[1] In a case where a land transaction permission is completed for the purpose of excluding or avoiding a land transaction permission even if the land was sold within a land transaction permission zone under the National Land Planning and Utilization Act and the price was received, or the registration of transfer was completed with a land transaction permission as if the first seller sold the land to a third party while the land was sold to the third party, whether the said registration remains without cancellation and the seller or the intermediary seller holds the purchase price received as it is, whether the transfer income tax is exceptionally imposed (affirmative)

[2] The case holding that in a case where the tax authority imposed capital gains tax, etc. on Party A, on the land resale after concluding a sale contract for Party B’s land within the land transaction permission zone with Party B, and completed the registration of ownership transfer under the name of Party C, etc. after obtaining land transaction permission for Party C, etc. as a direct party to Party B, the tax authority imposed capital gains tax, etc. on Party B, on the ground that the resale of the land constitutes subject to capital gains tax

[1] [Majority Opinion] (A) The main text of Article 88(1)3 of the former Income Tax Act (amended by Act No. 8144, Dec. 30, 2006; hereinafter “former Income Tax Act”) provides that “The term “transfer” in Article 4(1)3 and this Chapter refers to the actual transfer of an asset at a price due to sale, exchange, investment in kind in a corporation, etc., regardless of registration or enrollment of the asset, or the transfer of the asset at a price.” Meanwhile, a contract for sale, exchange, investment in kind, etc. (hereinafter “sale, etc.”) which is the cause of the transfer of the asset at a price does not require legal validity. Meanwhile, as the contract for sale, etc. was made with an intention to exclude or circumvent the land transaction permission as stipulated in the National Land Planning and Utilization Act (hereinafter “National Land Planning Act”), so it is unlawful or unlawful as the contract between the parties becomes effective, and thus, a contract between the parties is in excess of the seller’s legal interest in the sale and purchase and sale, etc.

(B) In a case where a sale of land within a land transaction permission zone as stipulated under the National Land Planning and Utilization Act was made and the purchase of land within a land transaction permission zone was made for the purpose of excluding or avoiding the land transaction permission, and the registration of transfer was completed for the purpose of excluding or evading the land transaction permission, or where the purchase of land within a land within a land transaction permission zone was made without completing the registration of transfer, but the purchase of land was made to a third party without completing the land transaction permission, and the first seller was directly sold to a third party, and the registration of transfer was completed after obtaining the land transaction permission, it is reasonable to view that the transfer registration remains without cancelling the registration of transfer, and the sale price received by the seller or the intermediate seller is subject to the transfer income tax on the ground that the seller, etc. has income from the transfer of the property, in exceptional

[Dissenting Opinion by Justice Park Si-hwan, Justice Kim Ji-hyung, Justice Jeon Soo-ahn, Justice Cha Han-sung, Justice Lee In-bok, and Justice Lee Sang-hoon] (A) The former Income Tax Act is based on the premise that the act of transferring the right was effective, and thus, if a sales contract, which is a cause act, becomes null and void, and the seller has no legitimate title to possess income from the transfer, it cannot be deemed that there is a transfer of assets or income from the transfer of assets. Therefore, within the above limit, the concept of transfer under the private law and the concept of transfer under the tax law cannot be separated from the concept of transfer under the tax law and the concept of transfer under the tax law, and it is difficult to accept as it practically transfers regardless of the existence or invalidity of a contract, which is the cause of transfer

(B) Where a sales contract for land within a land transaction permission zone was made for the purpose of excluding or avoiding permission from the beginning, it is conclusive. As long as a sales contract becomes null and void, this cannot be deemed as constituting transfer of assets subject to capital gains tax or income accrued from transfer of assets to a seller, etc., even if the sales contract was paid to the transferor.

