Seoul Administrative Court 201Gudan14749 ( November 29, 2011)

National Tax Service Review and Transfer 2010-0377 ( October 28, 2011)

It is legitimate to divide the value of land and buildings into the standard market price, and to convert the acquisition value into the acquisition value.

Although the price of land and buildings under a sales contract is divided and stated, it shall not be deemed a genuine agreement between the tax accountants in order to reduce capital gains tax, and it shall not be deemed a real agreement between the parties, and the price of land and buildings calculated according to the standard market price is significantly different from the price of land and buildings.

2012Nu1060 Revocation of disposition of imposing capital gains tax

XX

Head of Nowon Tax Office

Seoul Administrative Court Decision 2011Gudan14749 decided November 29, 2011

August 30, 2012

September 13, 2012

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant shall revoke the disposition of imposition of capital gains tax of KRW 000 on December 6, 2010 against the plaintiff on December 6, 201.

1. Quotation of judgment of the first instance;

The reasons for the judgment of this court are as follows: (a) at the end of 9th instance judgment of the first instance court (it is not sufficient to recognize that the real acquisition value of the commercial building of this case is 00 won even if all the statements in Gap evidence No. 13 through 22 submitted by the plaintiff at the appellate court; and (b) it is not sufficient to recognize that the real acquisition value of the commercial building of this case is 00 won; and (c) it is identical to the reasons for the judgment of the first instance court except for adding the plaintiff's new assertion and its decision at the appellate court as follows; and (d) it is cited

2. The plaintiff's assertion and judgment as to the plaintiff

A. The plaintiff's assertion

Even if the acquisition value of the commercial building of this case is calculated as the conversion value, the tax base and tax amount of the transfer income tax following the transfer of the commercial building of this case should be calculated as reported by the Plaintiff, but it is unlawful that the Defendant calculated differently.

B. Facts of recognition

1) Of the instant commercial buildings, the sales contract (No. 7) of No. 103 (including land and buildings; hereinafter referred to as “103 commercial buildings”) states the sales price of KRW 000; the land price of KRW 000; the building price of KRW 000; and the building price of KRW 108 (including land and buildings; hereinafter referred to as “108 commercial buildings”); and the sales contract (hereinafter referred to as “instant sales contract”) of No. 7-2, No. 103 and 108 states the sales contract (including land and buildings; hereinafter referred to as “No. 7-2, 103 and 108”), the sales price of KRW 00; among them, the land price of KRW 00; and building price of KRW 00.

At the time of the sales contract for the instant commercial building, the Plaintiff agreed on the sales price of the instant commercial building, namely, KRW 000 and KRW 000 of the sales price of the 103 commercial building, and KRW 108,000, which was the purchaser, and KRW 100,000, but the land and building price of each of the above sales price were classified as seeking advice from a certified tax accountant and informing him of it.

2) On September 2009, the Plaintiff submitted to the Defendant a return of tax base of transfer income tax (Evidence A 25), and calculated the transfer value and acquisition value of the instant commercial building as indicated in attached Form 1 (in the case of the purchase price of the land and building stated in the instant sales contract, the price of the land and building stated in the instant sales contract shall be the actual transfer value, and the acquisition value of the land and building shall be converted based thereon), and reported and paid 00 won of transfer income tax calculated accordingly.

3) The Defendant recognized the transfer value of the commercial building No. 103 and 000 won of the commercial building No. 108 under the sales contract of this case as the actual transfer value. However, on the ground that it is difficult to regard the transfer value of the commercial building of this case as the actual transfer value of the commercial building No. 103 and the transfer value of the commercial building No. 1000 won of the value of the commercial building No. 103 and the transfer value of the building No. 1000 won of the value of the commercial building No. 108 as the actual transfer value of the land and the building, the Defendant calculated the transfer value and the acquisition value of the commercial building of this case as shown in attached Form 2 (in the case of the commercial building No. 103, the purchase price of the land and the building was divided in proportion to the standard market value of the land and the building, and calculated based thereon, the acquisition value of the land and the building was calculated by converting the transfer value of the commercial building of this case to the Plaintiff.

C. Determination

According to Article 100(2) of the former Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009), Article 166(6) of the Enforcement Decree of the Income Tax Act, and Article 48-2(4)1 of the Enforcement Decree of the Value-Added Tax Act, where land and buildings are transferred along with each other, and the transfer value is calculated based on the actual transaction value, if the land and buildings are unclear, the value of the land and buildings is calculated based on the standard market price as of the date of the transfer contract, in proportion to the value calculated according to the standard market price as of the date of the transfer contract. Here, when the classification of land and buildings is unclear, it shall not be deemed that the transfer value of land and buildings is not limited to the case where the land and buildings are transferred without the division, but it shall be interpreted that the transfer value of the land and buildings is

According to the above facts in this case, the sale price of 103 and 100 won for the commercial buildings listed in the sales contract of this case shall be deemed to be the price agreed upon by the Plaintiff with the buyer. However, separate entry of each land and building price in the above sales contract shall be deemed to be the price determined by a genuine agreement between the parties, as the Plaintiff entered in the manner notified by the tax accountant in order to reduce capital gains tax, and shall not be deemed to be the price determined by the real agreement between the parties (the Plaintiff voluntarily stated to the purport that he was interested in the total sale price at the second date of the court and that he was not well aware of the classification of land and buildings). In light of the fact that the ratio of each land and building price exceeds the ratio of the value of land and buildings calculated according to the standard market price, the price of land and buildings stated separately in the sales contract of this case shall be deemed to be a reasonable price, as it goes beyond ordinary transaction practices.

Therefore, it is legitimate for the Defendant to calculate the transfer value of each land and building based on the standard market price by deeming that the value of each land and building of this case falls under the case where the classification is unclear, and to convert the acquisition value based on the calculation is lawful. Therefore, the Plaintiff’s assertion cannot

3. Conclusion

If so, the judgment of the court of first instance is legitimate, and the plaintiff's appeal is dismissed as it is without merit.