The meaning of a real estate sales businessman to whom the special surtax is added in the case of a transfer of a building pursuant to Article 59-2 (1) of the former Corporate Tax Act (amended by Act No. 3099 of Dec. 5, 1978)

In accordance with Article 59-2(1) of the former Corporate Tax Act (amended by Act No. 3099 of Dec. 5, 1978), a real estate sales businessman who is subject to special surtax even in case of a transfer of a building means a person who sells real estate or sells real estate at least once during a taxable period for profit by indicating the sale or brokerage of real estate for business purposes in accordance with Article 11(1) of the former Enforcement Decree of the Business Tax Act (amended by Presidential Decree No. 7827 of Sep. 24, 1975) and Article 1(1) of the Enforcement Rule of the Value-Added Tax Act.

Article 59-2 (1) of the former Corporate Tax Act (amended by Act No. 3099 of Dec. 5, 1978)

Supreme Court Decision 83Nu549 Delivered on June 26, 1984

Red Master Co., Ltd., Counsel for the defendant-appellant

Daejeon Head of the tax office

Seoul High Court Decision 80Gu755 delivered on August 17, 1983

All appeals are dismissed.

The costs of appeal shall be assessed against each appellant.

1. Judgment on the Plaintiff’s grounds of appeal

In the case of this case, if the plaintiff newly constructed a high-rise building and sold part of the newly constructed building to others, the acquisition value for the part of the newly constructed building is separate from those not sold among the above newly constructed building and there are special circumstances to determine its value, and if there is any evidence to prove this, it is acceptable to determine the acquisition value after dividing the total construction cost of the building newly constructed by the plaintiff into the total average numbers and determining its value at the same level, and then calculating its acquisition value. Further, in light of the records, the court below's determination that the plaintiff omitted import of the amount equivalent to 112,192,00 won as stated in its decision is just, and there is no error of law such as misunderstanding of facts against the rules of evidence, incomplete deliberation, or misunderstanding of legal principles, as pointed out in the theory of lawsuit, all of the arguments are groundless.

2. Judgment on the Defendant’s grounds of appeal

According to Article 59-2 and Paragraph (1) of the former Corporate Tax Act (amended by Act No. 1978, Dec. 5, 1978) which was in force during the taxable period of this case, the special surtax is that the total amount of gains on transfer generated from the transfer of land (including buildings in real estate sales business; hereinafter “land, etc.”) as determined by the Presidential Decree is stipulated. Thus, in the case of the transfer of a building, special surtax can be imposed only on the case where the corporation is a real estate seller. In this context, the real estate dealer is not a real estate sales businessman under the former Enforcement Decree of the Business Tax Act (amended by Presidential Decree No. 7827, Sep. 24, 1975) and Article 1 (1) of the Enforcement Rule of the Value-Added Tax Act, it is reasonable to interpret that the real estate was sold for profit-making purposes by a real estate sales businessman or a newly constructed real estate sales business for the purpose of sale of real estate or the sale of real estate at least once for profit-making purposes.

In light of the records, the court below's examination of the evidence preparation, fact-finding and its determination process is just and there is no error of law such as misconception of facts or lack of reasoning in violation of the rules of evidence as pointed out by the theory of lawsuit.

3. Therefore, all appeals by the plaintiff and the defendant are dismissed, and the costs of appeal are assessed against each losing party. It is so decided as per Disposition by the assent of all participating judges.

Justices Kim Young-ju (Presiding Justice)