Seocho 2010 Swiss0966 (2010.03.09)

Where a house is transferred due to unavoidable reasons such as overseas dispatch, it shall be subject to non-taxation for one household.

In cases where one household transfers one house in which one household has resided in Korea at the time of transfer, and all members of the household have moved overseas due to dispatch abroad at the time of transfer, so even if the period of residence in the house falls short of two years, it shall be subject to non-taxation of capital gains tax as the transfer of one house for one household even if

2010Gudan11651 Revocation of Disposition of Imposing capital gains tax

XX

O Head of tax office

November 29, 2010

December 13, 2010

1. The Defendant’s disposition of imposing KRW 5,216,30 on the Plaintiff on January 4, 2010 is revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On July 22, 200, the Plaintiff completed the registration of ownership transfer on the ground of sale and purchase on December 11, 1997 with respect to DDD apartment Nos. 102 and 1310 (hereinafter “the apartment of this case”), and on July 19, 200, the Plaintiff made a resident registration move-in report on the apartment of this case on July 19, 200, and resided in the apartment of this case from that time. (b) The Plaintiff was ordered on June 20, 202 to dispatch the apartment of this case to the corporate head of the above company’s subsidiary of the company as of June 15, 2002, and accordingly, the Plaintiff leased the apartment of this case on June 20, 200 and continued to reside in China along with the wife Furg and sonG as of June 20, 202.

C. On January 16, 2008, the Plaintiff, who was residing in China, was the only house owned in Korea as of January 16, 2008, filed for the registration of the transfer right to the instant apartment, based on the sale and purchase on November 23, 2007. However, the Plaintiff did not report the transfer income tax base and tax amount by deeming that the sale and purchase of the instant apartment constitutes the transfer of one house for one household, which is not subject to the transfer income tax under the Income Tax Act.

D. On January 4, 2010, the Defendant: (a) deemed that the Plaintiff’s sales of the instant apartment does not constitute a transfer of one house for one household subject to the exemption of capital gains tax under the Income Tax Act; and (b) rendered the instant disposition against the Plaintiff on January 4, 2010, imposing KRW 55,216,330 for each apartment of this case (including additional tax) on the Plaintiff.

[Reasons for Recognition] Gap evidence Nos. 1, Eul evidence Nos. 1, 2, and 3 (including paper numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff acquired the apartment of this case and resided in Korea for more than one year and transferred the apartment of this case, which is one house for one household, due to inevitable reasons that all members of the household have moved their residence to China due to overseas dispatch. Thus, the plaintiff's transfer of the apartment of this case falls under subparagraph 3 of Article 154 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20618, Feb. 22, 2008; hereinafter the same shall apply) and falls under subparagraph 3 of Article 154 (1) of the former Enforcement Decree of the Income Tax Act, and the defendant's disposition of this case was unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

Article 89 (1) 3 of the former Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009; hereinafter the same) provides that one house for one household as prescribed by the Presidential Decree and the land appurtenant thereto shall not be subject to capital gains tax. Article 154 (1) of the former Enforcement Decree of the Income Tax Act according to delegation by the resident and his spouse provides that "one house for one household shall have one house in Korea as of the transfer date and one household comprised of the family members who share the same livelihood with the same address or same place of residence, shall have three years or more (in case of the house located in the Seoul Special Metropolitan City, etc., the retention period of the house shall be three years or more, and the residing period shall be two years or more during the retention period of the house). Article 89 (1) 3 of the former Income Tax Act provides that all the residents and their spouse shall enter the house under the proviso of subparagraph 3 of the same Article for 1 year or more, circumstances of work, or other unavoidable reasons, and Article 28 (3) of the former Enforcement Rule.

In this case, Article 154 (1) 3 proviso of the former Enforcement Decree of the Income Tax Act provides that the transfer of one house owned by one household abroad as of the date of transfer shall be exempt from capital gains tax even if it does not meet the requirements of holding one house for one household which is non-taxation requirement under the former Enforcement Decree of the Income Tax Act, and Article 154 (1) 4 proviso of the former Enforcement Decree of the Income Tax Act provides that the transfer of the apartment house shall not be subject to capital gains tax under Article 154 (1) 5 of the former Enforcement Decree of the Income Tax Act because the transfer of the apartment house is not subject to taxation under Article 154 (1) 4 proviso of the former Enforcement Decree of the Income Tax Act because it constitutes "one house for one year or longer" under Article 154 (1) 5 proviso of the former Enforcement Decree of the Income Tax Act, which is not subject to taxation on capital gains tax, since the transfer of the apartment house at the time of transfer to Korea is not subject to taxation on capital gains tax under Article 3 (1) of the former Enforcement Decree of the Income Tax Act.

3. Conclusion

The plaintiff's claim shall be accepted on the grounds of its reasoning, and it is so decided as per Disposition.