Early High Court Decision 2008Gu3556 (209.06.09)

At the time permission for establishment of a medical corporation is revoked, donated property

Inasmuch as the property contributed by a medical corporation cannot be provided on a conclusive basis for the public interest project due to revocation of permission for establishment of a medical corporation, it is subject to gift tax, and as long as there is a low possibility that the period of use may be extended retroactively by the head of the local government, it is legitimate

1. The plaintiff's claim is dismissed.

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

The same list as the Defendant did against the Plaintiff on each of the dates stated in the Schedule of Disposition No. 30

The term "re-revision tax amount" shall be revoked in all of the disposition imposing gift tax for the year 2004 (hereinafter referred to as "disposition of this case") with each tax amount entered as gift tax.

1. Details of the instant disposition

(a) Plaintiff 1: (a) from around 10. 10, 192 to around 2, 198, 2.5 square meters; (b) from around 2,000, 1.5 square meters; (c) from around 2,000, 34-1, 2,585 square meters; (d) from around 2,000, 347/563 square meters; and (e) from around 2,000, 376-2, 400 square meters; and (e) from around 2,000, 25 square meters; and (e) from around 3,000, 25 square meters; and (e) from around 2,000, 15 square meters; and (e) from around 5,000, 196-2, 1068-32,764 square meters; and (e) from around 2,196-1,664 square meters;

B. On July 1, 2008, the Defendant: (a) pursuant to Article 48(2)1 of the former Inheritance Tax and Gift Tax Act (amended by Act No. 9916, Jan. 1, 2010; hereinafter “former Inheritance Tax and Gift Tax Act”); (b) pursuant to Article 48(2)1 of the former Inheritance Tax and Gift Tax Act, on the part of the Plaintiff corporation, the land totaling of 18,775 square meters of 00,000 ○○○○-dong, 377, and 13 parcels, which were possessed without direct use for the public interest after receiving the contribution, was deemed to have been donated respectively from KimA, ParkBB, and KimCC on May 31, 2004; and (c) accordingly, imposed gift tax on the “the first notified tax

C. On June 10, 2009, the Defendant: (a) determined that the portion of the penalty tax (additional tax on negligent return and additional tax on negligent return) from among the gift tax imposed initially on KimA on the donor KimA is not legitimate; (b) accordingly, the Defendant corrected the amount of penalty tax of KRW 1,765,854,650 from among the gift tax on donor KimCC; (c) KRW 3,273,528 from among the gift tax on donor KimCC; and (d) KRW 1,754,660 from the gift tax on donor ParkB from the gift tax on the donor; and (b) accordingly, the amount of penalty

D. On April 1, 2010, the Defendant issued a new gift tax on the donor KimA, i.e., partially correcting the gift tax amount on the donor KimA, i.e., the details of the attached disposition on imposition of the gift tax, i.e., the donor KimCC, and ParkB, and issued a new gift tax on the donor KimE and KimD.

[Ground of recognition] Facts without dispute, Gap evidence 1 to 3, 11, Eul evidence 7 to 15 (including branch numbers; hereinafter the same shall apply) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

(1) The plaintiff's assertion

(A) Although the permission for incorporation was revoked while the property contributed by the Plaintiff corporation was not used for the purpose of direct public interest projects, the articles of incorporation of the Plaintiff corporation stipulates that the remaining property shall be donated to a non-profit corporation for the purpose similar to the purpose of the establishment of the Plaintiff corporation or shall be reverted to the State. In such a case, Article 48(2)5 of the former Inheritance Tax and Gift Tax Act and Article 38(8)1 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 22042, Feb. 18, 2010; hereinafter referred to as the "former Enforcement Decree") shall apply, and in the case of the Plaintiff corporation, the remaining property shall not be imposed since it does not constitute "where the remaining property is not reverted to the State, etc. at the time of completion of the business."

(B) Even if the property is subject to gift tax, it is reasonable to impose gift tax at the time three years have elapsed since the date of receiving the property contribution.

(2) The defendant's assertion

Article 48 (2) 5 of the former Inheritance Tax and Gift Tax Act and Article 38 (8) 1 of the former Enforcement Decree of the same Act are not applicable to cases where a public-service corporation provided property to a business to operate the property contributed and provided to it as the Plaintiff corporation.

