Korea Housing Guarantee Co., Ltd. (Law Firm Gyeong & Yang, Attorney Yellow-ju, Counsel for the plaintiff-appellant)

Jinju Mayor (Law Firm Geum River, Attorneys Kim Won-tae et al., Counsel for the plaintiff-appellant)

April 17, 2014

Changwon District Court Decision 2013Guhap336 Decided July 9, 2013

1. The judgment of the court of first instance is modified as follows.

A. The Defendant’s imposition of registration tax exceeding KRW 386,183,960, and local education tax exceeding KRW 222,618,80, and the local education tax exceeding KRW 41,656,980, among the dispositions imposed by the Defendant on the Plaintiff as of March 12, 2012, each disposition of imposition of KRW 386,183,960 as to the registration of ownership transfer on the ○○ apartment in Jin-si, and KRW 72,263,70.

B. The plaintiff's remaining claims are dismissed.

2. Of the total litigation costs, 60% is borne by the Plaintiff, and the remainder 40% is borne by the Defendant, respectively.

The judgment of the court of first instance is revoked. The Defendant revoked the imposition of the registration tax of KRW 386,183,960 on March 12, 2012 and the local education tax of KRW 72,407,650 on the difference in the registered tax rate and KRW 72,407,650 on the additional registration tax of KRW 13,549,080 on the difference in the registered tax rate and KRW 72,407,650 on the additional registration tax of KRW 13,549,080 on the difference in the registered tax rate as of March 12, 2012 (the Plaintiff added the claim for revocation of the imposition of the additional registration tax of KRW 72,407,650 on the difference in the registered tax rate and the ancillary claim

1. Details of the disposition;

A. The Sungwon Housing Construction Co., Ltd. (hereinafter referred to as the “Mawon Housing”) is an implementer who constructs a new project (the scheduled commencement date of construction; January 2, 2006; December 31, 2007; hereinafter referred to as the “instant building”) on the ground of Jinju-si, a housing construction project under Article 16 of the Housing Act, and 29 parcels (hereinafter referred to as the “instant site”). The Sungwon Housing Co., Ltd. entered into a contract with the Plaintiff to trust land and buildings (hereinafter referred to as the “instant trust contract”) with the Plaintiff on the same day. The major contents of the instant trust contract were as follows:

(4) Where a truster or beneficiary holding concurrent office (hereinafter referred to as "A") and a beneficiary holding concurrent office (hereinafter referred to as "A") which are included in the main sentence of this Article and a housing mortgage (hereinafter referred to as "B") are concluded with a trust contract as follows: (a) Trust real estate under Article 1 (Trust Real Estate) intends to carry out a housing construction project after obtaining approval for a project plan under Article 16 of the Housing Act means land (including access roads and land subject to donation under an approval for a project plan; hereinafter referred to as "land") listed in the Attached Trust Real Estate List Act and buildings which are being constructed or constructed on such land. The purpose of this trust is to Article 2 (Trust Purpose) where "A" performs a sale contract to several buyers, or where "A" is unable to carry out a sale contract, it shall be paid to the beneficiary at the time of sale or acquisition of the trust property under Article 106 (1) 1 of the Enforcement Decree of the Housing Act or in order of sale or disposal of the real estate (hereinafter the same shall apply).

B. On December 28, 2005, the Plaintiff, separate from the instant trust agreement, entered into an agreement to transfer to the Plaintiff all rights related to the business site and the ground buildings, the seller for sale in lots and third parties, and all other rights related to the business (hereinafter “instant transfer agreement”) under the condition that the Plaintiff is liable to guarantee the buyer in cases where it becomes no longer possible to continue its business due to inevitable causes such as default, bankruptcy, etc.

C. On January 6, 2006, the Plaintiff entered into a housing sale guarantee contract with the content that “where the principal debtor is deemed unable to perform the housing sale contract due to a default, bankruptcy, etc., the execution rate verified by the supervisor is at least 25 percent of the expected progress rate, and thus it is impossible for the guarantee creditor to perform the sales contract due to a request for performance of the guarantee creditor (excluding the case where the guarantee company recognizes that there is no prearranged occupants), the Plaintiff bears within the limit of KRW 48,703,690,00 of the guaranteed amount for the obligation to refund the down payment and the intermediate payment paid for the sale of the relevant housing, and the Plaintiff has the right to indemnity against the principal house and the guarantee creditor has the right to indemnity against the principal house when the Plaintiff fulfilled the guarantee obligation (hereinafter “the guarantee contract of this case”).

D. On July 28, 2008, the Plaintiff received a provisional disposition prohibiting the disposal of real estate on the instant building, and completed the registration of preservation of ownership in the name of Sungwon Housing, which was based on the entrustment of the provisional disposition registration. After which, as the constructor of the instant building construction project, Eulwon Construction Corporation discontinued construction for a long time and delayed the inspection for approval for use, the Sungwon Housing renounced the construction of the instant building on August 11, 2008 (as of May 2008, the fairness ratio of the construction of the instant building is 94.75%).

