[1] Whether it is exempt from registration tax under Article 128 subparagraph 1 (a) of the former Local Tax Act where a trustee of land newly constructs or completes a building under a trust contract and concurrently registers the preservation of ownership in the name of the trustee (negative)

[2] The standard for determining whether a registration is subject to heavy registration tax under Article 138 (1) 3 of the former Local Tax Act, where a registration has been made in the name of the trustee under a trust contract (=trustee)

[1] Article 128 of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998) provides that registration tax shall not be imposed on any of the following items, while subparagraph 1 (a) provides that "registration of acquisition of property in the case of transfer of property right from a truster to a trustee by a truster (limited to a trust registered under the Trust Act and accompanied by a trust registration)." This provision provides that registration of acquisition of property in the case of transfer of property right from a truster to a trustee. In the interpretation of the provision, only registration tax shall be exempted in the case of acquisition of property right due to transfer of property right from the truster to the trustee. In the case where a trustee of land constructs a new building on the land in accordance with the trust contract and conducts registration of ownership in his name while making registration of ownership in the same manner, such registration does not constitute a non-taxable registration tax as provided in the above provision.

[2] Where matters concerning the acquisition, transfer, change or extinguishment of property rights and other rights are registered or recorded in the public register, the registration tax is imposed on the person who is registered or recorded with the simple existence of the fact that such registration is subject to taxation, and is not related to the existence of the registration or enrollment, and such legal principle is the same as the heavy taxation under Article 138 (1) 3 of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998). Thus, in a case where the registration is made in the name of the real estate trust company, which is the trustee, under a trust agreement under the Trust Act, it shall be based on the trustee in determining whether such registration is subject to heavy taxation under Article 138 (1) 3 of the former Local Tax Act.

[1] Article 128 subparagraph 1 (a) of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998) / [2] Articles 124 and 138 (1) 3 of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998)

[2] Supreme Court Decision 82Nu509 delivered on February 22, 1983 (Gong1983, 609) Supreme Court Decision 85Nu858 delivered on February 25, 1986 (Gong1986, 559) Supreme Court Decision 2001Du4559 Delivered on June 13, 2003, Supreme Court Decision 2001Hun-Ba24, 51(combined) Decided March 28, 2002 (Hun-Gong67, 52)

KB Real Estate Trust Co., Ltd. (former Real Estate Trust Co., Ltd.) (Law Firm Sejong, Attorneys Lee Ho-ro et al., Counsel for the plaintiff-appellant)

The head of Dongjak-gu Seoul Metropolitan Government (Attorney Go Young-deok, Counsel for defendant-appellant)

Seoul High Court Decision 2000Nu9559 delivered on March 13, 2001

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

1. 구 지방세법(1998. 12. 31. 법률 제5615호로 개정되기 전의 것, 이하 같다) 제128조 는 다음 각 호의 1에 해당하는 것에 대하여는 등록세를 부과하지 아니한다고 하면서 제1호 ㈎목 에서 신탁(신탁법에 의한 신탁으로서 신탁등기가 병행되는 것에 한한다)으로 인한 재산권 취득의 등기로서 '위탁자로부터 수탁자에게 이전하는 경우의 재산권 취득의 등기'를 들고 있는바, 이 규정의 해석상으로는 위탁자로부터 수탁자에게 재산권이 이전됨으로써 재산권 취득이 일어나는 경우의 등기 또는 등록만이 등록세 비과세대상이라 할 것이고, 토지의 수탁자가 신탁계약에 따라 그 토지상에 건물을 신축한 다음 자신의 명의로 소유권보존등기를 하면서 신탁등기를 병행한 데 지나지 않는 경우에는 그 등기가 위 규정 소정의 등록세 비과세대상에 해당한다고 할 수 없다.

The judgment of the court below to the same purport is just, and there is no violation of law as otherwise alleged in the ground of appeal.

2. The main sentence of Article 138(1) of the former Local Tax Act provides that the registration tax rate shall be five times the tax rates provided under Articles 131 and 137, and subparagraph 3 provides that real estate registration shall be conducted for the establishment of a juristic person and the establishment, establishment, and transfer of its head office, main office, branch office, or branch office in a large city and for the relocation of its head office, branch office in a large city. The registration tax is a tax imposed on a person who registers or registers his/her property rights or other rights with the mere existence of such registration or enrollment as an object of taxation where the registration or enrollment is made in the public book, and thus, it is not related to whether the registration or enrollment is void or substantially reverted to such registration or enrollment, and the same legal principle applies to the imposition of heavy taxation under Article 138(1)3 of the former Local Tax Act (see, e.g., Supreme Court Decision 200Nu82581, Feb. 22, 1983; 2008Du185, Aug. 1985, etc.).

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles as to the heavy registration tax.

3. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition.

Justices Lee Yong-woo (Presiding Justice)