Whether disposition imposing capital gains tax based on actual transaction price is legitimate

Even if land has been acquired before the date of designation or public notice of a planned area or the date of designation of a designated area, it shall not be subject to the special taxation of capital gains tax under the Restriction of Special Taxation Act as long as it has been acquired after the second anniversary retroactively from the date of

Article 85 of the Restriction of Special Taxation Act on Real Estate for Public Works in Designated Area

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of reduction or correction of capital gains tax against the Plaintiff on October 2, 2006 and disposition of imposition of capital gains tax of KRW 873,790 for the year 2006 shall be revoked.

1. Details of the disposition;

A. On December 30, 2003, the Plaintiff acquired and owned 1,442 square meters prior to 00-0,000 ○○○○○-dong, 000-0, and (hereinafter “instant land”). On July 6, 2005, the Plaintiff designated and publicly announced the instant land as a district for national rental housing complex development under the Act on Special Measures for the Construction, etc. of National Rental Housing (hereinafter “National Rental Housing Act”). On May 29, 2006, the Plaintiff agreed on the transfer of the instant land to ○○○○○-dong, Seoul, including the instant land to ○○○○-dong, and 485,783 square meters pursuant to the former Act on Acquisition of and Compensation for Land, etc. for Public Works (hereinafter “Public Works Act”). On the other hand, the instant land was located as a designated area under Article 14 of the former Income Tax Act (amended by Act No. 7316, Feb. 16, 2004).

B. The Plaintiff filed a request for correction of the tax base and amount of tax to correct the amount of capital gains tax to 13,139,620 won on September 18, 2006 on the ground that the Plaintiff erroneously applied the officially assessed individual land price to the Defendant on September 18, 2006, by calculating the transfer value and acquisition value of the instant land as the standard market price, and by calculating the transfer value and acquisition value of the instant land as the transfer value for public works within the designated area under Article 85 of the former Restriction of Special Taxation Act (amended by Act No. 8146, Dec. 30, 2006; hereinafter the same).

C. Accordingly, the Defendant calculated gains on transfer of the instant land by applying the actual transaction value on the ground that the Plaintiff did not fall under the special taxation of capital gains tax under Article 85 of the former Restriction of Special Taxation Act because the Plaintiff did not acquire the instant land before the second anniversary retroactively from July 6, 2005, which was the date of designation and public notice of the said scheduled area, pursuant to Article 17(2) of the National Rental Housing Act (the date of designation and public notice of the said scheduled area is deemed as the date of public announcement of the authorization of the project approval), and issued the instant disposition on October 2, 2006, which added KRW 873,790 to the capital gains tax reverted to the year 2006.

[Grounds for Recognition] Unsured Facts, Gap6, 7-1, Eul 1, 2

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff acquired the instant land before February 26, 2004, which was designated as a designated area and transferred under the Public Works Act before December 31, 2006, and thereafter on or before December 31, 2006, the transfer margin of the instant land should be calculated on the basis of the standard market price by applying Article 85 of the former Special Taxation Restriction Act. Therefore, the instant disposition that excluded the application of the said provision from the application of the said provision and calculated the transfer margin and the transfer income tax

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

Article 85 of the former Restriction of Special Taxation Act (referring to the date of public announcement by the head of the relevant administrative agency in the Official Gazette or the official bulletin; where the date of public announcement is within 2 years retroactively from the date of public announcement of the public announcement; where the date of notification falls within 2 years retroactively from the date of designation of the designated area, referring to the date of designation of the designated area; where the date of announcement arrives after the date of designation of the designated area, referring to the date of designation of the designated area); where the relevant project operator is transferred under the Public Works Act or other Acts before December 31, 2006, notwithstanding the provisions of Articles 104-2 (1) and 97 (1) 1 (a) of the Income Tax Act, the transfer value and acquisition value may be based on the standard market price; where the date of designation of the planned area of housing site development under subparagraphs 1 through 4; where the real estate is transferred under Acts other than subparagraphs 1 through 4, the designation of the planned area, development area, compensation plan and other similar date prescribed by Presidential Decree No. 5 of the former Act (amended by Presidential Decree No. 287.

Article 85 of the former Restriction of Special Taxation Act stipulates that "the two years retroactively from the date of public announcement of the designation of the designated area" and "the date of designation of the designated area" concurrently comes after the date of public announcement of the designation of the designated area, and where the designation and public announcement of the designated area is made under the National Rental Housing Act, the resident is within two years retroactively from the date of public announcement of the designation of the designated area (the date of designation and public announcement of the planned area under Article 17 (2) of the National Rental Housing Act is deemed to be the date of public announcement of the designation and public announcement of the planned area under the same Act if the designation and public announcement of the planned area is made at the same time before the date of public announcement of the designation or public announcement of the planned area is made within the first two years retroactively from the date of public announcement of the designation or public announcement of the planned area, and if the public announcement of the designation and public announcement of the planned area arrives after the designation and public announcement of the scheduled area is made within the first two years prior to the date of public announcement of the designation and public announcement of the real estate price.

Therefore, even if the Plaintiff acquired the instant land before the date of designation and public notice of planned area ( July 6, 2005) or the date of designation of the designated area ( February 26, 2004), as long as it acquired the instant land on December 30, 2003, which was later two years retroactively from July 6, 2005 ( July 6, 2003), since it did not constitute a special taxation for capital gains tax under Article 85 of the former Restriction of Special Taxation Act, since the instant land does not constitute a special taxation for capital gains tax under Article 85 of the same Act, it is legitimate to exclude the said provision from the said premise and calculate the gains on transfer and the gains on transfer of the instant land based on the actual transaction price.

3. Conclusion

Thus, the plaintiff's claim seeking the cancellation of the disposition of this case cannot be accepted, and it is dismissed.