Gwangju District Court 2015Guhap13468 ( October 12, 2015)

High Court 2014 Mine4245 (Law No. 11, 2015.09)

The fact that the registration number for the registration of real estate is granted shall not be deemed to have been registered with the competent authority.

It does not constitute an organization deemed a corporation under Article 13 (1) of the Framework Act on National Taxes, since only the fact that it is an organization registered under the provisions on the procedures for granting registration numbers for real estate registration is not established or registered with the competent authority

Article 13 (Organization Considered as Juristic Person)

Gwangju High Court-2016-Nu-3788 ( October 13, 2016)

00 Representatives of 000 00

00. Head of tax office

Gwangju District Court Decision 2015Guhap13468 Decided May 12, 2016

2016.08.25

oly 13, 2016

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The transfer income tax reverted to the Plaintiff in July 1, 2014 by the Defendant against the Plaintiff on July 1, 2014

5,155,350 won and additional dues 1,082,560 won, and total of 6,821,630 won for local income tax and additional taxes 583,720 won

Each disposition taken by the Board shall be revoked.

1. Details of the disposition;

A. On July 26, 2013, the Plaintiff, an unincorporated association, transferred 00 square meters of a religious site and 000 square meters of a building on the land owned by the Plaintiff to 00 Do, 000-0 Do, Jeonnam-gun, 000-0, and 000 square meters of a building on the land (hereinafter “instant real estate”), which was owned by the Plaintiff, to the Defendant, but did not report the transfer income tax to

B. On July 1, 2014, the Defendant deemed that a religious organization, other than an organization deemed a corporation under the Framework Act on National Taxes, transfers real estate to a non-corporate entity, it is subject to capital gains tax as a resident, and determined and notified capital gains tax of KRW 7,107,610 to the Plaintiff in 2013 (hereinafter “instant initial disposition”). On August 27, 2014, the Defendant confirmed errors in calculating the value of conversion of real estate of this case, and issued a decision of correction to reduce the amount of KRW 1,952,260 from the capital gains tax in the initial disposition of this case, and notified the Plaintiff thereof (hereinafter “instant initial disposition”).

C. The Plaintiff appealed and filed an appeal with the Tax Tribunal on August 2, 2014, but was dismissed on September 11, 2015.

D. Meanwhile, on the other hand, on January 9, 2004, the Plaintiff applied for the issuance of a registration number for the registration of real estate to the head of the Gun around that time, and received the above registration number, and on July 25, 2014, the Plaintiff was assigned an organization’s identification number (00-00-000) to be considered as a non-profit corporation that is not operating a profit-making business from the Defendant

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 5, 7, 11, 13, Eul evidence No. 1, the purport of the whole pleadings

2. The plaintiff's assertion and relevant Acts and subordinate statutes;

A. The plaintiff's assertion

(1) Considering that the Plaintiff’s secondary application of the Income Tax Act is an organization registered with the competent authority pursuant to the provisions on the procedures for granting registration numbers for real estate registration for unincorporated associations, foundations and foreigners, the real estate of this case is registered with the competent authority of 00 military administration, following the examination by the head of 00 registry office, and used it for the proper purpose business for at least 25 years, and the approval by the organization deemed as the Defendant corporation on July 25, 2014, the Plaintiff constitutes an association registered with the competent authority pursuant to Article 13(1)1 of the Framework Act on National Taxes. Accordingly, the Plaintiff is not a resident who is not a person liable to pay capital gains tax

(2) Principle of substantial taxation

The defendant recognized that the plaintiff is a substantial public-service corporation, but imposed capital gains tax by deeming the plaintiff as an individual of profit-making organization. The defendant's taxation violates the principle of substantial taxation under Article 14 of the Framework Act on National Taxes.

(b) Related statutes;

It is as shown in the attached Table related statutes.

3. Determination on the legitimacy of the instant disposition

A. As to the application of the Income Tax Act

(1) Legal principles

Article 13(1) of the former Framework Act on National Taxes (amended by Act No. 4810 of Dec. 22, 1994) provides that an unincorporated association, foundation, or other organization prescribed by the Presidential Decree shall be deemed a juristic person and shall be subject to this Act and other tax-related Acts. Article 8 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 14076 of Dec. 31, 1993; hereinafter the same shall apply) provides that an unincorporated association, foundation, or other organization deemed a juristic person upon delegation shall be deemed a juristic person. Article 8 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 14076 of Dec. 31, 1993; hereinafter the same shall apply) provides that "Unregistered association, foundation, or other organization with basic property contributed for public interest" shall be deemed to be a juristic person under the main sentence of Article 13(1) of the former Enforcement Decree of the Framework Act on National Taxes, and shall be deemed to be a juristic person without a specific type of taxation or other entity.

(2) In the instant case:

Comprehensively taking account of the following circumstances recognized in light of the above facts and relevant Acts and subordinate statutes, the Plaintiff does not constitute an organization deemed a corporation under Article 13(1) and (4) of the Framework Act on National Taxes, since it is not established or registered as an organization with permission from the competent authority. Therefore, the Plaintiff is liable to pay capital gains tax, and the Plaintiff’s above assertion

① On January 2004, the Plaintiff’s registration number for the registration of real estate was given by 00 heads of 00 heads and processed the registration of ownership transfer for the instant real estate. However, the registration number for the registration of real estate given by 00 heads of 00 heads of Gun is for entering the registration of real estate in the registration of real estate in accordance with Articles 26(1), 48(2), and 49(1)3 of the Registration of Real Estate Act, and Article 8 of the Regulations on the Procedure for the Assignment of Registration Numbers for the Registration of Real Estate by Unincorporated Associations and Foundations and Foreigners. Moreover, Article 49(1)3 of the Registration of Real Estate Act provides that Article 49(1)3 of the Registration of Real Estate Act provides that the head of Gun/Gu shall be the “competent authority of the Plaintiff as prescribed by Article 13(1)1 of the Framework Act on National Taxes.”

② Until July 26, 2013, the Plaintiff transferred the instant real estate, there was no fact that the competent authority obtained approval from the competent authority as a corporation under Article 13(2) of the Framework Act on National Taxes. Article 3(1)1 (d) of the Enforcement Decree of the Corporate Tax Act stipulates the date when approval is obtained from the head of the competent tax office as a corporation as the starting date of the business year of the corporation. Even if the Plaintiff received the identification number of an organization deemed a non-profit corporation from the Defendant on July 25, 2014, it cannot be deemed as a corporation approved by the head of the competent tax office on July 26, 2013

B. Principle of substantial taxation

The principle of substantial taxation under Article 14 of the Framework Act on National Taxes refers to the principle of imposing national taxes, which provides that when a taxpayer takes a unreasonable form or appearance that differs from the substance with respect to the taxation requirements of income, profit, property, transaction, etc., such as income, profit, property, etc., which are taxation requirements depending on the concealed substance, regardless of the form or appearance (see, e.g., Supreme Court Decision 2010Du1385, Sept. 10, 2015).

In this case, as seen earlier, Article 13 of the Framework Act on National Taxes only stipulates that an unincorporated association, foundation, or organization meeting certain requirements among the unincorporated associations, foundations, or other organizations shall be deemed a juristic person in the application of the tax law in order to specify the type of taxation subject to taxation due to the nature of the tax law. Even if the Plaintiff is a juristic person, insofar as it does not meet the requirements prescribed in the above provision, it cannot be deemed as a juristic person without deeming the Plaintiff as a juristic person and imposing capital gains tax on deeming it as a resident.

Therefore, the plaintiff's above assertion is without merit.

4. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it appears to be any mother or there is no ground, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit, and it is so decided as per Disposition.