Seoul High Court-2018-Nu-30459 (2018.05)

A business that solicits partners and resells land by purchasing it constitutes a profit-making business;

Whether a business that recruits partners and resells land by purchasing it constitutes a real estate business and an error in calculating the amount of tax in the disposition of this case exists.

Article 2 of the Enforcement Decree of the Corporate Tax Act

2018Du52518 Revocation of Disposition of Imposing Corporate Tax

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00. Head of tax office

Seoul High Court Decision 2018Nu30459 Decided July 5, 2018

on 01 October 01, 201

Of the lower judgment, the part concerning KRW 352,454,82 among the requests for revocation of the disposition imposing corporate tax for business year 2007 and the part concerning KRW 14,046,936 among the requests for revocation of the disposition imposing corporate tax for business year 2012

The judgment of the first instance court on this part shall be reversed, and this part of the lawsuit shall be dismissed.

The remaining appeals are dismissed.

All costs of the lawsuit shall be borne by the defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Review of the reasoning of the lower judgment and the record reveals the following facts.

(1) 원고는 2006. 6. 27. 및 같은 해 11. 16. 이@@ 등 3인으로부터 인천 서구 @@동 64-1 등 14필지 합계 72,231㎡를 매수하여 각 소유권이전등기를 마쳤고, 2007. 6. 29. 위 토지 중 일정 부분을 분양받기로 한 조합원들에게 각 해당 부분에 관한 소유권이전등기를 마쳐주었다.

(2) 원고는 2006. 12. 29. 이@@ 등 4인으로부터 인천 서구 @@동 63-4 등 23필지 331,388㎡(이하 '이 사건 토지'라 한다)를 매수하여 2010. 7. 12.부터 2010. 11. 23.까지 각 소유권이전등기를 마쳤고, 2013. 1. 14. 위 토지 중 일정 부분을 분양받기로 한 조합원들에게 각 공유지분 비율에 관한 소유권이전등기를 마쳐주었다.

(3) On September 11, 2014, the Defendant issued the instant disposition to determine and notify the Plaintiff of KRW 1,712,370,70 of corporate tax for the business year 2007, KRW 392,830 of corporate tax for the business year 2008, KRW 2,056,60 of corporate tax for the business year 201, and KRW 1,081,081,016,210 of corporate tax for the business year 2012.

2. Where an administrative disposition on the part concerning KRW 352,454,82 of the disposition imposing corporate tax for the business year 2007 and KRW 14,046,936 of the disposition imposing corporate tax for the business year 2012 is revoked, such disposition shall lose its effect and no longer exists. A revocation lawsuit against a non-existent administrative disposition is unlawful as there is no benefit of lawsuit (see Supreme Court Decision 2012Du18202, Dec. 13, 2012).

According to the records, after filing the instant appeal, the Defendant revoked ex officio the part of KRW 352,454,82 of the corporate tax for the business year of 2007 and KRW 14,046,936 of the corporate tax for the business year of 2012. Therefore, the Defendant’s claim for revocation of a disposition that had not been extinguished and became unlawful as there was no benefit of lawsuit.

3. Determination on the remaining grounds of appeal

(1) Article 40(1) of the Corporate Tax Act provides, “The business year to which the profits and losses of a domestic corporation accrue shall be the business year which includes the date on which the profits and losses are determined,” and the main text of Article 68(1)3 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 27828, Feb. 3, 2017) stipulates that “the business year to which the profits and losses accrue from the transfer of assets other than the goods, etc. belong” shall be “the business year to which the date when the profits and losses accrue.” As such, the Corporate Tax Act adopts the principle of confirmation of rights and obligations that the profits and losses are deemed realized at the time of the confirmation of the rights and obligations, and clearly provides for the period to which the profits and losses accrue, by uniformly understanding the taxable income of the taxpayer and promoting legal stability and ensuring fairness in taxation, and at the same time excluding the taxpayer (see Supreme Court Decision 2003Du10329, Feb. 13, 2004).

(2) Based on its stated reasoning, the lower court determined that: (a) the date on which members who received the instant land distributed fully paid the purchase price calculated at the rate of KRW 520,000 per square year to the Plaintiff is the date of settling the price; and (b) even if the said members paid the Plaintiff expenses such as the property tax and comprehensive real estate tax on the said land by 2012, prior to the registration of co-ownership transfer, the said expenses cannot be deemed to constitute a part of the purchase price of

In addition, the lower court determined that the Defendant’s inclusion of the balance of the purchase price in the business year to which the purchase price of the instant land was attributed as gross income was unlawful as it did not include the remaining payment date of the purchase price in the gross income for the pertinent business year in the calculation of gross income for the pertinent business year, since the members who purchased the said land fully paid the purchase price.

(3) Examining the record in accordance with the aforementioned provisions and legal principles, the lower court did not err by misapprehending the legal doctrine regarding the period of attribution of earnings under the Corporate Tax Act.

4. Conclusion

Therefore, among the judgment below, the part concerning KRW 352,454,82 and the part concerning KRW 14,046,936 among the claims for revocation of the disposition imposing corporate tax for the business year 2007 and the part concerning KRW 14,046,936 among the claims for revocation of the disposition imposing corporate tax for the business year 2012 shall be reversed. Since the Supreme Court is sufficient to directly render a judgment, this part of the judgment shall be revoked, and this part of the lawsuit shall be dismissed, and the remainder of the appeal shall be borne by the defendant, and the