Whether a request for correction can be made by changing the method of calculating transfer margin after the final return period

In case where the preliminary return was made by calculating gains on transfer based on the actual transaction price, the request for correction, etc. under the Framework Act on National Taxes may be made on the reported matters even after

Article 45 (Request for Rectification, etc.)

Article 85 (Special Taxation for Capital Gains Tax)

1. Revocation of a judgment of the first instance;

2. The Defendant’s disposition rejecting an application for rectification of capital gains tax against the Plaintiff on April 12, 2004 is revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On April 13, 1981, the Plaintiff acquired and owned each of the real estate 512-2 o-2 o-2 o-2 o-2 o-2 o-2 o-2 o-2 o85 o-2 o-2 o-2 o-2 o-2 o-2 o886 o-2 o-2 o-2 o86 o-2 o-2 o-2 o-2 o-2 o-2 o-2 o86 o-2 o-2 o-2

However, a single unit where the instant real estate is located was designated as an area where gains from transfer are calculated based on the actual transaction price under Article 96(1)6-2 of the former Income Tax Act (amended by Act No. 7837, Dec. 31, 2005; hereinafter the same) on May 29, 2003 (hereinafter referred to as “designated area”). Accordingly, the instant real estate fell under real estate in calculating gains from transfer based on the actual transaction price.

B. As ○○nam Do governor announced 2004-168 of August 30, 2004 on the designation and development plan of ○○○ Do Urban Development Zone as a project executor, the Plaintiff transferred the instant real estate to ○○ ○○ Do Construction Co., Ltd. on October 21, 2004.

C. On December 6, 2004, the Plaintiff calculated the transfer margin following the above transfer as the actual transaction price and made a preliminary return of KRW 1,403,615,829, and paid KRW 444,241,520 accordingly.

D. Meanwhile, as the Restriction of Special Taxation Act was amended by Act No. 7322 on December 31, 2004, Article 85 of the same Act was newly established a special provision on capital gains tax that can calculate capital gains on the basis of standard market price (hereinafter referred to as the "special provision of this case") for real estate for public works within the designated contents under Article 96 (1) 6-2 and Article 97 (1) 1 (a) of the former Income Tax Act.

E. When the Plaintiff became aware that the special provisions of this case can also be applied to the transfer of the real estate of this case, on February 21, 2006, the Plaintiff requested the Defendant to rectify the tax base calculated on the basis of the standard market price pursuant to Article 45-2(1) of the Framework Act on National Taxes to KRW 864,421,798, and the tax amount calculated on the basis of the standard market price (hereinafter referred to as the “request for correction of this case”).

F. On April 12, 2006, pursuant to Article 85 of the former Restriction of Special Taxation Act (amended by Act No. 7839, Dec. 31, 2005; hereinafter the same), the Defendant rendered the instant disposition rejecting the instant claim for correction on the ground that the Plaintiff shall report the transfer margin on the basis of the standard market price by May 31, 2005, which is the final return of the transfer income tax base, and there is no report of the transfer margin on the basis of the standard market price after the final return of the transfer income tax base expires.

Facts without dispute over the basis of recognition, Gap evidence 1, Eul evidence 1-3, Eul evidence 2-1 and Eul evidence 2-2, and the purport of the whole pleadings

2. Determination on this safety defense

In this part, the part of the member's explanation is identical to the part of "2............., the part of the member's explanation is citing it in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

3. Whether the instant disposition is lawful

A. The parties' assertion

(1) Plaintiff

Although the tax base and tax amount of transfer income tax on the transfer of real estate of this case must be calculated by the standard market price according to the special provisions of this case, the plaintiff made a preliminary return on the tax base and tax amount based on the actual transaction price under Article 96 (1) 6-2 of the former Income Tax Act before the special provisions of this case are enforced. This constitutes grounds for demanding correction under Article 45-2 (1) of the Framework Act on National Taxes. Nevertheless, the disposition

In addition, the Plaintiff received a reply from the National Tax General Counseling Center to the effect that “it is possible to file a claim for rectification even after the final return deadline,” and filed a claim for rectification. Therefore, the instant disposition is unlawful against the principle of trust protection.

