[1] The meaning of "real estate registration after the establishment of a branch" subject to the registration tax of Article 138 (1) 3 of the former Local Tax Act

[2] Whether the acquisition of real estate and the establishment of a branch, etc. are required to constitute “real estate registration following the establishment of a main office, branch, etc. within a large city” subject to heavy registration tax under the former Local Tax Act (affirmative)

[1] Article 138 (1) 3 of the former Local Tax Act (amended by Act No. 6842 of Dec. 30, 2002), Article 102 (2) of the Enforcement Decree of the Local Tax Act, Article 55-2 of the former Enforcement Rule of the Local Tax Act (amended by Ordinance of the Ministry of Government Administration and Home Affairs No. 266 of Feb. 1, 2005) / [2] Article 138 (1) 3 of the former Local Tax Act (amended by Act No. 6842 of Dec. 30, 2002), Article 102 (2) of the Enforcement Decree of the Local Tax Act, Article 55-2 of the former Enforcement Rule of the Local Tax Act (amended by Ordinance of the Ministry of Government Administration and Home Affairs of Feb. 1, 2005)

[1] Supreme Court Decision 91Nu5815 delivered on January 21, 1992 (Gong1992, 941) Supreme Court Decision 96Nu10539 delivered on November 28, 1997 (Gong1998Sang, 164) Supreme Court Decision 98Du2737 delivered on April 24, 1998 (Gong198Sang, 154) / [2] Supreme Court Decision 97Nu9253 delivered on October 14, 1997 (Gong197Ha, 3524) Supreme Court Decision 9Du1618 delivered on April 10, 201 (Gong201Sang, 1151)

Dongmun Construction Co., Ltd. (Law Firm Dong name, Attorneys Cho Chang-chul et al., Counsel for the defendant-appellant)

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

Seoul High Court Decision 2004Nu12218 delivered on May 19, 2005

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

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Article 138 (1) 3 of the former Local Tax Act (amended by Act No. 6842 of Dec. 30, 2002; hereinafter "the former Local Tax Act") provides that real estate registration after the establishment of a branch in a large city shall be subject to the imposition of registration tax. Article 102 (2) of the Enforcement Decree of the Local Tax Act provides that "real estate registration after the establishment of a branch means any real estate for business, non-business, or non-business, which is acquired within five years from the establishment of the branch." The main sentence of Article 55-2 of the former Enforcement Rule of the Local Tax Act (amended by the Ordinance of the Ministry of Government Administration and Home Affairs No. 266 of Feb. 1, 2005) defines a place of business or a place of business which is a branch, and provides that "any business or business is conducted continuously with human and physical facilities equipped with the requirements for the imposition of registration tax under the Corporate Tax Act, the Value-Added Tax Act, or the Income Tax Act."

In the same purport, the court below is just in holding that the Seoul Branch did not fall under the "real estate registration after the establishment of the Seoul Branch" and therefore the registration of the building and the site of this case is not subject to the registration tax because there is no evidence that the above Seoul Branch acquired the building and site of this case after the Plaintiff established the Seoul Branch, but it did not constitute the "real estate registration after the establishment of the branch", and there is no error of law such as misunderstanding of legal principles as to the branch as

2. Regarding ground of appeal No. 2

In full view of the adopted evidence, the court below determined that even after the Plaintiff established the Seoul Branch on January 5, 1999, it is not enough to conclude that the Plaintiff’s main office was transferred to the Seoul Branch on January 5, 1999. In light of relevant Acts and subordinate statutes and records, the court below’s fact-finding and judgment is justifiable, and there is no violation of the rules of evidence or misapprehension of legal principles as to the interpretation of Article 138(1)3 of the former Local Tax Act, etc., on the ground that the Plaintiff’s main office was transferred to the Seoul Branch on September 7, 2003.

3. As to the third ground for appeal

Article 138 (1) 3 of the former Local Tax Act provides that "real estate registration following the relocation of the head office, main office, branch office, or branch office of a corporation into a large city" as one subject to heavy taxation of registration tax, and Article 102 (2) of the Enforcement Decree of the Local Tax Act provides that "real estate registration following the relocation of the head office, main office, branch office, or branch office into a large city" means all the real estate registration acquired by the corporation or branch office, etc. prior to the establishment, establishment, or transfer. The term "real estate registration" refers to the registration of real estate acquired prior to the establishment, establishment, or transfer of a corporation or branch office, etc., and even if the entire real estate is not necessarily used for the business of a corporation or branch, the registration of real estate acquired without any relation to the establishment, establishment, transfer and transfer shall not be included (see, e.g., Supreme Court Decisions 9Du1618, Apr. 10, 2001; 205Du4205, Sept. 8, 2006).

According to the facts duly established by the court below and the records, the plaintiff acquired the instant building located in Yangcheon-gu Seoul Metropolitan Government for the purpose of real estate lease, acquired the instant building site located in the same Dong-dong as the site for housing construction, and thereafter thereafter, the plaintiff's headquarters also moved into the building located in Yeongdeungpo-gu Seoul Metropolitan Government, Yeongdeungpo-gu, Seoul, not the instant building or the site for housing construction. In light of these circumstances and the legal principles as seen earlier, it cannot be deemed that there exists any relationship between the registration of the instant building and the site and the transfer of the plaintiff's headquarters.

In the same purport, the court below is just in holding that the registration of the building and site of this case does not fall under the real estate registration due to the relocation of the head office subject to heavy registration tax under Article 138 (1) 3 of the former Local Tax Act, and there is no error of law such as misunderstanding of legal principles as to heavy registration tax requirements as

4. Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Si-hwan (Presiding Justice)