[1] The meaning of "the de facto owner" under Article 182 (1) of the former Local Tax Act concerning a taxpayer of local tax

[2] The case holding that where a buyer entered into a gratuitous concession contract on a building in the future and completed provisional registration for preserving the right to claim ownership transfer in order to guarantee the buyer's obligation to remove the above building after the buyer agreed to remove the above building with the seller, the buyer constitutes "the de facto owner" under Article 182 (1) of the former Local Tax Act

[1] For the purpose of Article 182 (1) of the former Local Tax Act (amended by Act No. 7332 of Jan. 5, 2005), the term "actual owner" means a person who has a real ownership of the pertinent property regardless of whether the person is registered as the owner on the public register.

[2] The case holding that in case where a buyer entered into a gratuitous concession contract on a building in the future and completed provisional registration for preserving the right to claim ownership transfer in order to guarantee the buyer's obligation to remove the above building after the buyer entered into an agreement with the seller to remove the above building, the buyer constitutes "the de facto owner" under Article 182 (1) of the former Local Tax Act (amended by Act No. 732 of Jan. 5, 2005)

[1] Article 182 (1) of the former Local Tax Act (amended by Act No. 732 of Jan. 5, 2005) (see current Article 183 (1)) / [2] Article 182 (1) of the former Local Tax Act (amended by Act No. 7332 of Jan. 5, 2005) (see current Article 183 (1))

[1] Supreme Court Decision 2002Du6361 decided Nov. 28, 2003 (Gong2004Sang, 72)

Korea Land Corporation (Law Firm Dongdong, Attorneys Kim Woo-hee, Counsel for the plaintiff-appellant)

The head of Yeongdeungpo-do Busan Metropolitan City

Busan High Court Decision 2004Nu4130 decided Oct. 14, 2005

The judgment below is reversed, and the case is remanded to Busan High Court.

1. The judgment of the court below

In full view of the selected evidence, the court below concluded a sales contract to purchase the land of this case 2.1 billion won on June 13, 1998 from Busan Shipbuilding Industries Co., Ltd. (hereinafter “Seoul Shipbuilding Industries”), and concluded the contract to remove all obstacles to the land of this case. On January 25, 199, the plaintiff prepared a gratuitous concession contract for the building of this case on the land of this case between Busan Shipbuilding Industries and 300, and completed a provisional registration for transfer of ownership on March 25, 1999 as to the building of this case on the condition that the plaintiff's non-performance of the obligation to remove the land of this case was 60,000,000 won. The court below decided that the plaintiff was liable for removal of the land of this case under the premise that the plaintiff's non-performance of the obligation to remove the land of this case on March 15, 199.

2. The judgment of this Court

However, we cannot accept the above decision of the court below for the following reasons.

Article 182(1) of the former Local Tax Act (amended by Act No. 6852 of Dec. 30, 2002 and enforced from July 1, 2003; hereinafter “former Local Tax Act”) provides that a person registered as an owner of property as of the property tax assessment basis date shall be a person liable for property tax: Provided, That if a change in the rights of a person registered in the property tax assessment ledger has occurred due to transfer of rights, execution of urban planning projects, or other reasons, or the registration has not been made in the property tax assessment ledger, the actual owner shall be a person liable for property tax. According to Articles 235-2, 239(1), and 260-2 of the former Local Tax Act, both urban planning tax, common facilities tax, and local education tax shall be a person liable for property tax, and the term “owner” in Article 182(1) of the Local Tax Act means a person who has a real ownership of the property registered as the owner on the public register, regardless of whether it is a de facto owner.

However, as duly admitted by the court below, even though the plaintiff agreed to remove the building of this case on the ground between Busan Shipbuilding and Busan Shipbuilding, if the plaintiff entered into a gratuitous concession agreement with Busan Shipbuilding on the building of this case, and made a provisional registration for preserving the right to claim for transfer of ownership, if the plaintiff entered into a provisional registration for preserving the right to claim for transfer of ownership, it shall be deemed that the plaintiff has the right to use, profit, and dispose of the building of this case which was not removed as of the property tax assessment basis date, and therefore, the plaintiff shall be deemed to be the "actual owner" of the building of this case, and the above gratuitous concession agreement or provisional registration shall not be deemed to be a security for the obligation to remove

Nevertheless, the court below determined that the plaintiff does not constitute "the de facto owner" under Article 182 (1) of the former Local Tax Act, based on its stated reasoning. The court below erred by misapprehending the legal principles on "the de facto owner" under Article 182 (1) of the former Local Tax Act, and it is obvious that such illegality affected the judgment.

3. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Ji-hyung (Presiding Justice)