Whether Article 67 subparagraph 2 (b) of the former Enforcement Rule of the Income Tax Act with respect to the calculation of global income tax on real estate sales businessmen can be determined on the basis of the standard market price (negative)

Article 67 subparagraph 2 (a) of the former Enforcement Rule of the Income Tax Act (wholly amended by Ordinance of the Prime Minister No. 505 of May 3, 1995) provides that the method of calculating global income tax under Article 82 (2) 1 of the former Income Tax Act (wholly amended by Act No. 4803 of December 22, 1994) concerning the calculation of global income tax on real estate brokers shall be indicated in the formula of calculating profits under Article 82 (2) 2 (b) of the Enforcement Rule of the Income Tax Act. Article 82 (2) 2 of the Act provides that "the method of calculating transfer income tax shall be indicated in the formula of calculating profits under Article 82 (2) 2 of the Enforcement Rule of the Income Tax Act (wholly amended by Ordinance of the Prime Minister No. 505 of May 3, 1995), Article 92 (2) of the Act provides that "the former Enforcement Rule No. 92 (14) of the Income Tax Act and the method of determining No. 147 of the former Enforcement Rule No.

Articles 82(2), 92(2), and 94 of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994); Articles 141 and 142 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994); Article 67 subparag. 2(b) of the former Enforcement Decree of the Income Tax Act (amended by Ordinance of the Prime Minister No. 505 of May 3, 1995)

Thai District Court Decision 201Na1448 decided May 1, 201

Head of Nowon Tax Office

1. The plaintiff's claim is dismissed.

2. Litigation costs shall be borne by the plaintiff.

The disposition that the Defendant imposed 22,785,590 won as global income tax on the Plaintiff on September 16, 1996 shall be revoked.

1. Basic facts

The following facts are not disputed between the parties, or they can be acknowledged in full view of the whole purport of the pleadings in the descriptions of Gap evidence 1, Gap evidence 2-1, 2-3, Eul evidence 4-1, 2, Eul evidence 1-3, Eul evidence 4-1, 2, Eul evidence 5, Eul evidence 6-1, 2, and Eul evidence 7-13, and there is no counter-proof.

A. On August 20, 1994, the Plaintiff, as a real estate sales businessman, newly constructed a commercial building of 2,485.19 square meters on the ground of 544 square meters of the block site in Nowon-gu, Seoul Special Metropolitan City, Nowon-gu, Seoul, and sold the said site and commercial building (hereinafter “instant real estate”).

B. On May 31, 1995, the Plaintiff made a final return on the tax base of global income tax in 1994 by applying 45%, which is the tax rate under Article 70(1) of the former Income Tax Act (amended by Act No. 4803, Dec. 22, 1994; hereinafter “Act”) to the global income tax amount of KRW 54,797,080, which is the global income tax amount of KRW 1994, and at the same time paid the said tax amount.

C. In making the final return on the tax base of global income tax in 1994, the Plaintiff calculated the global income tax according to the method of tax rate of global income tax under Article 82(2) of the Act, Article 134(2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994; hereinafter “Enforcement Decree”) and Article 67 subparag. 2(a) of the former Enforcement Decree of the Income Tax Act (amended by Ordinance of the Prime Minister No. 505 of May 3, 1995; hereinafter “Enforcement Rule”).

D. According to Article 82(2) of the Act, Article 134(2) of the Enforcement Decree, and Article 67 subparag. 2(b) of the Enforcement Rule of the Enforcement Rule, the Defendant: (a) compared the global income tax rate method under Article 67 subparag. 2(a) of the Enforcement Rule with the global income tax rate method under Article 67 subparag. 2(a) of the same Act and the tax amount under the method of the application of capital gains tax rate under Article 67 subparag. 2(b) of the Enforcement Rule; (b) calculated based on the profit margin reported by the Plaintiff on the basis of the profit margin entered by the Plaintiff, there is a higher tax amount under the method of the application of capital gains tax under Article 67 subparag. 2(b) of the Enforcement Rule of the Enforcement Rule of the same Act; and (c) calculated the Plaintiff’s global income tax in 194 after deducting the amount voluntarily paid by the Plaintiff; and (d) imposed the imposition of the instant disposition (hereinafter referred to as “instant disposition”).

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The Defendant asserts that the instant disposition is a legitimate disposition in accordance with the grounds for and relevant laws and regulations.

(2) As to this, the Plaintiff asserts that the instant disposition of taxation should be revoked on the following grounds.

(A) Article 82(2) of the Act provides that in calculating the global income tax on a real estate sales businessman with any global income other than the business income accruing from the sale and purchase of land, etc., the global income tax under Article 70 and the total amount of the tax calculated under Article 92(2) shall be the global income tax, whichever is larger, compared with the total amount of the tax for the relevant year under Article 92(2). Article 134(2) of the Enforcement Decree provides that the calculation of the calculated global income tax under Article 82 of the Act shall be governed by the Ordinance of the Ministry of Finance and Economy. Article 67 of the Enforcement Rule provides that the calculation of the calculated global income tax under Article 134(2) of the Decree shall be made by the following formula, where there is any global income other than the income accrued from the sale and purchase of land, etc. under subparagraph 2, the larger amount of the calculated global income tax shall be the calculated global

(a) Method of tax rate of global income under item (a): (trade gains £­ Other necessary expenses + other global income) £­ Tax base of global income deduction = global income.

