The plaintiff has sold the issue land for which the right of construction permit was granted in unregistered manner.

The plaintiff did not transfer the right of separation, but did not transfer the land for which the right of construction permit was granted, and the period of exclusion for imposition of ten years is applicable because the unregistered pre-sale constitutes fraud or other unlawful act.

Article 88 (Definition of Transfer) of Income Tax Act

Suwon District Court 2015Gudan930 Revocation of Disposition of Imposing Capital Gains Tax

MaO

O Head of tax office

November 4, 2015

December 2, 2015

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 corresponding to the year 2004 against the Plaintiff on August 1, 2014 is revoked.

1. Details of the disposition;

A. OO-dong 168-1 land owned by O-O was divided into 168-1 and 168-8 through 14 land from April 2004 to December 12, 2004, respectively, and O-O completed the registration of ownership transfer on the aggregate of 3,388-8 through 14 land on July 1, 2004.

B. The Defendant conducted an on-site investigation with respect to the Plaintiff, and determined that the Plaintiff transferred approximately KRW 3,454 square meters (1,045 square meters), which is part of the same 168-1 and 168-1, to the Plaintiff on the date and on the same date, the Plaintiff again purchased approximately KRW 168-1,040,000,000,000,0000,000,000,0000,000,0000,0000,000,0000,0000,000,0000,000,000,000,000,000,000,0000,000,000,000,000,000,0000,000,0000,000,0000,000,000,000.

[Reasons for Recognition] Evidence Nos. 1, 2, Eul No. 3-1 to 8, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful on the following grounds.

1) It is not an unregistered pre-sale. In other words, the instant land contract between the Plaintiff and JeongO is merely a provisional contract, and the Plaintiff merely transferred the status of the provisional contract to HuO and did not acquire the instant land. ② The instant land is subject to land transaction permission, and a sales contract between the Plaintiff and MaO and MaO is null and void because it is not subject to land transaction permission.

2) The Plaintiff’s transfer to HuO is not the instant land, but the right to construct (public interest).

3) The acquisition value and transfer value of the instant land were all KRW 1.25 billion, and even if the transfer gains did not accrue, the entire amount received from HuO was considered to have been transferred.

4) The instant disposition is a disposition taken with the imposition of seven years, the exclusion period for national tax imposition.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

1) On the date, HoO sold to the Plaintiff approximately KRW 3,454 square meters (1,045 square meters) as part of the 168-1, such as OO-dong 167-2 (the same was merged into 168-1, May 19, 2004) owned by it, to the Plaintiff at KRW 000,000,000,000,000,000.

2) On February 16, 2004, the Plaintiff filed an application for permission to engage in an act in a development-restricted zone with the OO Mayor. On April 13, 2004, the OO market notified the Plaintiff of the permission to engage in the public storage of agricultural and fishery products and the permission to engage in the public storage of agricultural and fishery products in OO-dong 168-1 and one parcel outside of O-dong 168-1.

3) On April 9, 2004, the Plaintiff sold the amount of approximately 1,045 O-dong 168-1,045 O-dong 168-1, livestock pens, approximately 135 o-house 150 o-house o-O to O-O for purchase amount of KRW 00 million.

4) On April 9, 2004, the Plaintiff received KRW 00 million as the down payment, and on May 25, 2004, KRW 00 million as the intermediate payment. From October 2004, the Plaintiff received only KRW 00 million out of KRW 00,000,000 from KRW 00,000.

5) After that, OOO-dong 168-1 land was divided into 168-1 land and 168-8 through 14 land, respectively, and OO completed the registration of ownership transfer on the instant land, the sum of which is 3,38-8 through 14 square meters on July 1, 2004.

6) On September 1, 2004, OOO newly constructed one building (one-story, one-story steel framed structure stable, 345.8 square meters, and 100.1 square meters on the land of the same 168-9 building (498 square meters on the land of the same 168-9 building), and obtained approval for use in the name of the Plaintiff on December 1, 2005.

7) On April 24, 2009, the appellate court (OOO court 2008 OOOOO, 2009 OOOOOO (Counterclaim) filed against OO on the premise that the unpaid balance is KRW O0,000,000, the Plaintiff paid the Plaintiff KRW 00,000,000 to OO, but the conciliation was concluded to deliver all documents necessary for the registration of preservation of ownership and transfer of ownership in the name of OO to OO with respect to the above building in its name.

8) On June 4, 2009, the Plaintiff received transfer of OO, OO, and the remainder received KRW 00 million in cash.

9) On May 27, 2009, the registration of ownership preservation was completed in the Plaintiff’s future on May 27, 2009, and the registration of ownership transfer was completed on January 14, 2010.

[Ground of recognition] Evidence Nos. 3, evidence Nos. 4-1 through 3, evidence Nos. 5-1, 2, evidence Nos. 11, 14, 15, 18 through 20, 22, evidence Nos. 4-1 through 4, fact inquiry results in the OO market of this court, the purport of the whole pleadings

D. Determination

1) Whether an unregistered pre-sale is made

A) First, we examine whether the agreement between the Plaintiff and HuO is merely a sale of a status under a provisional contract.

