE, in collusion with Nonparty FF, acquired the instant land by using money and name of the Plaintiff, etc. for its economic interest, and transferred it to the Plaintiff. Thus, the actual owner of the instant land transaction is EE and FF, despite the fact that the actual owner of the instant land transaction is EE and FF, the instant disposition made to the Plaintiff was unlawful in violation of the substance over form principle under Article 14(1

3. Whether the disposition is lawful;

(a) Facts of recognition;

1) EE and FF were indicted for the crime of fraud 2005Kadan2716 Seoul Central District Court and convicted of the following criminal facts on January 26, 2006. The judgment was finalized on May 16, 2006.

【Criminal Facts】

EEE과 FFF는, 사실은 피해자 CCC이 매수를 원하는 부동산의 위치는 서울 00구 00동 345-136 대지임에도 서울 00구 00동 산 1-11 임야(이 사건 토지)가 위 00동 대지인양 속이고 또한 이 사건 토지의 매도의뢰인(원고와 망 BBB이다)이 위 임야를 0억원에 팔아달라고 하여 그 매도의뢰를 받았음에도 위 임야의 매도금액을 0억원이라고 하는 등 매매물건과 매매금액을 기망하여 그 차액 0억원을 나누어 갖기로 공모하여, 2002. 9. 초순경 서울 00구 00동 290 소재 공소외 GGG 운영의 ㅁㅁㅁ공인중개사 사무실 및 위 임야 소재지에서 피해자에게 서울 00구 00동 345-136 대지를 보여주면서'이 땅은 서울 00구 00동 산 1-11번지(이 사건 토지)이고 0억원에 나와서 싸니까 사두어라'라고 기망하여 이에 속은 피해자와 2002. 9. 12. 14:00경 그 자리에서 위 매매물건에 대해 0억원에 매수하는 매매계약서를 작성하고, 이에 속은 피해자로부터 즉석에서 0,000만원은 매도인의 조흥은행 담보 대출금을 인수하여 부담케 하면서 계약금 명목으로 0,000만원을 교부받고, 중도금 명목으로 2002. 10. 5. 0,000만원, 잔금 명목으로 2002. 10. 15. 0,000만원을 각 교부받아 이중 0,000만원만 매도인인 공소외 AAA(원고), BBB에게 지급하고 나머지 0억원 중 피고인 CCC은 0,000만원, 피고인 FFF는 0,000만원을 차지하여 이를 편취하였다.

2) The director of the Gangseo-gu Tax Office confirmed that the transfer value of the Plaintiff, etc., the transferor of the instant land, reported the transfer value at KRW 000 (the Plaintiff’s share was KRW 000,000, and the transferee CCC, etc. reported the acquisition value at KRW 00,000,000, and conducted a field investigation of capital gains tax from March 20, 2013 to April 8, 2013.

① During this process, the CCC submitted a written confirmation to the effect that “the instant land acquired by oneself through the brokerage of EE was not the real estate originally introduced, and there was a fact that the Plaintiff, etc. has filed a criminal complaint for EE by mediating it at a level less than the amount requested for sale ( billion won).”

② During the investigation process, the Plaintiff asserted that it was a real transaction contract for the instant land and submitted a sales contract for the certificate No. 4. This is written as the buyer, including the Plaintiff, etc., on September 12, 2002, and on September 12, 2002.

③ The seal of approval (No. 5) submitted at the time of reporting the transfer income tax of the instant land is indicated as the instant land subject to sale, the sales price of KRW 00, the Plaintiff and the seller, BB, CCC, and HH.

3) After the acquisition of the instant land by the Plaintiff, etc., on July 15, 2002, the registration of creation of a mortgage over the instant land was completed with the maximum debt amount of 00 million won, the Plaintiff, the mortgagee, the mortgagee, and the mortgagee Co., Ltd., 00 banks, and on August 8, 2002, the duration of which was 30 years from August 8, 2002, and the scope of land within the scope of 30

The registration of creation of superficies was completed on October 17, 2002, which became a bank with superficies.

The cancellation was registered on the ground of termination.

