Cho High Court Decision 2016No3421 ( December 15, 2016)

Since the business plan, information, etc. of this case are transferred along with the fixed assets for business, it constitutes capital gains.

The plaintiff's business plan approval authority's status constitutes an "economic benefit that is obtained by obtaining approval, permission, license, etc. from the administrative agency", and the plaintiff cooperates with the non-party company to succeed to the status of the approval authority while transferring each of the real estate of this case, which is a business asset, to the non-party company. Thus, it falls under the business license under Article 94 (1)

Articles 21 (Other Incomes) and 94 (Scope of Transfer Income) of the former Income Tax Act;

2017Gudan56777 Revocation of Disposition of Imposing capital gains tax

Gangwon A

The director of the tax office.

March 14, 2018

April 4, 2018

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 130,058,60 (including household tax) for the year 2015 against the Plaintiff on August 12, 2016 is revoked.

1. Details of the disposition;

A. On March 31, 2006, the Plaintiff acquired the land and its ground buildings 】 ○○○○○○ Dong 】 (the same site 】 Dong 】 the same site 】 Dong 】 】 the same site 】 】 the same Dong 】 】 】 】 the site and its ground buildings 】 the same Dong 】 】 】 】 】 】 】 】 】 】 】 the site and its ground buildings (hereinafter collectively referred to as “each real estate”).

나. 원고는 2015. 10. 16. ○○○○시 ○구청장으로부터 이 사건 각 부동산을 사업부지로 하는 관광숙박업(관광호텔) 사업계획을 승인받은 다음, 2015. 12. 2. 주식회사 BBBBBBBB보험컨설팅(이하 '소외 회사'라 한다)과 사이에, ① 이 사건 각 부동산에 관하여 총 매매대금을 67억 원, 계약금 21억 6천만 원, 계약금 지급기일 2015. 12. 2., 잔금 45억 4천만 원, 잔금 지급기일 2016. 1. 15.로 하는 '매매계약서'를 작성하고, ② 원고가 소외 회사에 2016. 1. 15.까지 ㉠ 관광호텔에 대한 건축물 설계도서, ㉡ 관광호텔에 대한 사업계획, ㉢ 관광호텔 시공에 따른 지역 정보(이하 ㉠, ㉡, ㉢ 부분을 합하여 '이 사건 사업계획・정보'라 한다), ㉣ 관광호텔 사업진행에 따른 각종 인허가 신청서류(이하 '인허가 신청서류'라 하고, 이 사건 사업계획・정보와 합하여 '이 사건사업계획・정보 등'이라 한다)를 이전하는 대가로 소외 회사로부터 2016. 1. 15. 5억 원을 지급받기로 하는 내용의 '관광호텔사업정보제공계약서'를 작성하였다.

C. On February 26, 2016, the Plaintiff transferred each of the instant real estate and the instant business plan, information, etc. to the Nonparty Company, received KRW 6.7 billion from the Nonparty Company according to the sales contract, and received KRW 5.2 billion according to the provision of tourist hotel business information contract, and the said KRW 7.2 billion, deeming that all of the said KRW 7.2 billion constituted capital gains and paid to the Defendant as KRW 1,445,548,160.

C. However, on March 15, 2016, the Plaintiff filed a claim for the reduction of capital gains tax of KRW 138,700,000 on the ground that the instant business plan, information, etc., to the Defendant constituted not capital gains but capital gains tax of KRW 138,70,000 on the ground that Article 94(1)4(a) of the former Income Tax Act (amended by Act No. 14389, Dec. 20, 2016; hereinafter the same) is not a business right to transfer along with the fixed assets for business which is the cause of capital gains, but is an "industrial information" or "industrial secrets" under Article 21(1)7 of the former Income Tax Act, which is the cause of other income.

D. On July 15, 2016, the Defendant accepted the Plaintiff’s above assertion (However, the Plaintiff denied KRW 50,541,320, out of the amount reported as necessary expenses at the time of the scheduled return), and refunded capital gains tax of KRW 124,679,830 and additional dues of KRW 641,220, and determined and notified global income tax of KRW 29,865,040.

