Cho Jae-chul2012 Before 1474 (2012.0726)

The transfer of real estate in the speculative area is not subject to the application of the standard market price.

Since the date of acquisition of real estate in a speculative area is earlier than both the date of public announcement of change of a tourist destination, public announcement of business authorization, and date of designation of a speculative area, in calculating capital gains tax, special provisions that can be applied to the standard market price instead of actual transaction price cannot be deemed to have been applied, and such special provisions do not violate the principle

Article 85 of the Restriction of Special Taxation Act

2012Guhap2896 Revocation of a taxation disposition

XX

Decree of the National Tax Service

September 12, 2012

October 17, 2012

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of capital gains tax of KRW 000 for the year 2006 against the Plaintiff on March 10, 2012 is revoked.

1. Details of the disposition;

The following facts are either disputed between the parties, or acknowledged in full view of the whole purport of the pleadings in each entry of Gap evidence of Nos. 1 through 12 (including the number number; hereinafter the same shall apply) and Eul evidence of Nos. 1 through 5, unless there is a special reference to the facts.

A. The large bathing beach tourist destination located in the XX Dong, Chungcheongnam-do, Chungcheongnam-do (hereinafter referred to as the “instant tourist destination”), around January 21, 1969, is designated and publicly announced as a tourist destination pursuant to Article 16 of the former Tourism Promotion Act (amended by Act No. 2285 of Jan. 18, 1971; hereinafter the same) and then again, around November 28, 1983, the surrounding area of 1.31mm2 was designated and publicly announced as a tourist destination pursuant to Article 46 of the former Tourism Act (wholly amended by Act No. 3910 of Dec. 31, 1986; hereinafter the same) and became final and conclusive as the area of the instant tourist destination was 2.1m25m2.5m2.

B. On July 5, 1991, the Plaintiff acquired each ownership of the 000-1 p.m., 000-1, 198m2, 000-2 1,689m2, and 360m. (hereinafter collectively referred to as the “real estate of this case”) of the same on February 27, 1995. The instant real estate located within the instant tourist destination was designated or incorporated as the instant tourist destination around November 28, 1983, which is the date of the public announcement of the change in the designation of the instant tourist destination.

C. After the approval of the change of the plan to develop the tourist destination of this case was announced as 66 November 8, 1985, the development project of this case was implemented since the development project of this case was divided into 1, 2, and 3 districts. The real estate of this case was transferred on August 10, 2005 pursuant to Article 52 of the former Tourism Promotion Act (wholly amended by Act No. 8343, Apr. 11, 2007; hereinafter referred to as the " Tourism Promotion Act"). The approval of the change of the plan to develop the tourist destination of this case was announced as 205-141 of the public announcement of the plan to develop the tourist destination of this case (hereinafter referred to as the "public announcement of the change of the plan to develop the tourist destination of this case" or the "public announcement of the change of the plan to develop the tourist destination of this case").

D. The Plaintiff acquired the instant real estate two years from August 10, 2005, which was the date of the amendment public notice of the instant creation plan, and thus, determined that special provisions such as Article 85 of the former Restriction of Special Taxation Act (amended by Act No. 8146 of Dec. 30, 2006; hereinafter “Special Taxation Restriction Act”) apply to the transfer of the instant real estate, and reported and paid 00 won of capital gains tax to the Defendant on February 28, 2007, based on the standard market price which is not the actual transaction price, not the actual transaction price.

E. On November 28, 1983, the Defendant: (a) determined that the Plaintiff acquired the instant real estate after November 28, 1983 in which the instant tourist resort area became final and conclusive; and (b) determined that special provisions, such as Article 85 of the Restriction of Special Taxation Act, do not apply to the transfer of the instant real estate; (c) determined that the transfer income tax was calculated based on the actual transaction value and imposed tax on the Plaintiff, including the transfer income tax for the year of 2006 increased or adjusted to the Plaintiff on March 10, 2012 (hereinafter “instant disposition”).

F. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on March 21, 2012, but was dismissed on July 25, 2012.

G. Meanwhile, due to the concern of speculation, the territory of Boan City was designated as a designated area under Article 104-2(1) of the former Income Tax Act (amended by Act No. 8144 of Dec. 30, 2006; hereinafter “ Income Tax Act”) on Aug. 19, 2005 due to the concern of speculation.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In calculating the transfer income tax from the transfer of real estate of this case, the special provisions of Article 85 of the Restriction of Special Taxation Act, etc. should be applied. Even if it is deemed that the above special provisions are not applicable to the transfer of the real estate of this case, the court below expressed the view that the transfer income tax is applicable on the basis of the standard market price in the case of transfer of the land acquired before August 10, 2003 (2 years before August 10, 2005, which is the date the change of the creation plan of the tourist destination of this case was announced) and the plaintiff did not take any measure against the defendant to make a return and payment of the transfer income tax according to the standard market price and to meet five years thereafter, the disposition of this case by the defendant

