The case affirming the judgment below holding that the registration of transfer of ownership does not constitute “registration for the purpose of preserving or exercising a claim” subject to exclusion from registration tax under Article 102(2) of the former Local Tax Act, in case where Gap corporation, whose head office was located in a large city, was unable to recover the claim for lease deposit, etc., and acquired a successful bid in the auction procedure to exercise the security right, which was commenced by the mortgagee upon the application of the mortgagee, and the tax authority imposed a heavy registration tax pursuant to Article 102(2) of the former Enforcement Decree of the Local Tax Act.

Articles 131(1)(see current Article 28), 138(1)3(see current Article 28(2) and (3)(see current Article 28(5) of the former Local Tax Act (amended by Act No. 7843, Dec. 31, 2005); Article 102(2)(see current Article 45) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 20708, Feb. 29, 2008)

Bobi Development Co., Ltd. (Law Firm Samok, Attorneys Kim Ba-young, Counsel for the plaintiff-appellant)

E-Government Market

Seoul High Court Decision 2008Nu5690 decided July 23, 2008

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Article 138(1)3 of the former Local Tax Act (amended by Act No. 7843, Dec. 31, 2005; hereinafter the same) provides that the registration tax shall be imposed with respect to the real estate registration after the relocation of the head office into a large city. Article 102(2) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 20708, Feb. 29, 2008; hereinafter the same) provides that the term "real estate registration after the relocation of the head office into a corporation under Article 138(1)3 of the Act means any real estate for business, non-business, or non-business, acquired within five years after the relocation of the head office of the corporation."

According to the reasoning of the judgment below, the court below determined as follows: (a) on July 6, 2004, that the plaintiff moved the location of its head office to the building of Mapo-gu, Seoul Metropolitan City under Article 138(1)3 of the former Local Tax Act; and (b) on the ground that the lease deposit, etc. for the building of this case located in the same large city was impossible to recover three billion won; (c) on the ground that the lease deposit, etc. for the building of this case could not be recovered; (d) on the ground that the lease deposit, etc. for the building of this case located in the same city located in the same large city, the court below excluded the registration bond of this case from the purpose of securing the right of this case from the registration bond of this case for the purpose of securing the right of this case or the registration bond of this case for the purpose of collecting the loan of this case for the purpose of the acquisition of the right of this case for the purpose of the acquisition of the ownership transfer under the name of the plaintiff on June 30, 2005.

In light of the above laws, legislative purport, and records, the judgment of the court below is just and acceptable, and there is no error in the misapprehension of legal principles as to the provision of Article 102 (2) of the former Enforcement Decree of the Local Tax Act.

2. Regarding ground of appeal No. 2

In general, in order to apply the principle of trust protection to the tax authority's acts in tax law relations, the tax authority should be the premise that the tax authority should issue a public opinion statement that is the subject of trust to taxpayers (see Supreme Court Decisions 99Du10131, Nov. 27, 2001; 2004Du7634, Aug. 19, 2005, etc.).

According to the reasoning of the lower judgment, the lower court determined that the instant disposition did not contravene the principle of trust protection, on the ground that, even if the Plaintiff reported the registration tax according to the general tax rate regarding the instant transfer of ownership as alleged by the Plaintiff, and the Defendant’s employee received it and issued a notice for payment of registration tax accordingly to the Plaintiff, such reason alone does not constitute an expression of public opinion that the Defendant would not impose heavy registration tax on the instant transfer of ownership.

In light of the above legal principles and records, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the principle of protection of trust.

3. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Nung-hwan (Presiding Justice)