[2] Where Party A entered into a sale contract for the land owned by Party B within the land transaction permission zone with Party B, and completed the registration of ownership transfer in the name of Party B, etc. after obtaining land transaction permission for Party B, etc. as a direct party to Party B, the tax authority imposed capital gains tax, etc. on Party B, on the ground that the resale of land constitutes subject to capital gains tax, the case holding that the above sale and purchase contract and resale contract are null and void in all conclusive contracts with the content that excludes or excludes land transaction permission under the National Land Planning and Utilization Act, but if Party B remains without cancellation after completing the ownership transfer registration for Party B’s final buyer C, etc. and Party B holds the purchase price received by Party C without returning the purchase price, the above disposition is deemed to have been transferred by actual transfer of the above land, and it is subject to capital gains tax on the ground that Party A is subject to

[1] Articles 4 (1) 3 and 88 (1) of the former Income Tax Act (amended by Act No. 8144 of Dec. 30, 2006) / [2] Articles 4 (1) 3 and 88 (1) of the former Income Tax Act (amended by Act No. 8144 of Dec. 30, 2006)

[1] Supreme Court en banc Decision 95Nu18383 delivered on March 20, 1997 (Gong1997Sang, 1005), Supreme Court Decision 98Du5811 delivered on June 13, 200 (Gong200Ha, 1683) (amended) (1)

[Judgment of the court below]

Head of Pyeongtaek Tax Office

Seoul High Court Decision 2010Nu13502 decided October 8, 2010

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. A. Article 4(1) of the former Income Tax Act (amended by Act No. 8144, Dec. 30, 2006; hereinafter referred to as the “former Income Tax Act”) provides that a resident’s income is classified into global income, retirement income, capital gains, and forest income, and that transfer income is “income accruing from the transfer of assets” (Article 3). As such, transfer income tax is levied on income accruing from the transfer of assets. As such, even if an asset appears to have been transferred by sale, exchange, investment in kind, etc. (hereinafter referred to as “sale, etc.”) in appearance, if a contract on the sale, etc. becomes null and void from the beginning or is revoked later, the sales, etc. received by the transferor should be returned to the transferee in principle, and thus, it cannot be deemed as a taxable object of transfer income tax in view of the transferor’s income.

However, the main text of Article 88(1) of the former Income Tax Act provides that “The term “transfer” in Article 4(1)3 and this Chapter means the actual transfer of an asset at a price due to sale, exchange, investment in kind in a corporation, etc., regardless of the registration or enrollment of the asset,” and does not require that a contract, such as the sale and purchase, which is the cause of the transfer at a price, be legally effective. On the other hand, as the contract is made for the purpose of excluding or avoiding land transaction permission as prescribed by the National Land Planning and Utilization Act (hereinafter “National Land Planning Act”) from the beginning, as it is unlawful or unlawful, even if the contract is deemed effective between the parties, and the seller receives and holds the purchase price, etc. as the performance of the contract is deemed to belong to the seller, etc., and thus, if such contract is null and void, deeming that transfer income tax cannot be imposed on the transfer margin acquired by the seller, etc. on the ground that it does not require the seller, etc. to enjoy transfer gains tax as a result of taxation.

Considering the above, in a case where a sale of land within a land transaction permission zone prescribed by the National Land Planning and Utilization Act was made and the purchase of land within a land within a land transaction permission zone was made for the purpose of excluding or evading the land transaction permission even if the purchase price was made for the purpose of excluding or evading the land transaction permission, and the purchase of land within the land within the land transaction permission zone was made, and the registration of transfer was completed without completing the land transaction permission, but the first seller resells the land to a third party without completing the registration of transfer and receives the purchase price and then completed the registration of transfer to a third party, it is reasonable to deem that the transfer income tax is subject to exception if the sale price received by the seller or the intermediate seller continues to remain without cancelling the registration of transfer and the sale price received by the seller without returning it to the buyer or the third party.

Unlike the above exceptional cases, the Supreme Court en banc Decision 95Nu18383 Decided March 20, 1997; and Supreme Court Decision 98Du5811 Decided June 13, 2000, which held that such exceptional cases do not constitute the transfer of assets and thereby, income from such exceptional cases is not subject to capital gains tax, are modified to the extent that it conflicts with this Opinion.

B. The lower court confirmed the following facts:

On April 18, 2005, the Plaintiff entered into a sale contract with the deceased Non-Party 1 on each of the instant lands located within the land transaction permission zone (hereinafter “instant sale contract”). On January 10, 2009, the Plaintiff: (a) entered into a sale contract with Non-Party 2 and Non-Party 6 (hereinafter “final buyers”) on each of the instant lands (hereinafter “each of the instant resale contract”); and (b) completed the registration of ownership transfer in the name of the final buyers for each of the instant lands with the land transaction permission with the above deceased as a direct party to the land transaction permission zone; (c) the Plaintiff sold each of the instant lands to the final buyers of the instant case on the grounds that the Plaintiff’s resale of each of the instant lands to the final buyers constitutes a transfer of assets, and thus constitutes income subject to capital gains tax; and (d) disposed of the Plaintiff for additional tax for the year 2005, 2666, 386, 286, 2000.

