The disposition to apply the unfair calculation reduction rule to the difference between the value of the building and the value of the transfer is legitimate.

Where a corporation transfers real estate to a purchaser who is a related party at a lower price than the market price of real estate appraisal, it shall be subject to unfair calculation.

【Disappearance of Wrongful Calculation】

2017Guhap6802 Action for revocation, such as a disposition imposing value-added tax

△△, Inc.

Sponsoring Director

March 8, 2018

April 26, 2018

1. Of the instant lawsuits, the part of the Defendant’s claim for the revocation of each of the dispositions of notice of change in income amount of KRW 559,671,920 as a result of the recognition that the Defendant had reverted to KimA for the year 2015 and KRW 559,671,920 as a result of the recognition that the Defendant belonged to KimA for the year 2015

2. The plaintiff's remaining claims are dismissed.

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

Cheong-gu Office

Each disposition of imposition of value-added tax of KRW 165,103,210, corporate tax of KRW 275,514,840 for the year 2015, which the Defendant rendered to the Plaintiff on October 1, 2016, and each disposition of imposition of KRW 559,671,920 for the year 2015, as well as KRW 559,671,920 for the year 2015, and KRW 559,671,920 for each disposition of notification of change in income for the year 2015, shall be revoked.

1. Circumstances, etc. of the instant disposition;

A. This B and KimA purchased ○○○○○○○-dong 2,618.9 square meters from the State on August 28, 2013, and completed the registration of ownership transfer on October 25, 2013 in the name of B and KimA (each 1/2 equity shares), and then filed a building permit with the competent authority, which is the ○○○○○○○ Office, to construct the apartment building on the said land, and obtained the building permit around February 25, 2014.

B. ThisB and KimA established the Plaintiff (hereinafter “Plaintiff Company for convenience”) on May 28, 2014, along with KoreaCC, DoD, etc. for the convenience of financing and the rationalization of its operation in engaging in the franchise business, and held office as a joint representative director (BB and KimA shares 25 per cent).

C. On August 23, 2014, the Plaintiff Company entered into a contract with △△△△△△△△△△, and commenced the construction of the apartment building (hereinafter referred to as “instant building”).

D. Around August 11, 2015, Plaintiff Company: (a) obtained approval for the use of the instant building under its own name; (b) notified the Plaintiff Company that approval for the use was not possible under the name of the Plaintiff Company on the grounds of the relevant regulations, etc., which is the competent authority; (c) made the following sales contracts, while the Plaintiff Company, as the Plaintiff Company, to sell the instant building to BB and KimA (hereinafter “Buyer”) (hereinafter “the instant sales contract”); and (d) the main contents are as follows (e.g., omitted).

E. On August 25, 2015, the buyer, who was the original owner of the building permit, obtained the approval for the use of the building in this case.

F. The Plaintiff Company and the buyer prepared a sales contract with the following contents for the settlement of accounts, while the Plaintiff Company issued and delivered the sales tax invoice of KRW 2,459,276,160 as of September 1, 2015 to the purchaser (the title omitted).

사. 주식회사 □□감정평가법인이 이 사건 건물에 대한 감정을 실시한 결과, 이 사건 건물은 4,078,620,000원(기준시점: 2015. 9. 3. 조사기간: 2015. 8. 31. 〜 2015. 9. 3. 작성일: 2015. 9. 4.)으로 평가되었다.

H. On September 14, 2015, the buyer completed the registration of initial ownership (each of 1/2 shares) in his/her name with respect to the instant building.

I. The Plaintiff Company and the buyer drafted a sales contract with the following contents, while the Plaintiff Company issued and delivered the sales tax invoice of KRW 500,000,000 to the purchaser on December 31, 2015 (the title omitted).

차. 피고는 2016. 2. 24. 〜 2016. 2. 26. 부가가치세 환급현지확인조사를 실시한 결과, 이 사건 건물의 감정가액이 4,078,620,000원임에도 원고회사가 이 사건 매매에 관하여 공급가액 합계 2,959,276,160원(= 2015. 9. 1.자 매출세금계산서의 공급가액 2,459,276,160원 + 2015. 12. 31.자 매출세금계산서의 공급가액 500,000,000원)의 각 매출세금계산서만을 교부하였으므로, 원고회사가 이 사건 건물의 감정가액과 매출세금계산서의 공급가액의 차액인 1,119,343,840원 만큼 이 사건 건물을 특수관계자인 매수인들에게 저가양도한 것으로 보고, 부당행위계산부인 규정을 적용하여, 위 차액만큼 매수인들에게 상여로 소득처분하여 2015년 귀속분 각 559,671,920원을 소득금액변동통지하고, 2016. 10. 1. 원고회사에게 2015년 제2기 부가가치세 165,103,210원 및 2015 사업년도 법인세 275,514,840원을 각 경정ㆍ고지하였다.

