Plaintiff (Law Firm Completion, Attorneys Choi Sung-sung et al., Counsel for plaintiff-appellant)

Head of Seocho Tax Office

June 7, 2011

Seoul Administrative Court Decision 2010Gudan6918 decided October 5, 2010

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 defendant's disposition of imposition of capital gains tax of KRW 103,355,600 against the plaintiff on May 1, 2009 shall be revoked.

1. Quotation of judgment of the first instance;

The reasoning for the court’s explanation concerning this case is as follows: (a) the court ordered “ September 9, 2008” under Section 4 of Section 2 of the judgment of the court of first instance as “ October 28, 2008”; (b) the “61,543,403 won” under Section 21 of the judgment of the court of first instance as “61,545,403 won”; and (c) the part of the judgment of the court of first instance is as stated in the reasoning for the judgment of the court of first instance, except for the part not exceeding 6th 3th eth eth 7th eth 7th eth eth eth eth eth eth eth

2. Parts in height:

Therefore, the amended provisions of Article 133 of the Restriction of Special Taxation Act (amended by Act No. 9272, Dec. 26, 2008; hereinafter “New Act”) shall apply to the taxable year belonging to December 26, 2008, namely, the transfer after January 1, 2008. Thus, Article 133 of the New Act shall apply to the limit of reduction or exemption of capital gains tax on the land of this case transferred on October 28, 2008 and September 9, 2008.

Meanwhile, inasmuch as the principle of no taxation without law prevents the requirements for taxation, tax exemption, or exemption, and the interpretation of tax laws is not allowed either extensively or analogically without any justifiable reason, it is also consistent with the principle of fair taxation (see, e.g., Supreme Court Decision 2008Du11372, Aug. 20, 2009). As long as there is no clear provision that the former provision is continuously applied, the scope of the revised provision of Article 36(1) of the former Addenda of the Act should not be extended without permission for the interpretation of the supplementary provision of the Act, which is the transitional provision of the Act (see, e.g., Supreme Court Decision 2007Du15124, Jun. 12, 2008). Since the new provision of Article 36(2) of the former Addenda of the Act is not applicable to the newly amended provision of the Act, the new provision of Article 36(3) of the former Addenda of the Act should not be applied to the newly amended provision of the Act.

In addition, capital gains tax shall be determined on the basis of the time of transfer, since transfer income tax is a taxation requirement for transfer and is subject to taxation. Since the time when the plaintiff transferred the land of this case under the former Act as of October 28, 2008 and September 9, 2008, the amount of tax reduced or exempted for transfer of self-farmland for not less than eight years before December 31, 2005 pursuant to Article 36 (2) of the Addenda of the former Act shall not be added, but since the plaintiff had received reduction or exemption exceeding KRW 100 million after January 1, 206, it was impossible to obtain reduction or exemption at all under the former Act, since the limit of reduction or exemption can be extended due to the enforcement of the new Act, it is difficult to view that the new Act was in violation of the new Act and the new Act, which is the purpose of 10 million won reduction or exemption, and thus, it is difficult to view that the new Act and the new Act, which is the purpose of 200 capital gains tax reduction or exemption.

Therefore, it is reasonable to apply Article 36 (2) of the Addenda of the former Act in calculating the total amount of transfer income tax to be reduced or exempted for five taxable periods in calculating the limit of reduction or exemption of transfer income tax for self-farmland for at least eight years pursuant to Articles 133 and 69 of the former Act as to the transfer of the Plaintiff’s land. Therefore, the Defendant’s disposition of this case based on the above premise is lawful, and the Plaintiff’s assertion is without merit

3. Conclusion

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

Judges Kim Chang-suk (Presiding Justice)

1) For example, where a taxpayer who has been reduced or exempted from the transfer of his own farmland in 2004, KRW 150 million in 2005, and KRW 20 million in 2006, by transferring another person's own farmland in 2008, and the amount of his transfer income tax is calculated as KRW 90 million in the amount of his own farmland in 2004 and 2005 pursuant to Article 36 (2) of the Addenda of the former Act, the amount of his own farmland reduced or exempted can be reduced or exempted by subtracting KRW 80 million in the amount of his transfer income tax reduced or exempted in 206, KRW 50,000 from the amount of his transfer income tax reduced or exempted in 200,000,000 won in 200,000 won in 200,000 won in 200,000 won in 200,000 won in 205.