Seoul Administrative Court 201Gudan24708 ( October 13, 2012)

Board of Audit and Inspection 2011 depth0131

It is difficult to recognize that civil works, etc. were performed before the commencement report;

It is difficult to see that the commencement of construction works, including civil construction works, from the land concerned, are meaningful and includes preparation works necessary for the commencement of construction works, and even if construction works are conducted on the adjoining land, such fact alone cannot be deemed to have commenced construction works, and it is difficult to recognize that such construction works were commenced before the report of commencement of construction works.

2012Nu11838 Revocation of Disposition of Imposing capital gains tax

XX

Samsung Head of Samsung Tax Office

Seoul Administrative Court Decision 2011Gudan24708 decided April 13, 2012

November 29, 2012

January 10, 2013

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance court is revoked. The defendant revoked the disposition of imposition of capital gains tax of KRW 000 against the plaintiff on November 4, 2010 (the plaintiff corrected the date of the disposition as above in the appellate court and seems to include penalty tax on the recorded tax amount).

1. Details of the disposition;

A. On July 28, 200, the Plaintiff: (a) acquired the instant land at KRW 000 on April 19, 200, and entered into a sales contract with the content that the Plaintiff would receive KRW 000-1 forest land of 000-1 forest land of 274 square meters (the instant land was divided into KRW 000-5 forest land of 000-1 forest land of 1,860 square meters at the same time on February 13, 2009; (b) around April 19, 2008, the Plaintiff acquired KRW 1,414 square meters at the same time as 00-1 forest land of 00-5 forest land of 1,860 square meters at the same time; and (c) concluded a sales contract with the content that the instant land will be transferred at KRW 000,000 for the remainder.

B. The Plaintiff: (a) deemed the “business” on the ground of the transfer of the instant land according to the above sales contract; and (b) paid KRW 000,000, which was calculated by applying the general tax rate on September 26 of the same year; and (c) reported the transfer date of the instant land as of November 29, 2008, which was the balance payment date; (b) in fact, the Plaintiff was paid the balance of the instant land on February 2009; and (c) the registration of the instant land was transferred on May 8, 2009.

C. On November 4, 2010, the Defendant calculated the period for the Plaintiff’s construction to use the instant land for business, and issued a disposition of rectification and notification that regards the instant land as “non-business” and imposes capital gains tax (including additional tax) by applying the increased tax rate of 60% (hereinafter “instant disposition”).

[Reasons for Recognition] Unsatisfy, Gap evidence 7, 12, Eul evidence 1 to 3, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The plaintiff tried to newly construct a multi-family house on the land of this case. In order to establish a advanced and access road leading to the land of this case due to the fact that the land of this case is not adjacent to the existing road and could not obtain a building permit. On September 15, 2005, the plaintiff voluntarily started road construction work (hereinafter referred to as the "road construction work of this case") for the land adjacent to the land of this case (the land of this case (the land of this case Y 1055 and 1089), which is connected to the land of this case, for the purpose other than agricultural infrastructure (ci.e., ditches) from the Jinjin-gun-gun, and obtained permission for use from the owner of the land adjacent to the land of this case for the purpose of agricultural infrastructure and for the use necessary for the construction of the road. From May 206, the plaintiff voluntarily implemented the public construction work of this case from around the land of this case.

Therefore, the Plaintiff’s construction commencement after the acquisition of the instant land was made for the business purpose is September 15, 2005 when the instant road construction was commenced, and there was a temporary suspension of the said road construction and civil engineering works on the instant land. However, since this was caused by a civil petition system against neighboring residents, the suspension period can also be deemed the period during which the construction is in progress from the instant land. As such, the period from September 15, 2005 to February 20, 2009, which is the date of liquidation of the transfer price of the instant land, shall be the period used for business. Ultimately, the instant land does not constitute a non-business land under the relevant provisions of the Income Tax Act, and the instant disposition based on a different premise is unlawful.

B. Relevant statutes

[Attachment] The entry is as follows.

C. Determination

(1) Contents of the relevant provisions

According to Article 104-3(1) and (2) of the former Income Tax Act (amended by Act No. 9763, Jun. 9, 2009; hereinafter referred to as the "Income Tax Act") which applies to the disposition of this case and Article 168-6(1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22034, Feb. 18, 2010; hereinafter referred to as the "Enforcement Decree"), where the ownership period of the land is five years or more, the term exceeding one year from the date of the transfer exceeds two years from the date of the transfer, the term exceeding one year from the date of the preceding five years from the date of the transfer, the term exceeding 20/100 of the ownership period of the land constitutes the non-business land subject to transfer income tax, and where the land falls under any non-business land as prescribed by Presidential Decree due to prohibition of use due to the amendment of laws after acquiring the land, and other inevitable reasons prescribed by Presidential Decree, it may not be deemed the land as prescribed by Presidential Decree.

In addition, Article 168-14 (1) 4 of the Enforcement Decree of the Income Tax Act, which has been delegated under Article 104-3 (2) of the same Act, shall be deemed land for non-business use during the period prescribed by Ordinance of the Ministry of Strategy and Finance in consideration of the statutory restrictions due to public interest or inevitable reasons, the current status of land, grounds for acquisition, or the status of use. Article 168-14 (1) 4 of the Enforcement Decree of the Income Tax Act provides that the land falling under inevitable reasons prescribed by Ordinance of the Ministry of Strategy and Finance shall be deemed land not for non-business use during the period prescribed by Ordinance of the Ministry of Strategy and Finance, and the former Enforcement Rule of the Income Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 71 of Apr. 14, 2009) (hereinafter referred to as "the provisions of this case") shall be determined as land for non-business use after the commencement date of construction (including the period of suspension of construction due to a natural disaster, a civil petition, or any other justifiable reason).