(k) On April 21, 2017, the Plaintiff appealed and filed an appeal with the Tax Tribunal on April 21, 2017, but the Tax Tribunal dismissed the said appeal on July 7, 2017.

Facts without any dispute arising in recognition, Gap's 1 through 9, 12 through 16, Eul's 1, 2, 4, and 5 (including branch numbers in the case of additional numbers), and the purport of the whole pleadings.

2. Judgment ex officio on the claim for revocation of each notice of change in income amount against the purchaser;

Where the tax authority’s disposition of income and the notice of change in the amount of income accrued therefrom are given, the corporation is deemed to have paid the relevant amount to the person to whom the income recorded in the notice was reverted on the date of receipt of the notice of change in the amount of income, and at the same time the liability to pay the withheld income tax is established, and the corporation as a withholding agent bears the obligation to pay the withheld tax at the same time. Therefore, the corporation as a withholding agent has legal interest seeking the cancellation of the notice of change in amount of income through an appeal litigation (see, e

However, regardless of the notice of change in income amount to a corporation, the source tax liability of a person to whom income accrued from the disposition of income accrued is established at the time of the end of the taxable period to which such income accrued pursuant to Article 21(1)1 of the Framework Act on National Taxes, Article 39(1) of the Income Tax Act, and Article 49(1)3 of the Enforcement Decree of the Income Tax Act, etc. In light of the following: (a) the person to whom income accrued can sufficiently contest the existence or scope of the source tax liability arising from the disposition of income even through a claim for correction pursuant to Article 45-2(1) of the former Framework Act on National Taxes (see, e.g., Supreme Court Decision 2009Du20274, Nov. 24, 2011); and (b) the notice of change in income amount to a person to whom income accrues pursuant to the proviso to Article 192(1) of the Enforcement Decree of the Income Tax Act does not directly change the legal status of the person to whom the income accrue.

In addition, the proviso to Article 192 (1) of the former Enforcement Decree of the Income Tax Act is not a provision to impose a withholding duty on a corporation by providing a supplementary service to a resident who received a disposition of income in the event that a corporation is unable to serve a notice of change in the amount of income, but a special provision prepared to give a resident who received a disposition of income an opportunity to report additional tax base of global income and make a voluntary payment pursuant to Article 134 (1) of the former Enforcement Decree of the Income Tax Act. The tax authority’s notification of change in the amount of income to a person who received a disposition of income pursuant to the proviso to the above proviso cannot be deemed as a notice of change in the amount of income to a corporation, and it cannot be deemed that the corporation bears a withholding duty, so it cannot be deemed that there was any administrative disposition on the corporation in accordance with the notice of change in

In light of the above legal principles, according to the above evidence, the defendant can recognize the fact that the defendant gave notice of change of income amount to the purchaser who is the owner of income pursuant to the proviso of Article 192 (1) of the Enforcement Decree of the Income Tax Act. This is not an administrative disposition subject to appeal litigation, but it cannot be seen as an administrative disposition against the plaintiff company. Thus, this part of the claim by the plaintiff company seeking cancellation of the notice of change of income

3. Whether each disposition of imposition of KRW 165,103,210, and corporate tax of KRW 275,514,840, imposed on the Plaintiff on October 1, 2016 and KRW 275,514,840, which the Defendant imposed on the Plaintiff on October 1, 2016 is legitimate

A. Summary of the plaintiff's assertion

The buyers newly built the instant building and acquired a building permit after acquiring the site for the lodging business, but determined that it was reasonable for the buyers to establish a corporation and run the lodging business rather than conducting the lodging business due to the individual business, and the buyers established the Plaintiff Company and paid the actual construction costs to the buyers of the Plaintiff Company with the assets under construction of the Plaintiff Company.

However, in the name of the Plaintiff Company, it was impossible to obtain approval for the use of the building in the name of the Plaintiff Company, and it was intended to look at the instant building in its original condition because it was impossible to do so as to make it impossible for the Plaintiff Company to do so. Although the Plaintiff Company and the purchaser withdraw the form of the sale, it is a de facto cancellation by agreement and its substance will be restored to its original state. "The transfer of assets at a low price and the subsequent wrongful calculation report" is premised on the existence of a real sale. It is difficult to see that the instant sale has the substance as a real sale, and thus, the disposition on the other premise is unlawful against the principle of substantial taxation.

Furthermore, “transfer at low price of the instant building” refers to the transfer of assets at a price lower than the market price (Article 88(1)3 of the Enforcement Decree of the Corporate Tax Act), and “market price” refers to the objective exchange price formed through normal transactions, i.e., the exchange value determined through negotiations between interested parties. In this case, in the appraisal price of the instant building, KRW 2,459,276,160, and KRW 500,000 after the conclusion of the instant contract with the purchaser, excluding the portion of the remaining construction by additionally investing funds, were determined by the purchaser of the instant building, and the purchase price of the instant building was determined by the method of additionally paying the remaining construction to the Plaintiff Company. This is not only the purpose and background of the Plaintiff Company’s establishment company, the burden of construction costs of the instant building and the liability for construction, but also the interests of the purchaser of the instant building through negotiations between the Plaintiff Company and the purchaser of the instant building and the purchaser of the instant building.

