Examination Donation 2014-0084 ( November 12, 2014)

Notice of reduction decision shall not be an administrative disposition subject to appeal litigation;

The notice of a decision to reduce the value of donated property at the price calculated by applying the officially announced value under the premise that the value of donated property reported by the Plaintiff does not fall under the market price under the Inheritance Tax and Gift Tax Act does not constitute an administrative disposition subject to appeal

The contents of the decision shall be the same as attached.

Article 60 of the former Inheritance Tax and Gift Tax Act

Article 49 of the Enforcement Decree of the former Inheritance Tax and Gift Tax Act

Action Demanding revocation of Disposition of Value Determination

Gangwon 00

Head of the Tax Office

Dismissal

May 20, 2015

June 17, 2015

1. The instant lawsuit shall be dismissed.

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

Cheong-gu Office

On August 7, 2014, the defendant revoked the decision on the value of donated property made to the plaintiff on August 7, 2014 (" August 14, 2014" seems to be a clerical error).

1. Basic facts

A. On October 11, 2013, the Plaintiff: (a) donated 00 Ulsan-gun 00,000 Ulsan-do 775-3, 344 square meters (hereinafter “instant land”); and (b) completed the registration of ownership transfer on October 16, 201.

B. On November 28, 2013, the Plaintiff assessed the value of the instant land as KRW 00,000,000 by referring to the example of transaction examples, etc., and submitted a tax base return of gift tax and the dispatch of an agency to the Defendant on the basis of the value of donated property.

C. The Defendant determined that the value of donated property reported by the Plaintiff does not fall under the “market price” under Article 60 of the Inheritance Tax and Gift Tax Act (hereinafter “Inheritance Tax and Gift Tax Act”), and calculated the value of donated property as KRW 00,000 by applying the officially assessed individual land price under Article 61(1)1 of the Inheritance Tax and Gift Tax Act, and issued the following notice to the Plaintiff on August 7, 2014 (hereinafter “instant notice”).

4. Notice of decision of gift tax (No. 2)

He knows that, on November 28, 2013, you have been determined to correct the gift tax return and the direct payment of the gift tax reported on November 28, 2013 as follows:

1. Marking of the property;

- The land of this case

2. Status of determination of gift tax;

- Value of reported donated property: 000,000,000 won

- Value of donated property on decision:00,000,000 won

D. On August 26, 2014, the Plaintiff appealed and filed a request for review on August 26, 2014. On November 12, 2014, the Commissioner of the National Tax Service rendered a decision to dismiss the request on the ground that: (a) the Plaintiff’s example of business transactions does not meet the requirements for appraisal base or is difficult to view it as a similar land; and (b)

Facts without dispute over the basis of recognition, Gap evidence 1 through 3, Eul evidence 1 and 2, the purport of the whole pleadings

2. Whether the lawsuit of this case is lawful

A. The parties' assertion

1) The Plaintiff asserts that: (a) it is unfair for the Defendant to calculate the value of donated property of the instant land as the officially announced land price that was not properly reflected in the actual market price; and (b) the instant notice does not stipulate at all the grounds for calculating gift tax, and its tax base is omitted; (b)

2) On this issue, the Defendant asserts that the instant notice was lawful to assess the value of the instant land on the basis of the officially announced value pursuant to Article 61(1)1 of the Inheritance Tax and Gift Tax Act, since it is merely a reduction of the value of property reported by the Plaintiff and it cannot be deemed an unfavorable disposition against the Plaintiff. Thus, the instant lawsuit seeking revocation is unlawful.

B. Disposition of the notice of this case

1) Before determining the parties’ assertion, the issue of the instant notification ought to be examined ex officio with respect to the existence of the disposition of the instant notification. The term “administrative disposition”, which is the subject of an appeal litigation, refers to, in principle, an act of an administrative agency’s public law, which directly affects the rights and obligations of the general public by ordering the establishment of rights or the burden of obligations regarding a specific matter, or giving rise to other legal effects (see Supreme Court Decision 2010Du3541, Sept. 27, 20

This case’s notice is that the Plaintiff’s value of donated property calculated by applying the officially announced value under the premise that the donated property reported by the Plaintiff does not fall under the market price under the Inheritance Tax and Gift Tax Act is determined to reduce the value of donated property. As such, calculating the value of donated property for the purpose of determining the amount of gift tax by the tax authority, and determining the tax base accordingly does not themselves constitute an act that directly affects the rights and obligations of the taxpayer (see Supreme Court Decision 2001Du2

See Supreme Court Decision 95Nu12842 delivered on September 24, 1996, etc.

2) On this point, the Plaintiff asserts to the effect that there is a benefit to seek revocation of the decision on the value of donated property, as the Plaintiff’s transfer gains increase due to the acquisition value of donated property determined by the Defendant when disposing of the instant land in the future and the increase in the transfer margin. However, it cannot be said that the instant notification directly affects the Plaintiff’s rights and obligations, on the ground that it is anticipated that there are future circumstances asserted by the Plaintiff without any disposition imposing transfer income tax on the instant land transfer and the instant land transfer. (In the event that the transfer income tax of the instant land is at issue in the future, the Plaintiff will dispute

3. Conclusion

The instant notification does not constitute an administrative disposition that is subject to an appeal litigation, and is unlawful in the instant lawsuit seeking its revocation, and thus, it is so decided as per Disposition by the assent of all participating Justices.