C. Therefore, the sales contract between the instant sales contract and each resale contract, and the above deceased and the final buyer is null and void as a final and conclusive contract, which excludes or excludes any land transaction permission under the National Land Planning Act. However, under the invalid sales contract, if the above deceased remains without cancellation after completing ownership transfer registration in the future from the above deceased, and if the plaintiff holds the land without returning the purchase price received from the final buyer, the resale of each of the instant lands to the final buyer in light of the above legal principles shall be deemed to constitute a case where the Plaintiff is subject to capital gains tax on the ground that there is an exceptional income arising from the transfer of each of the instant lands, since it was transferred by the actual transfer of each of the instant lands to the final buyer. Accordingly, the Defendant’s disposition in this

Nevertheless, as long as the instant sales contract and each resale contract are null and void, the lower court concluded that the Defendant’s disposition of this case was unlawful on the grounds that there was no transfer of assets subject to capital gains tax or income from the transfer of assets. Therefore, the lower court erred by misapprehending the legal doctrine on the transfer of assets subject to capital gains tax, thereby adversely affecting the conclusion of the judgment. The allegation contained in

D. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition.

Except as otherwise expressly provided for in the Dissenting Opinion by Justice Park Si-hwan, Justice Kim Ji-hyung, Justice Jeon Soo-ahn, Justice Cha Han-sung, Justice Lee In-bok, and Justice Lee Sang-hoon, there is a concurrence with the Majority Opinion by Justice Kim Nung-hwan and Justice Ahn Dai-hee, and a concurrence with the Dissenting Opinion by

2. Dissenting Opinion by Justice Park Si-hwan, Justice Kim Ji-hyung, Justice Jeon Soo-ahn, Justice Cha Han-sung, and Justice Lee Sang-hoon

The majority opinion reversed the judgment of the court below on the ground that, even if the sale of the land within the land transaction permission zone and the receipt of the purchase price was completed, or the transfer registration was completed with the land transaction permission as if the first seller sold the land to a third party and received the purchase price, and the transfer registration was completed with the land transaction permission as if the first seller directly sold the land to a third party, the transfer registration remains without cancellation of the transfer registration, and the sale price received by the seller is null and void because it was made for the purpose of excluding or avoiding the land transaction permission under the National Land Planning and Utilization Act, it constitutes the transfer of the property subject to capital gains tax, i.e., the "actual transfer of the asset"

A. As to the concept of “transfer”, the main text of Article 88(1) of the former Income Tax Act provides that “transfer shall be made at a cost.” However, as the phrase “transfer is in response to the “transfer of assets” in the preceding sentence of the said Act by means of the expression “transfer at a cost”, it is reasonable to view that the term “de facto transfer” in this context refers to the time when the act of the transfer of rights takes effect, but the act of the transfer of rights is not equipped with registration or enrollment as a requisite for establishing a law for the transfer of rights. Thus, the transfer under the former Income Tax Act is based on the premise that the act of the transfer of rights takes effect strictly, and the sales contract, which is the act of the transfer of rights, becomes null and void and void, and thus, it cannot be deemed that there is transfer of assets or income from the transfer of assets, regardless of the concept of transfer of assets under the Act on Private Law, and thus, it is difficult to interpret that the concept of transfer and invalidation under the former Income Tax Act is separate from the concept of transfer under private law.

Therefore, since a sale and purchase contract on land was made for the purpose of excluding or avoiding a land transaction permit, where the sale and purchase contract itself becomes null and void from the beginning, any right under private law is not transferred in connection with land transaction. Thus, even if the sale and purchase price was paid to a seller or completed registration, it cannot be deemed that there was a “actual transfer of assets” or income from the transfer of assets subject to capital gains tax. Nevertheless, deeming that a transfer of assets exists solely on the ground that the sale and purchase price was paid or registered has been completed, as the majority opinion, would be an excessively expanded interpretation of the provisions of Article 88(1) of the former Income Tax Act.

