[1] Whether Article 112 (2) of the former Local Tax Act, which provides for heavy taxation of acquisition tax on a corporation's land for non-business use, violates the principle of no taxation without law and prohibition of comprehensive delegation (negative)

[2] The purport of Article 84-4 (3) 4 of the former Enforcement Decree of the Local Tax Act

[3] Criteria for determining "justifiable reasons" under Article 84-4 (1) of the former Enforcement Decree of the Local Tax Act

[1] Article 112 (2) of the former Local Tax Act (amended by Act No. 5406 of Aug. 30, 1997) provides that the acquisition tax rate shall be 750/100 of the ordinary tax rate when a corporation acquires land for non-business use as prescribed by the Presidential Decree. Article 84-4 of the Enforcement Decree of the same Act (amended by the Presidential Decree No. 15489 of Oct. 1, 1997) provides the specific standards for non-business land and the scope of non-business land. The legislative purpose of the legislation is to promote the sound development of the national economy by preventing a corporation from acquiring land for non-commercial purpose from converting its own land into the production capital and using the land efficiently. Since the meaning of "land for non-business use of a corporation" is a corporation's own land for non-business use, and it is not a value that can only change depending on the subjective judgment of a person, but a corporation's concept of comprehensive delegation of acquisition tax and its ability to cope with changes in the economic conditions of non-business.

[2] Comprehensive examination of Article 107 of the former Local Tax Act (amended by Act No. 5406 of Aug. 30, 1997) and Article 84-4 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 15489 of Oct. 1, 1997), where land acquired by a corporation falls under non-business land under Article 112 (2) of the same Act and Article 84-4 of the Enforcement Decree of the same Act, the purchaser shall not be exempted from acquisition tax even if the non-profit entrepreneur is under Article 107 subparagraph 1 of the same Act, and the acquisition tax shall be imposed with heavy taxation rate under Article 112 (2) of the same Act and Article 84-4 of the Enforcement Decree of the same Act. Furthermore, in light of the legislative purpose of the acquisition tax system for non-business land of a corporation and the characteristics of the acquisition tax system, etc., it shall be interpreted that the land is not used directly within the period of grace, and it shall not be interpreted within the specific purpose of grace period after its use.

[3] "Justifiable reason", which serves as a basis for determining whether a corporation is a non-business land of a corporation with heavy acquisition tax, includes not only external reasons that a corporation cannot use in mind, such as prohibition and restriction under Acts and subordinate statutes, but also internal reasons beyond the grace period since it has not been enough time to make normal efforts to use in its unique duties. Furthermore, in determining whether a justifiable reason exists, it shall be determined individually according to specific cases, considering the following factors: (a) the length of preparation period required for use in its own purpose in light of the purpose of acquisition of land; (b) whether the corporation is a profit-making corporation or a non-profit corporation; (c) the reasons and degree of disability in Acts and subordinate statutes that are not used for its own purpose; (d) whether the corporation has made a serious effort to use the land for its unique duties; and (e) whether the administrative agency

[1] Article 112 (2) of the former Local Tax Act (amended by Act No. 5406 of Aug. 30, 1997), Article 84-4 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15489 of Oct. 1, 1997) / [2] Article 112 (2) of the former Local Tax Act (amended by Act No. 5406 of Aug. 30, 1997), Article 84-4 (3) 4 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15489 of Oct. 1, 1997) / [3] Article 112 (2) of the former Local Tax Act (amended by Act No. 5406 of Aug. 30, 1997), Article 84-4 of the former Local Tax Act (amended by Presidential Decree No. 15484 of Oct. 15, 1997)

[1] Supreme Court Decision 92Nu15154 delivered on May 27, 1993 (Gong1993Ha, 1932), Supreme Court Decision 96Nu8789 delivered on May 29, 1998 (Gong1998Ha, 1814), Supreme Court Decision 96Nu12634 delivered on June 26, 1998 (Gong1998Ha, 2024), Constitutional Court Decision 96Hun-Ba52, 97Hun-Ba40 delivered on July 16, 1998, 97Hun-Ba52, 53, 87Hun-Ba2, 98Hun-Ba23, 98Hun-Ba23 (Joint) delivered on May 24, 1998 (Gong29, 638), Supreme Court Decision 98Hun-Ba98Hun-Ba, 298Hun-Ba, 397, 298Hun-Ba, 5797, 297

Social Welfare Foundation and the Social Welfare Association

Head of the Busan Metropolitan Government Shipping Authority (Attorney Park Jong-ok, Counsel for the defendant-appellant)

Busan High Court Decision 99Nu2246 delivered on January 14, 2000

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

The grounds of appeal are examined.