Facts that there is no dispute for recognition, each entry in the evidence A2-3, 3-1, and 3-2, and the purport of the whole pleadings.

(b) Whether the period of exclusion from the imposition of national taxes is expired;

1) According to Article 26-2(1)1, 2, and 3 of the former Framework Act on National Taxes (amended by Act No. 8139 of Dec. 30, 2006), national taxes may not be imposed after the expiry of the five-year period from the date on which the pertinent national tax is assessable. However, if a taxpayer fails to submit a tax base return by the statutory due deadline, national taxes may be imposed for seven years, and if a taxpayer evades a national tax by fraud or other unlawful act, national taxes may be imposed for ten years. The term “Fraud or other unlawful act” in this context refers to a deceptive scheme or other unlawful act that makes it impossible or difficult to impose and collect taxes impossible. In determining the tax base at a tax base on the amount reported by a taxpayer, submission of a false double contract in which the taxpayer under-reported the return amount while granting credibility to the amount reported by the taxpayer and conceals the actual transaction price constitutes a fraudulent act that significantly makes it difficult for him/her to impose and collect taxes as a fraudulent act (see, e.g., Supreme Court Decision 201201Du15.

2) Comprehensively taking account of the purport of body’s written evidence Nos. 3-1, 3-2, 4, 5, and 8-1 as to the instant case, the Plaintiff delegated the authority to conclude a sale and purchase contract of the instant land and report capital gains tax to EE under the law that delivers his/her seal, identification card, etc. to EE, etc., and EE is accompanied by a false real estate sale and purchase contract stating the transfer price as 00 won in the report document under the Plaintiff’s name. On the contrary, the Plaintiff’s written on-site investigation and report document on the instant land with the real estate purchase and sale price as 00 billion won can be recognized. “Unlawful means” as referred to in Article 26-2(1)1 of the Framework Act on National Taxes refers to not only the unlawful method done by the taxpayer himself/herself, but also the act of taxpayer’s agent or agent’s agent’s agent’s agent’s performing the expansion of the scope of the instant act by entrusting the relevant business to EE.

3) The Plaintiff asserts that all the above declaration documents, etc. were forged by EE, etc. and that himself/herself was unaware of preparing a false declaration document of capital gains tax. However, even if the evidence submitted by the Plaintiff was compiled, it is insufficient to acknowledge such fact, and there is no other evidence to acknowledge it.

C. Whether the substance over form principle is violated

1) Article 14(1) of the former Framework Act on National Taxes provides that if the ownership of income, profit, property, act or transaction subject to taxation is merely nominal and there is a separate person to whom such income, profit, act or transaction belongs, the person to whom such income, profit, or transaction actually belongs shall be the person

2) We examine the instant case. Since there is no dispute between the parties that the Plaintiff received KRW 000 from EE, etc. as the price for the purchase and sale of the instant land shares, the issue is whether the amount equivalent to KRW 1/2,000, out of the transfer value of KRW 000 recognized by the Defendant, was actually reverted to the Plaintiff when the Defendant acquired the buyer’s obligation for 00 bank loans to the buyer.

In light of the following: although EE et al. were punished for fraud in relation to the sale and purchase of the instant land, there is no evidence to acknowledge the Plaintiff’s assertion that EE et al. embezzled loans after registering the creation of a collateral security without the delegation of authority from the Plaintiff et al.; the sales contract No. 4 of the instant land submitted by the Plaintiff as an actual transaction contract; the sales price is KRW 00 million is stated in the sales price; the establishment of a collateral security right to secure the loan by a financial institution, including a bank, is ordinarily subject to strict procedures for verifying the status of the owner of the relevant real estate; and the portion of the said loan that the Plaintiff was liable for debt is acquired and extinguished by the buyer as consideration for the transfer of the Plaintiff’s share.

It is reasonable to view that the purchase price of KRW 00 million, including the above loan amount of KRW 00,000,000, actually reverted to the Plaintiff.

Therefore, the plaintiff's assertion on this part is without merit.

4. Conclusion

Therefore, the plaintiff's claim is dismissed for lack of reason.