B. In addition, the Majority Opinion argues that in a case where a land within a land transaction permission zone was sold and received, but the registration of transfer was completed as a result of donation in the purchaser’s future or the purchase price was sold to a third party and the first seller completed the registration of transfer with a land transaction permission as if the purchase price was sold directly by the third party, the transfer registration remains without cancelling the registration of transfer and the sale price received by the seller is null and void, and the transfer is subject to taxation of capital gains tax, even if it remains invalid. However, other than the above two cases, there is no concern as to the possibility of expanding the above logic even in the case of nullification, cancellation, and cancellation. Even if it is possible to limit the taxable object of capital gains tax in the above two cases, it is not restored as cited by the Majority Opinion even in the case of general invalidation, cancellation, and cancellation, and cancellation, and it is difficult to find reasonable grounds or criteria to deem the transfer under the Income Tax Act as invalid, void, or cancellation.

C. From the perspective of the time of transfer, the Majority Opinion has the following problems. In other words, according to the Majority Opinion, the transfer registration remains without cancelling the transfer registration after the buyer or the third party’s transfer registration after receiving the purchase price, and the seller’s possession of the purchase price received is subject to capital gains tax. In such a case, whether the time of transfer is the date of the settlement of the price or the transfer registration is completed after the date of the transfer registration, or if it can be deemed that there is no possibility of restitution after a considerable period of time has elapsed. Ultimately, according to the Majority Opinion, it is impossible to determine when the tax liability is established, and it is difficult to function properly as the criteria for taxation of capital gains tax because the initial date of exclusion period for imposition of additional tax and exclusion period for imposition of capital gains tax are ambiguous.

D. Furthermore, the proviso of Article 105(1)1 of the former Income Tax Act provides that where a price has been settled before obtaining a land transaction permission in the transfer of land located within a zone subject to land transaction permission under the National Land Planning and Utilization Act, a preliminary return on the tax base of capital gains shall be made within two months from the end of the month to which the date of permission belongs, and Article 110(1) proviso of the same Act provides that a final return shall be made from May 1 to May 31 of the year following the year to which the date of land transaction permission belongs, in the case of the transfer of land located within a zone subject to land transaction permission, if the price has been settled before obtaining the permission, the said preliminary return and final return shall be made after obtaining the land transaction permission. Thus, in principle, capital gains tax may not be levied even where a land transaction permission has not been granted on the grounds that the land transaction permission was made and completed as stated in the Majority Opinion.

E. Ultimately, if a sale and purchase contract for land within a land transaction permission zone was made for the purpose of excluding or avoiding permission from the beginning, it shall be null and void. As long as such a sale and purchase contract is null and void, it cannot be deemed that the sale and purchase contract constitutes a transfer of assets subject to capital gains tax or an income accrued from the transfer of assets, even if the sale

In the same purport, the court below is just in holding that the sales contract between the plaintiff and the deceased for each land of this case located within the land transaction permission zone and each resale contract between the plaintiff and the end buyer for the purpose of obtaining profits from resale under the agreement on the intermediate omission registration, which is concluded for the purpose of obtaining profits from resale, and all of the contracts are finally null and void since each transfer registration under the name of the end buyer is also null and void. Thus, the disposition of this case imposing capital gains tax on the plaintiff is unlawful on the ground that the transfer of assets subject to capital gains tax cannot be deemed to fall under the transfer of assets subject to taxation or that the transfer income was not generated, and there is no error

As above, I express my dissent with the Majority Opinion.

3. Concurrence with the Majority by Justice Kim Nung-hwan

A. As can be seen in the main sentence of Article 88(1) of the former Income Tax Act, “transfer” of assets subject to capital gains tax under the former Income Tax Act, which defines “transfer” as “transfer of assets with actual value due to sale, exchange, investment in kind to a corporation, etc., regardless of the registration or enrollment of assets,” is merely the unique concept of the Income Tax Act, and does not necessarily necessarily coincide with that under the private law. The former Income Tax Act lists taxable income as four kinds of global income, retirement income, capital gains, and forest income, and defines “income accruing from the transfer of assets” among them as “income generated from the transfer of assets” (Articles 3 and 4(1)), and further defines “transfer of assets with actual value” as “transfer of assets,” and thus, it is reasonable that capital gains tax should be imposed on such assets when a contract is invalid or cancelled from the beginning, which is the cause of transfer of assets, and thus, such transfer should not be returned to the transferee, even if such transfer is not subject to capital gains tax after being returned to the transferee.