1. Article 112(2) of the former Local Tax Act (amended by Act No. 5406, Aug. 30, 1997; hereinafter referred to as the "Act") provides that the acquisition tax rate shall be 750/100 of the ordinary tax rate when a corporation acquires land for non-business use as prescribed by Presidential Decree. Article 84-4 of the Enforcement Decree thereof (amended by Presidential Decree No. 15489, Oct. 1, 1997; hereinafter referred to as the "Enforcement Decree") provides the specific standards and scope of land for non-business use. The legislative purpose is to prevent the acquisition of land other than its own purpose from converting corporate funds into capital, thereby promoting the sound development of national economy by seeking the efficient use of land. Since the meaning of "land for non-business use of a corporation" is one's own land, which is not a corporation's own business, and thus, it cannot be seen that there is a big and detailed concept of delegation of acquisition tax or its ability to cope with changes in the economic conditions of the corporation.

The judgment of the court below to the same purport is correct, and there is no error of law in the misapprehension of legal principles as alleged in the grounds of appeal.

2. Article 107 of the Act shall not impose acquisition tax on the following land (excluding objects of taxation under Article 112 (2)): Provided, That in cases where such land is used for a profit-making business prescribed by Presidential Decree or all or part of acquired goods is not used for such business without any justifiable reason within one year (three years in cases falling under subparagraph 1) from the date of its acquisition, acquisition tax on such portion shall be imposed." subparagraph 1 of the same Article provides that "acquisition of real estate for such business by a nonprofit business operator prescribed by Presidential Decree for memorial, religion, charity, academic, art and crafts or other public services" and Article 84-4 of the Enforcement Decree of the Act provides that "acquisition tax shall not be imposed on such land for non-business purposes of the corporation, notwithstanding the provisions of paragraphs (1) and (2) of the same Article, if such land falls under the grace period for acquisition tax imposed on such business for non-business purposes by a corporation which does not use such land for non-business purposes, it shall not apply to cases where such corporation does not use such land for non-business purposes within 14 of the Act.

In this regard, the decision of the court below that rejected the plaintiff's assertion that Article 84-4 (3) 4 of the Enforcement Decree of the Act shall be subject to the three-year grace period and the ordinary tariff rate pursuant to Article 107 of the Act in this case on the premise that Article 84-4 (3) 4 of the Enforcement Decree conflicts with Article 107 of the Act, which is a superior law, shall

3. "Justifiable reason", which serves as a basis for determining whether a corporation is a non-business land of a corporation with heavy acquisition tax, includes not only external reasons that a corporation cannot use in mind, such as prohibition and restriction under Acts and subordinate statutes, but also internal reasons beyond the grace period due to lack of time to make normal efforts to use in its unique duties. Furthermore, in determining whether a justifiable reason exists, it shall be determined individually according to specific cases, considering the following factors: (a) the length of preparation period required for the use for its own purposes in light of the purpose of acquisition of land; (b) whether the corporation is a profit-making corporation or a non-profit corporation; (c) the reasons and degree of disability in Acts and subordinate statutes that cannot be used for its own purposes; (d) whether the corporation has made a serious effort to use the land for its unique duties; and (e) whether there was a reason attributable to an administrative agency (see, e.g., Supreme Court Decision 97Nu5121, Nov. 27, 1998

According to the reasoning of the first instance judgment cited by the court below, the court below acknowledged the fact that the plaintiff acquired the forest of this case as a corporation established under the Social Welfare Services Act for the construction of a comprehensive social welfare center, but failed to make any effort to change the land category within one year after its acquisition. The plaintiff filed an application for a subsidy for the construction of a welfare center on June 15, 1998 after the lapse of 2 years and 5 years from the acquisition date of the forest of this case, and the defendant received a reply from the defendant that the contents of the project plan and the application for the grant of the subsidy were insufficient due to the lack of the details of the project cost burden due to the lack of the project plan and the application for the establishment of a welfare center after the lapse of 98 years from the acquisition date. The court below determined that the plaintiff has a justifiable reason for not using the forest of this case directly for its own proper purpose within 1 year from the acquisition date. It is reasonable to review the records and records, and there is no violation of law such as misunderstanding of facts due to violation of the rules of evidence.

In addition, in light of the legislative intent as seen earlier under Article 112(2) of the Act and Article 84-4(3)4 of the Enforcement Decree of the Act, the "justifiable cause" under the proviso of Article 84-4(3) of the Enforcement Decree is not related to the ground for acquiring land under the main sentence of subparagraph 4, but to the reason that the land category was changed within one year from the date of acquisition under the proviso of subparagraph 4 and used directly for the purpose corresponding to the corporation's unique business. Thus, the plaintiff's assertion to the effect that the plaintiff should be viewed as a justifiable cause even for the reason that the plaintiff acquired the forest of this case for the purpose of establishing the welfare center.

4. Therefore, the appeal shall be dismissed and all costs of appeal shall be assessed against the plaintiff who has lost. It is so decided as per Disposition by the assent of all participating Justices.

Justices Cho Cho-Un (Presiding Justice)