Review Transfer 2012-0054 (O6.15)

Since the equipment and real estate are transferred comprehensively, it shall not be excluded from the transfer price.

It is reasonable to view that the equipment was comprehensively transferred as real estate in light of the fact that the special contract for separate settlement of the cost, such as the equipment, was entered in the preparation of the sales contract, but the value of the actual equipment is assessed or the price such as the equipment is not settled separately from the sales price, etc.

2012Gudan1476 Revocation of Disposition of Imposing capital gains tax

1.A 2.B

Daejeon director of the tax office

July 12, 2013

August 30, 2013

1. All of the plaintiffs' claims are dismissed.

2. The costs of the lawsuit are assessed against the Plaintiffs, including the cost of supplementary participation.

The Defendant’s imposition of OOO(including additional duties) on January 1, 2012, the imposition of OOO(including additional duties) on Plaintiff AA on January 1, 2012, the imposition of OOO(including additional duties) on Plaintiff BB, and the imposition of OO(including additional duties) on Plaintiff AA on August 7, 2012, and the imposition of OO(including additional duties) on Plaintiff BB on August 7, 2012.

1. Details of the disposition;

A. On February 20, 2001, Plaintiff BB and Nonparty CCC acquired each of 1/2 shares of OO-dong 92-5 O-dong 394 square meters (hereinafter “instant site”). On June 19, 2001, Plaintiff AB, the husband of Plaintiff BB, acquired the shares of the said CCC, and the Plaintiffs completed registration of initial ownership on December 27, 2001.

B. On March 27, 2002, the Plaintiffs transferred the instant real estate to the Intervenor joining the Intervenor (hereinafter referred to as the “ Intervenor”), and reported the transfer income tax base by making the acquisition value of the instant real estate as OOO won (OOO won + OOOO won of the cost of the instant building + OOOO won of the building design service cost of the instant building + OOOO won of the building design service cost) and transfer value as OOO.

C. After that, the Intervenor transferred the instant real estate to DD on July 6, 2010, and sentenced the acquisition value of the instant real estate as OOO, and the Defendant, upon conducting a tax investigation on the Intervenor, deemed that the Plaintiffs transferred the instant real estate to OOO won, and the Plaintiffs’ acquisition value is calculated as the conversion value, and the Plaintiff imposed capital gains tax on the Plaintiff AA and the Plaintiff BB, respectively.

D. The Plaintiffs appealed and filed a request for examination with the National Tax Service on March 22, 2012, and on June 2012.

15. was dismissed.

E. After that, the Defendant corrected the calculation of the acquisition value of the instant real estate at the time of the disposition of imposition as of January 1, 2012, and issued capital gains tax on August 7, 2012 by considering the actual acquisition value as the OOOOO won reported by the Plaintiffs as the acquisition value at the time of filing the transfer income tax return, and subsequently imposed capital gains tax on the Plaintiffs after deducting the tax amount paid by the Plaintiffs according to the disposition of imposition as of January 1, 2012, and then additionally imposed OOO(including additional tax) on Plaintiff A and Plaintiff BB (hereinafter “instant taxation disposition”).

[Ground of Recognition] The facts without dispute, Gap evidence 1 to 7, and Eul evidence 1 to 4 (including each number), and the whole purport of the pleading

2. Whether the instant taxation disposition is legitimate

A. The plaintiffs' assertion

1) At the time of transferring the instant real estate, the Plaintiffs agreed that the value of the instant real estate as an OOO and the amount in excess thereof would be settled as costs for equipment, etc. Accordingly, since the sales contract was submitted as at the time of reporting the transfer income tax, the above sales contract cannot be deemed as a double contract or false contract, and even if the Plaintiffs reduced the costs of the instant real estate excessively and underreporting the transfer value, it should be deemed as a mere general underreporting even if the Plaintiffs did not evade the transfer income tax by fraud or other unlawful acts, it is unlawful for the Defendant to take the instant disposition by applying the exclusion period of imposition for ten years.

2) It was true that the plaintiffs received OOO won in relation to the transfer of the real estate in this case from the intervenors, and the remaining amount of the above funds received by the plaintiffs, excluding OOO won, is paid as the purchase price for various facilities and equipment installed in the building in this case (hereinafter referred to as "price for non-goods, etc."). Even if the whole amount exceeded OOO won is not recognized as the purchase price for the equipment, etc., even if it is not recognized as the price for the whole amount, and at least, OOO which is paid to the plaintiffs in installing household appliances, furnitures, furnitures, and indoor artificials, signboards, and boilers, etc., which remain evidence to the plaintiffs at least should be deducted from the transfer price for the real estate in this case. Accordingly, the taxation disposition in this case as the transfer price for the real estate in this case is unlawful.

3) The Intervenor, among the OOO members claiming to be the purchase price of the instant real estate, did not pay the Plaintiff the six-story part of the instant building, which was used for residential purpose, as the construction cost to remodel the six-story part of the instant building into the guest room. Ultimately, the said construction cost should be deemed to have been paid by the Plaintiff, and the said cost should be deducted from the transfer value, as it falls under “the cost paid for the alteration, improvement or convenience of the use of the transferred asset.”

