Cho-2013-Divisions-4364 ( December 31, 2013)

It should be taxed by distinguishing the area of real estate acquired for the new construction of industrial buildings, etc.

Any disposition taken without determining the area corresponding to real estate acquired for the construction of industrial buildings, etc. as property tax reduction or exemption shall be illegal.

Article 276 of the Local Tax Act; Scope of Industrial Buildings, etc. under Article 224-2 of the Enforcement Decree of the Local Tax Act

2014Guhap2052 global income and revocation of disposition

KKK Co., Ltd.

YThe director of the tax office

November 28, 2014

January 9, 2015

1. All imposition of comprehensive real estate tax and special rural development tax imposed by the Defendant on the Plaintiff as shown in the separate sheet shall be revoked.

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;

The plaintiff has been sold on October 17, 2003 and completed the registration of ownership transfer in the future of the plaintiff on October 16, 2007, each of the following dates: ABB-Gu CB-dong Y68 large 16,726m26m2 designated as an industrial facilities zone under the former Industrial Cluster Development and Factory Establishment Act (amended by Act No. 6842, Dec. 30, 2002).

In addition, the Plaintiff was fully exempted from acquisition tax and property tax on the land of this case under the main sentence of Article 276 of the Local Tax Act.

After that, on June 17, 2010, the Plaintiff commenced construction of two buildings, such as the New Building and Art Hall, from the instant land on June 17, 2010, and completed the said two buildings on October 19, 2012. The use of the said two buildings is as follows.

However, the head of BB classified the instant land on the ground that the Plaintiff falls under the proviso of Article 276(1) of the Local Tax Act, and collected acquisition tax and property tax on the instant land which was reduced or exempted pursuant to the main sentence of Article 276(1) of the Local Tax Act before the completion of the said two buildings, and notified the Defendant of taxation data. Accordingly, the Defendant issued a notice of correction and notification of comprehensive real estate tax for 2008 to 2012 and special rural development tax for the Plaintiff (hereinafter “instant disposition”).

The Plaintiff did not object to the imposition of property tax by the head of BB, while the Plaintiff filed an appeal with the Tax Tribunal on August 19, 2013, but was dismissed on December 31, 2013.

[Ground of recognition] Facts without dispute, Gap evidence 1, 2 (including provisional number; hereinafter the same shall apply), Eul evidence 1 to 5, the purport of the whole pleadings

2. Summary of the parties' arguments;

A. The plaintiff

1) Form illegality

Since the Defendant did not properly specify the subject of taxation while issuing a tax notice on the instant disposition, it was erroneous in the form of the instant disposition.

2) substantive illegality

① Of the instant land, the area corresponding to the ratio of the portion leased to small and medium enterprises among the knowledge industry facilities, Dlick broadcasting facilities which are cultural industry facilities, and the part leased to the knowledge industry center among the leased parts of the knowledge industry center shall be fully exempted from comprehensive real estate tax and special rural development tax, and the total area of the area of the site of D DD Art Hall, which is cultural assembly facilities, shall be exempted from comprehensive real estate tax and special rural development tax.

② The Plaintiff’s failure to complete the construction within three years after the acquisition of the instant land is because the head of AA Metropolitan City BB rejected an application for modification of the Plaintiff’s occupancy agreement regarding the use of the building. Therefore, the Plaintiff’s failure to complete the construction within three years after the acquisition of the instant land constitutes “justifiable cause” under the proviso of Article 276(1) of the Local Tax Act. Thus, the instant disposition is unlawful.

③ The instant land is eligible for exemption from property tax under the Ordinance on Reduction and Exemption of Property Tax in the AA Metropolitan City BB Gu Tax.

④ From 2008 to 2010, the Defendant applied the instant tax rate on the premise that the instant land was subject to general aggregate taxation, but the delay in the commencement of the construction from the instant land was due to the fact that the head of AABB, a Metropolitan City BB, rejected the Plaintiff’s application for change of occupancy contract. Thus, this constitutes the land annexed to a building, the commencement of which is limited pursuant to Article 18 of the Building Act, which is subject to special aggregate taxation. Accordingly, the instant land ought to be subject to the

B. Defendant

1) Inasmuch as the Plaintiff completed two buildings on the instant land based on the provisions of Article 58-2 of the Restriction of Special Local Taxation Act, Article 276 of the Local Tax Act cannot be applied to the instant land. In addition, two buildings completed on the instant land do not constitute “industrial buildings, etc.” under the main sentence of Article 276(1) of the Local Tax Act.

2) Since the land of this case was originally specified as a site for industrial facilities, the circumstance that the Plaintiff applied for a change in the purpose of an occupancy agreement to the head of AA Metropolitan City BB, but was rejected does not constitute “justifiable cause” under the proviso of Article 276(1) of the Local Tax Act.

