[2] Whether "land acquired for the purpose of housing construction" under Article 84-4 (4) 10 of the former Enforcement Decree of the Local Tax Act includes non-residential part (negative)

[3] In a case where a corporation that runs a business of constructing, supplying, or leasing a house acquires land for the purpose of constructing the main complex building and starts the construction of the land within the four-year grace period for the residential part, whether the residential part and the non-residential part should be constructed at the same time constitutes a justifiable ground for the lapse of the one-year grace period for the non-residential part (negative)

[4] Where a corporation whose business is the construction, supply, or lease of a house acquires land for the purpose of housing construction, whether it does not constitute a corporation’s land for non-business use only for its own purpose until the four-year grace period expires (negative)

[2] Under the principle of no taxation without law, or under the principle of no taxation without law, the interpretation of tax laws shall be interpreted as the law, unless there are special circumstances, and it shall not be extensively interpreted or analogically interpreted without reasonable grounds. Thus, as long as Article 84-4 (4) 10 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15211 of December 31, 1996) provides that "land acquired for the purpose of housing construction" is "land acquired for the purpose of housing construction," the above provision shall not be extended to non-residential portion.

[3] Where a corporation that engages in the business of construction, supply, or lease of housing acquires land for the purpose of the construction of a main complex building and starts the construction of the land within the four-year grace period for the residential part, it is difficult to deem that there is a justifiable reason for the lapse of the one-year grace period for the non-residential part to simultaneously start the construction of a non-residential part.

[4] Unless it falls under other provisions deemed land for non-business use, such as the completion of a building and sale within five years from the acquisition date, as long as the land was used for its own purpose after starting the construction work and using it for its own purpose, it shall not be deemed that it does not fall under land for non-business use only until the lapse of four years from the grace period.

2. Two-minutes of litigation costs are assessed against the plaintiff and the remainder are assessed against the defendant.

The following facts do not conflict between the parties, or can be acknowledged by adding the whole purport of the pleadings to the statements in Gap evidence 1, 2, 3-1, 20-1, 28-5, 28-1 through 5, 30, 36-1 through 4, 37-1, 37-39-1, 39-2, and 43-1 through 5.

A. On May 6, 191, the Plaintiff, a corporation for housing construction business, etc., acquired a total of 4,803 square meters of a total of 26 lots, including 257-4, Seo-gu, Seo-gu, Busan (hereinafter “instant land”) from 5,142,262,00 won in order to construct and sell a main complex building on the said ground, and completed the procedure for ownership transfer registration on May 31, 199 (the sales contract date is March 6, 191; the remaining payment date is May 6, 199; the 34 lots of land subject to sale; the purchase price is KRW 5,51,00,000, but there is no dispute between the parties as above between the parties concerned as well as the number of lots of land subject to disposition on imposition of acquisition tax due to construction except for the above construction, park site, etc.

B. The Plaintiff, on the instant land, formulated a plan to build and sell multi-unit housing, business, sports, and neighborhood living facilities (hereinafter “instant building”) with the size of 40,063.42 square meters on the 2nd floor above the ground surface above the instant land, and obtained a building permit therefor from the Defendant on January 17, 1995 and conducted construction work on October 13, 1995, he transferred the instant land to the Non-Party Bosung Co., Ltd. on May 23, 1996 and completed the procedure for the registration of ownership transfer in the instant company.

C. Meanwhile, at the time of the Plaintiff’s acquisition of the instant land, the Minister of Construction and Transportation imposed a restriction on the construction permit from May 6, 191 to September 30 of the same year on the neighborhood living facilities with a total floor area of not less than 660§³ for the purpose of suppressing the heating of the construction competition. From July 15 of the same year to September 30 of the same year, the restriction period on the construction permit was extended until December 31, 192.

D. On June 10, 1996, the Defendant rendered a disposition imposing acquisition tax amount of KRW 802,192,870 (the calculation details of the tax amount shall be the same as the statement in the annexed tax account statement No. 1; hereinafter the same shall apply) by adding additional tax of KRW 20/100 to the tax amount calculated by applying the tax rate prescribed in Article 121(1) of the Local Tax Act to the tax amount calculated by applying the tax rate of KRW 5,142,262,00,00 as the land of this case to the land of this case as non-business land under Article 112(2) of the Local Tax Act.

2. The parties' assertion

A. The plaintiff's assertion

(1) The Plaintiff acquired the instant land for the purpose of housing construction, and was not entitled to a construction permit due to the restriction on the construction permit by the Minister of Construction and Transportation, within 4 years counting from January 1, 1993 to December 31, 192, excluding the period from May 6, 1991 to December 31, 192, and at least the corresponding portion corresponding to the ratio of the total floor area of the instant building to the total floor area of the instant building among the instant land is not non-business land.

