[1] Where an inherited real estate is transferred, the meaning of documentary evidence to verify the actual acquisition value necessary for calculating transfer margin based on the actual transaction value

[2] In a case where a taxpayer requests a tax return to the Fair Taxation Committee under Article 170 (9) of the former Enforcement Decree of the Income Tax Act, whether the submission procedure is necessary (negative)

[1] In case where an inherited real estate is transferred, documents evidencing the normal price at the time of acquisition, namely, the actual transaction price required for the acquisition of inherited real estate within the period of the preliminary return on transfer margin or the final return on tax base, shall be submitted in order to calculate transfer margin based on the actual transaction

[2] In light of the nature as an advisory body of the Fair Taxation Committee or the fact that the head of the tax office has the authority to convene it, even if the taxpayer requested to refer it to the Fair Taxation Committee, it does not exceed the meaning of urging the head of the tax office to make an ex officio action, and there is no ground to deem that it must necessarily go through the Fair Taxation Committee on the ground that such a request has been made. Therefore, it cannot be said that there was an error of exceeding the scope of discretion.

[1] Article 23 (4) 1 of the former Income Tax Act (amended by Act No. 4661 of Dec. 31, 1993), Article 45 (1) 1 (see Article 97 (1) 1 of the current Income Tax Act), Article 170 (4) 3 (see Article 166 (4) 3 of the former Income Tax Act (amended by Presidential Decree No. 14083 of Dec. 31, 1993) / [2] Article 170 (9) of the former Income Tax Act (amended by Presidential Decree No. 14083 of Dec. 31, 1993), Article 45 (1) 1 (see Article 97 (1) 1 of the current Income Tax Act), Article 82 (2) 2 (3) of the former Enforcement Decree of the Income Tax Act (amended by Ordinance of the Prime Minister of May 3, 195)

[1] Supreme Court Decision 92Nu15352 delivered on March 26, 1993 (Gong1993Sang, 1326), Supreme Court Decision 93Nu852 delivered on July 16, 1993 (Gong1993Ha, 2325), Supreme Court Decision 96Nu15602 delivered on March 28, 1997 (Gong1997Sang, 1282) / [2] Supreme Court Decision 92Nu4710 delivered on December 21, 1993 (Gong194Sang, 554)

Oral Paper (Attorney Lee Jong-chul, Counsel for defendant-appellee)

Head of tax office

Gwangju High Court Decision 94Gu940 delivered on March 23, 1995

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

1. On the first ground for appeal

The purpose of Article 23(4)1, Article 45(1)1(a) of the former Income Tax Act (amended by Act No. 4661 of Dec. 31, 1993; hereinafter the same shall apply), and each subparagraph of Article 170(4) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 14083 of Dec. 31, 1993; hereinafter the same shall apply) is to adopt the principle of taxation on the standard market price as an exception to the principle of taxation. Thus, in cases where assets are transferred, it is interpreted that the principle of taxation on the standard market price has been adopted as an exception to the principle of taxation on the actual transaction price. Thus, in filing the preliminary return on the transfer of assets under Article 95 of the Act or the final return on the tax base under Article 100 of the Act, if any documentary evidence verifying the actual transaction price is submitted, the transfer margin should be calculated based on the actual transfer and acquisition price, and if no such report is made or documentary evidence is submitted, the standard market price.

Examining the reasoning of the judgment below in light of the record and related Acts and subordinate statutes, since the plaintiff cannot be deemed to have submitted documentary evidence to verify the normal price at the time of acquisition, i.e., the market price, actual transaction value, appraisal value, etc., which means the actual transaction price required for the acquisition of the real estate of this case, inherited property within the above reporting period, and thus, the judgment of the court below that the transfer margin should be calculated on the basis of the standard market price is just and acceptable. In the event that the taxpayer notifies the tax authority that the actual transfer value is lower than the standard market price and notifies the tax authority of the fairness of the determination of the amount of tax by submitting it to the Fair Taxation Committee for Transfer Income Tax and notify that the actual acquisition value of inherited

2. On the second ground for appeal

Article 170 (9) of the Decree and Article 82-2 (1) of the Enforcement Rule provide that the head of the competent tax office may establish and use the Advisory Committee in determining capital gains. According to the Rules on the Establishment and Operation of the Fair Taxation Committee (amended by National Tax Service Directive No. 528 of April 29, 1976 and amended by April 658 of April 1978), the head of the competent tax office may establish a Fair Taxation Committee (hereinafter referred to as the “Committee”) at the tax office to realize fair taxation, protect taxpayers’ rights and interests, and promote efficiency in their duties. The Committee shall deliberate and decide on matters concerning property taxation such as capital gains tax, etc. which the head of the competent tax office deems necessary or important, and the meeting shall be convened by the chairperson at the request of the head of the competent tax office or the director in charge of the competent tax office. In light of the nature of the Committee’s advisory agency or the authority to convene the Committee’s request, even if a taxpayer has referred it to the Committee, it does not necessarily mean that it should go beyond the scope of discretion.

3. Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Don-hee (Presiding Justice)