[1] Purport of Article 15 (1) of the Enforcement Decree of the Income Tax Act

[2] In a case where one household which owned two houses in Korea has destroyed one of them, newly constructed a new house in that place, and completed a pre-use inspection, and transfers another house within the period under Article 155(1) of the Enforcement Decree of the Income Tax Act, whether the transfer of one house by one household constitutes a non-taxation requirement for capital gains tax (negative)

[1] The purpose of Article 155(1) of the Enforcement Decree of the Income Tax Act is to exempt transfer income tax from the transfer of one house if one household who owns one house in the Republic of Korea has come to possess two houses temporarily by acquiring another house before transferring the house, and if it transfers the previous house within one year from the date of acquiring another house, the transfer income tax is not imposed on the transfer of one house.

[2] In a case where a person acquires and owns a detached house, and completes the inspection of use by newly building a multi-family house at that place, and acquires the apartment house before the dispersion period, but transfers it within the period under Article 155(1) of the Enforcement Decree of the Income Tax Act after the inspection of use on the said multi-family house, the existing house shall be destroyed and newly building a new house at that place shall not be deemed to have acquired a house separate from the existing house, and therefore, it cannot be seen as a case where a household who owns a house in Korea has temporarily become two houses by acquiring another house before transferring the house.

[1] Article 89 subparagraph 3 of the Income Tax Act, Articles 154 and 155 (1) of the Enforcement Decree of the Income Tax Act / [2] Articles 89 subparagraph 3 and 98 of the Income Tax Act, Articles 154, 155 (1), and 162 (1) subparagraph 4 of the Enforcement Decree of the Income Tax Act

[2] Supreme Court Decision 97Nu10918 delivered on June 9, 1998

Plaintiff (Attorney Kim Chungcheong-won, Counsel for the plaintiff-appellant)

Samsung Head of Samsung Tax Office

Seoul High Court Decision 97Gu47486 delivered on July 8, 1998

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The purpose of Article 155(1) of the Enforcement Decree of the Income Tax Act is to exempt transfer income tax from the transfer of one house if one household who owns one house in Korea comes to possess two houses temporarily by acquiring another house before transferring the house.

However, according to the facts established by the court below, the plaintiff acquired and owned a detached house located in Gangnam-gu Seoul ( Address 1 omitted) on August 6, 1976, and newly built a multi-family house on September 27, 1995, and completed the inspection for use on February 6, 1996. On November 1, 1989, the plaintiff acquired a commercial apartment 2-dong 902 located in the same Gu ( Address 2 omitted) and transferred it on February 28, 1996, after the inspection for use on the multi-family house. Thus, if the facts are the same, even if the plaintiff destroyed the existing house and newly built a new house at that place, it is not deemed that the plaintiff acquired a house separate from the existing house (see this Court Decision 97Nu10918, Jun. 9, 1998), and it cannot be deemed that the household who owned the house in Korea constitutes another house by acquiring it temporarily before acquiring it.

In the end, the court below's decision that the plaintiff's apartment transfer does not constitute the requirement of non-taxation from the transfer income tax under Article 155 (1) of the Enforcement Decree of the Income Tax Act is just, and there is no error of law in the misapprehension of legal principles as alleged in

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition.

Justices Lee Don-hee (Presiding Justice)