Plaintiff (Law Firm Tae, Attorneys Kim Tae-hoon et al., Counsel for plaintiff-appellant)

Head of the District Tax Office

July 19, 2011

1. The plaintiff's claim is dismissed.

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

The defendant's refusal disposition of correction of capital gains tax against the plaintiff on December 17, 2009 shall be revoked.

1. Details of the disposition;

A. On April 29, 2002, the Plaintiff newly built and acquired a multi-household house (number omitted) in Seoul Special Metropolitan City, Nowon-gu (hereinafter “instant house”) and transferred 16 households among them from July 7, 2008 to October 31, 2008, and one household transferred on March 30, 2009.

B. When filing a final return of transfer income tax for the year 2008 and a preliminary return of transfer income tax for the year 2009, the Plaintiff reported and paid transfer income tax by calculating the amount of transfer income tax by applying the standard market price for the year 2006 based on the five-year expiration date of the period of reduction or exemption of transfer income less the amount of transfer income accrued for five years from the date of acquisition pursuant to Article 99-3 of the Restriction of Special Taxation Act, on April 28, 2007.

C. Thereafter, on November 6, 2009, the Plaintiff filed a request for correction of capital gains tax reduction by asserting that the expiration date of capital gains tax reduction or exemption period should be deemed as April 30, 2007 and that capital gains should be calculated by applying the standard market price in 2007, but the Defendant rejected the said request for correction on December 17, 2009 (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, Eul evidence Nos. 1 to 4 (including each number), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

Since the Plaintiff newly built and acquired the instant house on April 29, 2002, the expiry date of five years of the reduction and exemption period of the transfer income tax shall be April 30, 2007 (the first day and the second day as Sundays on April 29, 2007). Therefore, in calculating the transfer income amount to be reduced, the standard market price in 2007 (the notice of April 30, 2007) shall be applied, but the disposition otherwise reported is unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

Article 99-3 (1) of the Restriction of Special Taxation Act provides that "Any income accruing from the acquisition of a newly-built house located in an area other than that prescribed by Presidential Decree and transfer thereof within five years from the acquisition date of the newly-built house shall be exempted from the transfer income tax, and where the relevant newly-built house is transferred after five years from the acquisition date thereof, the transfer income accruing for five years from the acquisition date of the newly-built house shall be deducted from the income amount subject to the transfer income tax; and Article 95 (4) of the Income Tax Act provides that "the period of holding of assets shall be the date of acquisition of the relevant assets: Provided, That in cases of Article 97 (4), the donated spouse or lineal ascendant or descendant shall be counted from the date of acquisition of the relevant assets, and Articles 9-3 (2) and 40 (1) of the Enforcement Decree of the Restriction of Special Taxation Act provide that "the amount of transfer income accrued for five years from the acquisition date of the newly-built house 】 the standard market price at the time of acquisition - (standard market price at the time of transfer -)" shall be deemed to be deemed to be excluded from the above.

In this case, since the acquisition date of newly-built house by the Plaintiff on April 29, 2002, the fifth anniversary from the date of the acquisition thereof shall be April 28, 2007. Accordingly, the expiration date of the capital gains tax reduction or exemption period of the instant house shall be calculated on April 28, 2007 by applying the standard market price of 2006 publicly notified at the time. Thus, the first Plaintiff’s assertion on a different premise is without merit.

Therefore, the instant disposition is lawful.

3. Conclusion

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

[Attachment Form 5]

Judges Choi Ho-ho