early trial 2014west 4371 ( December 29, 2014)

It is the object of wrongful calculation that is leased at a free and low price to children with a special relationship without reasonable grounds.

The plaintiff's non-payment of the rent for the land of this case from children is unreasonably reduced by the tax burden on the income equivalent to the rent income by not receiving the rent that should be naturally paid if the plaintiff is a reasonable economy.

Article 29 of the Value-Added Tax Act

2015Guhap58492 Revocation of Disposition of Imposition of Value-Added Tax, etc.

IsaA

Other than the head of Eastern Tax Office 1

October 22, 2015

November 26, 2015

1. The plaintiff's claims against the defendants are all dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The imposition of value-added tax by the head of the Dong-gu District Tax Office on July 2, 2014 against the Plaintiff on the second period of 2012, the first period of 2013, and the second period of OOO in 2013 shall be revoked. The imposition of global income tax by the head of the tax office on July 1, 2014 against the Plaintiff on the 2012 year of 2012 and the first period of OOO in 2013 shall be revoked.

1. Details of the disposition;

A. The Plaintiff is a personal entrepreneur who runs a real estate rental business, etc., and owns an OO-O large of 1,472.7 square meters (hereinafter “instant land”).

B. On September 1, 2012, the Plaintiff leased the instant land to ASEAN (1980s) for two years from September 1, 2012 to August 31, 2014, and agreed on monthly rent as follows.

- A monthly rent shall be OO.

- However, there is no revenue from the lease of the building until the completion of the construction of the building under construction on the instant land, so the lessee (B) may not pay the rent. The lessee shall pay the rent for six months until the lease of the new building is activated after the completion of construction and shall recover to the original state as KRW O0,000 per month after the revitalization.

- The lessor shall bear the property tax imposed on the lessor when there is no income from the lessor until the completion of construction.

C. After that, on December 30, 2013, the Plaintiff changed the rent of the instant land into KRW O0,000 per month between this BB and EB.

D. According to Article 29(4) of the Value-Added Tax Act, Article 62 of the Enforcement Decree of the Value-Added Tax Act, Article 41 of the Income Tax Act, Article 98(4) of the Enforcement Decree of the same Act, and Article 89(4)1 of the Enforcement Decree of the Corporate Tax Act, the head of the Dong-gu Tax Office calculated the reasonable rent for the land of this case as indicated below, and the amount calculated by applying the unfair calculation report as indicated in the following table. On July 2, 2014, the Plaintiff corrected and notified each of the second half-yearly value-added tax OO for the second period of 2012, OO for the first period of 2013, OO for the second period of 2013, O for the second period of 2013, O for the second period of 2013, O for the second period of 2013 (hereinafter “value-added tax”).

E. In addition, on July 1, 2014, according to the sales amount corrected and notified as stated in the above paragraph (d), the head of the tax office having jurisdiction over the branch of the tax office issued a revised and notified the Plaintiff of the global income tax for the year 2012 and the global income tax for the year 2013 (hereinafter “instant global income tax disposition”), respectively (hereinafter “instant global income tax disposition”), and “each of the instant dispositions” in addition to the disposition imposing the value-added tax for the instant case.

F. On August 27, 2014, the Plaintiff appealed to the Tax Tribunal, but was dismissed on December 29, 2014.

[Ground of Recognition] Facts without dispute, Gap evidence 1-1-3, Gap evidence 2-1, 2-2, Gap evidence 3-5, Eul evidence 1-1-2, Eul evidence 3-2, Eul evidence 3-1-2, Eul evidence 3-1-2, Eul evidence 10-1-5, video and the purport of whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

As the Plaintiff used the instant land for a long time as a site for gas station, it takes a considerable period of time to purify the said land as contaminated, is anticipated that rent for a considerable period of time after the completion of the construction of the building is difficult, and the Plaintiff inevitably exempted the Plaintiff from the rent, taking into account the fact that large construction of the building takes place. Therefore, the Plaintiff’s lease of the instant land to thisB under the foregoing conditions cannot be deemed as a normal transaction to be done by a reasonable economic person in light of social norms and transaction practices.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

1) The instant land is located in the 6th line of the urban area and the 3th general residential area, and was leased to DD Co., Ltd and used as the gas station site.

2) After leasing the instant land from the Plaintiff, this B newly constructed a building of the first and sixth floor above the instant land (hereinafter referred to as “instant building”) and obtained approval for use on December 19, 2013, and completed registration for the preservation of ownership on February 17, 2014. On January 1, 2014, the said building was leased to the Plaintiff, the Plaintiff’s fraud, and one other. The said building is currently being used as a hospital building.

3) From September 10, 2012, DNA Co., Ltd. performed the purification of contaminated soil of the instant land from September 10, 2012. The removal of contaminated soil, etc. was delayed, and the said purification work was completed only on June 18, 2013.

[Reasons for Recognition] The above evidence, Gap evidence Nos. 6 through 8, Eul evidence No. 1-2, Eul evidence Nos. 4, 7, and 8, and the purport of the whole pleadings

D. Determination

1) Even if a resident’s act or calculation is consistent with objective facts and is legally effective and lawful, in cases where such act or calculation constitutes a type of transaction which unfairly reduces tax burden between related parties as stipulated in Article 98 of the Enforcement Decree of the Income Tax Act, the person having the authority to impose tax would have earned income objectively deemed reasonable and thereby realize fair taxation by supplementing the substance-over principle. Thus, the wrongful calculation is sufficient if it is deemed that a certain transaction between related parties cannot be deemed a normal transaction to be taken by a reasonable economic person in light of social norms and customs, and thus, it is deemed that an unfair reduction of tax burden is made, and thus, it does not require any tax avoidance or economic loss (see, e.g., Supreme Court Decisions 91Nu7637, Jan. 21, 1992; 200Du1799, Jan. 11, 2002; 200Du7462, Sept. 10, 2009).

2) In light of the above legal principles, the following circumstances revealed in the fact that the Plaintiff returned to the instant land, i.e., (i) it is difficult to recognize the fact that there was soil contamination on the instant land; (ii) the evidence submitted by the Plaintiff alone is insufficient to acknowledge that the Plaintiff used considerable time and expenses for purification work on the instant land; and (iii) there is no evidence to deem that even if the instant land was leased, the use of the instant land was impossible for a considerable period of time due to contamination; and (iv) in light of the location, size and current status of the instant land, it is difficult to understand that the Plaintiff was not paid any compensation for the instant land until the instant building was newly constructed; and (iii) there is no evidence to find that the Plaintiff leased the instant land to a third party due to the lack of a third party to lease the instant land at a reasonable price; (iv) the Plaintiff alleged that the Plaintiff would be difficult to rent the instant land even if the building was completed for a considerable period of time, and thus, it is difficult to view that the Plaintiff was unreasonably subject to rent reduction from the instant building rent.

Therefore, the plaintiff's assertion is without merit.

3. Conclusion

Therefore, the Plaintiff’s claim against the Defendants is dismissed in its entirety on the grounds that it is without merit. It is so ordered.

shall be determined as above.