Seoul Administrative Court 201Gudan1016 ( November 22, 2011)

Cho High Court Decision 2010Du2269 ( October 08, 201)

The Enforcement Rule of the Income Tax Act, which provides for the ratio of revenue to the non-business land of an off-road parking lot, shall not be deemed invalid

The Enforcement Rule of the Income Tax Act, which provides for the case where the amount of income is at least 3/100 of the value of the land for an exception to the land used as an off-road parking lot, can be recognized as the rationality of establishment of the purpose and standard establishment of real estate speculation, so it shall not be deemed as invalid

Article 104 of the Income Tax Act

Article 168-11 of the Enforcement Decree of the Income Tax Act

2011Nu45179 Revocation of disposition of imposing capital gains tax

XX

Head of Yeongdeungpo Tax Office

Seoul Administrative Court Decision 2011Gudan1016 decided November 22, 2011

July 5, 2012

July 12, 2012

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. The defendant shall revoke the disposition of imposition of KRW 000 on December 1, 2009 against the plaintiff on December 1, 2007.

1. Details of the disposition;

The court's explanation in this part is identical to the corresponding part of the reasoning of the judgment of the court of first instance (No. 3-14). Thus, this part is cited by Article 8 (2) of the Administrative Litigation Act and the main sentence of Article 420 of the Civil Procedure Act.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

1) The primary argument

According to the provisions of Article 104-3 (1) 4 (c) of the former Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009; hereinafter the same shall apply), Article 168-11 (1) 2 (c) of the former Enforcement Decree of Income Tax Act (amended by Presidential Decree No. 20720 of Feb. 29, 2008; hereinafter the same shall apply), and Article 83-4 (6) of the former Enforcement Rule of Income Tax (amended by Ordinance of the Ministry of Strategy and Finance No. 15 of Apr. 29, 2008; hereinafter the same shall apply), land owned by a person operating a parking lot operation business and used as an off-road parking lot, for which the ratio of annual income to the value of the land used as an off-road parking lot is 3/100 or more shall be excluded from the non-business land. However, Article 83-4 (6) of the former Enforcement Rule of Income Tax Act is unlawful by applying the provisions of Article 14(1) of the former Enforcement Rule.

2) Preliminary assertion

From July 2, 1997 to June 25, 2007, the Plaintiff continuously obtained revenue from the instant land using the instant land in accordance with the parking lot-related laws and regulations. However, the instant land was used as the land appurtenant to the building located within 000-2 large scale 314m2, such as 00-2 large scale 472m2, Gangdong-gu, Seoul (hereinafter referred to as the “1m2”) and its neighboring land, and the instant land was used as the land for the purpose of the parking lot. Since the parking fee of the private parking lot operated in the instant land was determined by considering the parking fee of the public parking lot regardless of the relevant land price, it did not constitute a legitimate profit rate under Article 83-4(6) of the former Income Tax Act, and thus, the instant land did not constitute a legitimate profit rate under Article 83-4(6) of the former Income Tax Act, and thus, it did not constitute a violation of Article 83-4(6) of the former Income Tax Act.

(b) Related statutes;

Attachment 'Related Acts and subordinate statutes' shall be as shown.

C. Facts of recognition

The court's explanation in this part is identical to the corresponding part of the reasoning of the judgment of the court of first instance (as stated in the 14th to 4th 9th eth eth eth eth eth eth eth eth eth eth eth eth e).

D. Determination

1) As to the primary argument

Article 104-3 (1) 4 (c) of the former Income Tax Act provides that the land excluding the land prescribed by the Presidential Decree as being directly related to residence or business in consideration of the situation of the use of the land and the fulfillment of the obligations under related Acts among the land other than the farmland, forest and stock farm land, and the amount of income, etc. shall be deemed as one of the land for non-business use. Article 168-1 (1) 2 (c) of the former Enforcement Decree of Income Tax Act provides that "any land having considerable reasons to recognize that it is directly related to residence or business" under Article 104-3 (1) 4 (c) of the former Enforcement Decree of Income Tax Act is owned by the person operating the parking lot operation business, and the land to be used for an off-road parking lot under the Parking Lot Act, and Article 83-4 (6) of the former Enforcement Decree of Income Tax Act provides that the ratio of income for one year to the value of the land is above the ratio prescribed by the Ordinance of the Ministry of Finance and Economy."

As such, Article 104-3 (1) of the former Income Tax Act provides a general standard on land for non-business use, which delegates specific criteria for the determination of land excluded from land for non-business use to the former Enforcement Decree of the Income Tax Act, and Article 168-11 (1) of the former Enforcement Decree of the Income Tax Act and Article 83-4 of the former Enforcement Rule of the Income Tax Act stipulate the grounds for exclusion from land for non-business use, and even if there is no "justifiable cause" in listing land for non-business use, the concept of "justifiable cause" is not clear. In light of tax law, it is inevitable to adopt the criteria for determination in the legislative technology to a certain extent (see Constitutional Court Order 96Hun-Ba92, 97Hun-Ba92, 97Hun-Ba2, 25, 325, 197).

Furthermore, the grounds for exception from land for non-business can be prescribed by the legislators in a uniform manner within the reasonable scope, taking into account all the circumstances, and it cannot be deemed that the legislators exceeded the delegation scope unless the above grounds for exception established are manifestly unreasonable. However, Article 83-4 (6) of the former Enforcement Rule of the Income Tax Act is a provision newly established on December 31, 2005 by Ordinance of the Ministry of Finance and Economy No. 476 and enforced from January 1, 2006. In full view of the fact-finding results of the fact-finding with the court of first instance, the Minister of Strategy and Finance (the Minister of Finance and Economy at the time of the establishment of the above provision) can not recognize the rent of land for non-business purposes, taking into account the appropriateness of the policy to apply heavy taxation rates to land for non-business purposes and the annual rent rate of 1st floor to the extent of 4-5% of the sales price of land for non-business purposes, and the purport of the above provision can be recognized as being considerably unreasonable after considering the above facts.

Ultimately, Article 83-4 (6) of the former Enforcement Rule of the Income Tax Act cannot be said to be invalid beyond the scope of delegation by the parent law. Thus, the plaintiff's primary argument is without merit.

2) As to the conjunctive argument

As seen earlier, the annual rate of return on the instant land does not correspond to the land which is at least 3/100 of the earning rate prescribed in Article 168-11(1)2(c) of the former Enforcement Decree of the Income Tax Act, and Article 83-4(6) of the former Enforcement Rule of the Income Tax Act. Since Article 168-1(1) of the former Enforcement Decree of the Income Tax Act and Article 83-4 of the former Enforcement Rule of the Income Tax Act are individually listed on the grounds for exception that are excluded from the non-business land, if the instant land does not fall under the grounds for exception prescribed in the above provision, it shall be deemed as the non-business land (see, e.g., Supreme Court Decisions 9Du4006, Aug. 22, 200; 98Du7916, Nov. 24, 200). Moreover, the Plaintiff’s disposal of the instant land should be excluded from the non-business land where the Plaintiff claims the same reasons as the “justifiable land.”

3. Conclusion

Therefore, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance is just in conclusion, and the plaintiff's appeal is dismissed as it is without merit.