6. In light of the following circumstances: (a) the Plaintiff’s sales contract was not entered in the name of the date of sale and purchase (the size of the sales contract and the basis for calculating the sales price per unit) and the date of payment of intermediate payments and remainder are specified as follows; (b) it is difficult to conclude that the contract was merely a mere contract on the instant land under the name of the Plaintiff’s owner after purchase of the instant land; (c) it appears that the Plaintiff had been permitted to engage in activities within a development-restricted zone for public interest, such as agricultural and fishery warehouses, on the instant land under the name of the Plaintiff’s owner; (d) it appears that the Plaintiff had no choice but to take the lead in the process of sale and purchase of the instant land; and (e) it is difficult for the Plaintiff to withdraw from the sales contract for the instant land under the name of the Plaintiff’s name of the Plaintiff, which was transferred to the Plaintiff at the time of purchase and sale-related public official of the instant land under the name of the Plaintiff’s sales and purchase-related public official; and (iii) the Plaintiff’s right to purchase and sale of the instant land was also necessary.

B) Next, we examine whether the land transaction permission zone becomes null and void as a sale within the land transaction permission zone under the National Land Planning Act. In a case where a transfer registration is completed due to a gift in the future of a purchaser under the pre-sale permission zone under the pre-sale permission zone under the pre-sale permission zone under the pre-sale permission zone under the pre-sale permission zone under the pre-sale permission zone under the pre-sale permission zone under the pre-sale of the pre-sale of the pre-sale of the pre-sale to a third party without completing the land transaction registration without completing the land transaction permission, and the first-sale of the pre-sale after receiving the pre-sale registration under the pre-sale permission, it is reasonable to view that the pre-sale is subject to capital gains tax on the assumption that the pre-sale has income accrued from the transfer of the assets if the pre-sale or the pre-sale seller owns the pre-sale without returning to the buyer or the third party (see, e.g., Supreme Court en banc Decision 2010Du23644, Jul. 21, 201).

However, even if the Plaintiff purchased the instant land within the land transaction permission zone without obtaining any land transaction permission and completing the registration of transfer of ownership, it is reasonable to deem that the Plaintiff has income from the transfer of assets, as seen earlier, since the Plaintiff purchased the instant land within the land transaction permission zone, but did not complete the registration of transfer of ownership without obtaining any land transaction permission, and sold the instant land directly to HuO, a third party, and completed the registration of transfer of ownership, even if the first seller sold the instant land to HuO, a third party, and completed the registration of transfer of ownership, and did not return the purchase price.

2) Whether only a duplicative right is traded

As seen earlier, the following circumstances, which are acknowledged by the evidence and the purport of the entire pleadings, are as follows: (i) the Plaintiff argued that the Plaintiff sold not only the building permit but also the instant land in the related civil litigation against HuOO; and (ii) in the process of concluding a contract with HuO, the land for which no building permit was granted was determined as KRW 00,000,000,000, considering the circumstances that the amount of the purchase price was equal to that of O00,000,000, and the land for which the building permit was granted was determined as KRW 10,000,000,000,000,000 won, and (iii) the Plaintiff stated that the acquisition of real estate for which the building permit was granted not only the public official in charge of tax investigation but also the acquisition of real estate for which the building permit was not granted, and as seen earlier, the value of the building permit was not separately stated in the sales contract, and the Plaintiff appears to have been finally paid the agreed purchase price through litigation.

3) Whether the transfer margin accrues

As seen earlier, if the object transferred by the Plaintiff to HuO is deemed to be the instant land for which a building permit was granted, the Defendant cannot be deemed to have erred in calculating the transfer income tax by deeming the transfer value of the instant land as KRW 00 million, which is the amount actually received by the Plaintiff.

4) Whether the exclusion period of national tax has expired

Article 26-2(1)1 of the former Framework Act on National Taxes (amended by Act No. 12848, Dec. 23, 2014; hereinafter the same) provides that national taxes may be imposed for ten years in cases where a taxpayer evades national taxes by fraud or other unlawful means. The legislative intent of the Act is to extend the exclusion period for imposition of national taxes to ten years because it is difficult to expect the exercise of the imposition right because it is difficult for the tax authorities to find it difficult for him/her to discover the taxation requirement of national taxes or to find false facts, unlike simple non-reports. Therefore, the exclusion period for imposition of national taxes is extended to 10 years because a person who purchased or resells real estate takes part in preparing a sales contract as if he/she directly concluded a sales contract between the seller and the final buyer. Furthermore, having him/her directly finish the period of the final buyer from the seller’s name without filing a preliminary return or final return on transfer income tax, and doing any such unlawful act, such as aiding or collecting taxes or any other unlawful act, as stipulated in Article 126(1-2) of the Framework Act.

As seen earlier, inasmuch as the Plaintiff’s purchase of the instant land without registration is recognized, such act constitutes “Fraud or other unlawful act” which significantly makes it difficult to impose and collect taxes as an active deception, and as a result, the exclusion period for imposition of capital gains tax of this case shall be ten years, and thus, the disposition of this case shall not be deemed to have been subject to the exclusion period for imposition.

5) Therefore, the Defendant’s instant disposition is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.