Whether the proviso of Article 170(1) of the former Enforcement Decree of the Income Tax Act (Presidential Decree No. 10120, Dec. 31, 1980) is valid (negative)

The proviso of Article 170 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 10120, Dec. 31, 1980) provides that the actual transfer price of assets or the conversion price, not the actual acquisition price, shall be considered the actual transaction price. This proviso does not coincide with the provisions of the former Income Tax Act (amended by Act No. 3271, Dec. 13, 1980) as the mother corporation, and Articles 23 (4) and 45 (1) 1 of the amended Income Tax Act (amended by Act No. 3271, Dec. 13, 1980) of the former Income Tax Act (amended by Presidential Decree No. 10120, Dec. 31, 1980) provide that where the standard market price is based on the standard market price, the conversion price pursuant to the method prescribed by Ordinance of Ministry of Finance and Economy can not be deemed the actual transaction price, and thus, the proviso is null and void because it expandss the tax requirement prescribed in the mother law.

Articles 23(4) and 45(1) of the former Income Tax Act (Act No. 3271 of December 13, 1980), Article 170(1) proviso of the former Enforcement Decree of the Income Tax Act (Presidential Decree No. 10120 of December 31, 1980)

Plaintiff

The Director of Gangnam District Office

Seoul High Court Decision 83Gu273 delivered on October 26, 1983

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal by the defendant litigant are examined.

1. According to the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 10120 of Dec. 31, 1980), Article 170(1) of the former Enforcement Decree of the Income Tax Act (amended by the Presidential Decree No. 10120 of Dec. 31, 1980), where one of the transfer value or acquisition value is determined based on the actual market price, the other is determined based on the actual market price and either one is determined based on the standard market price, the other is also determined based on the standard market price: Provided, That where calculating the transfer value or acquisition value pursuant to the provisions of paragraph (3) of the same Article, if it is impossible to investigate either of the actual market price at the time of transfer or acquisition, the value converted according to the method prescribed by the Ordinance of the Ministry of Finance and Economy shall be deemed as the actual transaction price at the time of transfer or acquisition. Thus, according to Articles 23(4) and 45(1)2 of the former Income Tax Act (amended by the Presidential Decree No. 3271 of Dec. 13, 19808) of the former Income Tax Act, supra.

However, at the same time, Article 170(1) proviso of the Enforcement Decree of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 10120, Dec. 31, 1980; 201. Article 170(4) proviso of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 170(3)) was amended to “where calculating gains on transfer according to the actual transaction price pursuant to the provisions of paragraph (3)”. In comparison with new and structure after the amendment, it is difficult to calculate gains on transfer according to the actual transaction price pursuant to the provisions of Article 170(3) of the former Enforcement Decree; 1. Where the actual transaction price at the time of transfer or acquisition is confirmed through transactions with the State, a local government, or a juristic person; 3. Where a resident who has received a notice of decision on gains on transfer of assets submits evidentiary documents to verify the actual transaction price at the time of transfer or acquisition; 2. Where it is obviously clear that the above provision and proviso 17.

2. The issue is that Article 23(4) of the former Income Tax Act (amended by Act No. 3271, Dec. 13, 1980; Article 23(4) of the former Income Tax Act (amended by Presidential Decree No. 3271, Dec. 13, 1980; hereinafter “transfer value shall be based on the standard market price at the time of the transfer of the asset if the transfer value is determined by the Presidential Decree; provided, Article 45(1)1 of the Enforcement Decree of the former Enforcement Decree shall be based on the standard market price at the time of the transfer of the asset at the time of the acquisition of the asset, where the transfer value is determined by the Presidential Decree; provided, “The actual transaction price required for the acquisition of the asset at the time of the transfer of the asset at the time of the transfer or acquisition shall be based on the standard market price at the time of the transfer or acquisition”

However, according to each provision of the former Income Tax Act, the transfer value or acquisition value is different from the actual transaction value. However, with respect to the case of the standard market price, the former provisions of the Act prior to the amendment stipulate that “if the actual transaction value is unclear,” the actual transaction value shall be determined by the Presidential Decree,” and accordingly, Article 170(3) of the Enforcement Decree after the amendment provides that the standard market price shall be determined by the standard market price. Thus, the provisions of Articles 23(4) and 45(1)1 of the former Income Tax Act concerning the case of the standard market price are based on the method prescribed by the Ordinance of the Ministry of Finance and Economy, but it is clear that the delegation basis of the proviso of Article 170(1) of the former Enforcement Decree, which provides that the conversion value pursuant to the method prescribed by the Ordinance of the Ministry of Finance and Economy, can be deemed as the actual transaction value.

Ultimately, since the amendment of the former Income Tax Act does not make it effective to the provisions of the proviso of Article 170 (1) of the Enforcement Decree of the said Act, the judgment below that the proviso of Article 170 (1) of the said Enforcement Decree is null and void is without merit.

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

Justices Lee Lee Sung-soo (Presiding Justice)