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

A. On March 21, 2012, the Plaintiff obtained approval for the establishment of a knowledge industry center under the Industrial Cluster Development and Factory Establishment Act (hereinafter “Industrial Cluster Act”), and thereafter acquired a total of 5,181 square meters of land size outside Seongdong-gu Seoul Metropolitan Government ( Address omitted) and a new knowledge industry center (hereinafter “instant knowledge industry center”). On July 18, 2014, the Plaintiff newly built “○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○

B. Meanwhile, the Defendant: (a) reduced 75/100 of the acquisition tax on the said land by the Plaintiff [the main sentence of Article 58-2(1)1 of the former Restriction of Special Local Taxation Act (amended by Act No. 12175, Jan. 1, 2014)]; (b) reduced 50/100 of the acquisition tax on the portion of the instant knowledge industry center, other than support facilities; and (c) reduced 50/10 [the main sentence of Article 58-2(1)1 of the former Restriction of Special Local Taxation Act (amended by Act No. 14477, Dec. 27, 2016; hereinafter referred to as “instant reduction provision”).]

C. On February 4, 2016, the Defendant: (a) applied the proviso to Article 58-2(1)1 (b) of the former Restriction of Special Local Taxation Act (amended by Act No. 14477, Dec. 27, 2016; hereinafter the same) to the Plaintiff on the ground that “30 defense rooms, including 401 of the knowledge industry center of this case, were sold to the Plaintiff for any purpose other than business facilities of the knowledge industry center within five years from the date of acquisition; and (b) issued a disposition of increase in acquisition tax of 319,487,050, special rural development tax, special rural development tax of 15,237,490, local education tax of 23,595,190, total amount of KRW 358,319,730 (including additional tax of KRW 2531,250,250, KRW 1084,785).

D. As indicated in the following table, the Plaintiff filed a request with the Tax Tribunal on April 28, 2016 for the imposition of KRW 283,798,680 (the details of the imposition of the taxes are the same as the attached Table 2; hereinafter referred to as “instant disposition”) regarding the total number of 23 defense rooms (hereinafter referred to as “each defense room of this case”) among the above dispositions was unlawful. However, the Plaintiff’s request was dismissed on November 18, 2016.

1) 0 △△△△△△△△6, 10, 18-1, 20, 20, 20, 20, 20, 18-1, 20, 20, 20, 18-1, 20, 170, 20, 20, 20, 20, 20, 20, 20, 10, 20, 20, 20, 20, 20, 10, 20, 20, 20, 10, 20, 20, 20, 10, 30, 10, 760, 760, 40, 106, 106, 97, 106, 70, 97, 97, 97, 10, 97, 106, etc. (1, 5 omitted).

[Reasons for Recognition] Facts without dispute, entry in Gap evidence 1, 3, and 10 (including branch numbers, if any) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(i) the first argument;

Although the Plaintiff did not directly sell or lease each of the of the units of this case to a knowledge industry center pursuant to Article 28-5 (1) 1 and 2 of the Industrial Cluster Act (hereinafter “business facilities”). However, it was demanded to the buyer that he/she would sell or lease only the units of this case to the buyer for the business facilities, and as the buyer actually leases each of the units of this case only for the business facilities such as manufacturing business, etc., the Plaintiff does not have any difference between the lease of each of the units of this case directly by the Plaintiff for the business facilities. Therefore, considering the legislative intent of the provision on mitigation of the provisions on supporting the smooth establishment and supply of the knowledge industry center facilities, it cannot be deemed that the Plaintiff sold or leased each of the units of this case for any other purpose than the business facilities, and thus the provision on collection of additional charges of this case is not applicable.

(ii) the second argument;

The phrase “sale for another purpose” as referred to in the Additional Collection Regulations refers to the case where the objective purpose of the building itself is changed to a purpose other than the business facility, and the Plaintiff newly constructed each of the subparagraphs of this case for a purpose appropriate to the knowledge industry center and sold it as it is without any change in the purpose of use. Therefore, each of the subparagraphs of this case does not constitute the case where the Plaintiff sold it to another purpose.

