Whether the land acquired by a corporation falls under non-business land where justifiable grounds exist for not using it directly for its unique duties after the grace period of one year expires.

The new construction of a private house to be used directly for its unique duties is merely the preparation stage for using directly for its unique duties and cannot be deemed to have been used directly for its unique duties: Provided, That even though normal efforts and promotions have been performed, if the grace period was imposed for the inevitable period for the construction of a building, it shall be determined whether it constitutes a non-business land under Article 84-4 (1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 13870 of Mar. 6, 1993) and thereafter, it shall be determined whether it constitutes a non-business land within five years after acquisition under Article 112-3 of the former Local Tax Act (amended by Presidential Decree No. 4415 of Dec. 14, 1991).

Article 112(2) of the Local Tax Act, Article 84-4(1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 13870 of March 6, 1993), Article 112-3 of the former Local Tax Act (amended by Act No. 4415 of December 14, 1991)

Attorney Park Jin-Un, et al., Counsel for the defendant-appellant

The head of Jung-gu Seoul Metropolitan Government

Seoul High Court Decision 92Gu15606 delivered on November 5, 1992

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal Nos. 1 and 2 are also examined.

Article 112(2) of the Local Tax Act and Article 84-4(1) of the Enforcement Decree of the same Act provide that the scope of land for non-business use of a corporation refers to land which is not used directly for the corporation’s unique business without justifiable grounds within one year from the date of its acquisition, and Article 112-3 of the Local Tax Act (amended by Act No. 4415 of Dec. 14, 191) provides that acquisition tax shall be imposed where the relevant land becomes a non-business land of a corporation within five years from the date of its acquisition. The new construction of a house to be used directly for the corporation’s unique business is merely a preparatory stage for its own business and is actually used directly for its unique business. However, if the grace period has been imposed on the date of inevitable construction work despite its unique efforts and promotion, it is difficult to use the land within the scope of non-business use under Article 84-4(1) of the Enforcement Decree of the Local Tax Act and the land under construction permission can be determined within one year from the date of its new construction permission to the date.

Therefore, the judgment of the court below that the land in this case cannot be seen as falling under the case of non-business land of the corporation within 5 years after acquiring the "land under Article 112-3 of the Local Tax Act" is just and there is no error of law such as misunderstanding of legal principles or incomplete hearing which points out the arguments.

The Supreme Court precedents cited by theory are not appropriate in this case because Article 84-3 (1) 3 of the former Enforcement Decree of the Local Tax Act is applied before Article 112-3 of the former Local Tax Act is newly established. The arguments are without merit.

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 Yoon Young-young (Presiding Justice)