Examination-transfer 2014-0207 ( October 16, 2015)

Transfer date shall be the date when the price has been settled;

If the Plaintiff recognizes that it received 1 billion won with the total transfer proceeds, but did not present a ground that the Defendant received any balance after April 10, 2008, which was confirmed as the date of the settlement of the balance, so this disposition is legitimate as the time of transfer when the transfer proceeds are paid.

Article 98 of the Income Tax Act: Time of Transfer or Acquisition

Incheon District Court 2014Gudan2109 Revocation of Disposition of Imposing Capital Gains Tax

H

BB Director of the Tax Office

June 2, 2015

July 14, 2015

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 KRW 47,025,054, and penalty tax of KRW 18,926,659 against the Plaintiff on December 1, 2014, among the transfer income accrued in the year 2008, was revoked.

1. Details of the disposition;

(a) Division of land;

Before the division owned by the Plaintiff, the registration of the land of 140-75 m2,133 m2 on January 29, 2009 is converted to 140-75 m2,060 m2,060 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,000 m2,00 m2,00 m2,00 m2,00 m2,00 m2,00 m2,07 m2,07 m2,07 m2,00 m2,00 m2,00 m2,00 m2,00 m2,00 (hereinafter referred to as “the land before the division”).

B. Conclusion of a sales contract and its subsequent progress

1) On February 2, 2008, TH Co., Ltd. (hereinafter “TH”) purchased the land before the instant partition from the Plaintiff for KRW 1 billion (hereinafter “the land”) in order to build a new head office building.

The contract of sale is called a contract of sale.

2) The non-party company: 100 million won as the down payment on the day of the contract pursuant to the instant sales contract to the Plaintiff.

3. The remainder of April 10, 2008:

The sum of KRW 25 million was paid to KRW 1 billion.

3) However, the non-party company did not obtain a building permit from the competent authority, thereby newly establishing the head office.

When it was impossible to accumulate, the non-party company and the plaintiff decided to change the purchaser under the sales contract of this case from the non-party company to the HongK, the representative director of the non-party company.

4) Accordingly, on April 2008, HongK applied for a new construction of a building and a permit to change its use under its name to the competent authority, as described in the foregoing paragraph (a), and completed the registration conversion and division of the land before the instant partition, and the Plaintiff and HongK permitted a new construction and a permit to change its use from the competent authority on June 2009, changed the purchaser under the sales contract of this case from HongK to the non-party company, thereby completing the registration of ownership transfer on the instant land in the name of the non-party company.

5) Meanwhile, on June 22, 2009, the plaintiff and the non-party company made a sales contract stating that "the plaintiff sold the land of this case to the non-party company at one billion won on June 22, 2009, but the non-party company receives KRW 200 million on the day of the contract, and KRW 800 million on June 24, 2009, respectively, from the non-party company," and on June 25, 2009, the plaintiff completed the registration of transfer of ownership for the land of this case to the non-party company on June 22, 2009.

(c) Return and payment of capital gains tax;

On July 8, 2009, when the Plaintiff transferred the instant land to the non-party company in KRW 1 billion, the Plaintiff reported KRW 203,246,110 to the non-party company on July 8, 2009, based on the time when the transfer of the instant land was completed under the name of the non-party company as indicated below (the date when the registration of transfer of ownership of the instant land was completed), and paid it on the 20th of the same month.

(d) Correction notice of capital gains tax;

The Defendant confirmed on April 10, 2008 that the date on which the Plaintiff received all the price of KRW 1 billion under the sales contract of this case from Hong K, after undergoing an on-site investigation of the transfer income tax against the representative director of the company, Hong K and the Plaintiff, was the date on which the Plaintiff received all the price of KRW 1 billion under the sales contract of this case. On December 1, 2014, the Defendant corrected and notified the Plaintiff of KRW 301,076,987, the transfer income tax for the year 2008, on the ground that the time of transfer of the land of this case was that the Plaintiff received all the said KRW 1 billion from Hong K on April 10, 208

(hereinafter referred to as "disposition of this case")

1) However, as seen earlier, on June 25, 2009, the date when the ownership transfer registration of the instant land was completed in the name of the non-party company, but on June 24, 2009, the Plaintiff entered June 24, 2009, which is the remainder payment date under the sales contract prepared between the Plaintiff and the non-party company, as the transfer date of the instant land

Correction

Details

Won 16,804,122 won on April 10, 2008

301,076,987 won

(1) Capital gains tax shall be 235,125,274 won.

