[1] Criteria for determining the period of attribution of capital gains under Article 98 of the former Income Tax Act and Article 162 (1) of the former Enforcement Decree of the Income Tax Act

[2] In a case where Gap's land was expropriated, but Eul deposited the expropriation compensation by the Korea Land Corporation upon Eul's decision on collection, disposal, and provisional disposition prohibiting payment of the expropriation compensation, but the decision dismissing Eul's request for confirmation of the right to claim payment of deposit money raised against Eul's clan, but the tax authority imposed Gap's report and additional payment on Gap's clan on the ground that Eul did not timely file a final return of capital gains tax and did not pay it, the case holding that the court below erred in the misapprehension of legal principles in holding that Gap's capital gains belongs to Gap's clan, not the date of deposit of the expropriation compensation but the date of the above final decision

[1] The time of transfer under Article 98 of the former Income Tax Act (amended by Act No. 10408, Dec. 27, 2010) and Article 162(1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010) shall not be determined as a general principle that is not an exception to the time of attribution of capital gains. Considering the management of capital gains, control and transfer income, the degree of objectiveization of capital gains, and the time of securing taxpayers' money, etc. in specific cases, it is reasonable to reasonably determine the time of attribution on the basis of whether it is considerably mature and finalized to the extent that the possibility of realization is considerably high.

[2] In a case where Gap's land was expropriated, but Eul's lower clan deposited the expropriation compensation by the Korea Land Corporation, which is the implementer of the housing site development project after receiving the decision of collection, disposal, and provisional disposition prohibiting payment of Gap's money, and the decision of rejecting Eul's claim for payment of deposit money against Eul was made, but the tax authorities did not make a final report of capital gains tax and make payment within the statutory period, the court held that the court below erred in the misapprehension of legal principles on the premise that Gap's right to deposit money was not the date of expropriation and the date of the final return of capital gains tax, since the deposit of the accommodation compensation was made for the reasons that the Korea Land Corporation cannot know a person who is entitled to the expropriation compensation without negligence due to provisional disposition, it is reasonable to deem that the deposit of the accommodation compensation was made in accordance with Article 40 (2) 2 of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor (amended by Act No. 11017, Aug. 4, 2011).

[1] Article 98 of the former Income Tax Act (Amended by Act No. 10408, Dec. 27, 2010); Article 162 (1) of the former Enforcement Decree of the Income Tax Act (Amended by Presidential Decree No. 22580, Dec. 30, 2010) / [2] Articles 39 (1), 98, and 118 of the former Income Tax Act (Amended by Act No. 10408, Dec. 27, 2010); Article 162 (1) of the former Enforcement Decree of the Income Tax Act (Amended by Presidential Decree No. 22580, Dec. 30, 201); Article 40 (2) 2 of the former Enforcement Decree of the Income Tax Act (Amended by Act No. 11017, Aug. 4, 2011)

[1] Supreme Court Decision 2001Du809 Decided July 9, 2002 (Gong2002Ha, 1973) Supreme Court Decision 2009Du2270 Decided October 13, 201

Coastal C&L (Attorneys Lee Jae-chul et al., Counsel for the plaintiff-appellant)

Head of Nowon Tax Office

Seoul High Court Decision 2010Nu11162 decided September 15, 2010

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

The grounds of appeal are examined.

Article 39(1) of the former Income Tax Act (amended by Act No. 10408, Dec. 27, 2010; hereinafter the same) provides that the year to which the total amount of income of a resident for each taxable period belongs shall be the taxable period to which the date when the total amount of income becomes final and conclusive, and this provision shall apply mutatis mutandis to capital gains tax pursuant to Article 118 of the former Income Tax Act. In addition, Article 98 of the former Income Tax Act and Article 162(1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010; hereinafter the same shall apply) shall be the date when the transfer is liquidated except in cases falling under each subparagraph of Article 162(1) of the former Enforcement Decree.