However, there are differences in circumstances cited in the Majority Opinion. The reason why a contract is null and void is that a party entered into a contract for the purpose of excluding or avoiding a land transaction permit under the National Land Planning Act. The purpose of the contract is achieved and realized by completing a registration of transfer in the future of the final purchaser. As a result, not only the first seller but also the intermediate seller or the final buyer complies with the purpose of completing a registration of transfer, which is the requirement for ownership acquisition, of the object, the sale, etc., and barring any special circumstance, no one may actually recover without wishing to reinstate. Therefore, in the instant lawsuit, the seller or the intermediate seller shall own gains from transfer. Accordingly, in the instant case, even if the Plaintiff purchased each of the instant land and sold it to the final buyer, the Plaintiff prepared a false sale contract as if the first seller were directly sold to the final buyer, and obtained a registration of transfer pursuant thereto, and even after the completion of the registration of transfer at the time of closing of argument, it is unreasonable to view that the transfer of assets is null and void as it does not fall under the purport of the former Act.

B. The Majority Opinion, as seen earlier, intends to be deemed to constitute the transfer of assets and be subject to capital gains tax, does not intend to change the general legal principles under the Income Tax Act on the timing of transfer, etc. Therefore, even in the above two cases, it shall be deemed that the date of liquidation of the price, in principle, pursuant to Article 98 of the former Income Tax Act and Article 162 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010) is the transfer date

Any contract made for the purpose of excluding or evading a land transaction permit is null and void from the beginning. However, it is difficult to understand that such purpose was simply the conclusion of a sale contract. The most apparent symbol is that a donation contract or a sale contract is concluded by means of avoiding a land transaction permit and a transfer registration is completed in the future of a buyer or a final buyer. Meanwhile, even if such transaction and a transfer registration is completed, in cases where a seller returns the purchase price received by him/her to a buyer and restores it to the original state, the seller does not have capital gains ultimately and does not have any ownership, and thus, it is not necessary for him/her to be subject to a taxation of capital gains tax. The Majority Opinion cited the circumstances that a transfer registration for a final buyer was completed in the future and remains without being cancelled, or that a buyer owns the purchase price received

However, in such a case, it cannot be deemed that a contract is made for the purpose of excluding or diving the permission of land transaction until the registration of transfer has been completed or the registration of transfer has been completed in the future of the final buyer, and it cannot be deemed that the obligation to pay capital gains tax becomes final and conclusive only after the registration of transfer has been completed. As such, there is no obligation to file the final return on the tax base under Article 110 (1) of the former Income Tax Act until the said time, and the final return on the tax base under Article 110 (1) of the former Income Tax Act shall be made from May 1 to May 31 of the following year, and the exclusion period for imposing capital gains tax shall begin to run from the next day. In such cases, since a contract, such as the sale, is not expected to be null and void from the beginning and obtain the permission of land transaction, the provisions of Article 105 (1) 1 (proviso) and Article 110 (1) of the former Income Tax Act as of the date of land transaction permission are not applicable.

C. The Majority Opinion exceptionally states that “any person who has filed a tax base return within the statutory period or who has received a determination of the tax base and the amount of national tax may file a claim for determination or correction within two months from the date on which he/she becomes aware of the occurrence of the cause falling under any of the following subparagraphs” under Article 45-2(2) of the former Framework Act on National Taxes (amended by Presidential Decree No. 22038, Feb. 18, 2010; Presidential Decree No. 25-2 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 22038, Feb. 18, 2010; hereinafter the same) provides that “When a contract, which was the basis of transaction or act on which the tax base and the amount of tax are calculated in the first declaration, determination or correction, is terminated or cancelled due to the exercise of the right to cancel or other unavoidable cause falling under subparagraph 4 or 3,” and thus, subparagraph 2 of Article 25-2 of the former Enforcement Decree of the Framework Act (amended by Presidential Decree No.

4. Concurrence with the Majority by Justice Ahn Dai-hee

Basicly, I agree with the concurring opinion by Justice Kim Nung-hwan and add the following opinions.

