Examination-transfer-2016-0087 ( November 15, 2016)

No transfer income tax may be calculated on the basis of the actual transaction price.

Since the transfer income tax cannot be calculated based on this is contrary to the substance over form principle, it is impossible to determine the transfer income tax of land.

Article 96 of the Income Tax Act

2017Guhap5039 Revocation of Disposition rejecting capital gains tax rectification

Hyo

○ Head of tax office

2, 2017.08

October 17, 2017

1. The Defendant’s rejection disposition against the Plaintiff on June 13, 2016 regarding KRW 00,00,000,000,000,000,000,000,000,000.

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

Cheong-gu Office

The same shall apply to the order.

1. Circumstances of dispositions;

A. The plaintiff set up a right to collateral security with the EE bank

1) On March 20, 2009, the Plaintiff: ○○○○○-○○○○○ on March 20, 2009 (hereinafter “the Plaintiff”) 7m2 square meters of a factory site (hereinafter “the Plaintiff”).

The sum of 195,00,000,000 won in total, consisting of 195,000,000 square meters in △△-△△-△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△△

2) The Plaintiff, a corporation AA (hereinafter “AA”) provides loans from the EE bank.

Upon receipt of the instant land on January 26, 2010, each of the △△△,000,000 won with respect to the instant land;

△△,00,000, △△,000,000 won (total of KRW 600,000,000), debtor AA, and ESA Bank respectively (hereinafter referred to as the “instant collateral security”) have been created by combining each of the above collateral security (hereinafter referred to as the “instant collateral security”).

B. Transfer of loan claims against the collateral security right of this case

1) In the event that AA fails to repay its loan obligations, the EE Bank shall not pay its loan obligations on the instant land.

An application for voluntary auction was filed (○○○○○○○○○○○○, around 2013), and on September 26, 2013, the method of transferring securitization assets prescribed by the former Asset-Backed Securitization Act (amended by Act No. 13797, Jan. 19, 2016) to BB limited liability companies (hereinafter referred to as “BB”), and transferred AA’s right to collateral security and the instant right to collateral security to BB to Kima on January 17, 2014.

2) On March 3, 2014, EE Bank received the transfer registration of the instant right to collateral security from BB on March 3, 2014, and BB from Kima on the same day.

(c) Procedure for the court's voluntary auction;

1) The appraisal value at the voluntary auction procedure for the instant land by the ○○ District Court was assessed as KRW 00,000 (hereinafter “court appraisal price”) based on November 15, 2013.

2) On August 8, 2014, Kima, Gbb, Lee C, and Choidd (hereinafter referred to as "Mala, etc.") participated in the auction procedure above, and acquired each of 1/4 shares by winning a successful bid of the instant land in KRW ○○○,00,000 (hereinafter referred to as "the successful bid of this case") on a successful bid on August 8, 2014. In the subsequent distribution procedure, Kima was a first-class mortgagee, who received dividends of KRW ○○○,○○,24, excluding execution expenses, etc. from the sum of the maximum debt amount above.

3) On September 3, 2014, Kima et al. sold the instant land to the CCC Co., Ltd. and did not report the transfer income tax. The head of the competent tax office of thisc deemed the acquisition price of the instant land as the successful bid price and decided that the instant land falls short of taxation (the acquisition cost is deemed as the acquisition cost at the same time).

D. Disposition of this case and appeal

1) On May 1, 2015, the Plaintiff reported to the Defendant ○○○, ○○, and ○○○○○○○, which reported the capital gains tax for the year 2014, computed by aggregating KRW 00,000 and KRW 00,000 of the successful bid price for the instant land and other land.

2) On April 2016, the Plaintiff’s transfer value of the instant land to the Defendant is a court appraiser.

Since ○○○○,○○,000 won, the amount of capital gains tax imposed on the Plaintiff was corrected as △△, △△, and △△△△.

3) On June 2016, 2016, the Defendant: (a) the bid price of this case, as the Plaintiff first reported to the Plaintiff.

For the reason of transfer value, the above request for correction was rejected (hereinafter referred to as the "disposition of this case").

4) On August 2016, the Plaintiff appealed and filed a request for examination with the Commissioner of the National Tax Service on August 2016, 2016.

11. ○○. The dismissal was made.

[Reasons for Recognition] Unsatisfy, entry of Gap evidence 1 to 11, the purport of the whole pleadings

2. Relevant statutes;

It is as shown in the attached Form.

3. The assertion and judgment

A. The plaintiff's assertion

Since the successful bid price of the instant land is KRW 00 million, the form of the land seems to be the actual transaction price under Article 96 (1) of the Income Tax Act, however, deeming it as the actual transaction price of the instant land is against equity due to the following circumstances, and thus, the income tax on the instant land should be calculated based on the court appraisal price.

