[1] The meaning of the actual transaction value, which is the basis for calculating the transfer value, where the actual transaction value is based in the calculation of the transfer margin for the portion to be deemed a transfer in a onerous donation

[2] The case holding that transfer gains on the part to be deemed a transfer shall be based on the actual transaction value and the transfer value based on the actual transaction value in case of onerous donation of apartment houses located in the real estate speculation area

[1] The actual transaction value is the actual transaction value between the transferor and the transferee, so the actual transfer value refers to the value received as a consideration for the transfer of assets between the transferor and the transferee. In the case of onerous donation, the amount equivalent to the obligation that the donor is exempted from by the donor as the donee takes over the obligation of the donor is not related to the donation itself. However, as long as the portion equivalent to the above obligation amount is deemed to have been transferred for consideration in the donation amount, the previous consideration shall be deemed to be the amount equivalent to the obligation that the donor is exempted from. Therefore, in the case of onerous donation, the actual transaction value for the portion to be deemed a transfer is equivalent to the obligation that

[2] The case holding that since gains on transfer of an apartment house located in a real estate speculation area on transfer should be based on the actual transaction value and the transfer value based on the actual transaction value, the transfer value of the portion to be deemed a transfer should be calculated based on the actual transaction value, and the transfer value of the portion to be deemed a transfer should be calculated based on the actual transaction value x (debt / donation value)

[1] Articles 88(1), 96(1), 97(1)1, and 100(1) of the former Income Tax Act (amended by Act No. 7006 of Dec. 30, 2003); Article 159 of the Enforcement Decree of the Income Tax Act / [2] Article 88(1), 96(1)6-2, and 97(1)1(a) of the former Income Tax Act (amended by Act No. 7006 of Dec. 30, 2003); Article 159 of the Enforcement Decree of the Income Tax Act

Lower instance

The Director of the Pacific District Office

June 13, 2005

1. The Defendant’s imposition disposition of KRW 79,862,800 against the Plaintiff on March 2, 2004 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. (1) On July 30, 2001, the Plaintiff acquired the above apartment at KRW 101 50,000,000,000,000, from Gangdong-gu, Seoul High-dong 499, 500,000,000. On November 24, 2003, the Plaintiff donated the above apartment on the condition that the Plaintiff was liable to return KRW 250,000,000,000,000,000,000,000 from the bank as security.

(2) In addition, on July 30, 2001, the Plaintiff acquired the above high-ro apartment 104 Dong 101 260 million won, and donated the above apartment on November 24, 2003, subject to the Plaintiff’s acquisition of the obligation to return KRW 250 million, which he borrowed the above apartment from the bank as security, to Lee Jong-woo, on condition that he borrowed the above apartment from the bank as security.

B. On February 3, 2004, the Plaintiff reported and paid KRW 5,484,720 as the transfer income tax reverted to the year 2003 after calculating the transfer margin by calculating the transfer margin according to the actual acquisition value of the portion to be deemed to be transferred due to the onerous donation of each of the above apartment buildings (hereinafter referred to as "each of the apartment buildings in this case"). The transfer value of each of the above apartment buildings (hereinafter referred to as "the apartment buildings in this case") shall be deemed to be the amount equivalent to the debt acquired by the donees.

C. However, on March 2, 2004, the Defendant issued a correction and notification to the Plaintiff on March 2, 2004 that the transfer value of the portion to be deemed to be transferred due to the onerous donation of each apartment of this case shall be calculated based on the standard market price at the time of donation 】 (amount of debt/donation value) 】 (amount of debt/donation value) 】 (amount of debt/donation value) 】 the acquisition value shall be calculated based on the standard market price at the time of acquisition 】 (amount of debt/donation value) 】 79,862,800 won shall be additionally paid as the transfer income tax for the year 2003 (hereinafter referred to as the "disposition in this case"). The details of calculation of the transfer value and acquisition value of each apartment of this case

[Reasons for Recognition] Uncontentious Facts, Gap evidence 1, Eul evidence 1 to Eul evidence 3-1, 2, Eul evidence 5-1 and 2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The plaintiff's assertion

(A) The area where each apartment of this case is located is publicly announced as real estate speculation area, and the transfer gains should be calculated by applying the transfer value and acquisition value based on the actual transaction value to the transfer of real estate located in the speculative area. Therefore, in calculating the transfer gains on the portion deemed a transfer in respect of each apartment of this case’s onerous donation, the transfer value shall be the “amount equivalent to the debt taken over by the donee”, and the acquisition value shall be calculated by multiplying the “actual acquisition value” by the “ratio equivalent to the debt amount in the actual acquisition value.” Therefore, the instant disposition is unlawful.