4) The proviso of Article 114 (4) of the former Income Tax Act (amended by Act No. 6781, Dec. 18, 2002; hereinafter the same) that stipulates that the actual transfer value of the real estate in this case exceeds the income tax calculated based on the standard market price in the case of the plaintiffs, and that the transfer income tax in this case should be calculated based on the standard market price, not on the actual transaction price, because the actual transfer value of the real estate in this case exceeds the income tax calculated based on the standard market price, and the transfer income tax in this case should be calculated based on the standard market price, not on the actual transaction price.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

In addition to the statements in Eul's evidence 5 to 12 and the overall purport of the arguments in Eul's testimony and EE, FF, the plaintiffs and the intervenors are acknowledged as having contracted the purchase price of the real estate in this case as OOO won (the contract price + the intermediate payment + the obligation of the loan OOOO Won + the balance + the obligation of the remainder of the payment), and thereafter, the Intervenor received the plaintiff's total amount of OOO2 as the purchase price of the real estate in this case by deducting the 6th floor remodeling cost of the remainder OO2 from the plaintiffs. In relation to the value-added tax for the second period of 2001, the plaintiff BB received the purchase price of the real estate in this case as the operator of the inn business and received the deduction of the input tax amount for OO2, including the purchase cost of the building in this case and the purchase cost of the household product.

C. Determination

1) Whether the exclusion period is expired

In light of the above facts and the circumstances under Paragraph (2) above, it is reasonable to see the sales price of the instant real estate as OOO won, and the evidence submitted by the plaintiffs alone is insufficient to recognize that the sales price of the instant real estate is OO won, and there is no other evidence to acknowledge otherwise. Therefore, the act of preparing and submitting a false contract in which the sales price of the instant real estate was unreasonably reduced, constitutes “the case where a taxpayer evades national taxes by fraud or other unlawful act under Article 26-2(1) of the Framework Act on National Taxes.” Therefore, it is legitimate for the Defendant to take the instant disposition on the premise that the exclusion period for imposition of ten years is set aside, and therefore, this part of the Plaintiff’s assertion

2) Whether the money such as the equipment is deducted

In the above facts, the following circumstances are added to the whole purport of the arguments, namely, that the plaintiffs and intervenors have entered a special agreement to separately settle the costs such as fixtures while preparing a sales contract. However, although the actual contract was not submitted, it is reasonable to view that the plaintiffs' purchase price was not included in the contract (Evidence A3) and the special agreement stated in the contract (Evidence A4) submitted by the plaintiffs at the time of reporting the transfer income tax, considering that the special agreement stated by the plaintiffs at the time of reporting the transfer income tax was the same, the actual contract seems to have been stated in the above special agreement, and that the price of the equipment is determined by evaluating the value of the equipment, or the price of the equipment is not settled separately from the purchase price in this case (for this, there is no dispute between the plaintiff and the intervenors), and that the special agreement to comprehensively transfer and acquire the household product purchase cost (OOO equipment) deducted from the input tax amount as fixed assets and that the acquisition price of the building in this case should be excluded from the transfer price.

3) Whether the construction cost is deducted

As seen earlier, the Plaintiffs reported construction cost of the building at the time of reporting transfer income tax as the construction cost of the instant building, and it is reasonable to view that the said OOO is included in the 6th floor remodeling construction cost in addition to the purchase cost of home appliances as well as the purchase cost of home appliances. Therefore, since the 6th floor construction cost paid by the Plaintiffs was already reflected in the calculation of the tax base of the instant transfer income tax, it is unreasonable to re-be deducted as necessary expenses. The Plaintiff’s assertion on this part is without merit.

4) Whether the standard market price is applied

Article 96 (1) of the former Income Tax Act provides that the transfer value of land and buildings shall be the standard market price at the time of transfer, and the transfer value shall be determined based on the actual transaction price under the proviso of the same Article, and one of them is that the transferor shall report the actual transaction value at the time of transfer and the time of acquisition along with evidential documents by the due date for final return (Article 6). The proviso of Article 114 (4) of the same Act provides that in case where a preliminary return or final return on the tax base of transfer income is filed and where the head of the district tax office having jurisdiction over the place of tax payment or the director of the regional tax office confirms

In light of the following facts: (a) under the principle of no taxation without the law, the interpretation of tax laws and regulations shall be made in accordance with the law, barring any special circumstances; (b) expanded interpretation or analogical interpretation without reasonable grounds; and (c) the legislative intent of the proviso of Article 114(4) of the former Income Tax Act is to: (a) according to the Supreme Court precedents, in cases where a taxpayer transfers real estate, and makes a preliminary return or final return on the tax base of transfer income based on the actual transaction price different from the fact, and the tax authority’s investigation confirms that the tax base and tax amount are to be determined based on the standard market price even in cases where the actual transaction price is confirmed by the investigation of the tax authority; and (b) so long as it is confirmed that the actual transaction price is different from the fact, the tax authority may rectify the transfer income tax according to the actual transaction price confirmed. Therefore, the Defendant’s disposal by making the actual transaction price and acquisition price confirmed under the proviso of Article 114(4) of the former Income Tax Act as the transfer price and acquisition price.

3. Conclusion

Since the plaintiffs' claims are without merit, all of them are dismissed. It is so decided as per Disposition.