Plaintiff

Head of Jung-gu, Daejeon Metropolitan City (Attorney Kim-type, Counsel for defendant-appellant)

April 6, 2011

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposition of acquisition tax of KRW 198,177,220 against the Plaintiff on December 4, 2008 and special rural development tax of KRW 27,783,470 shall be revoked.

1. Details of the disposition;

A. Studio-si Co., Ltd. (hereinafter “studio-si”) shall purchase 13 lots of land and buildings (hereinafter “each real estate of this case”) from the former owners, including the following contents: Jung-gu ( Address 3 omitted), ( Address 4 omitted), ( Address 5 omitted), ( Address 1 omitted), ( Address 2 omitted), ( Address 6 omitted), ( Address 7 omitted), ( Address 8 omitted), ( Address 8 omitted), ( Address 9 omitted), ( Address 10 omitted), ( Address 12 omitted), ( Address 13 omitted, ( Address 14 omitted), and ( Address 14 omitted) and complete the registration of ownership transfer from the former owners.

본문내 포함된 표 지번 소유권 이전등기일 전소유자 매매대금(원) 지급금(원) 미지급금(원) 취득세 등 매입비용(원) 1 (주소 3 생략) 2005. 5. 27. 소외 4 484,100,000 196,995,905 287,104,095 113,007,525 2 (주소 4 생략) 2005. 5. 27. 소외 5 336,200,000 184,910,000 151,290,000 16,186,650 3 (주소 5 생략) 2005. 5. 27. 소외 5 595,700,000 327,635,000 268,065,000 28,266,070 4 (주소 1 생략) 2005. 5. 27. 소외 1, 소외 2, 소외 3 1,688,600,000 168,860,000 1,519,740,000 79,990,060 5 (주소 2 생략) 2005. 5. 27. 소외 3 399,500,000 39,950,000 359,550,000 22,580,820 6 (주소 6 생략) 2005. 5. 27. 소외 6 545,900,000 295,245,000 250,655,000 198,365,232 7 (주소 7 생략) 2005. 5. 27. 소외 6 1,214,900,000 485,767,538 729,132,462 56,726,430 8 (주소 8 생략) 2005. 5. 27. 소외 7, 소외 8, 소외 9, 소외 10 1,000,000,000 700,000,000 300,000,000 46,478,630 9 (주소 9 생략) (102호) 2006. 9. 6. 소외 11 85,000,000 85,000,000 0 1,034,540 10 (주소 10 생략) 2005. 5. 27. 소외 12 895,200,000 858,598,160 36,601,840 84,441,236 11 (주소 11 생략) 2005. 5. 27. 소외 12 10,900,000 2,180,000 8,720,000 0 12 (주소 12 생략) 2005. 3. 30. 소외 13 355,000,000 355,000,000 0 17,308,590 13 (주소 13 생략) 2005. 3. 30. 소외 14, 소외 15 360,750,000 360,750,000 0 17,537,070 14 (주소 14 생략) 2005. 3. 30. 소외 16 200,000,000 200,000,000 0 9,573,280 합계 8,171,750,000 4,260,891,603 3,910,858,397 691,496,133

B. Each register of shareholders dated June 22, 2007, as of June 22, 2007, and June 30, 2007, stated that the Plaintiff acquired 5,000 shares of studio-si on June 26, 2007 from Nonparty 17 (2,250 shares), Nonparty 18 (50 shares), and Nonparty 19 (2,250 shares).

C. On December 4, 2008, the Defendant, on the ground that the Plaintiff acquired 100% of the studio-si shares on June 26, 2007 and became the first oligopolistic shareholder, disposed of acquisition tax (including additional tax of this case) by deeming the Plaintiff to have acquired real estate of 198,17,200,277,783,470,470,250,269, and 209, respectively, pursuant to Article 78(1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 20517, Dec. 31, 2007; hereinafter “former Enforcement Decree of the Local Tax Act”).

D. Upon filing an objection, the Plaintiff filed a tax appeal with the Tax Tribunal on July 15, 2009. However, the Tax Tribunal dismissed the appeal on September 8, 2010, and the Plaintiff was served with the said decision on September 13, 201.

[Ground] Facts without dispute, Gap evidence 1-2, Gap evidence 2-5, Gap evidence 6-1 through 29, Gap evidence 8-1 through 5, Eul evidence 1-2, Eul evidence 3, Eul evidence 4-1, 2-2, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Studio-si was already paid acquisition tax when acquiring each of the instant real estate. Since a corporation and a shareholder are separate personality, even if a corporation owns real estate, it does not have any legal or economic effect on its shareholders. Nevertheless, the mere fact that the Plaintiff acquired the stocks of Studio-si, deeming that the Plaintiff acquired the real estate owned by Pudio-si, and imposing acquisition tax on the Plaintiff is contrary to the principle of double taxation and the principle of substantial taxation.

2) From May 27, 2005 to September 6, 2006, before the Plaintiff becomes an oligopolistic shareholder, the real estate company KB trust under the Trust Act (hereinafter “KB trust”) completed the registration of ownership transfer of each of the instant real estate. Accordingly, the ownership of each of the instant real estate was transferred to KB trust within and outside the country, and even at present, the registration of ownership transfer was completed in the name of KB trust or provisional registration is made in the name of the former owner, and the real estate of this case is not occupied and managed. In full view of these circumstances, even if the Plaintiff became an oligopolistic shareholder, it cannot be deemed that the acquisition of each of the instant real estate is different from that of the former owner, and thus, the disposition of this case is unlawful.

3) Even if the Plaintiff is liable to pay acquisition tax, (1) Pudio City’s purchase of each of the instant real estate and acquisition of full ownership by paying the purchase price of KRW 3,910,858,397 in total, and thus, the unpaid purchase price must be deducted from the tax base; and (2) in relation to various costs, the term “inbound” under Article 82-3(2) of the former Enforcement Decree of the Local Tax Act refers only to a brokerage commission for acquiring real estate, etc. Therefore, in the instant case, the handling fee of Pudio City’s loan is not included in the above “in exchange for the risk of outstanding loan,” and the tax base should be deducted from the tax base, and the traffic impact assessment service fee of KRW 181,590,00,000 and KRW 1,046,940,000,000, including the district unit planning service cost of KRW 55,000,000,000 should also be calculated based on the tax base of this case’s tax base.

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

1) From March 30, 2005 to September 6, 2006, Studio Pty concluded a real estate security trust agreement with KB trust with the following contents, and completed the trust registration with regard to each of the instant real estate as the trust register.

(1) In the case of a trust principal and trust proceeds: (2) In the case of a trust principal and trust beneficiary under Article 2 of the Trust Act, the truster shall first provide the trustee with all necessary documents for the trust registration, such as the registration certificate, certificate of personal seal impression, proxy, etc. (2) In the case of a trust principal and trust beneficiary under Article 1 of the Trust Act: (1) In the case of a trust agreement between the truster and the beneficiary, the truster shall first bear all necessary expenses for the disposal of the trust property under Article 2 of the Trust Act; (2) in the case of a trust agreement between the truster and the beneficiary, the truster shall return the trust property under Article 1 of the Trust Act: (3) in order to guarantee the trustee’s preservation and management of ownership; and (4) in the event that the truster and the trustee fail to perform his/her obligations, the truster shall bear all necessary expenses for the disposal of the trust property under Article 2 of the Trust Act, such as the return of the trust property and the termination of the trust property under Article 5 of the Trust Act.

2) The process for the registration of ownership transfer of each of the instant real estate is as follows.

(2) On May 27, 2005, 205. (3. 1. 2. 2. 2. 2. 4 . 2. 4 . 2. 4 . 4 . 4 . 4 . 4 . 4 . 5 6. 4 . 4 . 205 . 4 6. 4 205 . 4 6. 1 205 6. 5 207 . 4 1. 205) The right to claim sale of ownership is omitted on May 27, 2005 (200 . 5 1 omitted). (3. 4 6. 5 207 1. 205 4. 205 2. 5 205 2. 7. 5 2007

[Ground of recognition] Facts without dispute, Gap evidence 7, Gap evidence 8-1 through 14, Gap evidence 9, 10, Eul evidence 5-1 and 2, and the purport of the whole pleadings

D. Determination

1) Whether the prohibition of double taxation is against the principle of substantial taxation or substance over form principle

A) First of all, as to whether the disposition of this case is contrary to the double taxation prohibition principle, and acquisition tax is contrary to the fact that it is the transfer of property, and it is possible to repeatedly occur according to the number of times when the transfer of property occurs as a distribution tax imposing tax by recognizing the tax-bearing force and imposing the tax. It is reasonable to view that the imposition of acquisition tax on oligopolistic stockholders under Article 105(6) of the former Local Tax Act (hereinafter “competing acquisition tax”) constitutes the imposition of acquisition tax for a new taxation separate from the acquisition tax paid by the corporation for the first time (see Constitutional Court en banc Decision 2005Hun-Ba45, Jun. 29, 2006). In this case, in accordance with the above legal principle, the taxation fact of acquisition tax already paid by Pudio City was acquired from the pre-owner, and the taxation fact of the disposition of this case cannot be deemed to violate the double taxation principle, and thus, it cannot be deemed that the Plaintiff acquired the stocks of Pudio-si shareholders and thus, it cannot be deemed to have violated the taxation principle of real property.

B) Next, as to whether the instant disposition is against the substance over form principle, (1) the legislative intent of the instant legal provision is similar to the acquisition of an object of taxation between individuals in a case where an unlisted corporation transfers its assets by means of transfer of stocks or equity shares; and (3) the acquisition of the assets of the relevant corporation or the status of management and operation where an oligopolistic shareholder becomes an oligopolistic shareholder of the relevant corporation; and thus, deeming the oligopolistic shareholder as having a tax-bearing capacity is in substance consistent with the fair taxation and the substance over form principle (see Constitutional Court en banc Decision 2005Hun-Ba45, Jun. 29, 2006). (2) The oligopolistic shareholder subject to the instant legal provision is in a position to substantially control the operation of the relevant corporation. In this case, the position of practically controlling the operation of the relevant corporation does not require the actual exercise of rights such as using, benefiting from, or disposing of the assets of the corporation through the management control of the relevant corporation; and (4) the Plaintiff is not able to exercise shareholder rights through the exercise of voting rights (see Supreme Court Decision 20000Du3196, Apr. 198, 190.

C) Therefore, the Plaintiff’s assertion on this part is without merit.

2) Whether the Plaintiff can be deemed to have acquired each of the instant real estate

A) First of all, it is difficult to consider that the Plaintiff had an oligopolistic shareholder registered in the name of KB trust before the Plaintiff becomes an oligopolistic shareholder, and thus, the Plaintiff cannot be deemed to have acquired each of the instant real estate under the name of KB trust. In other words, the following circumstances are ① completely transferred the ownership of the real estate to the trustee domestically and externally if the registration of ownership transfer is completed in the name of the trustee, and ownership is reserved to the truster in the internal relationship with the truster (see, e.g., Supreme Court Decision 2000Da70460, Apr. 12, 2002). However, in such a case, it is not reasonable for the trustee to manage and dispose of the trust property as stipulated in the trust deed within the scope of the purpose of the trust, in view of the legislative intent of the former Trust Act, to view that the acquisition tax is prohibited in principle from acquiring the trust property under the name of the trustee or to acquire the right thereof (Article 31(1) of the Trust Act), and to impose liability for damages on the trust company in violation of the trust property.

Therefore, prior to becoming an oligopolistic stockholder, the Plaintiff is deemed to have acquired each of the instant real estate under the name of KB Trust without relation to whether each of the instant real estate was already registered in the name of KB Trust, and is obligated to pay the deemed acquisition tax stipulated in the legal provisions of this case. Therefore, the Plaintiff’s allegation in this part is without merit.

B) Next, since Fudio City did not actually possess and manage each of the real estate of this case until the Plaintiff becomes an oligopolistic shareholder, it is clear whether the Plaintiff is not liable to pay acquisition tax, and since acquisition tax is a distribution tax and an act of acquiring goods by recognizing the ability to pay taxes, it is only a type of transfer of ownership (see, e.g., Supreme Court Decisions 98Da12171, Sept. 3, 1999; 95Nu12750, Feb. 9, 196; 95Nu105, Feb. 2, 1996). Article 73(1) and (2) of the Enforcement Decree of the former Local Tax Act provides that acquisition tax shall be deemed as acquisition if it is actually acquired even if the registration under the related Acts and subordinate statutes is not performed, and it shall not be deemed that the Plaintiff’s obligation to pay acquisition tax shall not have any effect on the date of acquisition of real estate in full. Thus, it shall not be deemed that the Plaintiff’s obligation to pay acquisition tax shall not have any form or form of real estate.

3) Whether there is an error in the calculation of tax base

A) First of all, the Plaintiff’s assertion that the value of each of the instant real estate constitutes the tax base for deemed acquisition tax pursuant to Article 111 of the former Local Tax Act and Article 82-3(1) of the Enforcement Decree of the same Act is unreasonable, and that the unpaid balance should be deducted from the tax base is not accepted, since it is merely an independent assertion that the Plaintiff’s assertion that the value of each of the instant real estate should be deducted from the tax base.

B) Next, according to Article 82-3 (1) of the former Enforcement Decree of the Local Tax Act, the acquisition price, which serves as the tax base for acquisition tax, refers to all expenses paid or to be paid to the other party or a third party in order to acquire the pertinent object prior to the time of acquisition of the object subject to taxation. In such a case, all expenses include introduction fees, design expenses, arrears, interest on installments, and construction funds, and direct and indirect expenses required for the acquisition of interest, etc. In this regard, as alleged by the Plaintiff, (1) it is reasonable to view that there is no ground to interpret the “inbound fee” only as real estate brokerage fees as alleged by the Plaintiff, all expenses paid to the third party in order to acquire the pertinent object shall be included in the acquisition price which serves as the tax base for acquisition tax, and (2) it is reasonable to deem that the indirect expenses paid to the third party for the acquisition of each real estate of this case without any plan to achieve each expenditure as a result, corresponding to the ratio of acquisition, which is counted in the corporate account book, as well as the tax base for acquisition tax.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.

[Attachment Omission of Related Acts]

Judges Embryon (Presiding Judge)