(2) Penalty taxes for failure to file a report shall be 47,025,054 won.

(3) Additional tax for insincere payment 18,926,659 won

[Ground of recognition] Facts without dispute, Gap 3, 4, Eul 1's entries, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The defendant's disposition of this case is unlawful for the following reasons.

1) In light of the fact that Nonparty Company paid KRW 585 million as part of the remainder to the Plaintiff with the money borrowed prior to the instant partition as collateral, and the progress after the conclusion of the instant sales contract and other various circumstances, the time of the transfer of the instant land ought to be deemed as the date the transfer registration of ownership of the instant land was completed in the name of Nonparty Company.

2) Even if the time of the transfer of the instant land is deemed to be the day the Plaintiff received the full payment of KRW 1 billion from Hong K, it should be deemed that there exists a justifiable reason that the Plaintiff reported and paid the transfer income tax on June 24, 2009 with the time of the transfer of the instant land.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Time of transfer of the instant land

A) Article 98 of the former Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009) and the former Act

Article 162 (1) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034, Feb. 18, 2010) provides that when calculating gains on transfer of assets, the transfer time of the relevant assets shall be the date of liquidation of the price of the relevant assets unless there is any exception under each subparagraph of Article 162 (1) of the former Enforcement Decree of the Income Tax Act. However, if the date of liquidation is unclear, the date of receipt of registration or transfer (including the date of registration or transfer) entered in the register, register, or register, etc., or the date of receipt of registration (including the date of registration or transfer of the name) entered in the register, register, or register, etc. shall be deemed the transfer time.

B) As to the instant case, it is evident that the date on which the Plaintiff received the full payment of KRW 1 billion as stipulated in the instant sales contract from Hong K on April 10, 2008. Thus, unless there exist any grounds under each subparagraph of Article 162(1) of the former Enforcement Decree of the Income Tax Act, the time of transfer shall be deemed the time of transfer. As asserted by the Plaintiff, the mere fact that the non-party company paid KRW 585 million to the Plaintiff as part of the remainder of the remainder of the remainder of the loans that it received as a security for the instant land before the division, cannot be deemed the date on which the ownership transfer registration for the instant land was completed in the name of the non-party company.

(ii) the existence of justifiable grounds

A) In order to facilitate the exercise of taxation rights and the realization of tax claims, additional tax under the tax law is an administrative sanction imposed as prescribed by the individual tax law in cases where a taxpayer violates various obligations, such as a return and tax payment, without justifiable grounds, and it is unreasonable for the taxpayer to be aware of such obligations, and where there are circumstances that make it unreasonable for the taxpayer to be reasonably present or to expect the performance of such obligations to be unreasonable, and where there are justifiable grounds that make it unreasonable for the taxpayer to be unaware of such obligations, it may not be imposed (see Supreme Court Decision 2011Du13842, Feb. 27, 2014). However, the taxpayer’s intentional or negligent acts are not considered, but does not constitute justifiable grounds that cannot be caused by the taxpayer’s breach of duty (see Supreme Court Decision 2012Du7370, Mar. 13, 2014).

B) In light of the above legal principles, as seen earlier, as long as the time of the transfer of the instant land was determined on April 10, 2008, the Plaintiff is liable to pay capital gains tax at that time. ② In light of the fact that the Plaintiff was aware of all the circumstances regarding the conclusion of the instant sales contract and its subsequent progress, and that it is difficult to deem that there is a conflict of opinion as seen earlier with regard to the time of the transfer of the instant land, it is unreasonable to deem that the Plaintiff was not aware of the obligation, and thus, it does not constitute “a case where there is a justifiable reason that does not cause an omission of the obligation, such as when there is a circumstance where it is unreasonable to give up the obligation or it is unreasonable to expect the parties to perform the obligation.”

3) Sub-decisions

Therefore, the defendant's disposition of this case, which was made on the same premise, is legitimate.

3. Conclusion

If so, the plaintiff's claim is without merit and it is so decided as per Disposition.