Article 12 of the Gross Real Estate Tax Act

2. The costs of the lawsuit are assessed against the defendant.

A. A. The regional housing association, the XX 2 regional housing association, the XX 3 regional housing association, the XX 4 regional housing association, the XX 5 regional housing association, and the regional housing association (hereinafter referred to as the “each of the instant associations”) established around 2002 for the purpose of jointly implementing the apartment construction project (hereinafter referred to as the “instant project”) in the Yongsan-gu Seoul Metropolitan Government Council, and the members of each association invested money or real estate in the association.

B. Each association of this case acquired land from its members with money invested, and completed the registration of ownership transfer in the name of the Regional Housing Association of XX, the representative association, and thereafter, each association of this case was dissolved in September and October 2006, and 1,242 members, including the existing union members, were established to succeed to the business of this case. On February 22, 2007, the association of this case obtained the authorization of establishment of the housing association from the head of Dongjak-gu Seoul Metropolitan Government from the head of the Gu on February 3, 2007 pursuant to Article 32 of the former Housing Act (amended by Act No. 9405 of February 3, 2009).

C. On the other hand, as of June 1, 2007, the assessment basis date of comprehensive real estate holding tax for the year 2007, the ownership transfer registration was made in the name of the regional housing association in XX.

1) Seoul Dongjak-gu Seoul Metropolitan Government 000-000125 23,458.7 square meters (hereinafter referred to as the “instant land”) and 510.9 square meters (land subject to separate aggregate of property tax) for four parcels

2) Seoul Dongjak-gu Seoul Metropolitan Government Y 64-56 Ground detached Housing and 293 (hereinafter “instant housing”)

D. Upon reporting the comprehensive real estate holding tax for 2007, the Plaintiff classified the instant housing into other housing (employee housing) under Article 4 of the former Enforcement Decree of the Comprehensive Real Estate Holding Tax Act (amended by Presidential Decree No. 20210, Aug. 6, 2007; Presidential Decree No. 20210, the same) and excluded it from the taxation subject to the comprehensive real estate holding tax. The instant land is subject to the taxation subject to the comprehensive real estate holding tax for 81 lots which are subject to the taxation subject to the comprehensive real estate holding tax on December 15, 207.

E. On February 1, 2011, on the premise that the instant land and the instant real estate (hereinafter “instant real estate”) are owned by the Plaintiff, the Defendant deemed the instant real estate as a general aggregate real estate tax subject to comprehensive real estate holding tax, and corrected and notified the Plaintiff of KRW 1,406,724,710 and special rural development tax for the Plaintiff in 2007 (hereinafter “instant disposition”).

G. The Plaintiff appealed and filed an appeal with the Tax Tribunal on April 29, 201, but was dismissed on July 22, 2011.

[Ground of recognition] Facts without dispute, Gap 1.4, 9, Gap 3, and 7's evidence l through 6, Gap 8, and 11's evidence 1, 2, Eul 1, 2's evidence 1, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

1) The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

① As the Plaintiff, a housing association established pursuant to Article 44 of the former Housing Construction Promotion Act (Article 32 of the current Housing Act) cannot be deemed as a juristic person, and thus, the instant disposition based on the premise that the Plaintiff is a juristic person is null and void as a disposition of taxation against an unincorporated person. Even if the Plaintiff falls under a non-juristic person, the Plaintiff’s regional housing association like the Plaintiff association plans to distribute business profits to its members. As such, the instant disposition of taxation is unlawful since it does not constitute an organization deemed as a juristic person under the tax law under Article 13(1)1

② At the time of June 1, 2007, the tax base date for the instant disposition, the instant real estate was registered under the name of the Regional Housing Association of the XX-Japan. The instant disposition against the Plaintiff, who is a separate organization from the Regional Housing Association of the XX-Japan, was unlawful as it was erroneous for the taxpayer’s designation.

③ In light of the contents and purport of Articles 7 and 12 of the former Gross Real Estate Tax Act (amended by Act No. 9273, Dec. 26, 2008; hereinafter the same shall apply) and Article 183 of the former Local Tax Act (amended by Act No. 8864, Feb. 29, 2008; hereinafter the same shall apply), the taxpayer of the comprehensive real estate holding tax on the instant real estate is the Plaintiff’s member, who is the actual owner, and thus, the disposition of this case by deeming the Plaintiff as the taxpayer is unlawful against the principle of substantial taxation.