A. The purpose of the Income Tax Act is to impose income tax on an individual based on the economic phenomenon that it appears that he/she has a tax-bearing capacity by taking advantage of the economic aspect. As such, taxable income is sufficiently deemed to have a tax-bearing capacity in light of the economic aspect, and thus, it does not necessarily have to be lawful and effective legal assessment of the causal relationship that is deemed to have a tax-bearing capacity. In the past, in corporate income, business income, interest income, and so-called illegal income have consistently been deemed to be subject to taxation. In the past, the Supreme Court has consistently recognized that the income gained from legal defective acts in corporate income, business income, and interest income in excess of the interest rate prescribed in the Interest Limitation Act and the so-called illegal income, even if paid actually, constitute an interest income subject to taxation (Supreme Court Decision 85Nu323 Decided July 23, 1985) and the income from a sales contract that is effective under the private law, and thus, is also deemed to be invalid and excluded from the tax-free income under the National Land Planning and Utilization Act.

B. The previous precedents that no capital gains tax shall be imposed on the transfer of assets even if the transfer price is invalidated or cancelled, even if the transfer price was paid to the transferor, or because it cannot be deemed that there was income from the transfer of assets. It is believed that there might be a harsh result to the transactional party on the grounds that there might be no other urgent remedy except for the method of claiming a return of the amount of tax in accordance with the legal principles of unjust enrichment by proving the significant and apparent defect in the case of loss of income due to the restitution after the taxation was imposed on the invalid transaction. However, after the revised correction claim system was established in Article 45-2 of the former Framework Act on National Taxes as amended in December 22, 1994, it can be deemed that it constitutes a ground for filing a subsequent request for correction as stipulated in Article 45-2 (2) of the former Framework Act on National Taxes if the income is lost due to the invalidation after the return or imposition of the amount of tax was made. Therefore, it is

C. The proviso of Article 105(1)1 of the former Income Tax Act and the main sentence of Article 110(1)1 of the same Act provide that a preliminary and final return on the tax base of capital gains shall be made after obtaining permission for land transaction. The foregoing provision expressly provides that only the case where permission for land transaction is granted. The foregoing provision is applicable to the case where a land transaction is granted, and where a contract is concluded for the purpose of excluding or evading permission for land transaction from the beginning, it cannot be deemed that the above provision is applicable. Therefore, it is difficult to establish the grounds

D. Above all, according to the Dissenting Opinion, in a case where the law is complied with, tax shall be paid, and in a case where the law is avoided, tax shall be paid, resulting in a result of not paying the tax, and the balance is contrary to the tax justice. The Majority Opinion is justifiable even in light of the legal advice that “No person may gain any benefit from his/her own mistake.”

5. Opinion concurring with the Dissenting Opinion by Justice Lee In-bok and Justice Lee Sang-hoon

A. The majority opinion is null and void as a contract of sale, etc. is illegal or unlawful, but it can be deemed that economic benefits accrue to a seller, etc. as a result of the fact that a contract of sale, etc. is null and void by law. However, it is extremely contrary to tax justice and equity as a result of having a seller, etc. enjoy a transfer margin without taxation. Therefore, if a sale contract of land within a zone subject to land transaction permission is null and void for the purpose of excluding or avoiding land transaction permission, it shall be deemed that it constitutes a transfer of assets subject to capital gains tax. In addition, the majority opinion is that a gift not subject to capital gains tax is made, and a transfer registration based on a gift is completed in the future of a purchaser, and the land is completed without obtaining permission of land transaction, and without obtaining permission of land transaction from a third party, the land is reselled to a third party without obtaining permission of the first seller, and even after completing land transaction registration, the first seller or the third party is not subject to capital gains tax.

The Majority Opinion criticizes the view that, in a case where a contract, such as sale and purchase, is unlawful or legal, and thus null and void from the beginning, transfer income tax is not imposed on the parties even if the purchase and sale price, etc. was received between them, but on the other hand, it is justifiable in principle. On the other hand, it can be said that the two cases, which fall under a part of the above cases, are removed separately, and that transfer income tax should be imposed on the corresponding income under the former Income Tax Act. This is deemed as a choice to avoid the cost, such as reducing the burden incurred from the full destruction and change of the previous Supreme Court precedents and lack of clarity. However, as seen below, the substance is not acceptable in the interpretation of tax laws by means of the creation of taxable requirements and grounds for tax disability by the court.

B. The Majority Opinion’s two cases requiring taxation of capital gains tax consisting of two elements, namely, “transfer of registration” and “holding of sales proceeds.”