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Whether special provisions, such as Article 85 of the Restriction of Special Taxation Act, are applied to the transfer of the instant real estate

Article 85 of the Restriction of Special Taxation Act: ① Where real estate in a designated area under the provisions of Article 104-2(1) of the Income Tax Act (hereinafter referred to as the “designated area”) is transferred to or expropriated in the side of a public project operator under the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects before December 31, 2006, the date of acquiring real estate in the above speculative area shall be the date stipulated in each subparagraph of this Article (1) (the date of public announcement of designation of a development area, industrial complex, development area or public announcement of compensation plan corresponding thereto), ② the date falling under the above (1) shall be two years retroactively from the date of public announcement of the project approval; ③ the date of designation of an speculative area after the date of public announcement of the project approval; ② the date of public announcement of the designation of an speculative area shall be determined by the Constitutional Court before the date of announcement of the project approval; ② the date of announcement of the development plan shall be determined by the standard market price in lieu of the transfer value and acquisition value of the real estate.

In addition, Article 85 subparagraph 5 of the Restriction of Special Taxation Act provides that "the date prescribed by Presidential Decree which is similar to the designation date of a planned development area, industrial complex, or development area or the date of public announcement of compensation plan as stipulated in subparagraphs 1 through 4 of the same Article." According to the main sentence of Article 79-2 (1) of the Enforcement Decree of the same Act, "the date prescribed in subparagraph 5 of the Restriction of Special Taxation Act" refers to the standard market price under attached Table 7, and subparagraphs 12 through 14 and 26 of the above [Attachment 7] subparagraphs 12 through 14 of the Enforcement Decree of the same Article shall be the date of designation of a hot spring source protection district under Article 3 of the Hot Spring Act (Article 12), the date of designation of a natural park under Article 6 of the Natural Parks Act (Article 13), the date of establishment of a development plan under Article 9 of the Urban Development Act (Article 14) or the date prescribed in subparagraphs 1 through 25 through 7 of the former Enforcement Decree of the Restriction of Special Taxation Act.

As to the instant case, the Plaintiff transferred the instant real estate located within speculative districts on December 29, 2006 at the time when the Plaintiff implemented the project for developing a tourist destination under the Tourism Promotion Act. As to the background of the instant disposition, the time when the Plaintiff acquired the instant real estate had already been considered in the process, as seen earlier, was between July 5, 191 and January 30, 2001. On the other hand, the date when the instant real estate was designated as a tourist destination was scheduled to be developed is November 28, 1983, which was the date of the public announcement of the change of the instant tourist destination. The date when the instant real estate was designated as a tourist destination was changed to the end of 2-3 years thereafter, and the date when the instant real estate was changed to the development plan for the tourist destination, which was a specific development plan, was later changed to the date when the instant real estate was transferred on August 10, 2005.

Therefore, with respect to the transfer of the real estate of this case, the plaintiff's assertion that only August 10, 2005, which is the date of approval for the change of the plan to create the tourist destination of this case under Article 5 (1) and Article 57 of the Enforcement Decree of the Restriction of Special Taxation Act, shall be deemed as the date falling under the above 1, which is the standard market price under the special provisions such as Article 85 of the Restriction of Special Taxation Act, and that the special provisions such as Article 85 of the Restriction of Special Taxation Act shall be applied to the calculation of the transfer income tax of this case. The plaintiff's assertion that the transfer of the real estate of this case does not meet the standard market price taxation requirements under the special provisions such as Article 85 of the Restriction of Special Taxation Act, and the disposition of this case, which was imposed based on the actual transaction price, is legitimate, and that part of the plaintiff's assertion of this error is without merit.

(2) Whether the principle of trust protection is violated

In general, in order to apply the principle of trust and good faith to the acts of tax authorities in tax and legal relations, the tax authorities must name the public opinion list that is the object of trust to taxpayers, and the tax authorities’ name of opinion is not attributable to the taxpayer. The taxpayer must trust the opinion list and act in what manner the taxpayer should trust, and the tax authorities impose dispositions against the above opinion list, thereby infringing the taxpayer’s interest (see, e.g., Supreme Court Decision 2007Du7741, Oct. 29, 2009).

According to the principle of evidence No. 13 as to this case, although the defendant sent a notice of capital gains tax reduction or exemption to the actual market price since August 19, 2005 in the case of Boan City 3 development project of the tourist destination of this case on August 30, 2006, the tax office's transfer income tax reduction or exemption can be deemed as the standard market price in the case of land acquired before 2 years from the public announcement date of the project. However, the defendant's notice of this case includes not only the fact that it can be subject to capital gains tax reduction or exemption if it satisfies the standard under Article 85 of the Restriction of Special Taxation Act, but also the fact that the defendant's notice of this case's transfer to the plaintiff as an addressee is not directly related to the transfer of the real estate of this case. It is difficult to view that the defendant's transfer of the real estate of this case to the plaintiff on the ground that the tax office's transfer of this case's 20th anniversary of this case's transfer of the real estate to the plaintiff.

3. Conclusion

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