Cho High Court Decision 2010Du3446 ( December 31, 2010)

Provisions of the Special Taxation shall apply only to cases of being designated as a project operator at the time of transfer.

The special provisions on taxation may apply only to the transfer of real estate to a landowner who was designated as a project operator or authorized for an implementation plan at the time of transfer, and the special provisions on taxation may not apply even if the designation and implementation plan

2011Gudan8034 Revocation of Disposition Rejecting Transfer Income Tax Correction

Song XX

The Director of Gangnam District Office

October 28, 2011

November 25, 2011

1. The plaintiff's claim is dismissed.

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

The defendant's rejection disposition against the plaintiff on July 30, 2010 shall be revoked.

1. Basic facts

(a) Details of the disposition;

(1) On January 1, 1985, the Plaintiff acquired and owned a total of 1/2 shares of 440,314 square meters of land (hereinafter “the instant real estate”) other than 0,000, 00 m2,000 m2,000,000, and entered into a sales contract on January 7, 2006, to transfer the instant real estate to the non-party company at KRW 8.65,000,000,000. On May 16, 2006, the Plaintiff transferred the instant real estate to the non-party company by changing the transfer price to KRW 8.45,000,000,000.

(2) On July 28, 2006, the Plaintiff calculated capital gains tax at KRW 1,317,028,090 after calculating the acquisition value and transfer value on the ground that the instant real estate constitutes real estate located within the speculative designated area, and calculated capital gains tax at KRW 1,317,028,090.

(3) On May 26, 2010, the Plaintiff requested the Defendant to rectify the transfer income tax by calculating the acquisition value and the transfer value as the standard market price, or claiming that the transfer income tax should be imposed only on the transfer value of forest land except for the transfer value of forest trees corresponding to forest income among the transfer value of real estate in this case, on the ground that the acquisition value and the transfer value can be based on the standard market price as the subject of the special taxation of transfer income tax under Article 85 of the former Restriction of Special Taxation Act (amended by Act No. 8146, Dec. 306).

(4) On July 30, 2010, the Defendant rendered the instant disposition rejecting the Plaintiff’s claim for correction on the ground that, at the time of the instant real estate transfer, the Nonparty Company, the transferee of the instant real estate, does not correspond to the project implementer stipulated in the special taxation provisions, and the income from the transfer of trees among the instant real estate cannot be deemed as forest income separate from the income from the transfer of the instant real estate.

(b) Designation of a project implementer and authorization of an implementation plan;

(1) On April 2006, the non-party company entered into a service contract with the non-party company in relation to the business of authorization for golf courses in order to construct golf courses in Echeon-si, Dongwon-si, Seoul Special Metropolitan City, XXri Council members, and Innju-si, △△△-gun. Around May 4, 2006 and around September 22 of the same year, the non-party company proposed the change of the specific use area and the decision of urban planning facilities for the construction of golf courses to the non-party company.

(2) On November 19, 2007, the Governor of the Gyeonggi-do publicly announced the decision of the E-Gun Management Planning with the content of changing the specific use area and determining urban planning facilities for the installation of golf courses in the Leecheon-si, Dongcheon-si, Eup, XXriwon, and Innju-gun, △△△△ Province.

(3) On February 26, 2008, the Leecheon-cheon City announced the inspection on February 26, 2008 to designate the non-party company as a project implementer for the construction of the site for the golf course XX (hereinafter referred to as the “instant public works”) and authorize the implementation plan. On April 21, 2008, the designation of the project implementer and the implementation plan were processed, and the examination was conducted on June 2, 2008.