(iii) the third assertion;

Article 58-2 (2) of the Restriction of Special Local Taxation Act provides for the reduction or exemption of acquisition tax on a buyer who acquires a knowledge industry center to use it directly for business facilities, and where a buyer does not directly use it (Article 1) or where a buyer uses it for other purposes within five years from the date of acquisition (Article 58-2 (2) of the Restriction of Special Local Taxation Act), acquisition tax reduced or exempted shall be additionally collected. Therefore, the buyer of each subparagraph of this case, who is a real estate rental business entity, is not entitled to benefits from the reduction or exemption of acquisition tax under the above provision as to each subparagraph of this case. As such, if a person who acquired a knowledge industry center by new construction of a knowledge industry center, sells it to a real estate rental business entity for business facilities, it is reasonable to view that benefits from the reduction or exemption of acquisition tax should be granted to a person who newly acquires a knowledge industry center

B. Relevant statutes

Attached Form 1 is as listed in the relevant statutes.

C. Determination

1) Determination on the first argument

A) The instant reduction provision provides that acquisition tax shall be reduced for real estate acquired to use directly for business facilities or to sell in lots or rent a knowledge industry center through the new construction or extension of a knowledge industry center, and that for a newly constructed or expanded knowledge industry center, acquisition tax shall be reduced for a knowledge industry center directly used for business facilities or acquired for the purpose of sale in lots or rent, or for a person who intends to acquire or to newly construct or expand a knowledge industry center to provide support to revitalize industrial clustering and smoothly supply the knowledge industry center by granting tax benefits. Meanwhile, the instant additional collection provision stipulates that reduced acquisition tax on the relevant portion shall be collected as a penalty in cases where the knowledge industry center

Therefore, a person who newly constructs a knowledge industry center, but uses it for other purposes, or who sells or leases it for business facilities cannot, in principle, receive tax benefits under the provisions of the reduction in this case.

However, in cases where a real estate rental business operator who purchased a knowledge industry center in lots from a new constructor of a knowledge industry center rents the relevant knowledge industry center for business facilities, if the new constructor of the knowledge industry center has the authority to direct, control, and supervise the real estate rental business operator to the extent that it can be exceptionally seen as directly leasing the relevant knowledge industry center, the provisions on mitigation in this case may apply. However, in cases where the new constructor of the knowledge industry center does not have the authority to direct, control, and supervise the real estate rental business operator, the provisions on

B) Comprehensively taking account of the overall purport of the arguments in Gap evidence Nos. 6, 7, and 8, the plaintiff sold each of the subparagraphs of this case to the real estate rental business operator within five years from the date of its acquisition, and at the time of the sale, the plaintiff demanded the real estate rental business operator to confirm that "I, at the time of the sale, promise to lease only the apartment-type factory of this case for business facilities after having been sold from Ha company," and it is recognized that the above real estate rental business operator leased each of the subparagraphs of this case for business facilities and occupied facilities that can move into the knowledge industry center of this case.

C) According to the above facts, the Plaintiff appears to have selected the method of selling each of the instant units to reduce economic losses arising from the unsold parcels of the knowledge industry center newly constructed and acquired, and to have ultimately supplied each of the units to the real estate rental business entity through the real estate rental business entity for business facilities. However, even if the Plaintiff sold each of the units of this case to the real estate rental business entity and received the said undertaking from the real estate rental business entity, it is merely a private contract between the Plaintiff and the real estate rental business entity, and thus, it is likely to be in violation of at any time as it is merely a private contract between the Plaintiff and the real estate rental business entity. Therefore, it cannot be deemed that the Plaintiff had the power to direct, control, and supervise the relevant units to determine when they are leased for

Therefore, even if each subparagraph of this case was leased and used for actual business facilities, it is reasonable to view that the Plaintiff sold it for other purposes, not for business facilities, within five years from the date of acquisition of the knowledge industry center, unless there are special circumstances that the Plaintiff exercised the authority to direct, control, and supervise the lease due to the Plaintiff’s act of leasing real estate rental business entities unrelated to the Plaintiff’s act of selling the units of this case. The Plaintiff’s above assertion on a different premise is rejected.

D) Meanwhile, according to the statement in Gap evidence No. 9, the questioning reply in Seoul Special Metropolitan City (Seoul Tax-5137, April 26, 2013) to the purport that "if a person who newly constructs a knowledge industry center entrusts a local government with the lease and management of the knowledge industry center to a local government where the knowledge industry center is located, and the relevant local government leases it to a business operator entitled to move into the knowledge industry center, it constitutes cases where the said new constructor directly leases the knowledge industry center for business facilities."

