[1] The meaning of and requirements for the establishment of non-taxation practices under Article 18(3) of the former Framework Act on National Taxes

[2] Whether “high-class house” under Article 99-3(1)1 of the former Restriction of Special Taxation Act is included in the exclusive use area of the balcony part constructed by means of pressing Curtain Wall on the “high-class house” (negative)

[3] In a case where a housing construction business operator purchased a house which is a main complex building with a little 165 square meters area and transferred it to another person, and the tax authority applied for capital gains tax reduction or exemption, the case holding that the judgment below that the disposition imposing capital gains tax on which the balcony area was included in the exclusive area of the balcony area was unlawful as it goes against the national tax administration practices accepted by the taxpayer, on the ground that the taxation practice was established as impliedly expressing the intention not to include the balcony area in the exclusive area of the apartment

[1] Article 18 (3) of the former Framework Act on National Taxes (amended by Act No. 911 of Jan. 1, 2010) / [2] Article 18 (3) of the former Framework Act on National Taxes (amended by Act No. 9911 of Jan. 1, 2010), Article 9-3 (1) 1 of the former Restriction of Special Taxation Act (amended by Act No. 6762 of Dec. 11, 2002), Article 89 subparagraph 3 of the former Income Tax Act (amended by Act No. 6781 of Dec. 18, 2002) (see current Article 89 (1) 3 of the Income Tax Act), Article 156 subparagraph 2 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 1751 of Oct. 1, 2002) / [2] Article 156 subparagraph 1 of the former Framework Act on National Taxes (amended by Act No. 36719 of Dec. 19, 19, 20197

[1] Supreme Court Decision 2007Du19294 Decided April 15, 2010 (Gong2010Sang, 933) Supreme Court Decision 2001Du7855 Decided September 5, 2003 (Gong2003Ha, 2031) Supreme Court Decision 2008Du15350 Decided December 24, 2009 (Gong2010Sang, 275)

Plaintiff

Head of the District Tax Office

Seoul High Court Decision 2009Nu18556 Decided December 1, 2009

The appeal is dismissed. The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

Article 99-3 (1) 1 of the former Restriction of Special Taxation Act (amended by Act No. 6762 of Dec. 11, 2002) provides for a tax amount equivalent to 100/100 of the transfer income tax on the income accruing from the transfer of a newly-built house acquired by a person who first concludes a sales contract with a housing developer within the newly-built house acquisition period within five years from the date of its acquisition, but the same shall not apply in cases where the newly-built house falls under a high-class house excluded from the subject of non-taxation of the transfer income tax pursuant to Article 89 subparagraph 3 of the Income Tax Act. Article 89 subparagraph 3 of the former Income Tax Act (amended by Act No. 6781 of Dec. 18, 2002) provides that one of the non-taxation transfer income for a first household house (excluding a high-class house whose total floor area, value, facilities, etc. exceed the standard prescribed by the Presidential Decree, and the area of land appurtenant thereto is used as an exclusive residential house (including its exclusive area).

Meanwhile, the customs duty of non-taxation under Article 18(3) of the former Framework Act on National Taxes (amended by Act No. 911, Jan. 1, 2010) refers to an erroneous interpretation or practice that was accepted by a general taxpayer who is not a specific taxpayer as just and without any objection to the extent that it is not unreasonable for a taxpayer to trust such interpretation or practice (see, e.g., Supreme Court Decision 2007Du19294, Apr. 15, 2010). In order to establish a non-taxation practice of a tax authority with respect to the tax law, there is objective fact that the tax authority did not impose any tax on any matter over a long-term period. In addition, if the tax authority knew that it was able to impose tax on the matter, and it requires that the tax authority’s intent will not be imposed on any particular matter explicitly or implicitly, and that it will not be seen as a case where it continues to exist for a long time period of 201Du7855, Sept. 5, 2003).

According to the reasoning of the lower judgment, the lower court: (a) deemed that the Plaintiff’s construction work of balcony 6 was carried out out and opened to the outside of the wall of the building; (b) based on the characteristics of the balcony 6, the size of the apartment building’s apartment units to be widely distributed and expanded; and (c) determined that the building area of the apartment units was changed to the inner space similar to that of the body because of the general building’s installation of reinforced concrete or brick built on the 6th anniversary of the fact that the Plaintiff’s construction work of the balcony 6th anniversary of the building’s installation of the above apartment units, and the lower court’s construction work of the 6th anniversary of the building’s construction site’s construction site’s construction site’s construction site’s construction site’s construction site’s construction site’s construction site’s 7th anniversary of the initial construction site’s construction site’s construction site’s construction site’s construction site’s construction site size was not included in the 6th floor area of the apartment units.

Furthermore, the court below held that the taxpayer's disposition of national tax administration of this case was unlawful because it is against the practice of national tax administration by accepting the disposition of taxation of this case, on the ground that the apartment house is subject to the former Housing Construction Promotion Act or the current Housing Act, and the apartment house is subject to both the main body and the main body are not subject to the building, and it is difficult to be included in the party building in the balcony and the structure or function of the main body, and it is difficult to view that there is a qualitative difference between the outer wall and the main body of the balcony in the apartment building constructed by the "Crast Construction Law" and the outer wall constructed by the "Crast Construction Law," and it is difficult to view that there is a qualitative difference between the outer wall and the main body of the balcony in the apartment building in the general apartment.

In light of the above legal principles and records, the above fact-finding and judgment of the court below are just, and there are no errors in the misapprehension of legal principles as to exclusive area and non-taxation practice or the rules of evidence against the limits of free evaluation of evidence as otherwise alleged in the ground of appeal

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cha Han-sung (Presiding Justice)