Since the Plaintiff’s foundation does not use the donated property for the purpose of public interest directly within the time limit for its use, Article 48(2)1 of the former Inheritance Tax and Gift Tax Act applies. The disposition of this case is legitimate by deeming the date of revocation of the permission to incorporate the foundation to be no longer possible.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

(1) After obtaining permission to establish a medical corporation on January 1, 1992, the Plaintiff corporation contributed land from KimA, etc. for the establishment of the medical corporation, but the business was delayed due to changes in the business site, etc., and was approved five times from January 1, 1996 to January 6, 2004 by the ○○ Metropolitan City Mayor for the extension of the term of establishment and the term of use of contributed property.

(2) After ○○ Metropolitan City Mayor, the procedure was conducted to revoke the authorization of establishment under the Medical Service Act on the grounds that the Plaintiff corporation did not establish a medical institution within the term of establishment of the medical institution. However, the Plaintiff corporation was granted a grace period on May 29, 2004 to the ○○ Metropolitan City Mayor to start the construction of the medical institution by May 29, 2004.

(3) However, the Plaintiff corporation failed to commence the construction of the medical institution by the period of suspension due to financial circumstances, etc., and eventually notified ○○ City Mayor of May 29, 2004 that the Plaintiff corporation would voluntarily dissolve the Plaintiff corporation.

(4) On May 31, 2004, the ○○ City Mayor revoked the permission for establishment of a medical corporation against the Plaintiff corporation.

[Reasons for Recognition] Facts without dispute, Gap evidence Nos. 4, 5, Eul evidence No. 3, and the purport of the whole pleadings is determined.

(1) Whether a gift tax is subject to imposition

According to Article 48(1) and (2)1 of the former Inheritance Tax and Gift Tax Act and Article 38(3) of the former Enforcement Decree of the same Act, the value of property contributed by a public corporation, etc. shall not be included in the taxable amount of gift taxes. However, if the property contributed by the public corporation, etc. is not used for a business directly for public interest or for a business within three years from the date of its receipt, it shall be deemed a donation by the public interest corporation, etc., and if it is difficult to use the property for the whole public interest business within three years from the date of its receipt, due to unavoidable reasons such as necessity for a long period of use, etc., and the competent Minister or the delegated person has recognized it as such. According to the above provision, where the use period is extended by the competent Minister, etc., it shall not be imposed gift tax even if the property contributed was not used for the public interest business, but is still not used for the public

In light of the above facts in light of the above legal principles, although the time limit for use of the property contributed with the inevitable recognition by the ○○ Metropolitan City Mayor was extended on May 29, 2004, the establishment of the medical institution was not commenced until the expiration of the time limit, and the permission for establishment of the medical corporation was revoked on May 31, 2004, thereby preventing the property contributed to public interest from being provided definitely for public interest projects, it is subject to the imposition of gift tax pursuant to Article 48(2)1 of the former Inheritance Tax and Gift Tax Act.

On the other hand, the Plaintiff asserts that Article 48(2)5 of the former Inheritance Tax and Gift Tax Act and Article 38(8)1 of the former Enforcement Decree should be applied to this case. However, the above provision applies to a case where a public-service corporation provided the contributed property to a public-service business and operated it for the purpose of public interest, and it cannot be viewed as a provision applicable to a case of an asset without any provision provided to a public-service business at the beginning, such as this case.

(2) Timing for imposing gift tax

The main text of Article 48(2) of the former Inheritance Tax and Gift Tax Act provides that “Immediate gift tax shall be imposed when any of the causes specified in the subparagraphs occurs.” In this case, as seen earlier, the cancellation of permission for the establishment of a medical corporation of the Plaintiff on May 31, 2004 after the expiration of the use period approved by the ○○ Metropolitan City Mayor, and as long as the possibility of ex post facto extension of the use period from the ○○ City Mayor after the cancellation of permission for establishment on May 31, 2004, the disposition of this case at this point is lawful as at the time of donation.

On the other hand, the plaintiff asserts that the gift tax should be imposed at the time of donation when three years have passed from the time of donation. However, in light of the fact that whether the extended use period was provided for the public interest project on the basis of the expiration date of the extended use period, it is reasonable to apply the same standard as the time of donation. Thus, this part of the argument is not justified. [The plaintiff is exempted from the acquisition tax and the registration tax pursuant to Article 290 (1) of the former Local Tax Act (amended by Act No. 5406 of Aug. 30, 197), even if there are justifiable reasons for not using the real estate directly for its proper business within one year from the date of acquisition, the tax base date for presumption is one year from the date of real estate acquisition, and one year has passed from the date of termination of the justifiable reason, but it is not appropriate to invoke the above former Local Tax Act and the provisions of the former Local Tax Act applicable to this case at all different forms in the above judgment].

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.