3) It is difficult to deem that the construction is restricted pursuant to Article 18 of the Building Act by the head of AA Metropolitan City BB, by denying an application for change of the Plaintiff’s occupancy agreement. Therefore, the instant land ought to be subject to the general aggregate taxation rate.

3. Relevant statutes;

The entries in the attached statutes are as follows.

4. Determination

A. The main sentence of Article 276(1) of the former Local Tax Act (amended by Act No. 8864 of Feb. 29, 2008; hereinafter the same) provides that real estate acquired by a person (including a person who wishes to lease real estate for factories to a small or medium enterprise owner) who intends to construct or extend buildings for industrial use, research facilities, and experimental production prescribed by Presidential Decree in an inducement area under the Industrial Cluster Development and Factory Establishment Act shall be exempted from acquisition tax and registration tax, and property tax on such real estate shall be reduced by 50/10 for five years from the date on which the tax liability becomes first effective. Article 224-2 of the Enforcement Decree of the Local Tax Act provides that "buildings prescribed by Presidential Decree" as one of the "buildings prescribed by Presidential Decree" among "buildings for factory knowledge industry, knowledge industry, information and communication industry, resource storage facilities, and educational, research, information processing, and distribution facilities related directly to education, research and development, and Article 2 subparag. 3 of the Industrial Sites and Development Act and Article 2 subparag. 1 (j).

While the Plaintiff asserts that a considerable portion of the two buildings completed on the instant land constitutes an industrial building, etc. under Article 276 (1) of the former Local Tax Act, the Defendant asserts that the said two buildings are not subject to the “industrial building, etc.” under Article 276 (1) of the former Local Tax Act, since the Plaintiff was subjected to reduction of acquisition tax and property tax under Article 58-2 of the Restriction of Special Local Taxation Act for the said two buildings, it does not fall under the “industrial building, etc.” under Article 276 (1) of the former Local Tax Act

However, in cases where there are more than one provision on the basis of tax reduction and exemption for the same taxable object, if the requirements for tax reduction and exemption are met, and if there is no provision on the tax reduction and exemption or there is no ground for tax reduction and exemption, it is not allowed to impose additional collection as long as there is still a ground for additional collection attached to the remaining provision on the tax reduction and exemption even if it is possible to do so (see Supreme Court Decision 2010Du26414, Jan. 27, 2012).

Therefore, even if the acquisition tax and property tax have been reduced due to the "reduction or exemption to the knowledge industry center, etc." under Article 58-2 of the Restriction of Special Local Taxation Act for the two buildings completed on the instant land, such circumstance alone alone does not lead to the conclusion that the said two buildings do not constitute "industrial buildings, etc. under Article 276 (1) of the former Local Tax Act" in determining whether to grant reduction or exemption of local taxes on the instant land. Rather, it is determined that the portion corresponding to the area of industrial buildings, etc. among the instant land constitutes "industrial buildings, etc. under Article 276 (1) of the former Local Tax Act as broadcasting facilities and cultural assembly facilities" under the main sentence of Article 276 (1) of the former Local Tax Act, and in such a case, it is excluded from general aggregate taxation and special aggregate taxation (Article 182 of the former Local Tax Act).

C. Meanwhile, the proviso of Article 276(1) of the former Local Tax Act provides that where industrial buildings, etc. are not used directly for the purpose of use within three years from the date of acquisition without justifiable grounds, or where industrial buildings, etc. are sold or used for other purposes without using directly for the purpose of use for at least two years from the date of use, the exempted acquisition tax, registration tax and property tax shall be collected.

The acquisition date here means the actual balance payment date in the case of acquisition by succession by a local government (Article 73 (1) 1 of the Enforcement Decree of the Local Tax Act, Article 111 (5) 1 of the former Local Tax Act), and the scope of "direct use" includes the case where a building to be used for the corporation's unique business is being constructed (Article 230 of the Enforcement Decree of the Local Tax Act).

In this case, the date when the Plaintiff paid the remainder of the land of this case was August 14, 2007 (No. 5) and on June 17, 2010, which was before the elapse of three years from the date of the payment of the remainder, the construction of the above two new buildings on the land of this case was commenced. Thus, it constitutes a case where the land of this case was directly used for the purpose of industrial buildings, etc. within three years from the date of acquisition. Therefore, there is no reason for additional collection under the proviso of Article 276 (1) of the former Local Tax Act

D. In full view of the aforementioned circumstances, a considerable portion of the instant land is a real estate acquired to newly construct an industrial building, etc. under the main sentence of Article 276(1) of the former Local Tax Act, and constitutes property tax reduction or exemption. Therefore, the instant disposition conducted without setting the area corresponding to real estate acquired to newly construct an industrial building, etc. among the instant land as the land is unlawful, and the submitted evidence alone does not necessarily lead to illegal parts. Thus, the instant disposition should be entirely revoked.

Therefore, the plaintiff's assertion about the formal illegality of the disposition of this case is not examined.

5. Conclusion

If so, the plaintiff's claim is reasonable and acceptable.