E. However, on August 19, 2016, the Defendant considered the instant income as transfer income, and determined and notified the Plaintiff’s transfer income tax of KRW 130,097,040 (including additional tax) for the year 2015 (hereinafter “instant disposition”), and refunded the global income tax of KRW 29,865,040, and additional dues of KRW 69,230 for additional dues.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 5, Eul evidence 1 (including branch numbers for those with more than one number), evidence 2-1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant business plan, information, etc. falls under industrial information or industrial secrets, not business rights transferred along with the fixed assets for business, and thus, the instant income constitutes other income. The instant disposition is unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Determination on the part of application documents for authorization

The right to operate business transferred along with the fixed assets for business includes the economic benefits obtained from the administrative agency with the approval, permission, license, etc. and recognized as being included in the assets under the social norms (Article 94 (1) 4 (a) of the former Income Tax Act).

On the other hand, the interpretation of a juristic act shall be reasonably interpreted in accordance with logical and empirical rules, and the common sense of society and the common sense of transaction, by comprehensively taking into account the content of the juristic act, the motive and background leading up to such juristic act, the purpose and genuine intent to be achieved by the juristic act, and transaction practices (see, e.g., Supreme Court Decision 95Da29130, Jul. 30, 1996).

In this case, the facts that the Plaintiff obtained approval of a tourist accommodation business plan (tourist hotel) plan with respect to each real estate of this case from the head of ○○○○○○○○○○ on October 16, 2015 are as above. In full view of the purport of the entire pleadings in the statement No. 2-2 of the evidence No. 2-2, the fact that the hotelCC DPB designated by the non-party company succeeded to the status of the Plaintiff on April 12, 2016 can be acknowledged. In light of these facts, the documents as fluids do not have any particular economic value in itself, it is reasonable to interpret that the application document for authorization and permission prescribed in the tourist hotel information provision contract does not mean documents as fluids, but rather means that the Plaintiff or a third party designated by the non-party company has the duty to cooperate with the non-party company or the non-party company so that it can succeed to the status of the Plaintiff.

In addition, the plaintiff's status of approving authority's business plan constitutes "economic benefits obtained by obtaining authorization, permission, license, etc. from the administrative authority", and the plaintiff transferred each real estate of this case, which is fixed assets for business from the non-party company, to the non-party company, and the non-party company can succeed to the status of approving authority's business plan. Thus, the status of approving authority's business plan corresponds to the business right under Article 94 (1)

2) Determination on the instant business plan, etc.

A) Relevant legal principles

(1) Generally, a goodwill refers to an intangible asset value, such as the company’s tradition, social credibility, location conditions, existence of a special manufacturing technology or special transaction relationship, which is an excess profit-making capacity that enables other companies engaged in the same kind of business to increase their profits more than those raised by the same type of business due to the monopoly of manufacture and sale (see, e.g., Supreme Court Decision 2003Du7804, Apr. 9, 2004).

(2) On the other hand, whether an intangible asset value related to a business falls under the category of business property right or industrial information or industrial secrets should be determined depending on whether it is mainly related to a specific business, associated with a specific business, associated with the fixed business asset, or not, depending on a uniform standard. In addition, it is difficult to determine in accordance with a uniform standard, and it is difficult to determine whether the object of transfer has property value independently from the fixed business asset, if it can be transferred independently from the fixed business asset, and if it can be transferred independently from the fixed business asset, it should be determined reasonably in accordance with social norms, by comprehensively taking into account various circumstances, such as whether there is any difference between the consideration that can be paid when the transfer is made together with the fixed business asset and the fixed business asset, and the consideration that the owner of the fixed business asset or the beneficiary of the fixed business

B) In the instant case:

Considering the following, it is reasonable to view the instant business plan and information as the business right transferred along with the fixed assets for business.

