[2] Whether Article 10 (1) and (3) of the former Restitution of Development Gains Act on the calculation of land price, which serves as the basis for the calculation of development charges, violates the Constitution (negative)

[3] In cases where a corporation imposes corporate tax on the whole income from the transfer of the pertinent land by adding other income generated from the transfer of the pertinent land, whether the tax amount equivalent to the starting point of imposition to the transferring point among the corporate tax imposed on the income from the transfer of the pertinent land can be appropriated in the development cost

[2] (A) Under Article 10(1) and (3) of the former Restitution of Development Gains Act (amended by Act No. 9045 of March 28, 2008), the officially announced price of reference land, which is based on the calculation of the land price, shall be calculated based on the average of the prices appraised by two or more appraisal business entities after the Minister of Construction and Transportation selects the reference land among a group of lands deemed generally similar to the land use situation or surrounding conditions, and the natural and social conditions. The officially announced price of reference land, which is based on the calculation of the land price as of the starting point, is calculated by using the reference land price as well as the “standard ratification sheet on land price formation factors” as announced annually by the Ministry of Construction and Transportation. In addition, all appraisal business entities are verified by the reference land price as well as the “land price formation factors” which are announced annually in the Ministry of Construction and Transportation, and thus, it has objectivity and rationality to the extent of objection procedures, and thus, it is difficult to deem that the method of calculating the land price under the above provision is excessively more or more than the fundamental rights.

(B) Article 10(3)5 of the former Enforcement Decree of the Restitution of Development Gains Act (amended by Presidential Decree No. 19752, Dec. 15, 2006) provides that “When the land price as at the starting point of the development charges is calculated based on the actual purchase price, it does not violate the principle of prohibition of comprehensive delegation by clearly stipulating the scope of delegation so that the standards for the purchase price of the actual system are expected to be determined by Presidential Decree, and does not violate the principle of substantial taxation and the principle of prohibition of excessive restriction under the Constitution, or violates property rights and equal rights under the Constitution, in full view of various circumstances, such as the rate of the charge prescribed by Presidential Decree, the propriety of land price calculation, appeal procedures, etc., and accordingly, it cannot be deemed that Article 9(5)1 of the former Enforcement Decree of the Restitution of Development Gains Act (amended by Presidential Decree No. 19752, Dec. 15, 206) provides unfavorable to the people.

[3] Article 12 (1) of the former Restitution of Development Gains Act (amended by Act No. 9045 of Mar. 28, 2008) provides that the transfer tax amount may be appropriated as development costs in consideration of the fact that the income from the transfer of land or business subject to capital gains tax and the development gains subject to development charges are identical in substance. The above provision provides that the special surtax imposed on the initial transfer gains of a corporation may be appropriated in the development costs as well as the capital gains tax, and the special surtax imposed on the initial transfer gains shall be also added to the development expenses. The amendment of the Corporate Tax Act (amended by Act No. 6558 of Dec. 31, 2001) is amended pursuant to Article 24 of the Addenda. This provision does not mean that the purpose of excluding the amount of tax imposed on the corporation transfer gains, unlike the case where the transfer income tax is imposed on an individual, shall not be deemed to be the purpose of excluding the amount from the calculation of development costs to the whole income from the transfer of the relevant land.

1. On the first ground for appeal

Article 6 (1) 3 of the former Restitution of Development Gains Act (amended by Act No. 9045 of Mar. 28, 2008; hereinafter the same) provides that where the status of a project implementer is succeeded before the completion of a development project, a successor to such status shall be liable to pay development charges. This provision is established in consideration of the fact that it is not easy to take into consideration the development gains accrued until the succession of the status where the development project is succeeded, and the development gains accrued after the succession of the status where the development project is succeeded. Unless there are special circumstances, such as that it is impossible to make an agreement on the succession of the development gains and the development charges on the premise that the agreement is possible between the parties to the succession of the development project, a successor to the status of the project shall be liable to pay the development charges (see, e.g., Supreme Court Decisions 200Du2655, Apr. 12, 200; 206Du9870, Oct. 26, 2006).

According to the reasoning of the judgment below, on April 30, 2003, the non-party 2 obtained approval of factory construction from the defendant on the land of this case owned by the non-party 1 corporation, and on March 3, 2005, the name of the construction of factory was changed in the name of the non-party 3. The plaintiff purchased the land of this case from the non-party 1 corporation on May 9, 2005 in the price of KRW 1.75 billion and agreed that "after construction is borne by the purchaser". The plaintiff changed the name of the factory construction on July 12, 2005 and completed construction of a new factory on the land of this case and obtained approval for use on December 9, 2005, and the defendant issued the disposition of this case that imposed development charges on the plaintiff in relation to the development project on the factory site of this case on February 26, 2007.

