Whether the law applied to business example is in violation of the no taxation without law

If the value confirmed in a transaction example is significantly different from the market price, the taxpayer can prove that the cause is clear and the price is unreasonable, which cannot be said to contravene the principle of no taxation without the law.

Article 49 of the Inheritance Tax and Gift Tax Act

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The Defendant’s imposition of gift tax of KRW 56,757,610 on January 2, 2007 against Plaintiff Gab○○ on January 2, 2007 and the imposition of gift tax of KRW 11,505,680 on January 5, 2007 is revoked.

1. Details of disposition;

A. Of the ○○○○-dong ○○ apartment ○○○○-dong, Seoul, ○○○○○○-dong, ○○○○○○-dong (hereinafter “instant apartment”), Plaintiff Park Jong-○ was registered on May 25, 2005 on the share of 29/4 shares, with respect to the share of 15/44 shares from 15/15/44 shares from Y○-dong, which was the former owner of the instant apartment.

B. The Plaintiff Park ○-○ is an infant of Park○-○, and the Plaintiff Lee ○-○ is an wife of Park○-○.

C. On August 23, 2005, when reporting gift tax on the instant apartment on August 23, 2005, Plaintiff Park○○ filed a return by multiplying the standard market value of the instant apartment by one’s own share ratio of KRW 580,000,000, by the standard market value publicly notified by the Commissioner of the National Tax Service. Plaintiff Lee○○ was KRW 300,000,000, by multiplying the said standard market value by one’s own share ratio, and did not file a return on gift tax on the ground that he did not have any obligation to pay gift tax by the spouse’s gift tax deduction.

D. Accordingly, on or before May 25, 2005, the date of donation of the apartment in this case, the Defendant investigated the trading cases of neighboring apartment units for three months before and after May 25, 2005. As a result, the Defendant stated that the apartment unit of ○○○ Dong was attached to the same apartment complex, and the size, direction, floor, and standard market price of which are the same as that of the apartment in this case, and transacted with 1,130,000 won on May 31, 2005. The Defendant additionally included the gift value of the apartment in this case to ○○○○○○○○○○○○○○ apartment unit for five years (amended by Act No. 8139 of Dec. 30, 206; hereinafter referred to as “the Inheritance Tax and Gift Tax Act”) and included the gift value of the apartment in this case as KRW 60(1) and (2), Article 60(1) of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 18989 of Aug. 5, 2000, 15, 10075).

(In fact that there is no dispute, Gap evidence 2, 4, Eul evidence 1-1, 2, 2, 3, 4-1, 4-3, 5, 6, 7-1, 2, 8, 9, 10-5, 1-5, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

Article 49(5) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that the tax authority’s arbitrary taxation may be possible by putting the transaction details of the same or similar property on the friendly factor in calculating the value of donated property. The Plaintiffs are in violation of the principle of no taxation without the law. Although, at the time of reporting the gift tax, there was no method to judge whether or not apartment buildings are identical or similar to those of other apartment buildings at the time of reporting the gift tax, or to know whether or not other apartment buildings are traded, transaction prices, etc., and thus, imposing gift tax additionally based on the standard market price, it would result in the deprivation of legal benefits due to voluntary payment of gift tax, on the grounds that the Defendant’

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Article 60(1) and (2) of the Inheritance Tax and Gift Tax Act provides that the value of donated property is calculated on the basis of “market price” as of the date of donation, and Article 60(1) and (2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that the meaning of “market price” includes the value which is recognized as “market price” in addition to the value which is generally accepted if a transaction takes place freely between many and unspecified persons. Article 49(1) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, enacted upon delegation by the parent law, provides that “The market price of donated property” shall be the subject transaction where the sale, appraisal, expropriation, auction, or auction takes place during the period of three months before or after the date of evaluation, and provides specific criteria for values in each subparagraph. However, Article 49(5) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act extends

(2) “The market value” is based on the premise that it is, in principle, an objective exchange price formed through a normal transaction. However, it is not a transaction price determined by a single transaction. (2) The Inheritance Tax and Gift Tax Act delegates a specific standard to the Presidential Decree as the market value because it is difficult to provide for a complex transaction reality in the form of a law and any continuous transaction method due to continuous changes in the transaction form. However, Article 49(5) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides for the approximate standard of transaction which is already recognized as the market price in the mother law. (3) Article 1817 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides for the method of calculating the market value of the property newly established on December 30, 203 and its legislative purport is to eliminate unreasonable points that are virtually identical or similar to the property in question, and it is not an objective provision that reflects the market value of the property at issue in the form of a transaction value that is equal or similar to the market value of the property at issue in accordance with the principle of fair taxation.

(3) In addition, in a case where the market price of an apartment is at issue as in the instant case, the approximate market price of the apartment can be easily confirmed by neighboring licensed real estate agents, etc., and in the event that the assessment of the value of the property subject to donation by applying Article 49(5) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act is substantially different from the market price confirmed as above, the taxpayer can prove that the price is unreasonable by specifying the original date. Thus, the mere fact that the market price of similar real estate was considered as the market price does not violate the principle of no taxation by infringing on the predictability of the national tax obligations and allowing arbitrary taxation. Therefore, the Defendant investigated the trading case for three months before and after May 25, 2005, which is the date of the instant apartment donation, and conducted the instant disposition by deeming the sale price confirmed in the transaction case of the apartment complex on May 31, 2005, where the size, direction, floor, and standard market price of the apartment complex in the same complex to be the market price of the instant apartment.

(4) The Plaintiffs asserted that the imposition of gift tax additionally on the basis of the transaction cases of other apartment buildings revealed ex post facto results in deprivation of legal reduction or exemption benefits due to voluntary payment of gift tax. However, as seen earlier, if the gift tax is reported and paid by investigating the approximate market price of apartment buildings from nearby licensed real estate agents, etc. and reporting and paying the gift tax based on the tax base, it may be subject to a tax credit for the total amount of reported and paid apartment value. Therefore, the Plaintiffs’ assertion based on the premise that the said investigation is not conducted, but simply on

3. Conclusion

Therefore, the disposition of this case is legitimate, and the plaintiffs' claim of this case is dismissed as it is without merit. It is so decided as per Disposition.