[1] Whether the use of reclaimed land in the purpose of business on the corporate register other than the purpose of reclamation stipulated in the reclamation license of public waters constitutes the use directly for the corporation’s own business (negative)

[2] Criteria for determining whether the land constitutes "land prohibited from use" under Article 84-4 (4) 6 of the former Enforcement Decree of the Local Tax Act

[1] Article 84-4 (2) of the Enforcement Decree of the Local Tax Act, as a corporation's unique business related to land for non-business use of a corporation, refers to "business of obtaining authorization or permission from the administrative agency" in addition to "business of purpose business on the corporate registry". In light of its unique characteristics, the business of obtaining authorization or permission from the administrative agency should be judged independently from the business of the corporation. Thus, even if the business of the authorization or permission or the business of the representative is a corporation on the corporate registry, it shall not be deemed that the business of the corporation is a corporation's own business. Thus, it shall not be used for the purpose of reclamation authorized at the time of acquisition of the reclamation license for four years after the date of authorization for the completion of construction, and there is no material to recognize the use of the land as a justifiable reason, the land shall be deemed a corporation's land for non-business use without considering whether the land was used on the corporate registry or whether there is any justifiable reason for not being used on such business.

[2] Article 84-4 (4) 6 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14481 of Dec. 31, 1994) provides that the land shall be acquired and the construction or use of which is prohibited under the related Acts and subordinate statutes shall not be deemed land for non-business use of the corporation, but the land shall not be deemed land for which one year has not passed since the date of cancellation of the prohibition. However, whether it is a land under this provision shall be determined in comparison with the unique duties of the corporation related to the land, and even if it is possible to use the corporation's unique duties regardless of whether the construction is prohibited, it shall not be excluded from land

[1] Article 112 (2) of the former Local Tax Act (amended by Act No. 4611 of Dec. 27, 1993); Article 84-4 (2) and (4) 9 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14481 of Dec. 31, 1994) / [2] Article 112 (2) of the former Local Tax Act (amended by Act No. 4611 of Dec. 27, 1993); Article 84-4 (4) 6 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 1481 of Dec. 31, 1994)

[1] Supreme Court Decision 92Nu2226 delivered on November 13, 1992 (Gong1993Sang, 157)

Hanjin Construction Co., Ltd. (Korea-U.S. Law Office, Attorneys Myeong-hee et al., Counsel for the defendant-appellant)

Head of Seo-gu Busan Metropolitan Government (Attorney Park Jong-ok, Counsel for the plaintiff-appellant)

Busan High Court Decision 95Gu9747 delivered on June 13, 1996

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

We examine the grounds of appeal.

1. As to the imposition of acquisition tax

Article 84-4 (4) 9 of the Enforcement Decree of the Local Tax Act provides that land reclaimed under the Public Waters Reclamation Act and for which four years have not elapsed since the date of authorization for completion of construction work shall not be deemed land for non-business use of a corporation subject to acquisition tax. The land reclaimed under the Public Waters Reclamation Act shall not be deemed land for non-business use of a corporation even if it is not used for the corporation's unique business, while the grace period expires without using it for the corporation's unique business or if it is sold or disposed within the grace period without using it for its unique business, it shall be deemed land for non-business use of a corporation unless there is a justifiable reason for the grace period (see Supreme Court Decision 94Nu9245 delivered on April 11, 195). Meanwhile, Article 84-4 (2) of the Enforcement Decree of the Local Tax Act provides that "business for non-business use of a corporation" as its unique business related to land for non-business use of a corporation under the Public Waters Reclamation Act and it shall be deemed that it belongs to 19.

According to the court below's determination, the land of this case was reclaimed by the plaintiff corporation pursuant to the Public Waters Reclamation Act, and the purpose of reclamation authorized at the time of obtaining a reclamation license was not used as dredging equipment piling site for four years after the date of authorization for completion of construction work, and there is no data to recognize any justifiable reason for not using the land in the records. Thus, the land of this case shall be deemed as the land of the corporation for non-business use without any justifiable reason for not using the land in warehouse storage business, tourist business, or housing construction business, which is purpose business on the register of the plaintiff corporation, or for not using it in such business.

In addition, Article 84-4 (4) 6 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14481, Dec. 31, 1994; hereinafter the same) provides that land, the construction or use of which is prohibited under the related Acts and subordinate statutes, shall not be deemed land for non-business use of a corporation, although one year has not passed since the date of the cancellation of the prohibition, it shall not be deemed land for non-business use of a corporation. However, it shall be determined in comparison with the unique duties of a corporation related to the land of this case, and even if the land of this case is the land, the construction of which is prohibited, such as the plaintiff's assertion, the unique duties of the corporation of this case shall be limited to dredging equipment, and it shall be reasonable to deem that the use of this work is possible regardless of whether the construction is prohibited. Thus, the land of this case

Although the reasoning of the judgment of the court below is inappropriate, the conclusion that the land of this case constitutes an excessive acquisition tax as non-business land of a corporation is just, and there is no violation of the rules of evidence or misapprehension of legal principles as otherwise alleged in the ground of appeal.

2. As to the imposition of registration tax

Article 138(1) of the former Local Tax Act (amended by Act No. 4611 of Dec. 27, 1993) provides that the registration tax for the corporate registration within a large city area shall be heavy, but this provision shall not apply to the business type prescribed by the Presidential Decree. subparagraph 3 provides that the real estate registration for the establishment, etc. of a juristic person within a large city and the establishment, and real estate registration for the establishment, after the establishment, shall be excluded from the distribution industry under the provisions of the Distribution Industry Modernization Promotion Act as one excluded from heavy, according to the proviso of Article 101(1)9 of the Enforcement Decree of the Local Tax Act. Paragraph (2) provides that the grace period for the establishment of a real estate shall be 9 years if the property acquired by a person who runs the business under the provisions of each subparagraph of paragraph (1) for the purpose of use, is not used directly for the business type within one year after the date of its establishment or registration, and Article 105(1)9 of the Enforcement Decree of the Local Tax Act provides that the establishment of a real Estate within 9 years and 5 years after its establishment.

According to the records established by the court below, since the plaintiff corporation established Busan Branch on May 30, 1990 and completed the registration of preservation of ownership on the land of this case located in Busan on October 19, 190, the registration of preservation of ownership is clear that the corporation falls under the subject of registration tax, and even if it falls under the distribution industry of the Enforcement Decree, which is excluded from the subject of heavy taxation, such as the plaintiff's assertion, the registration date of warehouse for the installation of open storage on the land of this case shall be the date of May 15, 1993, and it shall not be excluded from the subject of heavy taxation because it is obvious that the grace period has elapsed one year from the date of the registration of real estate.

In the same purport, the judgment of the court below that the real estate registration of this case is subject to heavy registration tax is just, and there is no violation of the rules of evidence or misapprehension of the legal principle as otherwise alleged in the ground of appeal.

3. Therefore, the appeal is dismissed, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cho Chang-hun (Presiding Justice)