In addition, the initial buyer purchased the site of the building in this case for the purpose of engaging in the telecoming business, and the said site is still owned by the buyer, as the first objective of the transaction was impossible to conduct the telecoming business in the name of the Plaintiff Company, the buyer was forced to purchase the building in this case. The reasons why the sales price as seen earlier was determined, and the wrongful calculation father are to regulate the distribution of hidden profits to related parties, and there are no profits that the buyer acquired throughout the entire of this case, the sale in this case does not constitute "transaction without economic rationality, which is the requirement for the avoidance of wrongful calculation."

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

In full view of the following circumstances, the above evidence and evidence Nos. 10, 11, 3, and 6 as well as the overall purport of the pleadings, it is reasonable to see that the sale of this case is "transfer of assets to the purchaser who is a specially related person at a price lower than the market price" (Article 52 of the Corporate Tax Act and Article 88 (1) 3 of the Enforcement Decree of the same Act). Thus, this part of the disposition imposing value-added tax and corporate tax on the Plaintiff company is justifiable by applying the provisions on the appraisal price of the building of this case and the calculation price of each sales tax invoice issued and issued by the Plaintiff company in relation to the sale of this case to the difference between the appraisal price of the building of this case and the supply price of each sales tax invoice issued and issued by the Plaintiff company. Accordingly,

① In light of the fact that the Plaintiff Company sought approval of the use of the instant building around August 11, 2015, and the purchaser obtained approval of the use of the instant building on August 25, 2015, the instant building appears to have been almost completed around August 2015, when the Plaintiff Company decided to sell the instant building to the purchaser.

② The building of this case started after entering into a contract for construction under the name of the Plaintiff Company, and even though a significant portion of the construction cost of the building of this case was paid by the Plaintiff Company as the amount borrowed from the buyer by the Plaintiff Company (2,459,276,160 won for the buyer of the Plaintiff Company), it is determined that the building of this case was newly constructed on the Plaintiff Company’s account, at least until the time when the building of this case was sold to the buyer, considering the circumstances that the buyer, KoreaCC, and DoD had invested a considerable amount of money in relation to the construction of the building of this case in the course of establishing the Plaintiff Company.

③ In selling the instant building to the buyer, the Plaintiff Company presumed that the purchase price for the instant building was the aggregate of the acquisition price and incidental expenses incurred by the Plaintiff Company in the construction of the building. On the other hand, the Plaintiff Company would pay the purchase price to the buyer at KRW 2,459,276,160, which is the amount that the Plaintiff Company received from the buyer, and then would settle the price through appraisal. This shows that the Plaintiff Company invested the separate construction cost in addition to the amount that the Plaintiff Company received from the buyer in the construction of the instant building.

④ Although the appraisal value of the instant building was assessed as KRW 4,078,620,00, the Plaintiff Company issued only the sales tax invoice of KRW 500,000 in addition to the sales tax invoice of KRW 2,459,276,160, which was issued and issued before the said appraisal.

⑤ If the Plaintiff Company’s assertion that the instant building was merely a mere restitution to the buyer upon the rescission of an agreement, there was no need to prepare each sales contract or the minutes of the board of directors’ meeting to settle the difference between the provisional payment for the purchaser of the Plaintiff Company and the appraised value of the instant building. Moreover, there was no need to additionally issue the sales tax invoice of KRW 500,000,000 as of December 31, 2015.

(6) On September 1, 2015, a real estate sales contract concluded on September 1, 2015, to settle the sales price of the instant building through a subsequent appraisal. It is difficult to deem that the purchaser, as of September 4, 2015, incurred additional construction accompanied by a rise in value of approximately KRW 1.1 billion (the difference between the appraised price of the instant building and the supply price of the sales tax invoice) by raising his/her own funds.

7) The Plaintiff Company asserts that the sale price of the instant building is determined by consultation with the buyer and joint business operators, HanCC and LeeD, and thus falls under “market price which is a legitimate exchange value,” or that the instant sales price exists in an economic rationality. However, from 4,078,620,00 won which is the appraisal price of the instant building, the sales price of the instant building is 2,459,276,160 won to the buyer of the Plaintiff Company, and the portion excluding KRW 500,000,000, which appears to have been paid by the buyer to the Plaintiff Company, should be attributed to the Plaintiff Company. However, it is difficult to view that the sales price of the instant building reverted to the buyer is a transaction where an economic rationality exists, or that the sale price is a legitimate exchange value.

4. Conclusion

Therefore, the part of the lawsuit of this case seeking revocation of the notice of change in income amount is dismissed as unlawful, and the part seeking revocation of the disposition of value-added tax and corporate tax against the plaintiff company is dismissed as it is without merit. It is so decided as per Disposition.