(2) Defendant

The special provisions of this case stipulate that the transfer income tax shall be calculated based on the actual transaction price if the transfer value and acquisition value are reported as actual transaction price. However, inasmuch as the Plaintiff calculated the transfer margin based on the actual transaction price and did not file a different return by the deadline for final return after the preliminary return of the transfer income tax base is made, the transfer margin of this case shall be determined based on the actual transaction price pursuant to the provisions of the proviso above. Therefore, the claim for correction

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

According to Article 45-2(1)1 of the Framework Act on National Taxes, where the tax base and tax amount entered in the tax base return exceeds those to be reported under the tax-related Acts, a person who has filed the tax base return within the statutory due date of return may request the head of the competent tax office to correct the tax base and tax amount within three

Meanwhile, according to Articles 96 (1) 6-2 and 97 (1) 1 (a) of the former Income Tax Act, where real estate prescribed by the Presidential Decree among real estate within a designated area is transferred to the relevant business operator under the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects or other Acts and subordinate statutes, gains from transfer may be calculated based on the actual transaction price. However, the legislative intent of the special provisions of this case is to facilitate the expropriation of real estate for public services by reducing taxpayer's tax burden on real estate for public services by recognizing the special taxation of transfer income tax on real estate for public services within the designated area. However, the special provisions of this case provide that gains from transfer should be calculated as reported if a taxpayer files a return on the transfer value and acquisition value under the proviso of Article 96 (1) 6 and Article 97 (1) 1 (a) of the former Income Tax Act, so that the taxpayer may not be disadvantaged by the standard market price due to the calculation of gains from transfer due to the standard market price.

In this case, the Plaintiff calculated and reported gains on transfer on the basis of the actual transaction price higher than the standard market price pursuant to Article 96 (1) 6-2 of the former Income Tax Act because the instant real estate constitutes a designated area. Since January 1, 2005, the due date of the final return of the transfer income tax base for the instant real estate after the date of the final return of the instant specific case, the special provision of this case also applies to the transfer of this case, and the transfer of this case became effective on May 31, 2005. Thus, the Plaintiff did not make the tax base and tax amount initially scheduled by the Plaintiff even though it was possible to calculate and report gains on transfer by the standard market price up to the due date of the final return of the transfer income tax base. Thus, the tax base and tax amount initially scheduled by the Plaintiff shall be deemed to fall under the case where the Plaintiff exceeds the tax base and tax amount to be reported under the tax law (e.g., the application of the proviso of this case in case of the transfer of this case is excluded

Therefore, the Plaintiff’s report on the transfer margin calculated based on the actual transaction price when reporting the transfer margin following the transfer of real estate in this case constitutes grounds for filing a claim for correction pursuant to Article 45-2(1)1 of the Framework Act on National Taxes, and thus, the instant disposition rejecting

4. Conclusion

Therefore, the plaintiff's claim of this case shall be accepted with due reasons, and since the judgment of the court of first instance is unfair with different conclusions, the plaintiff's appeal shall be accepted and the judgment of the court of first instance shall be revoked and the plaintiff's claim shall be accepted as per Disposition.

public official law, order of law,

【National Tax Basic Act

Article 45-2 (Request for Rectification, etc.)

(1) In any of the following cases, a person who has filed a tax base return within the statutory due date of return may request the head of the competent tax office to determine or correct the tax base and amount of the national tax (where the tax base and amount of tax are determined or corrected under the provisions of each tax-related Act, referring to the tax base and amount of tax after such determination or correction) of which the initial return

1. Where the tax base and tax amount entered in the tax base return (referred to the tax base and tax amount after such decision or correction is made, if such decision or correction is made under the provisions of each tax-related Act), exceed those to be returned under the tax-related Acts;

2. Where the deficit amount or refundable tax amount entered in the return of tax base (referred to the deficit amount or refundable tax amount after such decision or correction is made, in case where such decision or correction is made pursuant to the provisions of each tax-related Act), is short of the deficit amount or refundable

(3) The head of the tax office shall, upon receiving a request for decision or rectification under paragraphs (1) and (2), decide or rectify the tax base and amount, or notify the person making the request of the fact that there is no reason to make any decision or rectification, within two months after he receives such request.