(2) Determination

(A) As to whether the instant road works constitute commencement under the instant provision, taxation requirements are met under the principle of no taxation without the law, or the interpretation of tax laws should be interpreted in accordance with the law, barring any special circumstance. It is not permitted to expand or analogically interpret the requirements for tax reduction or exemption without reasonable grounds. In particular, strict interpretation of the requirements for tax exemption or exemption accords with the principle of fair taxation (see, e.g., Supreme Court Decision 2006Du8969, Feb. 15, 2008). However, the purport of the instant provision is that, in order to start construction for acquiring land on which the instant building is not built and to use it for business, preparation of construction with various authorization and permission is required for construction for 2 years from the date of its acquisition, and it is reasonable to deem that construction works are not for non-business even before the construction starts, and that construction works are not for construction for 97 years from the date of its commencement, and that construction works should be deemed as “construction works for new construction or new construction works” to the minimum extent necessary for construction works.

Ultimately, in light of the above legal principles, even if there was a construction work to open the land of this case on the land of this case that was adjacent to the land of this case from September 15, 2005 from around September 15, 2005 to the land of this case, such fact alone cannot be deemed as the "construction work commenced for use for business" as stipulated in the provisions of this case from the land of this case.

(B) From May 2006, the Plaintiff asserted that, from around May 2006, the construction of the instant land was commenced on its own, the Plaintiff performed civil engineering works for the construction of multi-family houses for commercial buildings from around May 2006, and accordingly, according to the overall purport of sculp, Gap evidence Nos. 2 and 3, and Gap evidence Nos. 8-1 to 4, the Plaintiff performed road construction works for the purpose of entering the instant land in terms of the above YG 0000 connected to the instant land. From around September 15, 2005, on the ground that the Plaintiff obtained approval for the use of the instant land for the purpose other than the construction of Ji-ri 105 and did not implement the project according to the plan for the use of the facilities submitted at the time of the application for the use, the Plaintiff concluded a contract for the use of the above land for the construction of 00 OM and the construction of the instant land within the scope of 00,000 square meters.

"However, from May 206 to May 2006, the plaintiff failed to submit objective data, such as the construction contract to support the construction work or the payment details of the construction cost, etc. to the head of the 20th unit of the building in this case. From May 2006 to May 2006, it is insufficient to recognize that the plaintiff started the civil construction work for the construction of the building in this case after completing a series of administrative procedures for the construction work for the construction of the building in this case from May 2006 to the 20th unit of the building. However, according to the evidence presented by the 20th unit of the 20th unit of the building in this case, the above evidence was submitted as evidence to support the plaintiff's assertion that the construction work in this case was newly constructed and transferred to the 20th unit of the 20th unit of the building in this case.

Therefore, in full view of the aforementioned circumstances, the period during which the Plaintiff used the instant land for business purposes during the period in which the Plaintiff owned the instant land ( July 28, 2000 - February 20, 2009, which the Plaintiff actually received any balance), cannot be deemed to be from September 15, 2005 to February 20, 2009, which is the said transfer date, as alleged by the Plaintiff.

In addition, as long as the provision of this case provides that the period of suspension shall be included in the period used for business in the case where the construction is suspended due to justifiable grounds, such as filing a civil petition, the period of suspension shall be included in the period used for business, as seen earlier by the order of the head of Jin-gun, who entered into a contract for work with OO Construction Co., Ltd. as seen earlier by the plaintiff, and additionally implement road packaging construction work on the land XX00, etc., after considering that the land of this case was used for business, the period from August 14, 2007, which is the date of the contract of this case, to February 20, 209, which is the date of the above transfer to the date of the above transfer, and from July 28, 200, which is the date of the acquisition of the land of this case by the plaintiff, even if the land of this case can be assessed as the land for business use for the period exceeding two years immediately before the above transfer date, the period exceeding three years immediately before the above transfer date, and the period exceeding three years.

Ultimately, since the disposition of this case by the defendant on the ground that the land of this case constitutes non-business land cannot be deemed unlawful, the plaintiff's above assertion based on a different premise cannot be accepted.

In this regard, the Plaintiff had expressed a few times that prior to the disposition of this case, Defendant tax officials would not impose capital gains tax in addition to the above amount of capital gains tax reported by the Plaintiff on the land for business. However, the Plaintiff asserts to the effect that the disposition of this case additionally imposing capital gains tax on the Plaintiff on the land for non-business use is contrary to the principle of good faith as stipulated under Article 15(1) of the Framework Act

In general, in order to apply the new gender doctrine to the acts of the tax authorities in tax and legal relations, the tax authorities must name the public opinion list that is the object of trust to the taxpayer, the taxpayer has no reason to believe that the tax authority's opinion list is justifiable, and the taxpayer must act in trust to what is the opinion list, and the tax authorities' disposition against the above opinion list should result in infringing the taxpayer's interest (see, e.g., Supreme Court Decision 2007Du1947, 19454, Apr. 29, 2010). Even if the tax officials in charge of the defendant gave reply that the land of this case can be seen as business land as alleged by the plaintiff, it is difficult to view that the plaintiff is not attributable to the plaintiff without questioning the above tax officials in writing seeking to express public opinion, and further, the plaintiff's answer cannot be accepted unless the plaintiff's answer is acknowledged as violating the new opinion.

3. Conclusion

If so, the plaintiff's claim of this case is dismissed due to the lack of reason, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed.