Cho Jae-2014- Daejeon-3239 ( October 14, 2014)

Whether the revised Comprehensive Real Estate Tax Act which does not deduct part of the attached property tax amount violates the principle of no taxation without law or double taxation prohibition.

The calculation method in attached Form 3 of the Enforcement Rule of the Comprehensive Real Estate Tax Act is to reduce the scope of property tax to be deducted than that prescribed by the Comprehensive Real Estate Tax Act, which is in violation of the principle of no taxation without the law, and the portion on which the Comprehensive Real Estate Tax was imposed without deducting part of the property

Article 14 (Tax Rate and Amount of Comprehensive Real Estate Holding Tax)

Cheongju District Court-2015-Gu Partnership-10020 ( August 27, 2015)

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○ Head of tax office

2015.08.13

2015.08.27

1. On November 16, 2013, the Defendant’s imposition of comprehensive real estate tax of 434,441,860 won against the Plaintiff in the year 2013 exceeds KRW 396,974,060, and the imposition of special rural development tax of KRW 86,88,370, which exceeds KRW 79,394,80,00, shall be revoked, respectively.

2. The costs of the lawsuit are assessed against the defendant.

Cheong-gu Office

The same shall apply to the order.

1. Details of the disposition;

A. On November 16, 2013, the Defendant imposed 434,441,860 won of comprehensive real estate holding tax in 2013 and 86,888,370 won of special rural development tax on the Plaintiff (hereinafter “instant disposition”).

B. The Plaintiff filed an appeal with the Director of the Tax Tribunal on June 12, 2014, asserting that comprehensive real estate holding tax amounting to 37,467,80 won and special rural development tax amount to 7,493,570 won should be revoked, but the said claim was dismissed on October 14, 2014.

[Ground of Recognition] Facts without dispute, Gap evidence Nos. 1 through 4, Eul evidence No. 1, whole pleadings

Purport

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

If property tax and comprehensive real estate tax are imposed concurrently on the same taxable object, it is illegal as double taxation. In this regard, Articles 9(3), 14(3) and (6) of the Comprehensive Real Estate Holding Tax Act and Articles 4-2 and 5-3(1) and (2) of the Enforcement Decree of the Comprehensive Real Estate Holding Tax Act provide that in calculating the amount of comprehensive real estate holding tax, the amount of tax imposed as property tax shall be deducted for the portion

However, in calculating the deducted amount of property tax, the Defendant did not deduct only the amount of property tax imposed on the portion subject to the comprehensive real estate holding tax in accordance with the calculation method in attached Form 3 of the Enforcement Rule of the Comprehensive Real Estate Holding Tax Act by again multiplying the amount of property tax by the fair market price ratio, and did not deduct the remaining amount of tax. Therefore, the portion on which the comprehensive real estate holding tax was imposed without deducting

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) The Local Tax Act amended by Act No. 7332, Jan. 5, 2005, in order to realize the tax base, provides that the property tax base shall be based on the publicly notified price pursuant to the Public Notice of Values and Appraisal of Real Estate Act, but the property tax base shall be calculated according to the annual application rate of the publicly notified price in order to ease a rapid tax burden following the introduction of a new system. The Gross Real Estate Tax Act enacted by Act No. 7328, Jan. 5, 2005, puts the amount obtained by deducting a certain amount of tax base from such aggregate amount of the property tax

However, since the above application rate of the Local Tax Act was determined to be increased by step, it was difficult to flexibly adjust the appropriate level of tax burden so that it could be a fair tax burden, so the Local Tax Act amended by Act No. 7843, Dec. 31, 2005; the Gross Real Estate Tax Act amended by Act No. 9273, Dec. 26, 2008 adopted a fair market value ratio system applicable to property tax and comprehensive real estate holding tax to a certain tax base within a certain scope, taking into account the real estate market trend, financial conditions, etc. However, Article 5 of the Addenda of the Local Tax Act adopted a fair market value ratio applicable to property tax and comprehensive real estate holding tax so that the fair market value ratio can be determined within a certain scope of tax base based on both the publicly notified price of the property tax and comprehensive real estate holding tax, and Article 8(1)10 of the Enforcement Decree of the Local Tax Act provides that the fair market value ratio of each property and comprehensive real estate holding tax shall be 0/100 of the statutory standard market value ratio.

On the other hand, the purpose of the comprehensive real estate holding tax introduced following the reorganization of the real estate holding tax system on January 5, 2005 is to enhance equity in taxation burden on real estate holding and to stabilize the price of real estate by first imposing property tax, which is local tax, at a low rate, on a person who owns real estate in excess of a certain standard amount of taxation, and again imposing comprehensive real estate holding tax, which is national tax, at a high rate on a person who owns real estate in Korea.

As such, property tax and comprehensive real estate tax are based on the same taxable capacity of holding taxable property.

Since the Act on Comprehensive Real Estate was enacted by Act No. 7328 on January 5, 2005, the amount of taxes imposed as property tax should be deducted from the calculated amount of comprehensive real estate holding tax. Accordingly, Articles 4-2, 5-3 (1) and (2) of the former Enforcement Decree of the Comprehensive Real Estate Holding Tax Act (amended by Presidential Decree No. 21293, Feb. 4, 2009) provide that the deducted amount of property tax shall be the total amount of taxes imposed as property tax, such as a house x the amount of property tax calculated as the standard tax rate of property tax for the portion exceeding the standard

The formula (hereinafter referred to as the "amount equivalent to the property tax calculated by adding up houses, etc.).

It is stipulated that the calculation should be made in accordance with the previous formula of Enforcement Decree.

After that, on February 4, 2009, Article 4-2, Article 5-3 (1) and (2) of the Enforcement Decree of the former Enforcement Decree of the Gross Real Estate Tax Act (amended by Presidential Decree No. 21293, Feb. 4, 2009) changed the method of calculating the amount of property tax to be deducted as property tax, such as housing 】 total amount of property tax equivalent to property tax calculated according to the standard tax rate of property tax on the tax base of housing ± the amount equivalent to property tax calculated according to the standard tax rate of property tax on the tax base of housing, etc. ± the formula of "amount equivalent to property tax calculated according to the standard tax rate of property tax on housing, etc. (hereinafter referred to as the "the formula of the Enforcement Decree of this case").

In light of the developments and purport of the amendment of the provisions related to the Local Tax Act, the Gross Real Estate Tax Act and the Enforcement Decree of the Gross Real Estate Tax Act, even if the portion exceeding the standard amount of taxation, such as a house, stated in the molecular in the previous formula in the Enforcement Decree, was changed to the “tax base for the house, etc.” as stated in the molecular in the instant formula in the Enforcement Decree, there is no change in the basic purport of deducting the amount of property tax imposed overlapping with the comprehensive real estate tax for the portion exceeding the standard amount of taxation. Therefore, even if the method of calculating the amount of property tax was changed to the instant formula in the previous Enforcement Decree, such amendment

2) Furthermore, examining the method of calculating the amount of property tax to be deducted in accordance with the instant formula in the Enforcement Decree, the amount of property tax to the portion exceeding the standard amount of taxation of the comprehensive real estate holding tax is calculated based on the formula of "(public notice price - the standard amount of taxation) x the fair market price ratio of the comprehensive real estate holding tax." The amount of comprehensive real estate holding tax to the same portion is calculated based on the formula of "(public notice price - the standard amount of taxation) x the fair market price ratio of the comprehensive real estate holding tax. However, since this two amounts refer to the portion on which property tax and the comprehensive real estate holding tax are imposed respectively for the portion of "public notice price - the standard amount of taxation - the fair market price of the comprehensive real estate holding tax (amount of taxation) x the portion on which property tax is imposed in duplicate. In addition, since comprehensive real estate holding tax is not imposed on the portion excluded from the fair market price ratio of the comprehensive real estate holding tax, it is not necessary to consider this portion of property tax to be deducted on the ground that it is duplicate.

In full view of these points, the amount of property tax to be deducted according to the formula of the Enforcement Decree of this case 】 (Public notice price - the amount of tax base) 】 the smaller of the fair market price ratio of property tax and comprehensive real estate holding tax 】 the property tax rate 】 the amount of property tax. Therefore, in cases of comprehensive real estate holding tax in 2013, the fair market price ratio of property tax is less than the fair market price ratio of comprehensive real estate holding tax or less than the fair market price ratio of comprehensive real estate holding tax x the fair market price ratio of property tax 】 the fair market price ratio of property tax 】

3) Ultimately, the amount of comprehensive real estate tax and special rural development tax to be borne by the Plaintiff is the amount obtained by deducting the amount stated in the separate sheet No. 2 (the scope of revocation) from the amount of tax imposed in the instant disposition. Thus, the part of the Defendant’s imposition of comprehensive real estate tax in November 16, 2013, which exceeds 396,974,060 won (=434,441,860 won - 37,467,800 won), among the disposition of imposition of comprehensive real estate tax in the year 2013, which was imposed by the Plaintiff (=434,461,860 won - 37,467,88,370 won), which exceeds 79,394,800 won among the disposition of imposition of special rural development tax (=86,88,370 won -7,493,570 won), should be revoked.

3. Conclusion

Then, the plaintiff's claim of this case is justified and it is so decided as per Disposition.

partnership.