Whether the transfer value immediately before the transfer value can be viewed as the actual transaction value, which is the acquisition value of the transfer.

The burden of proof of taxation requirement is the tax authority, and it is difficult to regard the transfer value as the acquisition value of the transfer of this case in light of the standard market price at the time of the transfer.

Article 96 of the Income Tax Act

2015Gudan58314 Revocation of Disposition of Imposing capital gains tax

Kim Jong-hee

The director of the tax office.

October 25, 2017

November 08, 2017

1. The Defendant’s disposition of imposition of capital gains tax of KRW 128,099,910 (including additional tax) for the year 2014 on May 9, 2016 against the Plaintiff shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On August 1, 200, the Plaintiff, together with the Plaintiff’s mother A, divided 1/2 shares (42 square meters in land into 100-7 square meters in the same Ri on May 28, 2008, and the house was destroyed on June 23, 2006; hereinafter “the instant real estate”). On December 3, 2010, the Plaintiff acquired shares in the instant real estate from AA on a 1/2 share of 491.93 square meters in total (96.78 square meters in a house, 197.6 square meters in a warehouse, 197.5 square meters in a house, and 197.5 square meters in a house). The Plaintiff acquired shares in the instant real estate from AA on December 3, 2010.

B. On May 2, 2014, when the Plaintiff transferred the instant real estate to the Defendant on July 31, 2014, the Plaintiff calculated the acquisition value of the instant real estate as KRW 99,468,589 (the Plaintiff’s shares, among the instant real estate, are KRW 423,273,69, and the Plaintiff’s shares, which were originally owned as a donation, as the shares of the AAA, were assessed as KRW 176,194,890 according to the supplementary assessment method prescribed by the Inheritance Tax and Gift Tax Act) and reported and paid the transfer income tax.

C. However, the Defendant: (a) conducted a tax investigation of capital gains tax on the Plaintiff from February 15, 2016 to March 5, 2016; (b) confirmed that BB reported the transfer value to the head of the competent tax office in relation to the instant real estate, etc. at the time of reporting the tax base of capital gains to the head of the competent tax office; and (c) issued a disposition imposing capital gains tax on the Plaintiff (including additional taxes) on May 9, 2016 on the premise that the acquisition value of the instant real estate is KRW 80,000,000 on the Plaintiff’s property on the premise that the acquisition value of the instant real estate was KRW 80,00,000, and on the premise that it was KRW 28,09,910 (including additional

D. On July 26, 2016, the Plaintiff filed an appeal with the Tax Tribunal on December 13, 2016 on the instant disposition, but the Tax Tribunal dismissed the Plaintiff’s appeal on March 2, 2017.

[Reasons for Recognition] No dispute, Gap evidence Nos. 1 through 17, Eul evidence No. 1, and the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The purchase price pursuant to the sales contract concluded between the Plaintiff and AAAB on August 1, 200 is not KRW 80,000,000. Moreover, the tax investigation conducted by the Defendant was conducted in violation of the general tax investigation practice. Furthermore, even though the Defendant rendered a re-audit decision as to the disposition of this case as a result of the review of the objection against the disposition of this case, the Defendant’s employee in charge of the instant case determined that the re-audit was reasonable without any particular grounds, and the Plaintiff’s request for copy of the report on the closure of the investigation was rejected for the reason that the Plaintiff’s failure to perform his duties in good faith. Accordingly, the disposition of this case is a disposition for which the tax requirement is not proved, and is based on an illegal tax investigation, and is illegal as a disposition contrary to the good faith principle as provided in Article 15 of the Framework Act on National Taxes.

B. Determination

1) According to Articles 94 through 97, and 100 of the former Income Tax Act, gains from transfer on real estate shall be deducted from the transfer value, but the transfer value and the acquisition value shall be based on the actual transaction value. However, pursuant to Article 114(7) of the former Income Tax Act and Article 176-2(1) of the former Enforcement Decree of the Income Tax Act, where it is impossible to recognize or confirm the actual transaction value of the relevant assets due to the absence of books, sales contracts, receipts, and other documentary evidence necessary to confirm the actual transaction value or lack of important parts, the tax authority may make a decision or rectification based on the conversion value, etc.

2) Comprehensively taking account of the overall purport of evidence Nos. 4 and 2 as well as the purport of the evidence Nos. 4 and 2, BB reported the transfer value of the instant real estate to the head of the competent tax office at the time of filing a transfer income tax base report, but on the other hand, BB’s husband CCC made a so-called “the so-called “contract” with the Plaintiff, etc. to lower the actual transaction value at the time to lower the transfer income tax at the time. At the time, the standard market price of the instant real estate was 300,373,760 won; the secured debt amount of the right to collateral security established on the instant real estate was 160,00,000,000 won; on the other hand, there is no evidence to acknowledge that the transfer value of the instant real estate was 00,000,000 won and 00,000,0000 won, 00,000 won and 0,000,0000 won.

3) Therefore, the instant disposition is unlawful as it is a disposition without proof of taxation requirements (the added thereto, the price of the instant land at the time when the Plaintiff et al. purchased the instant land and the Plaintiff’s transfer of the instant real estate has a difference between 42 square meters due to the subdivision of the land even if the land area was determined at the time of the transfer of the instant real estate, and there is a difference in the current status of the building due to the destruction of the instant real estate. Thus, even if the transfer value reported by BB is deemed the actual transaction value, the Defendant should have considered the difference by considering the nature of the sales contract concluded between BB and the Plaintiff et al. in calculating the acquisition value of the instant real estate, but the transfer value reported by BB et al. should have been considered as the acquisition value of the instant real estate.

C. Sub-committee

Therefore, without examining the remaining arguments of the Plaintiff, the instant disposition is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be accepted for the reasons and it is so decided as per Disposition.