2) The defendant's assertion

The head of Dongjak-gu Seoul Metropolitan Government imposed property tax on the plaintiff for 2007 on the subject of taxation on the subject of the real estate tax. According to Articles 7 and 12 of the former Gross Real Estate Tax Act, the plaintiff, who is the taxpayer of the property tax of this case as of the tax base date of the comprehensive real estate tax, becomes the taxpayer of the comprehensive real estate tax, and there is no provision that excludes the plaintiff from the subject of the comprehensive real estate tax on the same housing association as the plaintiff under the former Gross Real Estate Tax Act. Furthermore, it is not clear whether the real estate of this case is a trust property because the trust agreement between the plaintiff and its members is not prepared. Furthermore, according to Article 183(2)5 of the former Local Tax Act, the truster is defined as the taxpayer of the property tax in the case of trust property registered under the name of the trustee,

Therefore, the instant disposition that deemed the Plaintiff as the owner of the instant real estate is lawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

1) The XX Japan District Housing Association acquired the instant real estate with the money invested by the members of each of the instant associations, and completed the registration of ownership transfer under the said association’s name. On April 5, 2007, the Association changed its name to the Plaintiff Association and reported a correction of its corporate registration under the Value-Added Tax Act on April 17, 2007.

2) On October 17, 2007, the Plaintiff: (a) on September 23, 2003, established the instant real estate as the grounds for registration; (b) on October 1, 2008, filed a report of change of ownership under the name of the Plaintiff; (c) on October 1, 2008, a report of change of business registration following the change of the place of business; and (d) a report of change of the representative on August 28, 2009; (c) closed the corporate registration on September 3, 2010; and (d) filed a report of change of ownership on November 30, 201.

3) The Plaintiff completed a trust registration under the Trust Act as to the instant real estate on November 19, 2010 on the ground that it omitted the registration of the trust, even though the instant real estate was acquired in money in trust by the Plaintiff’s members.

4) Meanwhile, on May 14, 2009, the head of Dongjak-gu Seoul Special Metropolitan City Office, which is the property tax of the instant real estate, imposed a total of KRW 134,00,000 on the instant real estate (land portion and housing portion) for the Plaintiff in 207. The Plaintiff paid the said property tax in entirety.

5) According to the Plaintiff’s rules of the association (Evidence 2), the purpose of the said rules is to ensure stability in the life of union members by prescribing matters necessary for the business of a regional housing association under the light of housing (Article 2), thereby protecting the rights and interests of union members and facilitating the promotion of business (Article 10(1)); union members have the right to demand the supply of housing of union members as prescribed by a business plan (Article 10(1)); union presidents and not more than 10 directors shall represent the association and exercise overall control over the affairs of the association (Articles 15 and 19); union presidents shall represent the association (Articles 15 and 19); union presidents shall set up a general meeting consisting of all union members and determine the major agenda items such as the selection, change, conclusion of a contract for construction, appointment and dismissal of the partnership executives (Articles 23 and 24); union members shall register a site for the project with a trust in order to ensure smooth progress of the project, and upon completion of the project, partnership shall exercise their property rights to the association members immediately upon termination of trust (Article 422).

[Ground of recognition] Facts without dispute, Gap 2, 5, 6, 12 evidence, Gap 11-2, and the purport of the whole pleadings

D. Determination

1) Determination on the first argument

Article 13(1)1 of the former Framework Act on National Taxes (amended by Act No. 8830, Dec. 31, 2007; hereinafter the same) provides that an unincorporated association, foundation, or other organization, which is established with permission or authorization from the competent authority, or which is registered with the competent authority under the Acts and subordinate statutes, shall be deemed a juristic person and shall be subject to the application of this Act and other tax-related Acts and subordinate statutes. Meanwhile, a housing association established under the Housing Act (hereinafter the Housing Act) has regulations that have the nature of an association with its own own purpose only when it uses the name of the association, and accordingly has a general assembly, a decision-making agency, an operating committee, and an organization that employs a representative, etc., who is a decision-making agency, based on such regulations, and regardless of the change following the membership or withdrawal of the association members, the association itself constitutes a non-corporate body, regardless of its name (see, e.g., Supreme Court Decision 96Da39721, Jan. 24, 1997).

