[2] Criteria for determining whether property tax is a profit-making business excluded from non-taxation

[3] The case holding that it constitutes a profit-making business where it is allowed for the general public to use the swimming pool of a social welfare foundation and received the service fee in return

[2] Whether a business constitutes a profit-making business excluded from the object of non-taxation on property tax, etc. under Articles 184 and 234-12 of the Local Tax Act shall be determined reasonably according to social norms, considering whether the business is profitability or for profit-making purposes, and whether the business has continuity and repetition to the extent that it can be seen as business activities in light of its size, frequency, mode, etc.

[3] The case holding that if the subject of the use of a swimming pool owned by a social welfare foundation is not limited to the person with disabilities, including the general public, and its operating hours are without any restriction, and most users (9.2%) including the general public (92.6%) bear the user fee, and the user fee also reaches 50 to 68% of the nearby swimming pool, the operation of the swimming pool is for profit-making purposes and is excluded from non-taxation such as property tax, etc.

1. According to the reasoning of the judgment below, the court below rejected the Defendant’s assertion that the Defendant’s imposition of property tax and aggregate land tax (hereinafter “property tax, etc.”) against the Plaintiff on January 10, 1995 on the first floor of reinforced concrete building 867.44m2, including the 16-dong, Gwangjin-gu, Seoul Special Metropolitan City, which is a social welfare foundation, constitutes a non-taxable object of property tax, etc. under Article 184 subparag. 1 and 234-12 of the Local Tax Act (hereinafter “property”) which is the property and real estate used directly by the non-profit entrepreneur for its business, and that the Plaintiff’s use of the above swimming pool constitutes a profit-making business under Article 184 subparag. 1 and 234-12 of the Local Tax Act for the purpose of using the above 90-day, which is 000 won to the general public, since it constitutes a non-taxable purpose of the Defendant’s assertion that the above swimming pool is not subject to non-taxation of property tax, etc.

2. Subparagraph 1 of Article 184 and Subparagraph 2 of Article 234-12 of the former Local Tax Act (amended by Act No. 4415, Dec. 14, 1991) shall not impose property tax, etc. on the property, etc. directly used for its business by a nonprofit business operator prescribed by Presidential Decree, who conducts religious, religious, charity, academic, art, or public services: Provided, That the same shall not apply to cases where the property, etc. is used for a fee or where part of the property, etc. is not used for its original purpose, and each of the above provisions after the amendment was added to cases where the property, etc. is used for profit-making business prescribed by Presidential Decree, as one of the items excluded from the objects of

"Cases where the property is used as rent" under the above provisions before the amendment refers to cases where the user pays the price to the non-profit entrepreneur for the use of the property, etc., and if the use has a quid pro quo meaning, the length of the period of use, the method of payment of the price, and the difference in the price thereof shall not be asked (see Supreme Court Decision 92Nu1505 delivered on September 14, 1993). Whether a business constitutes a profit-making business shall be reasonably determined according to social norms, considering whether the business is profitable or for profit-making business, and whether there is continuity and repetition of the degree that it can be seen as business activities in light of its size, frequency, mode, etc. (see Supreme Court Decision 93Nu2623 delivered on April 15, 1994).

As determined by the court below, if the subject of the use of the swimming pool in this case is not limited to the person with disabilities, including the general public, and its operating hours are also without any restriction, and most users (9.2%) including the general user (92.6%) bear the user fee, and the user fee also reaches 50 to 68% of the nearby swimming pool, it is reasonable to view that the operation of the swimming pool in this case is beneficial or for profit-making purposes.

According to the records, the swimming pool of this case is relatively worn out compared to the swimming pool in the vicinity of 20 years after the opening of the swimming pool of this case, and the depth in the swimming pool of this case is 80 to 120§¯ for the convenience of disabled persons, and it is mainly installed for disabled persons, such as toilets and shower, and thus, it is deemed that the use fee of the general public is less than that of the neighboring swimming pool is based on such circumstances, and it cannot be readily concluded that the use fee is based on the actual cost level specially set according to the relation with the target project, and that the amount of revenue is less than the amount of revenue.

In addition, even if the person with a disability can improve social integration and adaptation ability by engaging in activities together with the general public, and even if the swimming pool of this case is particularly installed for the person with a disability, if the plaintiff corporation continues to provide the swimming pool of this case for the use of the general public continuously and repeatedly as seen earlier and receives the price therefor, it cannot be said that the swimming pool of this case is used for profit-making business in light of the size, frequency, mode, etc. of use.

This situation is the fact that Article 4 (No. 125 of the records) of the articles of incorporation of the Plaintiff corporation provides that a swimming pool is established and operated as a profit-making business to achieve the purpose of social welfare business.

Therefore, on the ground that the operation of the swimming pool in this case does not constitute profit-making business, the court below revoked each disposition of imposition of the Defendant’s property tax in the year 1992 through 1994 against the Plaintiff, etc., shall not be deemed to have committed any violation of law that affected the conclusion of the judgment by misapprehending the above legal principles. The appeal

Meanwhile, in imposing property tax, etc. for the year 191 to which the provisions of the Act before the amendment apply, the decision that the operation of the swimming pool of this case constitutes a profit-making business pursuant to the provisions of the Act after the amendment and excluded it from the object of non-taxation under the provisions of the same Act shall be erroneous. However, as seen earlier, in the case of this case where the swimming pool of this case was used for the swimming pool facilities in return for the consideration from a large number of general public, etc., it is nothing more than that of "where the swimming pool of this case is used for rent" under the provisions before the amendment, and the error in applying the above Acts and subordinate statutes shall not affect

In light of this, the lower court’s revocation of each of the above dispositions on the sole ground that the legal application was erroneous shall not be deemed to have committed an unlawful act affecting the conclusion of the judgment by misapprehending the legal doctrine. The ground of appeal assigning this error is with merit.

3. Therefore, the judgment of the court below is reversed, and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices

Justices Kim Jong-sik (Presiding Justice)