E. Under the instant guarantee contract from September 25, 2008 to December 11, 2008, the Plaintiff refunded a total of KRW 43,513,917,400 to 317 households among the buyers who are secured creditors (hereinafter “instant refund performance deposit”). The Plaintiff entered into a contract with the Sungwon Housing on November 27, 2008 under the instant transfer agreement with the Plaintiff to be transferred the instant building site and buildings, and the Plaintiff received the registration of ownership transfer under the Plaintiff’s name on December 18, 2008 as to the instant building on November 27, 2008. The Plaintiff acquired the registration of ownership transfer under the Plaintiff’s name on the ground of the transfer on November 27, 2008, after selling the instant building site and building in the Osung Housing Co., Ltd. and selling it in the name of 30,530,000,000,000 on May 10, 2015.

F. Pursuant to Article 40(3) of the Registration of Real Estate Act, the entire site of this case was registered on September 13, 2010 as the right to use each site in the registry as to each section of exclusive ownership of the instant building by co-ownership shares constituting the section of exclusive ownership of the instant building, and the registry of the instant site was closed (at the time, the ownership of the instant site and the building was all the owner of the instant building and the building was a pro rata

G. On November 27, 2008, the Plaintiff reported and paid 279,728,290 won of registration tax and 55,945,650 won of local education tax calculated by applying 1.5% of registration tax, which is the registration tax rate under Article 131(1)2 of the former Local Tax Act (amended by Act No. 9302, Dec. 31, 2008; hereinafter “former Local Tax Act”).

H. On December 7, 2011, the Defendant determined that the Plaintiff acquired the instant apartment (the aggregate of the instant apartment site and the instant building) at a cost, and issued a notice of the result of tax investigation and a notice of taxation that the Plaintiff collected the registration tax of KRW 906,730,530, and the local education tax of KRW 169,535,080, applying 2% of the registration tax rate, which is the registration tax rate of KRW 131(1)3 of the former Local Tax Act, as the tax base of the total amount of the refund repayment amount.

I. After the Plaintiff’s request for pre-assessment review, the Defendant: (a) calculated again the tax amount calculated by reducing 50% of the above tax rate by 50% pursuant to Article 269(5) of the former Local Tax Act because the apartment acquired by the Plaintiff constitutes a house for which the sales contract was concluded to implement the guarantee of housing sale; (b) subsequently, on March 12, 2012, the amount of tax calculated by reducing the above tax rate by 24,865,364,579 [the amount acquired by the Plaintiff = 43,513,917,400 won (the refund repayment amount determined as the Defendant’s tax base) - 18,648,552,821 won (the current base value of the building of this case reported and paid as the Plaintiff’s tax base); (c) the registration tax rate of 386,183,960 won and 72,263,700 won and the registration tax rate of 150% (the registration tax rate of 130% of the Plaintiff’s.

(j) On May 11, 2012, the Plaintiff filed an appeal with the Tax Tribunal on the instant disposition, but was dismissed by the Tax Tribunal on November 6, 2012.

[Ground of recognition] Facts without dispute, Gap evidence 1 to 10-2, Eul evidence 1, 3 and 10, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) As the Plaintiff acquired the instant building in accordance with the instant trust agreement and the instant transfer agreement, the tax base of the registration tax, etc. of the instant building is not the refund repayment but the current base value of the instant building.

2) Even if the tax base of registration tax, etc. for the registration of the building of this case is assumed to be the repayment amount of refund of this case as alleged by the Defendant for household affairs, the repayment amount of refund of this case includes the acquisition cost of the building of this case, so the acquisition cost of the building of this case is the remainder after deducting the acquisition cost of the building of this case from

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) As to whether the filing period is observed

The defendant asserts that the plaintiff's additional registration tax of KRW 72,407,650 and the additional local education tax of KRW 13,549,080 due to the difference in the registered tax rates added at the trial were to have exceeded the filing period.

However, as seen earlier, the instant disposition includes both registration tax of 386,183,960, and local education tax of 72,263,70, and additional registration tax of 72,407,650, and local education tax of 13,549,080, and additional registration tax of 13,549,080, due to the difference in the registered tax rate. The Plaintiff dissatisfied with the instant disposition and filed a prior trial procedure (request against the Tax Tribunal). Upon filing the instant administrative lawsuit, the Plaintiff sought revocation of the instant disposition only with respect to “386,183,960, and local education tax of 72,263,70,00, which is the acquisition value as the tax base,” and the Plaintiff did not seek revocation of the initial disposition within the scope of 10,000,000, including “additional registration tax of 72,407,650, and additional registration tax of 13,549,080.

2) As to the Plaintiff’s allegation No. 2. A. 1

According to Article 124 of the former Local Tax Act, registration tax shall be imposed on a person who is registered or recorded (including being registered) when matters concerning the acquisition, transfer, change, or extinction of property rights or other rights are registered or recorded in the public register. According to Articles 130(1), 111(5), and 130(3) of the former Local Tax Act and Article 82-2(1) of the former Enforcement Decree of the Local Tax Act (wholly amended by Presidential Decree No. 22395, Sept. 20, 2010; hereinafter “Enforcement Decree of the former Local Tax Act”), the registration tax shall be imposed on a person who is registered or recorded. The actual acquisition value refers to the cost paid or to be paid to the other party to the transaction or a third party for the acquisition of the relevant property in order to obtain the relevant property right at the time of registration, and the cost of acquisition or transfer of such right is the total cost of acquisition or extinguishment of property rights, which is determined by Presidential Decree of the former Local Tax Act.