(B) Even if the transfer value and acquisition value are to be calculated based on the standard market price in the calculation of the gains on the transfer of the part to be deemed a transfer in respect of the onerous donation of each apartment of this case, the transfer income tax calculated based on the standard market price cannot exceed the scope of the gains on transfer based on the actual transaction price. However, as the Defendant’s calculation of transfer income tax calculated based on the standard market price for the portion to be deemed a transfer in respect of the onerous donation of each apartment of this case exceeds the transfer gains of 41,356,349 won based on the actual transaction price, the difference should be revoked.

(2) The defendant's assertion

In the calculation of gains on transfer where a real estate in an speculative area is transferred, both the transfer value and the acquisition value shall be based on the actual transaction value. However, in the case of calculating gains on transfer of the portion deemed a transfer in respect of onerous donation, there is no actual transaction value at the time of donation, so the transfer value is bound to be based on the standard market price, and so long as the transfer value is calculated based on the standard market price, the acquisition value shall also be calculated based on the standard market price. Therefore, it is legitimate for the Defendant to calculate gains on transfer after calculating the transfer value and the acquisition value for the portion deemed a transfer in respect of onerous donation for each apartment of this case by the "ratio occupied by the part equivalent

B. Relevant statutes

Attached Form (2) is as listed in Annex 2.

(c) Markets:

(1) The latter part of Article 88(1) of the former Act provides that where a donee takes over any obligation of a donor in an onerous donation, the part equivalent to the amount of such obligation in the value of the donation shall be deemed to have been actually transferred for price of the property. Article 159 of the Enforcement Decree provides that in the calculation of gains on transfer of the portion to be deemed a transfer in an onerous donation, the acquisition value and transfer value shall be calculated by multiplying the value of the relevant property by the ratio of the portion equivalent to the amount of obligation in the value of the donation to the value of the relevant property pursuant to Article 96 and Article 97(1)1

Therefore, in the calculation of gains on transfer on the part to be deemed a transfer in case of onerous donation of assets, the transfer value and the acquisition value shall be based on the value of the relevant assets at the time of donation or acquisition 】 (amount of debt/donation) 】 (amount of debt/donation). In this case, where the transfer value and the acquisition value are to be based on the standard market price, the transfer value and the acquisition value are to be calculated based on the standard market price of the relevant assets at the time of donation or acquisition 】 (amount of debt / donation) 】 (amount of debt / donation) . Even in cases where the transfer value and the acquisition value are to be based on the actual transaction value,

However, in cases where the transfer value is to be based on the actual transaction value, there is no actual transaction value at the time of donation, and thus, it cannot be calculated by the method stipulated in Article 159(1) of the Enforcement Decree. Article 159 of the Enforcement Decree is reasonably interpreted in accordance with the purport of the latter part of Article 88(1) of the former Act (see Supreme Court Decision 98Du20018, Jan. 21, 2000). Therefore, in cases where the transfer value cannot be calculated pursuant to the latter part of Article 88(1) of the former Enforcement Decree, it is necessary to calculate the transfer value in accordance with the purport of the latter part of Article 88(1) of the former Act. However, inasmuch as the actual transaction value between a transferor and a transferee is the actual transaction value (proviso of Article 96(1) of the former Act), the actual transfer value means the value received in return for the transfer of assets to a transferee. Therefore, an amount equivalent to debts owed by a donee is not related to the donation itself, but equivalent to the above amount equivalent to the actual transaction value.

(2) Meanwhile, the proviso of Article 96(1)6-2 and Article 97(1)1(a) of the former Act stipulates that the transfer value and acquisition value shall be based on the actual transaction value in calculating gains on transfer of real estate in a specific case among real estate located in an area designated by the Minister of Finance and Economy in accordance with the standards and methods prescribed by the Presidential Decree (hereinafter referred to as “the following area”), as the rate of increase of real estate prices in the relevant area is higher than the rate of increase of real estate prices for the nation-wide consumers, in consideration of the rate of increase of real estate prices in the relevant area.

However, since there is no dispute between the parties that each apartment house of this case is located in the speculative area, gains on transfer on the part to be deemed a transfer in the onerous donation of each apartment house of this case shall be based on the actual transaction value and the transfer value based on the actual transaction value. Therefore, in each apartment house of this case, the transfer value of each apartment house of this case to be deemed a transfer is equivalent to the debt taken over by each donee, and the acquisition value shall be calculated based on the actual transaction value 】 (amount of debt / donation value) 】 (amount of debt / donation value). Nevertheless, the defendant calculated the acquisition value of each apartment of this case based on the basic market price 】 (amount of debt / donation value) 】

3. Conclusion

Therefore, the plaintiff's claim seeking the revocation of the disposition of this case is reasonable, and it is so decided as per Disposition with the assent of all participating Justices.

Judges Park Jong-chul