A building in which an officetel is actually used for residence and which falls under a house under the provisions of the former Income Tax Act;

It is reasonable to view that officetels actually offered for residence, notwithstanding the purpose in the public record, falls under the house under the provisions of the former Income Tax Act. Thus, any disposition of transfer income tax made on the premise that the instant house is not one house for one household which is exempt from taxation is legitimate.

Article 89 (1) 3 of the former Income Tax Act / [Non-taxable Capital Gains]

2016Gudan57260 Revocation of Disposition of Imposing capital gains tax, etc.

1. AA;

1. BB director of the tax office;

April 18, 2017

May 16, 2017

1. The plaintiffs' claims are dismissed.

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

Cheong-gu Office

Defendant’s capital gains tax of KRW 283,256,810 for the Plaintiff on November 4, 2015 (additional tax) for the transfer income tax of 2014 reverted to the Plaintiff.

(including) revoke the disposition of imposition.

1. Details of the disposition;

A. On February 17, 1989, the Plaintiff acquired OOOOO-dong OOOOOOO apartment OOOOOO-dong (hereinafter “instant apartment”) on November 27, 2014, but transferred the said apartment on November 27, 2014, and reported KRW 7,795,330 to the Defendant on January 30, 2015, applying the non-taxation provision for one house for one household.

B. At the time of the transfer of the instant apartment, the Defendant: (a) deemed that the Plaintiff constituted two houses for one household on the ground that the OO-O O-O OO OO OO OO OO OO OO OO OO OO OO OO OO O OO OO O O OO O O OO O O O O (hereinafter “instant officetel”); (b) excluded the provision of one house for one household; (c) on November 4, 2015, the Defendant issued a correction and notification (including additional tax) for capital gains tax of 283,256,810 that reverts to the Plaintiff in 2014.

C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on January 29, 2016, but was dismissed on April 19, 2016.

Facts that there is no dispute to be recognized, described in Gap's evidence 1 through 4 (including Serial Nos. 1 to 4), the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The instant officetel does not fall under the houses stipulated in Article 89(1)3 of the Income Tax Act.

2) The DDA office imposed property tax on the premise that the instant officetel is a non-housing facility. In light of such circumstances, the Plaintiff could not have known that the instant officetel constitutes a house under Article 89(1)3 of the Income Tax Act. Therefore, on the premise that the instant officetel constitutes a house under the Income Tax Act, there was a justifiable ground for the Plaintiff’s failure to report and pay the transfer income tax on the instant apartment on the premise that the instant officetel constitutes a house under the Income Tax Act, and thus, the disposition imposing a penalty tax

3) The current market price of the instant officetel is about KRW 90 million, and the Plaintiff’s wife is obliged to pay more than three times the instant officetel’s price as capital gains tax of the instant apartment, on the ground that the Plaintiff’s wife possessed the instant officetel, violates the substance over form principle and the principle of good faith.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

1) Whether the instant officetel constitutes a house under the Income Tax Act

(2) In light of the fact that the Plaintiff’s other buildings are owned by other persons, the issue of whether the instant officetels constitutes “house” under Article 89 (1) 3 of the former Income Tax Act, and Article 154 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 25751, Nov. 19, 2014) should be determined by the approval of the building actually used for the purpose of residence regardless of the usage classification of the building injury. In addition, the issue of whether the instant officetels constitutes “house” under Article 154 (1) of the former Enforcement Decree of the Income Tax Act (amended by Act No. 1282, Dec. 23, 2014; 2.00: (3) the Plaintiff’s housing units were used for the purpose of this case’s 2nd 1st 6th son’s residential building without any exception and special circumstance on the part of the taxpayer; and (4) the burden of tax exemption and exemption for the reasons for exemption and reduction is against the taxpayer.

Therefore, the instant disposition based on the premise that the instant housing is not one house for one household, which is exempt from taxation, is legitimate, and the Plaintiff’s assertion on this different premise is without merit.

2) Justifiable cause exists

As seen earlier, in light of the internal structure and text of the instant officetel, the Plaintiff appears to have been aware that the instant officetel was used as a house for the purpose other than the registered purpose at the time of the transfer of the instant apartment. Therefore, the Plaintiff’s assertion on this part is without merit.

3) Whether the substance over form principle and the good faith principle are violated

Article 14(2) of the Framework Act on National Taxes, which provides for the principle of substantial taxation, provides that “The provisions on the calculation of tax base under tax-related Acts shall apply according to the substance regardless of the name or form of the income, profit, property, act or transaction,” and the instant disposition is premised on the premise that the instant officetel is actually being used as a house, unlike the purpose entered in the public register, and thus accords with the principle of substantial taxation. In addition, it is true that the transfer income tax following the instant disposition is more than the current market price of the instant youth, but such circumstance alone alone is insufficient to deem that there was an error in violation of the principle of trust and good faith in the instant disposition

4) The instant disposition is lawful.

3. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.