(1) The former Restriction of Special Taxation Act (amended by Act No. 7839 of Dec. 31, 2005)

Article 85 (Special Taxation of Transfer Income Tax on Real Estate for Public Works within Designated Area) Where a resident acquires real estate within the designated area under Article 96 (1) 6-2 of the Income Tax Act from the date prescribed in any of the following subparagraphs (referring to the date publicly announced by the head of the relevant administrative agency in the Official Gazette or the Official Gazette; where the date of public announcement is within 2 years retroactively from the date of public announcement of the project approval, referring to the date on which 2 years retroactively from the date of public announcement of the project approval, and where the date of announcement arrives after the designation of the designated area under Article 96 (1) 6-2 of the Income Tax Act, referring to the date on which the designated area comes after the date of designation of the designated area under Article 96 (1) 6-2 of the Income Tax Act or other Acts on or before December 31, 2006, the transfer price and acquisition price under the provisions of Articles 96 (1) 6-2 and 97 (1) 1 (a) (proviso) of the Income Tax Act may be based on the standard market price:

1. The date of designating the scheduled housing site development area under Article 3 of the Housing Site Development Promotion Act;

2. The date designated as the industrial complex under Article 7-3 of the Industrial Sites and Development Act;

3. The date on which the multi-regional development area is designated under Article 4 of the Balanced Regional Development and Support for Local Small

4. Date of announcement of a compensation plan pursuant to Article 15 of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects in connection with the relocation of the United States Armed Forces (referring to the United States Armed Forces stationed in the Republic of Korea under the Mutual Defense Treaty between the Republic of Korea

5. In cases of the immovables transferred under the Acts other than those under subparagraphs 1 through 4, the planned area and area, designation of the development zone, public announcement of a compensation plan and other similar dates as prescribed by the Presidential Decree for the project area whereto the immovables belongs under the relevant Acts.

Addenda (No. 7322, Dec. 31, 2004)

Article 1 (Enforcement Date) This Act shall enter into force on January 1, 2005: Provided, That the following amended provisions shall enter into force on the date specified in the relevant subparagraph (Exemption from each subparagraph):

Article 12 (Application of Special Cases of Taxation of Transfer Income Tax on Real Estate for Public Works within Designated Area) The amended provisions of Article 85 shall apply from the date of arrival of the final return of transfer income tax base after this Act enters into force.

(1) The former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005)

Article 96 (Transfer Price)

(1) The transfer value of assets referred to in Article 94 (1) 1 and 2 shall be the standard market value at the time of transfer of the assets concerned: Provided, That where the assets concerned fall under any of the following subparagraphs, the actual transaction value between the transferor and transferee (hereinafter referred to as “actual transaction value”) shall apply:

6. Where the transferor reports the actual transaction price at the time of transfer and acquisition to the head of tax office having jurisdiction over the place of tax payment by the deadline for final return under Article 110 (1), together

6-2. Where the rate of increase of real estate prices in the relevant area is higher than the national consumer price inflation rate, and falls under real estate prescribed by the Presidential Decree, among those located in the area designated by the Minister of Finance and Economy according to the standards and methods prescribed by the Presidential Decree, because the prices of real estate

Article 97 (Calculation of Necessary Expenses in Transfer Income)

(1) In calculating gains on transfer of a resident, necessary expenses to be deducted from the transfer value shall be as follows:

1. Acquisition value:

(a) In case of assets as prescribed in Article 94 (1) 1 and 2, the standard market price at the time the assets are acquired: Provided, That it shall be based on the actual transaction price required for the acquisition of such assets falling under any subparagraph of Article 96 (1);

Article 105 (Preliminary Return of Tax Base of Transfer Income)

(1) A resident who transfers assets under each subparagraph of Article 94 (1) shall report the tax base of transfer income calculated under Article 92 (2) to the chief of the district tax office having jurisdiction over the place of tax payment within the period classified in each of the following subparagraphs

1. Two months from the last day of the month where the transfer date belongs in cases of transfer of assets under Article 94 (1) 1, 2 and 4: Provided, That it shall be two months from the last day of the month where the relevant permission date belongs and where the proceeds are liquidated before obtaining the permission for a land transaction contract in cases of transfer of land located within a zone where land transaction contract is permitted under Article 117 (1) of the National Land Planning

(2) A return on the tax base of transfer income under paragraph (1) shall be filed by a preliminary return.

Article 110 (Final Return on Tax Base of Transfer Income)

(1) Any resident having any transfer income amount in the current year shall make a return on the tax base of transfer income to the chief of the district tax office having jurisdiction over the place of tax payment from May 1 to 31 of the year following the current year (from May 1 to 31 of the year following the year to which the date of permission for land transaction contract belongs, in cases falling under the proviso of Article 105 (1) 1 belongs),

(3) A tax base return referred to in paragraph (1) shall be filed by making a final tax return.

(4) Notwithstanding the provisions of paragraph (1), any person who files a preliminary return may choose not to file a final return on the relevant income: Provided, That the same shall not apply to cases prescribed by Presidential Decree, such as where preliminary returns on the assets subject to progressive rates in the current year are made twice or more, etc.