In full view of the purport of the entire argument in the private theory as seen earlier, the Plaintiff, a housing association established under the Housing Act, has an organization, such as a general meeting, which is a decision-making body, and a representative who is an executive body, for the implementation of the instant project, based on which the Plaintiff, which is a housing association established under the Housing Act, has established rules for the implementation of the instant project. The resolution or the execution method is conducted in accordance with the principle of majority, and the association itself becomes final and conclusive as an organization, such as existence, regardless of the change following the joining or withdrawal of the union members. Furthermore, the Plaintiff, as a non-corporate group, obtained the authorization for the establishment of a housing association from the head of Dongjak-gu Seoul Metropolitan Government, the competent authority on February 22, 2007, pursuant to Article 32 of the Housing Act. Thus, the Plaintiff constitutes an organization deemed

As to this, Article 13(1) of the Framework Act on National Taxes provides that only an unincorporated association, foundation, or other organization which does not distribute profits to its members shall be deemed a corporation under tax law, and thus, the Plaintiff’s profit distribution plan does not constitute an organization deemed a corporation under the above provision. However, the requirement of “non-profit distribution to its members” is newly added as the Framework Act on National Taxes was amended by Act No. 8830, Dec. 31, 2007 (Enforcement Date, January 1, 2008) and thus, it cannot be deemed that the above requirement should be met even at the time of February 22, 2007, which is the tax base date for the disposition of this case, and the date of authorization for the establishment of the housing association for the Plaintiff.

Therefore, the plaintiff's above assertion that the plaintiff does not constitute an organization deemed a corporation under Article 13 (1) 1 of the former Framework Act on National Taxes is without merit.

2) Judgment on the second argument

In full view of the following circumstances that can be seen through the purport of the entire facts and arguments as seen earlier, namely, ① the Plaintiff was established for the purpose of implementing the instant project with the same content as each of the instant cooperatives, and a majority of the union members were the same; ② the Plaintiff did not report a closure of the establishment; ③ the instant disposition of imposition was made after the Plaintiff obtained authorization from the competent authority for establishment of the association; ③ the Plaintiff’s registration of business was closed; and ④ on October 17, 2007, the registration of change of ownership in the Plaintiff’s name was made for establishment on September 23, 2003, the date of establishment of the instant regional housing association, the date of establishment of the instant regional housing association; and thus, the Plaintiff ought to be deemed to have recognized the unity with the regional housing association that actually represents each of the instant cooperatives. Therefore, the Plaintiff’s assertion on this part is without merit.

3) Judgment on the third argument

According to Articles 7(1) and 12(1) of the former Gross Real Estate Tax Act, a person who is liable to pay property tax on a house as of the tax base date and whose aggregate amount of published prices of housing subject to property tax in Korea exceeds 600 million won, and a person who is liable to pay property tax on a piece of land exceeding 300 million won, or a person who actually owns property as of the tax base date of property tax on a piece of land exceeds 4 billion won, shall be liable to pay each comprehensive real estate tax. Meanwhile, Article 183(1) of the former Local Tax Act provides that "a person who actually owns property as of the property as of the tax base date of property tax shall be liable to pay the property tax." "A person who actually owns property" refers to a person who actually owns the relevant property regardless of whether he/she is registered as an owner on a public register (see, e.g., Supreme Court Decision 2010Du10

In light of the above provisions and legal principles, the following circumstances acknowledged through the health stand, the facts recognized as above, and the entire argument, namely, ① acquired the instant real estate in the form of money invested from the members, and completed the registration of ownership transfer in the name of the Plaintiff-based housing cooperative, which is the telegraph of the Plaintiff, and subsequently completed the registration of ownership transfer in the name of the Plaintiff, and subsequently completed the registration of trust on November 19, 2010. ② The Plaintiff, who is the implementer of the instant project, newly constructed the instant real estate on the basis of money invested from the members, real estate, and real estate acquired from the members, and then reverted to the members, and then is dissolved after the occupancy and registration procedure were completed. ③ If the ownership of the instant real estate newly constructed through the instant project is ultimately reverted to the members, it can be deemed that money and real estate invested by the Plaintiff cooperative was actually entrusted to the Plaintiff Cooperative, and the real estate acquired from the trust property can also be deemed as the trust property, and it can be deemed that the Plaintiff’s real estate was not subject to the Plaintiff’s ownership transfer of the instant real estate.

Therefore, the disposition of this case, based on the premise that the Plaintiff is liable to pay comprehensive real estate holding tax, is unlawful as the actual owner of the instant real estate.

3. Conclusion

The plaintiff's claim is justified and accepted.