Seocho 2013west0609 (2013.04.05)

In determining one house for one household, the total amount of the house value shall be determined based on the determination of the expensive house.

After determining whether a single house or high-priced house falls under a single house or high-priced house based on the whole house, it cannot be deemed as a violation of the principle of ability to pay, the guarantee of property rights under the Constitution, the right to equality, and the principle of prohibition of cumulative taxation on property of a

2013Gudan8779 Revocation of Disposition of Imposing capital gains tax

Park AA

Head of Yeongdeungpo Tax Office

August 16, 2013

October 11, 2013

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

On January 8, 2013, the defendant revoked the imposition disposition of the capital gains tax OOO(including additional tax) against the plaintiff.

1. Details of the disposition;

A. On June 9, 2004, the Plaintiff: (a) acquired and owned OOO-dong OO-dong 916 BB apartment OO-dong OO-dong 916 BB apartment OO-dong 2 (hereinafter “instant apartment”); (b) transferred OO-dong on June 1, 2010 to OO-dong; and (c) did not report the transfer income tax on one household’s non-taxable housing.

B. The Defendant determined that the instant apartment falls under a high-priced house among one house for one household, and determined and notified the Plaintiff on January 8, 2013, after calculating the gains from transfer of the Plaintiff and thisCC, the instant disposition was rendered to the Plaintiff on January 8, 2013.

C. On January 24, 2013, the Plaintiff filed an appeal with the Tax Tribunal, but was dismissed on April 5, 2013.

Facts that there is no dispute, Gap 2, and 3's evidence, the purport of the whole pleading, and the purport of the whole pleading.

2. The plaintiff's assertion

(a) Whether it falls under one house high-priced house for one household;

1) After acquiring the instant apartment, the Plaintiff transferred the instant apartment, which is one house for one household, under the status of being divorced with the instant apartment on 2008 and became a separate household. The transfer value of the Plaintiff’s share in the instant apartment is less than 90 million won because it is merely OO won.

2) In determining the scope of expensive houses pursuant to Article 156(1) of the Enforcement Decree of the Income Tax Act, the Defendant issued the instant disposition by deeming the instant apartment to be a high-priced house and its appurtenant land as being in excess of 900 million won (referring to the amount calculated by dividing the sum of actual transaction prices at the time of transfer of a house and its appurtenant land by the ratio of the portion (including the portion owned by others) transferred from the aggregate of actual transaction prices if a house and its appurtenant land are partially transferred or owned by others).

3) However, the above enforcement decree is null and void in violation of the principle of satisfaction with respect to taxation on individual income, the principle of guarantee of property rights and equality under the Constitution, and the principle of prohibition of cumulative taxation on property rights of the married couple, and thus, the transfer of the Plaintiff’s share in the apartment of this case does not constitute transfer of expensive houses.

B. As to the necessary cost deduction

The plaintiff acquired the apartment of this case to the OOD, and prepared a sub-titled contract to purchase the apartment of this case at the request of the transferor KimD, who was the transferor, and paid the OOOD to KimD inevitably by holding that the KimD, who was additionally collected the capital gains tax from the plaintiff's information, should ask the plaintiff the total amount of the above tax and pay the OOOD to the plaintiff. Thus, in calculating the gains on transfer of the apartment of this case, it should be deducted as necessary expenses.

3. Whether the disposition is lawful;

(a) Whether it falls under a expensive house;

The reason why no income tax is imposed on the income accruing from the transfer of one house for one household is the basis of a citizen’s residential life. As such, since transferring one house owned in Korea by one household is deemed to be not a transfer income tax, or temporarily residing or owning it for the purpose of speculation, the income tax is not imposed on the transfer income, and thus, guarantees the citizen’s freedom of residential stability and relocation of residence. As such, a consistent legal application can be made based on the overall transfer value of the house transferred regardless of whether the form of ownership of a house is sole ownership or joint ownership, and after determining whether it falls under one house for one household and high-priced house based on the whole house, it cannot be deemed as violating the principle of satisfaction burden, the constitutional guarantee of property rights, the right to equality, and the principle of prohibition of aggregate taxation on property rights of the couple and wife, so Article 156(1) of the Enforcement Decree of the Income Tax Act cannot be deemed to be null and void (if the plaintiff alleged that the apartment house in this case falls under 11 house for one household, it cannot be determined as a whole house transferred to below 100 million won.

B. Whether necessary expenses are deducted

Article 97 (1) of the Income Tax Act provides that "the necessary expenses to be deducted from the transfer value, such as acquisition value, capital expenses, etc. prescribed by Presidential Decree, transfer expenses, etc." Article 163 (1) of the Enforcement Decree of the Income Tax Act provides that capital expenses and transfer expenses shall be as follows. Thus, the additional collection of capital gains tax that the Plaintiff paid to KimD does not fall under any of the acquisition value, capital expenses, transfer expenses, etc., so the Plaintiff's above assertion is without merit.

【Enforcement Decree of the Income Tax Act

Article 163 (Necessary Expenses for Transferred Assets)

(3) The term "capital expenditure, etc. prescribed by Presidential Decree" in Article 97 (1) 12 of the Act means those falling under one of the following subparagraphs:

1. Capital expenses computed by applying mutatis mutandisArticle 67 (2);

2. Where litigation is instituted after acquisition of an economic asset, the costs of litigation and reconciliation, etc. directly required to secure the ownership thereof, excluding those included in necessary expenses in calculating the income amount of each year paid.

3. Expenses incurred in altering, improving, or enhancing the use of an economic asset;

3-2. Development charges under the Restitution of Development Gains Act (where the person obligated to pay the development charges and the transferor are different, referring to the amount equivalent to the development charges to be actually distributed to the transferor);

3-3. Rebuilding charges (where the person obligated to pay the rebuilding charges and the transferor are different, referring to the amount equivalent to the rebuilding charges to be actually distributed to the transferor) pursuant to the Restitution of Excess Rebuilding Gains Act;

4. Other expenses determined by Ordinance of the Ministry of Strategy and Finance, which are equivalent to subparagraphs 1 through 3, 3-2 and 3-3.

(5) The term "those specified by Presidential Decree" in Article 97 (1) 3 of the Act means those falling under any of the following subparagraphs:

1. Expenses under the following items, which are directly paid for transfer of assets under the subparagraphs of Article 94 (1) of the Act:

(a) Securities transaction tax paid pursuant to the Securities Transaction Tax Act;

(b) Expenses for preparing a return of tax base of capital gains tax and contract preparation;

(c) Notarial fees, stamp charges, and brokerage;

(d) Expenses prescribed by Ordinance of the Ministry of Strategy and Finance, similar to those under items (a) through (c).

2. In acquiring assets under Article 94 (1) 1 of the Act, the losses from sale arising from the transfer of national housing bonds and land development bonds purchased pursuant to Acts and subordinate statutes, etc. before maturity. In such cases, where the assets are transferred to a person other than financial institutions prescribed by Ordinance of the Ministry of Strategy and Finance (hereafter referred to as "financial institutions" in this subparagraph), the losses from sale generated by the transfer

4. Conclusion

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