Busan Co., Ltd. (Law Firm Chungcheong, Attorney Lee Jong-chul, Counsel for the plaintiff-appellant)

Seopo City (Attorney Seopo-hoon, Counsel for the defendant-appellant)

November 9, 2011

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposing KRW 709,260,350 on the Plaintiff on September 25, 2010 and KRW 851,112,42,420 on the aggregate of KRW 141,852,070 on the Plaintiff and KRW 141,852,070 on the local education tax is revoked.

1. Details of the disposition;

The following facts may be acknowledged either in dispute between the parties or in full view of the purpose of each entry (including each number, if any) in Gap evidence 1 through 4 and all pleadings:

A. The Plaintiff is a company that operates a golf course with the trade name of ○○○○○○○○○, a company that operates a golf course in the middle of Seopo-si in Seopo-si (hereinafter omitted).

B. In accordance with the “Installation and Utilization of Sports Facilities Act”, the Plaintiff applied for the separate registration of a membership golf course business [30,286 square meters in golf course, parking lots, and roads 39,147 square meters in a road, 140,658 square meters in a 53,428 square meters in land attached to a management facility, 70,893 square meters in a circular preservation green area, 645,131 square meters in a total, and 8,022.84 square meters in a 5-dong building] and each registration of a golf course business (370,533 square meters in land) among general lots, and received each registration certificate on October 22, 2008.

C. On September 3, 2010, the Defendant issued each disposition imposing KRW 709,260,350, and KRW 851,112,42, and 420, respectively, on the Plaintiff’s property tax belonging to the year 2010 and KRW 141,852,070, respectively.

D. The Plaintiff dissatisfied with the instant disposition and filed an objection against the Defendant on December 23, 2010, but was dismissed on March 16, 201, and filed the instant lawsuit on May 16, 201.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Although the land subject to the separate taxation of property tax is registered as a membership golf course (hereinafter “instant land”), the instant disposition made on the premise that the land subject to the separate taxation of property tax is the land subject to the separate taxation of property tax, it is an illegal disposition contrary to the substance over form principle, the principle of imposition of current status, and the principle of prohibition of retroactive taxation, even though it has been actually operated as a membership golf course.

(b) Related statutes;

It is as shown in the attached Form.

(c) Markets:

Article 182 and Article 188 of the former Local Tax Act (amended by Act No. 10221, Mar. 1, 2010; hereinafter referred to as the "former Local Tax Act") classify land subject to property tax as objects of general aggregate taxation, objects of separate taxation, objects of separate taxation, and objects of separate taxation. Among them, the "land subject to separate registration among real estate for membership golf courses under the Installation and Utilization of Sports Facilities Act" is defined as objects of separate taxation as the standard tax rate. As seen above, the Plaintiff’s completion of separate registration of membership golf course business pursuant to the "Installation and Utilization of Sports Facilities Act" with respect to the land in this case constitutes objects of separate taxation under the former Local Tax Act, and as such, the tax rate of 40/1,000 shall be applied to the land in this case (However, in the case of the land in this case, the tax rate of 30/1,000 after the reduction or exemption of the tax rate under Article 41(1)30 of the former Ordinance).

6. The Plaintiff argues that the land of this case is actually operated as a golf course among the general golf courses, and thus constitutes a separate taxation under the substance over form principle and the principle of imposition of the current status. However, the interpretation of tax laws and regulations is prohibited in accordance with the law, barring any special circumstance (see, e.g., Supreme Court Decision 97Nu20090, Mar. 27, 1998). (2) The former Local Tax Act explicitly provides that “land subject to separate taxation among real estate for membership golf courses under the Installation and Utilization of Sports Facilities Act is the land subject to separate taxation.” It does not mean that land subject to separate taxation is not subject to the establishment of a golf course under the law, which is not subject to separate taxation under the substance over form principle and the principle of imposition of the substance over form principle.” (3) It does not mean that land subject to separate taxation is not subject to the establishment of a golf course by means of the establishment of a membership golf course or the establishment of a membership golf course, and thus, the establishment of a membership golf course or the establishment of a membership.

Furthermore, according to the various administrative precedents and the previous Supreme Court precedents, although the tax authority imposed local taxes according to the current state of the subject of taxation regardless of the public purpose of the public purpose of the subject of taxation, it argues that the land of this case as the subject of separate taxation is contrary to the principle of retroactive taxation prohibition provided by Article 1-2 (3) of the former Local Tax Act. However, the principle of retroactive taxation prohibition cannot be applied to the taxation requirement that is closed before the establishment or amendment of tax statutes or the tax authority's interpretation or disposal guidelines on the subject of taxation before the entry into force. The cases presented by the plaintiff are not about the "land subject to separate registration among real estate for membership golf courses" in this case, and the plaintiff argued that the current state of the determination of the "land for high-class recreation center" is based on the precedents, but the "land for high-class recreation center, public bath, special bath, etc." which is the subject of separate taxation under the former Local Tax Act, and therefore, it cannot be viewed as the "land annexed to a building prescribed by the Presidential Decree among buildings used for similar purposes" as the establishment or use of the subject of taxation.

3. Conclusion

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

[Attachment]

Judges injured Persons (Presiding Judge) and Jin-Jin for Kim Ho-ho