1) Kima, etc. used the NPL claim (mortgage loan claim) which is the non-performing loan claim of the so-called financial right from BB at low price. Specifically, after purchasing the non-performing loan claim of this case, Kima, etc., the court appraiser was awarded a successful bid of this case in the light procedure due to voluntary auction of the right to collateral security, and thereafter acquired the ownership of the land of this case without paying any actual expenses by receiving 600 million won as a collateral security in the distribution procedure. Nevertheless, when transferring the land to CCC, it was sold at a normal price, and the acquisition cost was not paid with 00 million won. Accordingly, the sum of the expenses actually paid by Kima, etc. during the auction procedure of the land of this case and the expenses paid to BB for the purchase of the bonds and auction expenses, and it is nothing more than the appearance that 00 billion won was taken out to avoid the capital gains tax as such.

2) The obligor of the NPL claim (including the surety's property to secure another's obligation) has no ability to repay, and where the successful bid has been made at a higher price, the obligor without sufficient ability to repay bears capital gains tax on the basis of the successful bid price, and the NPL obligee's reduction or exemption of capital gains tax on the basis of the cost of acquisition at the time of capital gains is contrary to equity.

B. Determination

Article 96 (1) of the Income Tax Act provides that the transfer income tax shall be calculated based on the actual transaction value of the transferee and the transferor, which is the actual transaction value, and the form of KRW 00 billion, which is the light price, can be deemed as the actual transaction value stipulated in the above provision. However, for the following reasons, taking the transfer income of the land of this case as the light price is in violation of the principle of substantial taxation, and thus, the transfer income tax cannot be calculated on the basis of this case.

Since income cannot be confirmed, the disposition of this case, which limited it, should be revoked.

section 3.

1) Article 14(1) of the Framework Act on National Taxes provides that “The provisions on the calculation of tax base under tax-related Acts shall apply according to the substance regardless of the name or form of the income, profit, property, act or transaction,” and provides for the principle of substance in the transaction details.

In the instant case, although the Plaintiff kept the form of selling the instant land in KRW 00 billion, the Plaintiff, as a person who has pledged his property to secure another’s property, has transferred the instant land through a voluntary auction, and there was no fact that the Plaintiff participated in the transaction. On the contrary, Kimaa et al., abused his position as a mortgagee to receive the full maximum debt amount, and formed the instant successful bid price to create an appearance to deduct excessive acquisition cost in preparation for the event of resale of the instant real estate after being awarded the successful bid. Therefore, it is apparent that this is not a normal transaction. Accordingly, in the event of imposing capital gains tax on the basis of the successful bid price of the instant case, it goes against the principle of substantial taxation.

2) On the other hand, with respect to the interest vested in the Plaintiff, the Plaintiff, as a surety, was exempted from the physical burden of the Plaintiff as a surety, which is consistent with the market price of the real property collateral. However, according to the appraisal by the executing court, the market price of the instant land is merely KRW 00,00,000, if there was no involvement in Kima, etc., then the Plaintiff’s profit is within 00,000,000, and the Plaintiff has a legitimate expectation to pay taxes within the scope of the appraisal.

However, if the successful bid price of this case, the external appearance of Kima, is viewed as the plaintiff's interest, it is identical in that the plaintiff is exempted from physical security liability by losing the ownership of the real estate offered as security. However, the actual amount of tax is a large amount of tax exceeding the court's appraisal of the land of this case, thereby impairing the plaintiff's legitimate expectation.

3) The adjudication price of the instant case does not reflect at all the ordinary market price exceeding three times the court’s appraisal price.

4) The nature of the instant case is set up in order to maximize the difference in resale in cases where Kima, etc. resells the instant land in the future, and thus, in fact, it is necessary to correct its structural contradictions merely because Kima, etc. puts the current burden on the Plaintiff at the present of the tax burden to be borne by Kima, etc.

5) The expenses actually incurred in acquiring the instant real estate from a voluntary auction are merely the sum of the purchase price of the NPL claim and the execution cost of the voluntary auction, and the auction expenses are the same.

As seen above, ○○○○, 776 won (○0,000,000 won – ○○, ○○, ○○○, 224 won) and the cost of purchasing bonds cannot be known. As such, the actual transaction price of the instant land constitutes a case where the actual transaction price cannot be known.

However, as long as the claim purchase price, such as Kima, is unknown, the court appraisal of this case can be seen as the estimated survey price under Article 114 (7) of the Income Tax Act. In light of the fact that the defendant still has the fact that the claim purchase price such as Kima is investigated and confirmed the real market price, it is not desirable to recognize the appraisal of this case as the estimated survey price immediately.

4. Conclusion

Therefore, the plaintiff's claim shall be accepted on the grounds of its reasoning, and it is so decided as per Disposition.