Plaintiff (Law Firm Sejong, Attorneys Choi Chang-gyeong et al., Counsel for the plaintiff-appellant)

Head of Yongsan Tax Office

August 20, 2014

Seoul Administrative Court Decision 2013Gudan23006 decided February 13, 2014

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance is revoked. The Defendant’s imposition of capital gains tax of KRW 186,721,430 against the Plaintiff on January 5, 2013 shall be revoked.

1. Quotation of the first instance judgment

This court's reasoning is as follows, except for the addition of the judgment below on the plaintiff's assertion that is especially emphasized or re-emphasized by this court, and thus, this court's reasoning is cited in accordance with Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

2. Judgment on the plaintiff's assertion

A. The plaintiff's assertion

The Plaintiff’s each of the instant dispositions was unlawful, even if the Plaintiff continued to engage in the rental business jointly by inheritance from the senior non-party 1, and only 4 of each of the instant housing units were not leased by inheritance. However, the instant disposition that reduced and interpreted Article 97 of the Restriction of Special Taxation Act and Article 97(1) of the Enforcement Decree of the same Act without reasonable grounds.

B. Determination

The reasoning of the judgment of the court of first instance cited by this judgment is as follows: ① The reduction or exemption of capital gains tax on the long-term rental house stipulated in Article 97 of the Restriction of Special Taxation Act and Article 97 of the Enforcement Decree of the same Act is limited to the provision that the number of rental houses leased by the predecessor shall be added to the house lease period in the case of inheritance, and there is no provision as to whether the number of rental houses leased by the decedent shall be treated as all the co-inheritors in the case of joint inheritance of rental houses; ② The interpretation of the tax law shall be interpreted as the legal text, barring any special circumstances, and it shall not be interpreted extensively or analogically without any reasonable reason, and in particular, it shall be strictly interpreted that the provision on reduction or exemption of capital gains tax is clearly considered as the provision on preferential treatment in the provisions on the requirements for reduction or exemption of capital gains tax (see Supreme Court Decision 2002Du9537, Jan. 24, 2003).

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.

Judges’ aid (Presiding Judge) Transfering of permanent equipment

Note 1) The meaning of the abbreviationd language used below is the same as that of the first instance judgment.