Examination Transfer 2013-012 (Law No. 21, 2014)

No capital gains tax shall be included in one house for one household exempt from capital gains tax.

As of the date of the transfer of real estate, it is reasonable to deem that he/she constituted the same household as a family sharing the same livelihood. Therefore, it does not constitute one house for one household exempt from capital gains tax.

Article 89 of the Income Tax Act

Scope of one house for one household under Article 154 (1) of the Enforcement Decree of the Income Tax Act

2014Guhap3175 Revocation of Disposition of Imposing capital gains tax

NewA

○ Head of tax office

2015.02.03

2015.02.10

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 32,042,173 and additional tax of KRW 15,896,121 as of February 14, 2013 against the Plaintiff on February 14, 2013 is revoked (it is obvious that additional tax of KRW 15,898,121 as stated in the written complaint is a clerical error).

1. Details of the disposition;

The following facts are not disputed between the parties, or may be recognized by taking into account the whole purport of the arguments in the statements in Gap evidence 1-2, evidence 1-2, evidence 2-1 through 5, evidence 9-1-5, evidence 1-1 through 5, 10, and evidence 10-1, 6, 25, 32-3, 35, Eul 5, 6, 7, and evidence 8, 9-1, 2, and 3.

A. On February 19, 2001, the Plaintiff acquired 85-6 Do-dong 2005 Do-dong 1005 on September 18, 2009, and transferred on September 18, 2009, but did not report and pay the transfer income tax until November 30, 2009, the deadline for filing the transfer income tax.

B. As of the transfer date, the Defendant owned ○○○○○○-dong 178-53 No. 178-53 underground floor-02, while organizing the same household as the Plaintiff, and thus, was not subject to tax exemption for one household, and imposed capital gains tax on January 3, 201 and additional tax on KRW 38,768,539 and its additional tax on KRW 9,893,730.

C. On February 8, 2011, the Plaintiff asserted that the transfer of the instant real estate was exempt from taxation and filed an objection against the Defendant on the ground that the newB constituted a separate household that is separate from the Plaintiff.

D. After that, the Defendant revoked ex officio the above disposition on February 24, 2011 on the ground that the notice on imposition of tax imposed on January 3, 2011 was not served on the Plaintiff, and was served on the Plaintiff’s neighboring residents, and the Plaintiff voluntarily withdrawn an objection against the said disposition on the same day.

E. However, the public official belonging to the Defendant moved personnel without taking a lawful procedure to impose capital gains tax, and thereafter, the Defendant did not take any measure. On February 14, 2013, the instant disposition imposing capital gains tax amounting to KRW 32,042,173 and additional tax amounting to KRW 15,896,121 on the Plaintiff.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

1) On September 18, 2009, the date of the instant real estate transfer, the Plaintiff and the NewB had been separately living on September 18, 2009, and in particular, the newB had earned income as a fixed-term teacher at the time and reached 28 years of age, and the newB constituted an independent household unit with the Plaintiff. Therefore, the instant disposition was unlawful on the premise that the Plaintiff failed to meet the requirements for non-taxation on one house for one household due to the real estate owned by the newB.

2) On February 24, 2011, the Defendant accepted the Plaintiff’s objection and revoked the disposition of imposition as of January 3, 201, but later two years have passed, the instant disposition was again made in the same case, and it was unlawful against the principle of trust protection.

3) The fact that the Plaintiff did not pay additional tax on the transfer income tax of this case until now is due to the fact that the Defendant revoked ex officio the disposition of imposition on January 3, 2011, and that the additional tax accrued thereafter was generated without any cause attributable to the Plaintiff and thus, it is unreasonable to impose it on the Plaintiff.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether the non-taxation requirements are met

(3) Article 89 (1) 3 (a) of the Income Tax Act and Article 154 (1) of the Enforcement Decree of the same Act stipulate that one household comprised of the residents and their spouse together with the family members living together with the same address or same place of residence as the transfer date shall be subject to non-taxation for one household. Paragraph (2) 1 and 3 of the Enforcement Decree provides that even if there is no spouse, the resident's age is at least 30 years old, or where it is possible to maintain independent livelihood while managing and maintaining the house or land owned by at least the minimum cost of living in the National Basic Living Security Act, it shall be deemed that the new apartment was located in the △△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△○'s new apartment.

Therefore, this part of the Plaintiff’s assertion is without merit on the premise that a newB constitutes an independent household with the Plaintiff.

2) Whether the principles of trust protection are violated

The Plaintiff asserted that the Defendant’s revocation of the disposition of imposition on January 3, 201 by its authority is the Plaintiff’s assertion that the newB constituted an independent household with the Plaintiff at the time of the transfer of the instant real estate. However, as seen earlier, the Defendant revoked the said disposition ex officio on the ground of the defect in the delivery of the notice of scheduled taxation. The Defendant’s revocation of the said disposition is erroneous. The Defendant’s failure to immediately impose capital gains tax immediately after the ex officio revocation is erroneous. However, it is difficult to view that the Defendant’s failure to dispose of the instant real estate for a long period of time is not the subject of non-taxation, and there is no evidence to deem that the Defendant expressed the Plaintiff’s public opinion that is the subject of trust.

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

3) Whether the additional tax is lawful

Under the tax law, where a taxpayer violates various obligations, such as reporting, and tax payment, without justifiable grounds, in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, the taxpayer’s intent or negligence is not considered as administrative sanctions as prescribed by the individual tax law. Provided, That where a taxpayer is not unaware of his/her duty or it is unreasonable for him/her to expect the fulfillment of his/her duty, etc., and there is a justifiable reason that it is impossible to impose tax on him/her (see, e.g., Supreme Court Decision 95Nu14602, May 16, 1997).

In other words, the above recognized facts, Gap evidence 10-24, and the above evidence are revealed through the following circumstances, namely, the additional tax of this case is an additional tax without filing a return under Article 47-2 of the Framework Act on National Taxes and an additional tax for unfaithful payment under Article 47-4 of the same Act. It is evident that the plaintiff has neglected to report and pay capital gains tax due to the transfer of the real estate in this case until now, and that the plaintiff has failed to immediately dispose of the real estate after the revocation of the ex officio disposition of imposition of capital gains tax as of January 3, 2011. However, in light of the following circumstances, the plaintiff sufficiently explained that the transfer of the real estate in this case is subject to imposition of capital gains tax, and the fact that it seems clearly that the transfer of the real estate in this case would be subject to imposition of capital gains tax after the ex officio revocation of the disposition of imposition as of January 3, 2011 and the obligation to report and pay capital gains tax is not justified.

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

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.