The Plaintiff asserts that, insofar as the Plaintiff has invested in a long time and cost and effectively reflected the location conditions of each real estate of this case and demand for tourist hotels and officetels, and the Nonparty Company paid KRW 500 million to the Plaintiff, the instant business plan and information of this case constitutes industrial information or industrial secrets. However, the property value itself cannot be the basis for distinguishing business rights and industrial information or industrial secrets. If there is no property value, it is difficult to be subject to transfer at the beginning. Furthermore, if the Nonparty Company uses the instant business plan and information, it is more than the other companies running the same kind of tourist accommodation business in the neighboring area of each real estate of this case, or if it is possible to bring more profits than the case where the Nonparty Company operates tourist accommodation business in each real estate of this case without being provided with the business plan and information of this case from the Plaintiff, it is compatible with the concept of business rights immediately above.

The Plaintiff also recognized that the instant project plan and information are meaningful as a means to enhance the profitability of each of the instant real estate (the Plaintiff has always been considered to improve the profitability of the instant real estate) (the second page of the complaint), “The Plaintiff has studied how to obtain maximum profits from the instant land during several years (the second page of the preparatory document dated October 30, 2017)” (the third page of the above preparatory document) is the subject of extensive support.” (The third page of the above preparatory document)

The Plaintiff also argued that “The instant information provided by the Plaintiff to the transferee corporation is unique to the instant land and building, and it is practically impossible to assess the value of the instant information by appraising the instant information (2 pages of the preparatory document dated March 12, 2018).” According to this, the instant business plan and information seems to have no property value or to have decreased considerably in value by independently from each of the instant real estate.

㉣ 원고가 이 사건 사업계획・정보를 이 사건 각 부동산의 양수인인 소외 회사 이외의 제3자에게 매각하는 것은 쉽지 않았을 것으로 보인다.

Pursuant to the project plan and information of this case, the Plaintiff includes a business method in which the users of a tourist hotel can enjoy profits continuously even at a time when the number of hotel users are relatively small. This means that the Plaintiff first designed and falls under industrial information or industrial secrets. First of all, the business method is not an objective fact-finding, and it cannot be deemed industrial information. The profitability according to the above method is inevitable to vary depending on the conditions of location of real estate or the cost of demand for officetels and tourism hotel (for example, it is reasonable to manage a tourist hotel rather than operating both in the same building where demand for a tourist hotel is extremely high than an officetel demand). In light of the above, it is not reasonable to apply the above business method to a tourist hotel as a whole, and it does not constitute industrial secrets without examining further confidential requirements. If the business right falls under the business right's business right's portion as it is included in the business right's own real estate's business right's ratio and its ratio as it is included in the business right's own real estate's own business right's ratio.

Inasmuch as the Plaintiff prepared a separate contract on each of the instant real estate and a contract on the instant business plan, information, etc. with the Nonparty Company, deeming the instant business plan and information as a business right to be transferred in combination with the fixed assets for business violates the principle of substantial taxation. However, whether a business right has been transferred along with the fixed assets for business ought to be determined depending on whether the parties to the transfer contract reasonably interpret the intent of the parties to the transfer contract, and whether the transfer contract has been prepared separately according to social norms. Rather, it goes against the principle of substantial taxation.

The Plaintiff asserts that: (a) each of the instant business plans and information was not commenced at the time of transfer to the non-party company; (b) therefore, the Plaintiff asserts that there is no goodwill in logical and time. However, even in the process of preparing the business prior to the commencement of the business, the merchant may hold the fixed business assets and intangible asset value, which is an intangible asset value, all of which is a business asset. In this case, the Plaintiff held each of the instant real estate, which is the fixed business assets, at latest, and obtained approval of the business plan for tourist accommodation business from the head of ○○○○○○○○, on October 16, 2015, acquired the business license by generally and externally indicating the business intention, and thereafter, on December 2, 2015, it should be deemed that the Plaintiff had the business license as a merchant possessing each of the instant business plans, information, etc., which is an intangible asset of the instant real estate and intangible property value.

3) Sub-decisions

The instant business plan, information, etc. are all transferred along with the fixed assets for business. The instant disposition is lawful.

3. Conclusion

The plaintiff's claim is dismissed as it is without merit, and the costs of lawsuit shall be borne by the plaintiff who has lost. It is so decided as per Disposition.