Examining these facts in light of the legal principles as seen earlier and the provisions of the relevant Acts and subordinate statutes, which provide the time when the imposition of development charges is completed as of the date of the report on the completion of the construction of a site for the construction of a factory, even if the construction work to create a factory site at the time of the purchase of the instant land was implemented, as alleged by the Plaintiff, it cannot be deemed that the development gains in this case are not entirely attributed to the Plaintiff on the ground that the amount of the purchase price for the instant land purchased by the Plaintiff is larger than the price at the time of the completion of the imposition of the instant land whose calculation method is different, and it is possible for the Plaintiff to enter into an agreement on the succession of development gains and development charges with the non-party 1 corporation, and thus, the instant development charges in this case are liable to the Plaintiff for the payment, and it cannot be deemed that they violate the principle of substantial taxation or infringe on property rights and equal rights under the Constitution.

In the same purport, the judgment of the court below that the plaintiff is liable to pay the development charges of the development project of this case is just, and there is no error of law as alleged.

In addition, the Supreme Court Decision 93Nu10521 Decided October 8, 1993, the plaintiff cannot be invoked in the case of this case where the plaintiff cannot be deemed to have been the actual owner of development gains.

2. On the second ground for appeal

Article 10(1) of the former Restitution of Development Gains Act provides that “The land price at the time of termination shall be the aggregate value of the increases in normal prices from January 1 of the relevant year to the date of termination of the imposition” as of the officially announced value of reference land which is the most similar to the land to be imposed at the time of completion of the imposition, and the land price at the time of completion under the comparison table under Article 9(2) of the Public Notice of Values and Appraisal of Real Estate Act.” The main text of Article 9(3) of the same Act provides that “the land price at the time of commencement shall be the aggregate value of the increases in normal prices from January 1 of the relevant year to the date of termination of the imposition.” The officially announced land price at the time of commencement, which is based on the calculation of the land price at the time of completion of the imposition, shall be the average value calculated from the officially announced value of the land in the year to the date of commencement of the imposition to the date of the imposition to the point of commencement of the imposition of the imposition, and shall not be deemed to be more reasonable than the average value of the above fundamental value.

In addition, Article 10(3) proviso of the former Enforcement Decree of the Restitution of Development Gains Act (amended by Presidential Decree No. 19752, Dec. 15, 2006) provides that “Where the actual purchase price is objectively recognized as the normal transaction price,” and Article 9(5)1 of the former Enforcement Decree of the Restitution of Development Gains Act (amended by Presidential Decree No. 19752, Dec. 15, 2006) provides that “Where the purchase price becomes the tax base for acquisition tax or registration tax” shall be clearly defined in the proviso of Article 10(3) so that the actual purchase price or acquisition price may increase or decrease the price from the date of purchase to the date of commencement of the imposition.” The above legal provision does not violate the principle of prohibition of comprehensive delegation by clearly stipulating the scope of delegation so that the ratio and land price calculation as stipulated in the above Act does not violate the principle of substantial taxation under the Constitution and the principle of excessive prohibition, procedures for objection, etc., and does not violate the right to equality and equality under the Constitution.

On the same premise, the judgment of the court below that the land price at the time of termination of the imposition and the starting point of the imposition are legitimate is just, and there is no error in the misapprehension of legal principles as to the unconstitutionality of statutes as alleged.

3. On the third ground for appeal

Article 12(1) of the former Restitution of Development Gains Act provides that “where capital gains tax is imposed on any income accruing from the transfer of land or business, etc. before the imposition of development charges after the starting point, an amount equivalent to the starting point of imposition from the starting point of imposition to the time of transfer, etc. may be appropriated in development costs.” This provision provides that the transfer tax may be appropriated as development costs, considering that the income from the transfer of land or business, etc. subject to the imposition of capital gains tax and the development gains, which are the object of the imposition of the development charges, are identical in substance in substance. The above provision provides that the special surtax imposed on the capital gains accruing from the initial transfer of a corporation may be appropriated in the development costs like the capital gains tax, and the special surtax imposed on the capital gains accruing from the transfer of the corporation, which was amended by Act No. 6558 of Dec. 31, 2001 and repealed pursuant to Article 24 of the Addenda of the Corporate Tax Act, unlike the case where such amendment imposes capital gains tax on an individual, it shall not be considered as excluding the development costs from the transfer tax amount imposed.

According to the reasoning of the judgment below, it can be known that the non-party 1 corporation sold the land of this case to the plaintiff after the starting point of imposition of the development charges of this case and the non-party 1 corporation imposed corporate tax of 2,105,83,151 on the total income of the non-party 1 corporation including the income accrued from the sale of the land of this case in 2005. Thus, the court below should have deliberated on the book value and transfer value at the time of sale of the land of this case, expenses disbursed by the non-party 1 corporation for the sale of the land of this case, etc., which was the premise of corporate tax calculated as above, and then should have appropriated the tax amount equivalent to the tax amount from the starting point of imposition to

In contrast, the lower court determined that the corporate tax amount of the non-party 1 corporation cannot be appropriated as development costs. In so determining, the lower court erred by misapprehending the legal doctrine on the calculation of development charges, and thereby adversely affected the conclusion of the judgment. The part pointing this out in the grounds of appeal is with merit.

4. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Sung-tae (Presiding Justice)