It cannot be deemed that any defect exists in a tax notice, and any defect in the determination of the requirements for reduction or exemption is objectively apparent.

It cannot be deemed that there exists any defect in the entries in a tax notice, and the fact that the transferred land constitutes farmland for which three years have elapsed since the date of incorporation into a residential area at the time of transfer does not have any dispute as to whether the project implementer's delay in compensation or inevitable reasons is objectively apparent. Thus, it cannot be deemed as void as

Article 69 of the Restriction of Special Taxation Act

2012Guhap1308 Invalidity of a disposition imposing capital gains tax

XX

Head of Namyang District Tax Office

August 28, 2012

September 25, 2012

1. The plaintiff's claim is dismissed.

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

On July 1, 2011, the Defendant confirmed that the imposition of capital gains tax of KRW 000 for the year 2010 against the Plaintiff is null and void.

1. Details of the disposition;

A. On August 1, 1985, the Plaintiff succeeded to XX Dong-dong 000 to 744 square meters, and on October 20, 2010, the Plaintiff transferred each of 559/74 shares (hereinafter referred to as “instant land”) among the same 000 square meters and 000-1 square meters divided from the said land, which was divided from the said land, to Yangyang-si, Nam-si, and transferred each of 559/74 shares (hereinafter referred to as “the instant land”).

B. On December 31, 2010, the Plaintiff filed a preliminary return on capital gains tax with the transfer value of the instant land at KRW 000, the acquisition value at KRW 000, and the tax amount to be voluntarily paid at KRW 000, and filed an application for reduction or exemption by applying the farmland reduction and exemption provisions and the land reduction and exemption provisions for public works under Article 77(1)1 of the Restriction of Special Taxation Act (amended by Act No. 10406, Dec. 27, 2010; hereinafter the same) for at least eight years under Article 69(1) of the Restriction of Special Taxation Act.

C. However, the Defendant applied the Land Reduction and Exemption Regulations for Public Works Projects to reduce or exempt 20/10 of capital gains tax; however, the Defendant refused to apply for reduction and exemption of capital gains tax according to the self-sufficiency requirement for at least eight years on the ground that the instant land constitutes farmland for which three years have passed since the Plaintiff acquired by inheritance or was incorporated into a residential area at the time of transfer; and on July 1, 2011, the Defendant corrected and notified the Plaintiff of KRW 00 of capital gains tax for the year 2010 for the Plaintiff (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence 1-2, Gap evidence 2-4, Eul evidence 1-2 and Eul evidence 1-2, the purport of the whole pleadings

2. Whether the instant disposition is null and void

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is null and void due to the following significant and apparent defects.

(1) Defect in a tax payment notice

In rendering the instant disposition, the Defendant did not accurately state the reasons for rejecting the application for tax reduction or exemption in the tax payment notice.

(2) The subject of exemption from capital gains tax under the proviso of Article 66(4)1 of the Enforcement Decree of the Restriction of Special Taxation Act

The Defendant appears to be not eligible for exemption from capital gains tax pursuant to the main sentence of Article 66 (4) 1 of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 22493, Nov. 15, 2010; hereinafter the same) on the ground that the instant land constitutes farmland inherited by the Plaintiff for at least eight years, or farmland for which three years have passed since it was incorporated into a residential area at the time of transfer. However, in South Korea-si, the instant land was designated as a buffer green belt and road, and the land was immediately incorporated into a residential area, and was obstructed in a state where any development act cannot be performed. After delaying development activities for at least three years, there exists a circumstance that the Plaintiff would be no other method of disposal except for the Plaintiff’s transfer of such land, and in light of such circumstances such as project site, etc., the transfer of the instant land constitutes an exception provided for in the proviso of Article 66 (4) 1 of the Enforcement Decree of the Restriction of Special Taxation Act and thus, becomes exempt from capital gains tax.

B. Relevant statutes

The entries in the attached Table-related statutes shall be as follows.

C. Determination

(1) As to the assertion of defects in the tax payment notice

(A) According to Article 9(1) of the National Tax Collection Act (amended by Act No. 10527, Apr. 4, 201) and Article 83 of the Income Tax Act (amended by Act No. 10408, Dec. 27, 2010); and Article 149(1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 22493, Nov. 15, 2010), a notice of national tax payment is subject to a notice of tax payment stating the taxable year, tax item, tax amount, calculation basis, payment deadline, place of payment, etc. of the national tax, so that the taxpayer can be aware of the details of the disposition in principle. The aforementioned provisions are intended to ensure fairness in tax administration by having the tax authority take a careful and reasonable disposition in accordance with the principle of no taxation without law, and to make a detailed notification to the taxpayer of the details of the disposition and to ensure convenience in filing an objection.

(B) As to the instant case, the following circumstances acknowledged by the purport of the Statement No. 3 and the entire pleadings, namely, the omission of the essential entry in the instant tax payment notice does not appear, and even if there are somewhat unclear parts as to the grounds for refusing to grant an application for reduction or exemption of farmland for more than eight years, such entry does not seem to have any defect to the extent that a taxpayer would have an objection to the instant disposition or interfere with filing an appeal. In light of the above, it cannot be deemed that there is a defect in the entries in the instant tax payment notice as alleged by the Plaintiff, and that the defect is serious and obvious to the extent that the instant disposition should be invalidated. Accordingly, the Plaintiff’s assertion on the different premise is without merit.

(2) As to the assertion that exemption from capital gains tax is subject to the proviso of Article 66(4)1 of the Enforcement Decree of the Restriction of Special Taxation Act

(A) In order for a taxation to be null and void as a matter of course, the mere fact that there is an illegality in the taxation disposition is insufficient. It is objectively apparent that the defect violates an important statute, and it is necessary to determine whether the defect is significant and obvious, and there is a need to reasonably consider the purpose, meaning, function, etc. of the laws and regulations which form the basis of the taxation disposition, and at the same time, about the specificity of the specific case itself. From this perspective, in a case where there is no legal relationship or fact which is the basis of the taxation disposition, the defect is grave and obvious, but it can be found that the factual basis is clearly examined as to any legal relation or fact which is not the object of taxation because there is objective reason to believe that it is the object of taxation due to the objective circumstance that it is not the object of taxation, it cannot be said that the defect is apparent even if it is serious, so it cannot be said that the taxation disposition that misleads the fact of taxation is null and void as a matter of course (see, e.g., Supreme Court Decision 96Nu2634, Jun. 26, 1998

(B) As to the instant case, there is no dispute between the parties as to the fact that the instant disposition constitutes farmland for which three years have passed since the date of transfer by the Plaintiff, and thus, it cannot be deemed that the instant disposition was imposed on a person who has no legal relation or factual basis subject to taxation. In addition, to fall under the proviso of Article 66 (4) 1 of the Enforcement Decree of the Restriction of Special Taxation Act, which is the ground for the Plaintiff’s assertion that the instant land is subject to exemption from capital gains tax, there should be defects such as mistake or error of factual basis as to whether the instant disposition constitutes “a project implementation by phase or delay of compensation by phase or inevitable reasons prescribed by Ordinance of the Ministry of Strategy and Finance” under the aforementioned item (a) or “inevitable reasons prescribed by Ordinance of the Ministry of Strategy and Finance” under the above item (b). Thus, it cannot be deemed

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.