In full view of the contents and legislative purport of the above provisions, the time of transfer under Article 98 of the former Income Tax Act and Article 162(1) of the former Enforcement Decree of the Income Tax Act shall not be determined as a general principle without exception to the time of attribution of capital gains. In specific cases, considering the management of capital gains, the degree of universalization of control and capital gains, and the time of securing taxpayers’ fees, etc., even if capital gains are not realized in reality, it is reasonable to reasonably determine the time of attribution on the basis of whether there has been considerably mature and final maturity in the possibility of realization (see, e.g., Supreme Court Decisions 2001Du809, Jul. 9, 2002; 2009Du2270, Oct. 13, 2011).

Meanwhile, Article 40(2) of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor (amended by Act No. 11017, Aug. 4, 2011; hereinafter “former Public Works Act”) provides that “Any project operator may deposit compensation in the deposit office in the location of the land, etc. to be expropriated or used until the commencement date of expropriation or use, in any of the following cases.” Article 40(2) of the same Act provides that “When a project operator is unable to identify a person entitled to compensation without any negligence of the project operator.” Article 40(2)2 of the same Act provides that “Where the prohibition of disposal of the claim for the indemnity is imposed on the claim for the indemnity due to a dispute over the ownership of the land subject to expropriation due to a dispute over the ownership of the land, the project operator is unable to know the person entitled to the indemnity without negligence, and thus the project operator may deposit the land pursuant to Article 40(2)2 of the former Public Works Act (see, e.g., Supreme Court Decisions 95Nu5509, Mar.

According to the reasoning of the judgment below and the evidence duly admitted by the court below, the Korea Land Corporation, the implementer of the housing site development project for the Sungnam branch, intended to pay KRW 22,867,917,500 of the compensation for the expropriation of this case according to the decision of the Central Land Tribunal rendered on October 19, 2004, and ② the plaintiff's subordinate clan clan clan on November 29, 2004 (hereinafter referred to as the "family clan") was issued a provisional disposition order prohibiting the collection, disposal, and payment of the compensation for the expropriation of this case with the plaintiff as the debtor and the third party debtor of the Korea Land Corporation, ③ The Korea Land Corporation deposited the compensation for the expropriation of this case on the ground that the above provisional disposition order was issued on December 2, 2004, and the registration of ownership transfer was completed on the ground that the plaintiff's right to claim the sale of the land was not known to the plaintiff's original right to claim the sale of the clan, which was the right to claim the registration of ownership transfer of the clan.

Examining these facts in light of the legal principles as seen earlier, the deposit of the compensation in this case is a dispute over the ownership of the land in this case subject to expropriation, and thus a disposition prohibiting the disposal of the claim for the compensation has been taken, and it is reasonable to deem that the claim for the compensation in this case was made in accordance with Article 40 (2) 2 of the former Public Works Act on the grounds that the Korea Land Corporation, which is a project operator, could not know the person entitled to the compensation without negligence due to the above provisional disposition, and the plaintiff could not be recognized as the right holder of the deposit before the judgment dismissing or dismissing the claim in the lawsuit claiming confirmation of the claim for the payment of deposit money raised by the Sungsung Military clan, etc. Thus, the plaintiff's right to the deposit in this case is considerably mature and final (see Supreme Court Decision 2010Du9372, Feb. 23, 2012). Thus, the transfer date of the land in this case should be deemed to be the date of the transfer of the compensation in this case, which is the date of the transfer of the transfer of the land in this case to the plaintiff.

Nevertheless, under the premise that the time of the transfer of the instant land was December 2, 2004, the date of the deposit of the expropriation compensation, the lower court determined that the instant disposition was lawful, on the ground that the Plaintiff did not perform such obligation even though it was obligated to file a final return on the tax base of transfer income due to the transfer of the instant land from May 1, 2005 to May 31, 2005 and pay the said amount of tax, on the ground that the Plaintiff did not perform such obligation. In so doing, the lower court erred by misapprehending the legal doctrine on the time of the transfer of assets, thereby adversely affecting the conclusion of the judgment. The

Therefore, without further proceeding to decide on the remaining grounds of appeal, 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 by the assent of all participating Justices on the bench.

Justices Park Poe-young (Presiding Justice)