If the plaintiff completed the registration of ownership transfer of the apartment of this case under his name, the above registration shall be subject to the registration tax regardless of whether the cause of registration is a security for transfer or a payment in kind.

In addition, according to Article 2 of the former Multi-Unit Residential Building Act (amended by Act No. 10204, Mar. 31, 2010; hereinafter “former Multi-unit Residential Building Act”), “the section for exclusive use” refers to the section of the building which is the object of sectional ownership (Article 3); “the section for common use” refers to the section of the building, other than the section for exclusive use; the section for common use; the accessory to the building that does not belong to the section for exclusive use; and “the site of the building” refers to the land that becomes the site of the building in accordance with the land and regulations in which one building to which the section for exclusive use belongs is located (Article 5); and “the right to use the site” refers to the right that a sectional owner has against the site of the building in order to own

In this case, the right to use the site refers to the ownership of the site of this case. The right to use the site of this case can not be disposed of separately from the section for exclusive use pursuant to Article 20 (1) and (2) of the former Aggregate Buildings Act as an aggregate building of the former Aggregate Buildings Act. As seen earlier, in full view of the fact that, upon the transfer agreement of this case, where the original house cannot continue to operate a business on the grounds of dishonor, etc., the Plaintiff is subject to the transfer of all rights, etc. on the site of this case from the Sungwon Housing under the condition that the Plaintiff bears the responsibility to guarantee the buyer, etc., even after the completion of the transfer registration of the ownership of this case due to the trust of this case, the Plaintiff paid the refund payment of this case to the buyer in order to acquire the ownership of the building of this case. Therefore, it is reasonable to view that some of the repayment payment of this case was paid for the acquisition of the building of this case. Therefore, it is reasonable to deem that the Defendant’s assertion that the entire repayment payment of this case constitutes the registration tax base of this case.

3) As to the Plaintiff’s allegation No. 2. A. 2

Comprehensively taking account of the purport of the entire pleadings in the statements No. 6, No. 5, No. 7, and No. 10, the repayment of the instant case can be acknowledged that the sum of the down payment and the intermediate payment paid by the buyers of the instant building with the purchase price paid by the buyers of the section for exclusive use in the instant building, includes all the purchase price for the instant building and the instant building.

According to Article 128 of the former Local Tax Act, at the time when the ownership transfer registration on the instant site was made in the name of the Plaintiff, the registration tax for the registration of the acquisition of property in the case of transfer from the truster due to the trust to the trustee was exempted.

Since the object of taxation of the disposition of this case is registered of the building of this case except for the site of this case, the acquisition cost of the site of this case cannot be the tax base. Accordingly, only the remaining amount obtained by deducting the portion equivalent to the acquisition cost of the site of this case from the refund performance amount of this case shall be the tax base of registration tax, etc.

(iv) a reasonable tax amount;

In full view of the overall purport of the pleadings as to Gap evidence Nos. 11, 12, 13, and Eul evidence Nos. 1, 10, and Eul evidence Nos. 43,513,917,400, and the value of the instant land (applicable to the amount of KRW 335,00,000,000 officially announced in the year 2008 of the instant land) is KRW 5,954,625,00,00 (i.e., KRW 17,775 square meters x 335,00), and the standard market value of the instant building is 18,648,52,82,821, and the standard market value of the instant land is 32,982,389,226 won [number 43,513,907,400 x 18,684,528,5285].

Therefore, the reasonable amount of the registration tax calculated by multiplying the acquisition value of the building of this case by 14,33,836,405 won [=32,982,389,226 won (the acquisition value of the building of this case) - 18,648,52,821 won (the base value reported for the acquisition value of the building of this case)] by 22,618,800 won [=143,338,360 won + 28,67,670 won (additional tax) + 50,612,70 won (additional tax) + 41,656,980 won [the reasonable amount of the local education tax + 28,67,760 won (the base value reported for the acquisition value of the building of this case + 26,760 won + the legitimate amount of the registration tax + 294,205,279 won (the additional tax + 209,4675,2545

5) Sub-committee

Therefore, the Defendant’s imposition disposition imposing the Plaintiff as of March 12, 2012, in excess of KRW 386,183,960 of the registration tax on the registration of transfer of ownership on the Jinju-si ○○ apartment and KRW 72,263,70 of the local education tax, which exceeds the legitimate registration tax of KRW 222,618,80 of the registration tax and the legitimate local education tax of KRW 41,656,980, should be revoked.

3. Conclusion

Therefore, the plaintiff's claim is justified within the scope of the above recognition, and the remaining claims are dismissed as it is without merit. Since the judgment of the court of first instance is unfair with different conclusions, the plaintiff's appeal is partially accepted and the judgment of the court of first instance is modified as per Disposition.

[Attachment]

Judges Jin Sung-chul (Presiding Judge)