(1) In relation to the transfer of registration, the Majority Opinion is affirmed as a principle, if the sale and purchase, etc., which is the cause of registration, becomes null and void from the beginning or becomes void later, and becomes retroactively null and void, the transfer of assets cannot be deemed as having been made solely from the act of cause such as sale and purchase, on the ground that the transfer of registration, which cannot be deemed as having formed the substance of the transfer of rights, was made. Furthermore, there is no further basis to deem that the transfer of assets was made inasmuch as a sale and purchase contract on the land within the land within the land transaction permission zone under the National Land Planning and Utilization Act becomes null and void from among the transfer of registration, and only where the transfer of registration is deemed to have been made by pretending

If the Majority Opinion considers that the transfer of assets under tax law is deemed to fall under the transfer of assets, as long as the purchase and sale, etc. was invalidated from the beginning or cancelled later, the propriety of the opinion can be deemed to fall under the interpretation of tax law, apart from the propriety of the opinion. However, in such a case, the Majority Opinion’s interpretation that the transfer of assets does not fall under the transfer of assets in principle under the tax law should be exceptionally subject to transfer income tax in light of tax justice and equity, and in such exceptional cases, setting the requirements for imposition of transfer income tax in the form of judicial precedents cannot be deemed to fall under the creation of tax requirements rather than the interpretation of tax law. The establishment of taxation requirements through such precedents cannot be allowed in light of the principle of no taxation without law.

(2) Next, in relation to the holding of sale proceeds, if capital gains tax is subject to the transfer of assets and the generation of income therefrom, in principle, the taxation requirements upon receipt of sale proceeds cannot be directly affected the establishment of a tax liability. Therefore, this cannot be the basis for whether a “transfer of assets”, which is the taxation requirement of capital gains tax, is “transfer of assets” or not, and it is merely the issue of whether the basis is lost for any reason after the establishment of a tax liability following the fulfillment of the taxation requirement. Ultimately, the Majority Opinion does not appear to have different from the holding of sale proceeds, which is not the “holding of sale proceeds,” but the “unholding, such as return or loss of sale proceeds,” which is not the “holding of sale proceeds,” but the court’s determination of the grounds for tax disability, which is not planned by the tax law, in the form of judicial precedents, cannot be permitted under the principle of no taxation without law.

C. Meanwhile, in relation to the change of Supreme Court precedents pursuant to the Majority Opinion, criminal law should not be considered. Tax laws directly relate to criminal law through the relevant provisions of the Punishment of Tax Evaders Act and the Act on the Aggravated Punishment, etc. of Specific Crimes. The establishment of taxation requirements and the establishment of the grounds for taxation disability pursuant to the Majority Opinion can be different from that of the establishment of elements related to punishment. Furthermore, considering the fact that it is difficult to deem that the change of the Supreme Court precedents regarding criminal law is excluded from the retroactive effect, threats to the function of guaranteeing the elements of a crime through the change of the above precedents are very realistic and serious.

Of course, if there is no room for other interpretation of the legal provision because it is clear and meaningful, the duty of the court with regard to the proper interpretation of the law should take precedence over the above consideration, but if it is intended to modify the precedent from a policy consideration that the outcome of the interpretation is not socially and economically unreasonable even though the attitude of the previous Supreme Court precedent is difficult to be deemed to have been wrong as a legal interpretation, it cannot be viewed as a desirable interpretation of the law if it expands the taxation requirement and further expands the scope of criminal punishment against the people.

D. The Majority Opinion does not understand that the purport of the Dissenting Opinion is to realize equity and tax justice by allowing transfer income tax to be imposed on the act of gaining unjust profits by excluding or avoiding land transaction permission. In addition, inasmuch as a sales contract is null and void in the past, even if the sales contract was paid to the transferor, it cannot be deemed that there was income from the transfer of assets subject to capital gains tax or the transfer of assets, even if the sales contract was paid to the transferor. However, although the Supreme Court has changed the previous precedents as mentioned above, it would be somewhat helpful for the policy party to prevent the act of excluding or avoiding land transaction permission, it would also undermine legal stability without being justified by the interpretation of tax laws and regulations.

As above, the Majority Opinion is unreasonable in light of the same point of view, and the reasons for the supplement are specified.

Chief Justice Lee In-bok (Presiding Justice)