Whether a taxpayer's voluntary payment of capital gains tax and then the tax authority denies it and imposes a comprehensive income tax on the taxpayer as a real estate sales businessman constitutes a double taxation disposition (negative), and whether the amount of capital gains tax payable is deducted from the global income tax (affirmative)

A taxpayer’s receipt of a tax amount voluntarily paid at the same time as the scheduled return of tax base of capital gains tax is merely an act of fact, and cannot be deemed a confirmative disposition. Therefore, deeming that a taxpayer’s voluntary payment of capital gains tax constituted real estate sales business and imposing a comprehensive income tax on a taxpayer does not constitute double taxation. In such a case, when the tax authority imposes a comprehensive income tax, it may collect the remainder after deducting the voluntary payment amount of capital gains tax from the total determined tax amount as the already paid tax amount pursuant to Article 131(1)3 of the former Income Tax Act (wholly amended by Act No. 4803, Dec. 22, 1994).

Article 51 of the Framework Act on National Taxes, Article 20 (see the current Article 19), Article 23 (see the current Article 94), and Article 131 (1) 3 (see the current Article 85) of the former Income Tax Act (amended by Act No. 4803, Dec. 22, 1994)

Supreme Court Decision 87Nu642 delivered on April 13, 1990 (Gong1990, 1086) Supreme Court Decision 96Nu8758 delivered on October 11, 1996 (Gong1996Ha, 3362) Supreme Court Decision 96Nu1081 delivered on February 25, 1997 (Gong197Sang, 988)

New Security (Attorney Kim Young-dae, Counsel for the defendant-appellant)

Head of Dong Tax Office

Seoul High Court Decision 94Gu25287 delivered on September 19, 1996

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

We examine the grounds of appeal.

1. The judgment of the court below which held that the act of transferring the real estate of this case was conducted as part of continuous and repetitive business for the purpose of profit by viewing it as a whole is just (see, e.g., Supreme Court Decisions 94Nu1170, Mar. 3, 1995; 95Nu92, Nov. 7, 1995; 95Nu92, Nov. 7, 1995); and there is no error of law by misunderstanding legal principles as argued in the Grounds for Appeal.

2. The view that a taxpayer’s receipt of a tax amount voluntarily paid by the tax authority at the same time as the scheduled return of tax base of capital gains tax is merely an act of fact, and it does not constitute a confirmative disposition (see Supreme Court Decision 87Nu642, Apr. 13, 1990). The tax authority considers a transfer of assets as a real estate sales business and imposes a comprehensive income tax on it pursuant to Article 131(1)3 of the former Income Tax Act (wholly amended by Act No. 4803, Dec. 22, 1994); and the tax authority can collect the remainder after deducting the voluntary payment amount of capital gains tax from the total determined tax amount as the tax amount already paid.

In this case, where the Plaintiff paid the preliminary return and tax amount of transfer income tax base and tax on the transfer of real estate of this case, and there is no evidence to acknowledge that there was a separate tax imposition disposition by the tax authority, the lower court erred in determining that the instant disposition does not constitute double taxation on the premise that the tax authority’s disposition was made, but the conclusion that there was no error in the collection notification procedure is the same as that of the lower court’s determination.

3. Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Im-soo (Presiding Justice)