(2) In light of the legislative intent of the heavy taxation system for non-business land, if a corporation constructs a so-called multi-purpose building, like the building in this case, combined with residential and non-residential purposes within four years after it acquired land for the purpose of housing construction, the whole site of the building should be the land for business purpose. Even if the total floor area is more than 50% of the multi-purpose building, the whole site of the building should be the land acquired for housing construction purpose. Thus, although the ratio of the residential part of the total floor area of the building in this case was less than 50% but the ratio of the non-residential part was more than 50% within the above grace period, the plaintiff acquired the land in this case for the purpose of housing construction. Even if it is not so, since the construction of non-residential part should be combined with the non-residential part, the use of the land corresponding to the non-residential part should be delayed until the construction time of the whole building within four years.

B. Defendant’s assertion

The issue of whether the portion of the instant land corresponding to the ratio of the non-residential part among the instant buildings is non-business land should be determined depending on whether it was used for its unique business within one year from January 1, 1993 to January 13, 1993 for which the period of restriction on construction permission expires. As seen earlier, the Plaintiff started construction work on October 13, 1995, which was one year after this, and thus, the portion corresponding to the non-residential part among the instant land constitutes non-business land. While the period of restriction on construction permission starts within four years from January 1, 1993, the period of restriction on construction permission begins, it was not used for the original purpose, but for the other party on May 23, 1996, which was four years before the expiration of the period of restriction on construction permission, it should be deemed as non-business land.

3. Relevant statutes;

A. Article 112(1) of the Local Tax Act (amended by Act No. 5406, Aug. 30, 1997; hereinafter referred to as the “Act”) provides that the tax rate of local taxes shall be 20/100 of the value of acquired articles. Paragraph (2) provides that the tax rate of local taxes shall be 750/100 of the value of acquired articles for non-business land of a corporation prescribed by the Presidential Decree.

B. Article 84-4(1)1 of the Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15211, Dec. 31, 1996; hereinafter "Decree") provides that a corporation shall, in principle, regard a land not directly used for its unique duties as a non-business land within one year from the date of its acquisition, without justifiable grounds. In this case, when a corporation starts a construction work, it shall be deemed that it is directly used for its unique duties, and subparagraph 2 provides that the land sold within five years from the date of its acquisition shall also be deemed land for non-business use.

C. Meanwhile, Article 4 (4) 10 of the same Act provides that the land acquired for the purpose of housing construction by a corporation which conducts the construction, supply, or lease of a house shall not be deemed land for non-business use, for which four years have not passed since the date of its acquisition. However, the latter part of the land was newly inserted by Presidential Decree No. 15211 on December 31, 1996, and the latter part of the new provision provides that "in this case, the land acquired for housing construction shall be deemed to be the land acquired for the purpose of housing construction in case where the one building is used for both residential and non-residential purposes, and 50/10 or more of the total floor area of the building used for both residential and non-residential purposes." Article 1 of the Addenda provides that the above amended provision shall be enforced from January 1, 1997, and Article 5 (1) provides that the above amended provision shall be applied from acquisition tax of land for

4. Determination

(a) Calculation of the grace period;

The restriction on construction permission by the Minister of Construction and Transportation as mentioned above constitutes a case where construction or use is prohibited under the related Acts and subordinate statutes under Article 84-4 (4) 6 of the Decree. Thus, whether or not the land of this case was used for its unique purpose shall be determined by counting from January 1, 1993 where the above restriction on construction permission was cancelled (not to dispute this point).

B. Interpretation of the Addenda to the amendment and the statutory provisions applicable to this case

As seen earlier, Article 1 and Article 5(1) of the Addenda amended by Presidential Decree No. 15211 of Dec. 31, 1996 provides that the latter part of Article 84-4(4)10 of the Decree shall apply to a case where the grace period has not elapsed as of January 1, 1997. As seen earlier, the new provision of the latter part of Article 84-4(4)10 of the Decree provides that the new provision shall apply to a case where the grace period has not elapsed as of January 1, 1997. In light of the following: (a) the non-residential part of the non-residential part is applied to a case where the grace period has not expired as of December 31, 1996 to relieve the corresponding part of the non-residential part of the non-residential land as non-residential land; (b) the grace period has not expired as to the non-residential part of the land that was acquired after the acquisition date, and (c) the provision of the above non-residential part becomes retroactively applied to the land after the grace period of 197.

Therefore, with respect to the land previously acquired, the provisions prior to the amendment of December 31, 1996, which are the laws and regulations at the time of acquiring the land of this case, shall apply when the taxation requirements prescribed by the law have been completed in accordance with the general principles.

(c) Calculation of the grace period for complex buildings and the application of this case;

(1) In light of the principle of no taxation without law, or the requirements for non-taxation or tax reduction and exemption, the interpretation of tax laws and regulations shall be interpreted as the law, unless there are special circumstances, and shall not be extensively interpreted or analogically interpreted without reasonable grounds. Since Article 84-4 (4) 10 of the Decree provides that "land acquired for housing construction" shall not be extended and applied to non-residential portion, the above provision shall not apply to non-residential portion. Thus, from the date of cancellation of the above construction restriction, it shall be interpreted that the residential portion of the building of this case shall be excluded from 4 years pursuant to Article 84-4 (4) 10 of the Decree, and the non-residential portion shall be excluded from the non-residential land to be used for its original purpose within 1 year pursuant to Article 84-4 (1) of the Decree (the establishment of the latter part of the above provision shall be for the immediate interpretation and application of such somewhat unreasonable interpretation and application, it shall not be deemed that the grace period for 4 years shall not apply to the whole non-residential complex building).