However, this is related to the case where a local government is entrusted with the lease and management of a knowledge industry center by a new constructor of a knowledge industry center, and it can be deemed that a new constructor is a lessor under the entrustment contract and lease contract, or that a new constructor has the authority to direct, control, and supervise a lessor when he/she can exercise the rights and duties under the entrustment contract only at any time even if a local government is a new constructor as a local government. Thus, the new constructor cannot be invoked in this case where the new constructor is holding the authority to direct, control, and supervise a lessor, as it entirely depends on the judgment of a rental business operator as to whether a new lessee bears only the contractual obligations to a new lessee and whether a lessee bears or not, and the lease is continued or not. The Plaintiff’

2) Judgment on the second argument

A) Article 28-5 (1) of the Industrial Cluster Act limits the industrial cluster to facilities that can move into a knowledge industry center, manufacturing business, knowledge-based industry, information and communications industry industry, and other facilities for operating business prescribed by Presidential Decree ( subparagraph 1), facilities for operating venture business ( subparagraph 2) under Article 2 (1) of the Act on Special Measures for the Promotion of Venture Businesses, and other facilities for supporting occupant enterprises' production activities ( subparagraph 3) prescribed by Presidential Decree. Article 2 subparagraph 13 of the Industrial Cluster Act provides that "knowledge industry center" means a multi-story building prescribed by Presidential Decree in which persons who conduct manufacturing business, knowledge industry business, and information and communications industry business and support facilities can move into the same building, and Article 4-6 of the former Enforcement Decree of the Industrial Cluster Development and Factory Establishment Act provides that the total building area of knowledge industry centers shall be at least 3 stories above the ground (referring to the aggregate building area of knowledge industry centers in Article 2 (1) 1 and 3 of the Enforcement Decree of the Building Act shall be at least 10 percent above the ground floor area (referring to the aggregate building area of the knowledge industry center).

B) However, in such a case, the purpose of the Industrial Cluster Act, which seeks to promote the smooth supply of a knowledge industry center, is to prohibit occupants of a knowledge industry center from using the knowledge industry center for purposes other than those of facilities subject to occupancy or from transferring or leasing all or part of the knowledge industry center to those who intend to use it for purposes other than facilities subject to occupancy or from using it for purposes other than facilities subject to occupancy (Article 28-7(1)3 prohibits occupants, etc. of a knowledge industry center from transferring or leasing all or part of the knowledge industry center to those who intend to use it for purposes other than facilities subject to occupancy or to use it for purposes other than those of facilities subject to occupancy. Article 28-8(8) provides that the head of a Si/Gun/Gu may take measures such as ordering rectification thereof within a fixed period of time.

C) Considering the legislative intent of the mitigation provision in the above relevant statutes is to provide tax benefits to those who intend to use, sell or rent a knowledge industry center directly for business facilities, or to those who intend to acquire, or to newly construct or expand the knowledge industry center for the purpose of sale or lease, so that the industry cluster can be activated and support the smooth supply of the knowledge industry center, it is reasonable to determine whether the provision in the instant additional collection provision constitutes “cases of sale for any other purpose” should be determined based on whether it was sold “for any purpose other than those allowed to move into the knowledge industry center” based on the actual use situation of the knowledge industry center by buyers. The Plaintiff’s above assertion

3) Judgment on the third argument

Article 58-2 (2) 1 of the Restriction of Special Local Taxation Act provides that an occupant who purchases a knowledge industry center from a person who newly constructed or expanded such knowledge industry center for the first time to use it directly for business facilities shall be exempted from 50/100 of the acquisition tax.

Where an actual consumer who can move into a knowledge industry center intends to acquire a knowledge industry center, the above provision is prepared to indirectly support it by granting tax benefits, and it is clear that a real estate rental business operator who acquires a knowledge industry center without an intention to directly use it for business facilities does not receive benefits from reduction or exemption of acquisition tax under the above provision. This alone does not necessarily mean that the above provision should be applied as a matter of course to a new constructor of a knowledge industry center who sells the knowledge industry center to a rental business operator.

On the other hand, even though each subparagraph of this case was supplied for business facilities, among the newly-built Plaintiff of a knowledge industry center and the real estate rental business entity that purchased the knowledge industry center from the Plaintiff, any person, among the real estate rental business entities that purchased the knowledge industry center from the Plaintiff, may not benefit from the reduction or exemption of acquisition tax. However, as seen earlier, as long as the supply of each subparagraph of this case is viewed as a result of the lease of the buyers who do not receive the direction of the Plaintiff, it cannot be said that the application of the provision on reduction or exemption of acquisition tax of this case is different depending on the incidental circumstances that each subparagraph of this case is used for business facilities.

Therefore, the plaintiff's above assertion cannot be accepted.

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 Omission]

Judges Hah Tae-hun (Presiding Judge)