[Grounds for Recognition] Unsatisfy, Gap evidence 1 to 13 (including each number), Eul evidence 2, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

In light of the fact that there is no legal basis to limit a project operator to a business operator who has been designated as a project operator or has obtained authorization of implementation plan under the special taxation provisions of this case, and that it is necessary to reduce or exempt taxes from a transferor of land in cooperation with the implementation plan before the designation of a project operator or authorization of implementation plan. At the time of the transfer of this case, the non-party company was designated as a project operator of this case, or did not obtain authorization of implementation plan of this case, but is a person who actually implemented the public project of this case and who actually implemented the public

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

Article 85 subparag. 5 of the former Restriction of Special Taxation Act (amended by Act No. 8146 of Dec. 30, 2006) and Article 79-2(1) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 19888 of Feb. 28, 2007) provide that where a resident transfers (including expropriation) real estate within a designated area under Article 104-2(1) of the former Income Tax Act (amended by Act No. 8852 of Feb. 29, 2008) to a project implementer under Article 91 of the former National Land Planning and Utilization Act (amended by Act No. 8250 of Jan. 19, 2007; hereinafter referred to as the "National Land Planning Act"), if the resident transfers (including expropriation) the relevant project implementer under the National Land Planning Act before the approval date of the implementation plan, the provision provides for the special taxation for the acquisition value of the standard market price (hereinafter referred to as "the provision").

Meanwhile, Article 86(5) and (7) of the National Land Planning and Utilization Act, Article 96(3) of the Enforcement Decree of the National Land Planning and Utilization Act (amended by Presidential Decree No. 20535, Jan. 8, 2008; hereinafter the same) provides that a landowner, etc. may implement an urban planning facility project after being designated by the Minister of Construction and Transportation, the Mayor/Do Governor, the head of a Si/Gun, or the head of a Gun. Article 88(1) and (2) of the National Land Planning and Utilization Act provides that an implementor of an urban planning facility project shall prepare an implementation plan for an urban planning facility project and obtain authorization from the Minister of Construction and Transportation, the Mayor/Do governor, and the Mayor/Do governor. Article 95 of the National Land Planning and Utilization Act provides that an implementor of an urban planning facility project may expropriate or use the land, buildings, land settlement, etc. necessary for the urban planning facility project. Article 133(1)15 of the National Land Planning

Considering the language and text of each provision and the following ① through 6, the instant special taxation provision may apply only where a landowner, etc. transfers real estate to a landowner, etc. who has obtained designation of a project operator or authorization of an implementation plan. If a landowner, etc. did not obtain designation of a project operator or authorization of an implementation plan at the time of transfer, it shall be deemed that the instant special taxation provision is not applicable even if the landowner, etc. obtained designation of a project operator or authorization of an implementation plan later (see Supreme Court Decision 2009Du1408, May 26, 2011). Therefore, the non-party company, at the time of the transfer of real estate in this case, did not fall under a project operator as prescribed by the special taxation provision of this case.

① The legislative intent of the special taxation provisions of this case is to recognize the right to expropriate real estate to a project implementer under the National Land Planning and Utilization Act, and even if the transferor transfers real estate to the project implementer, the decision-making authority on the transfer value is restricted. Therefore, the transfer income tax burden is mitigated by allowing the transfer value and the acquisition value to be based on the standard market price, and at

(2) In principle, an urban planning facility project cannot be implemented without obtaining authorization for an implementation plan under Article 88 of the National Land Planning and Utilization Act.

(3) Where a landowner, etc. is designated as a project implementer or obtains authorization for an implementation plan, it is difficult to deem that the designation of a project implementer or authorization for an implementation plan is planned, and the expropriation authority granted to a project implementer

(4) Where real estate is transferred to a landowner, etc. before obtaining designation of a project operator or authorization of an implementation plan, if the special taxation provisions of this case apply, the requirements for reduction and exemption as stipulated in the special taxation provisions of this case may be unclear as the base point

(5) Considering that there are cases where a project implementer, other than landowners, etc., under the National Land Planning and Utilization Act, is required to obtain authorization of an implementation plan, Article 88 of the National Land Planning and Utilization Act is merely interpreted as the general provisions of the procedure for applying for authorization of an implementation plan, including the above cases in the context before and after the project implementer, and it is difficult to deem that a landowner, etc

(6) In order for a landowner, etc. to be designated as an implementer of an urban planning facility project, at least 2/3 of the area of the land at issue shall be owned as seen earlier, but such circumstance is insufficient to readily conclude that the assessment standard of capital gains tax is based on the standard market price in calculating the capital gains tax for the transfer of land before the designation of a project implementer or the authorization of

3. Conclusion

Thus, the plaintiff's claim is dismissed as it is without merit.