(2) Therefore, in the case of this case, the part of the residential building is excluded from the non-residential land for its original purpose within 4 years from January 1, 1993 for which the period of restriction on construction permission has expired, and from the non-residential part within 1 year, the non-residential part is excluded from the land for its original purpose. As seen earlier, the plaintiff started construction of the building of this case on October 13, 1995 and used it for its original purpose within the 4-year grace period for the residential part, but the non-residential part becomes non-residential land after the 1-year grace period for the non-residential part, and it is difficult to view that the 1-year grace period has expired to start together with the non-residential part for which the 4-year grace period has been allowed.

(3) Therefore, as a matter of course, the grace period of four years should be applied to the entire building of this case, which is a main complex building, or even if not, the residential part is more than 50 percent, so the grace period of four years shall be applied to the entire building of this case. The plaintiff's assertion that there is justifiable reason, even if it is not a house, is without merit.

(4) On the other hand, the defendant's assertion that the plaintiff, as the plaintiff commenced a construction and used a residential part for its original purpose within five years from the acquisition date, does not fall under other provisions regarding non-business land, such as that the plaintiff sold it within five years from the acquisition date without justifiable reasons, should complete the building of this case and sell it for its original purpose, or that it does not fall under non-business land only until the four years have passed from the expiration of the grace period, and since the plaintiff sold the land of this case to another person before the expiration of the four-year grace period counting from January 1, 1993 (at the expiration of five years from the acquisition date by acquiring on May 6, 1991 and selling it on May 23, 1996).

(d) The standard period and reasonable tax amount for the computation of tax amount;

(1) As seen earlier, when the Plaintiff had already commenced a construction work after obtaining a construction permit for the instant building, the taxation requirement, namely, acquisition tax for non-residential land, which was already completed after the grace period for the non-residential part has already expired. Therefore, the subject of acquisition tax for non-residential land among the instant land is the corresponding part to the ratio of the non-residential part to the area of the non-residential part among the instant building at the time of the construction permit, and the subsequent modification of design leads to a change in the ratio of the area of non-residential part to the non-residential part, and thus,

(2) Furthermore, we examine the reasonable tax amount by calculating the ratio of non-residential part at the time of building permission to the non-residential part.

In addition to the whole purport of the pleading in the entry of Gap evidence No. 45, the area of multi-family housing among the area of 35,487.04 square meters on the ground of the building in this case at the time of the building permission is 16,879.52 square meters and the remaining area of 18,607.52 square meters on the ground of the building in this case is 16,879.52 square meters on the non-residential area, so if the 1,207.42 square meters on the ground used as public facilities are divided in proportion to the same ratio, the 21,007.13 square meters (18,607.52 ±35,487.04 x 40,063.42) out of the building area of this case is 2,518.43 square meters (21,007.13 ± 40,063.42 x 803 square meters on the land in this case, it is justified as the defendant 292.260

5. Conclusion

Therefore, the plaintiff's claim of this case is justified within the scope of the above recognition, and the remainder is dismissed as it is without merit. It is so decided as per Disposition.

Judges Hand-type (Presiding Judge) the highest number of the judges

[Attachment 1]

【The amount of tax plus the amount of tax】

(2) The disposition of this case is imposed by the defendant)

1. Tax base: Acquisition value: 5,142,262,00 won;

2. Heavy tax amount:

5,142,262,00 won ¡¿ 20/100 ¡¿ 750/100 = 71,339,300 won

3. The tax amount paid at the time of acquisition.

5,142,262,00 won ¡¿ 20/100 = 102,845,240 won

4. Difference (B-3).

71,339,300 won-102,845,240 won =68,494,060 won

5. Additional tax (No.40/100)

68,494,060 won ¡¿ 20/100 =13,698,810 won

No. 6. The amount of tax imposed by the defendant (No. 5)

668,494,060 won +13,698,810 won =802,192,870 won end.

[Attachment 2]

【The amount of tax plus the amount of tax】

(as to the part corresponding to the non-residential building area among the land in this case)

1. Tax base: Acquisition value of non-residential area = All acquisition value ¡¿ non-residential area/total area;

5,142,262,00 won ¡¿ 2,518.43 ¡À4,803 =2,696,320,400 won

2. Heavy tax amount:

2,696, 320,400 won ¡¿ 20/100 ¡¿ 750/100 = 404,448,060 won.

3. The tax amount paid at the time of acquisition.

2,696, 320,400 won ¡¿ 20/100 = 53,926,400 won

4. Difference (B-3).

404,448,060 won-53,926,400 won =350,521,650 won

5. Additional tax (No.40/100)

350,521,650 won ¡¿ 20/100 =70,104,330 won

6. Consolidated (No.D.)

350,521,650 won + 70,104,330 won = 420,625,980 won end.