The global income tax base ¡¿ the global income tax amount.

(b) The application method of capital gains tax rates under item (b) : [The tax rates under the subparagraphs of Article 70(3) of the Act ¡¿ (the trade marginal profits ? capital gains deduction ? the income deduction under Article 68(2) of the Act) 】 tax rates under the subparagraphs of Article 70(3) of the Act} £« (the amount of other

(B) The purport of the above provision is not to simply apply the profit margin on business income to the higher tax rate, but to separately compare the tax amount calculated by the method of taxation of transfer income tax with the higher tax rate. The Defendant calculated the tax amount by applying 60% higher than the global income tax basic rate and the transfer income tax rate to the sales price multiplied by the standard income rate, but it is in violation of the pertinent provisions of the Income Tax Act.

(C) Therefore, it is unlawful for the Defendant to correct the amount of taxes by misunderstanding the purport of the tax law, even though the Plaintiff voluntarily reported and paid lawful taxes, on the ground that the amount of taxes under the method of tax rate of global income tax rate exceeds the amount of taxes under the transfer income tax rate method.

B. Relevant statutes

Article 82 (2) of the Act: In calculating the amount of global income tax on a person who has global income, other than the business income generated from the sale and purchase of land, etc., as a real estate sales businessman, the larger of the following amounts shall be the calculated global income tax:

1. Global income tax amount under the provisions of Article 70;

2. The sum of the calculated tax amounts under the provisions of Article 92 (2) for the current year; and

Matters necessary for the calculation of global income tax on a real estate sales broker under paragraphs (1) and (2) shall be prescribed by Presidential Decree.

Article 134 (2) of the Enforcement Decree: The calculation of calculated global income tax prescribed in Article 82 of the Act shall be governed by the Ordinance of the Ministry of Finance and Economy.

Article 67 of the Enforcement Rule: The calculation of the calculated global income tax under Article 134 (2) of the Decree shall be made by the following formula:

1. (Omission)

2. Where there exists any global income other than the income generated from the sale and purchase of land, etc., the larger of the amounts calculated under the following (a) and (b) shall be the calculated global income tax:

(a) (Sales marginal profit £­ Other necessary expenses + Other global income amount) £­ Tax base of global income deduction amount = global income tax base.

The global income tax base ¡¿ the global income tax amount.

(b)[The trading marginal profit £­ the transfer income deduction £­ the income deduction amount under the provisions of Article 68 (2) of the Act) ¡¿ tax rate under the subparagraphs of Article 70 (3) of the Act} £« (the amount of other global income deduction ? the amount of income deduction) ¡¿ the amount of global income calculated = the amount of global income.

(c) Markets:

Therefore, the disposition of this case is not subject to the estimation decision as it was imposed based on the account books kept and recorded pursuant to Article 119 of the Act and the final return of the claimant's tax base based on documentary evidence. In the event of loss, the plaintiff is not subject to the separate payment by calculating the tax amount according to the transfer income tax method. Thus, the plaintiff's assertion based on the premise that the defendant applied the standard

In addition, Article 67 subparagraph 2 (a) of the Enforcement Rule of the Act provides that the method of calculating the global income tax rate under Article 82 (2) 1 of the Act is indicated in the formula of calculating the profit margin under Article 82 (2) 2 (b) of the Act, and Article 82 (2) 2 of the Act provides that the method of applying the capital gains tax rate is indicated in the formula of calculating the profit margin under Article 67 subparagraph 2 (b) of the Enforcement Rule, and Article 92 (2) of the Act provides that "the total amount of the calculated tax under Article 92 (2) of the Act shall be the calculated global income tax," and Article 92 (2) of the Act provides that "the calculated tax amount of the transaction marginal profit shall be the amount calculated by multiplying the profit margin by the tax rate under each subparagraph of Article 70 (3) of the Enforcement Rule, and Article 141 and Article 142 of the Enforcement Rule provide that "Article 92 (4) and Article 94 (1) 2) of the Enforcement Rule shall not be referred to "Article 2 (2) of the Enforcement Rule".

Therefore, in accordance with Article 82 of the Act and Article 67 of the Enforcement Rule of the Act, when calculating the tax amount based on the method of applying the global income tax rate and the tax amount based on the method of applying the capital gains tax rate, the disposition of this case in accordance with the method of applying the capital gains tax rate is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case seeking the revocation of the disposition of this case is dismissed as it is without merit, and the costs of lawsuit are assessed against the losing plaintiff and it is so decided as per Disposition. (Attachment omitted)

Judges Kim-soo (Presiding Judge)