early 2012west 4012 ( December 17, 2012)

Article 40 of the Enforcement Decree of the Restriction of Special Taxation Act shall apply mutatis mutandis to the transfer of newly-built house within five years.

Article 40 of the Enforcement Decree of the Restriction of Special Taxation Act provides for the transfer of a newly-built house after the lapse of five years from the acquisition date of the newly-built house to calculate the income amount, so it is unlawful as there is no legal basis to apply the calculation formula under Article 40 of the Enforcement Decree of the Restriction of Special Taxation Act in

2013Gudan5671 Revocation of Disposition of Imposing capital gains tax

AAAA

Head of Mapo Tax Office

June 12, 2013

July 10, 2013

1. The Defendant’s imposition disposition of capital gains tax of KRW 000 against the Plaintiff on July 9, 2012 shall be 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 November 6, 1997, the plaintiff acquired the old house located in Eunpyeong-gu Seoul OOdong (hereinafter referred to as "the old house of this case") and acquired (approval for use) OOO apartment 000 as of December 20, 2002 (hereinafter referred to as "the new house of this case") for reconstruction of the old house of this case, and transferred it on May 31, 2007.

B. The Plaintiff transferred the newly-built house of this case within five years from the date of its acquisition, and thus, the Restriction of Special Taxation Act (amended by Act No. 9272, Dec. 26, 2008; hereinafter “Act”).

It was reported that the transfer income tax under Article 9-3(1) is subject to full reduction or exemption.

C. On the ground that the transfer income tax on the income accrued from the date of acquisition of newly-built house of this case is not exempted, the Defendant issued a correction and notification of 000 won of the transfer income tax on July 9, 2012 (hereinafter “instant disposition”). In calculating the amount of transfer income tax to be reduced or exempted after the acquisition of the newly-built house of this case, Articles 9-3(2) and 40(1) of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 21307, Feb. 4, 2009; hereinafter “Enforcement Decree”), which is the method of calculating the transfer income amount accrued for five years from the date of acquisition of the newly-built house of this case, where the Defendant transfers it after the lapse of five years from the acquisition date of the newly-built house of this case.

[Grounds for recognition] Gap 1-2, 3, 1, the purport of the whole pleading

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In calculating the amount of reduction or exemption of capital gains tax, the defendant applied mutatis mutandis the calculation formula under Article 40 (1) of the Enforcement Decree, and the calculation formula under Article 40 (1) of the Enforcement Decree is only applicable to the transfer after five years from the date of acquisition of the newly-built house, but the defendant applied the calculation formula under the above provision to the transfer within five years from the date of acquisition of the newly-built house without any

B. Relevant statutes

Attached Form is as shown in the attached Form.

C. Determination

Article 99-3(1) of the Act provides that "where a newly-built house is transferred within five years from the date of its acquisition, the amount of capital gains shall be calculated by using "the method of reducing or exempting the amount of tax," while Article 99-3(2) of the Act provides that "if the newly-built house is transferred after five years from the date of its acquisition, the amount of capital gains accruing for five years from the date of its acquisition shall be deducted." Therefore, where the newly-built house is transferred within five years from the date of its acquisition, the amount of capital gains accruing for five years from the date of its acquisition shall not be calculated as "the method of deducting the amount of capital gains applicable to the transfer after five years from the date of its acquisition" (referring to Supreme Court Decision 2010Du3725 Decided June 28, 2012). In applying Article 99-3(4) of the Act, the amount of capital gains accruing for five years from the date of its acquisition shall be determined by Presidential Decree."

The latter part of paragraph (1), i.e., the transfer income amount deducted from the income amount subject to the transfer income tax, in the case of transfer after the lapse of five years from the date of acquisition of a newly-built house. Therefore, in calculating the amount of tax to be reduced and exempted, it seems that there is no legal basis for applying the formula of calculation under Article 40(1) of the Enforcement Decree in calculating the amount of tax to be reduced and exempted. Therefore, the instant disposition, which calculated the transfer income amount to be reduced and exempted

3. Conclusion

If so, the plaintiff's claim shall be accepted with due reason.