[1] In a case where a decision in lieu of conciliation becomes final and conclusive on the premise that a contract was rescinded by the exercise of the right to cancel due to delay in the remainder after the completion of the registration of ownership transfer pursuant to a sales contract, whether the exercise of a tax claim established based on the tax base at the time of acquisition (negative in principle), and whether the aforementioned grounds alone can be deemed as having an application

[2] In a case where Company A filed a registration of ownership transfer under a sales contract and filed a return and payment of acquisition tax, etc., but a decision in lieu of the procedure for registration of ownership transfer arising from the cancellation of a sales contract was finalized in a lawsuit filed by a seller for a delay in the balance of Company A, and where Company A filed a claim for correction of acquisition tax, etc. and the head of the competent Si/Gun/Gu rejected such claim, the case affirming the judgment below holding that the aforementioned grounds do not constitute grounds for correction under Article 51 (1) 1 of the former Framework Act on Local Taxes, and do not constitute grounds for correction under Article 51 (2) 1 and 3 of the same Act, and Article 30

[1] Acquisition tax is a kind of distribution tax, based on the fact that the transfer of the original goods is the transfer of the goods and imposes a tax-bearing capacity recognition and imposition of the tax-bearing capacity, and does not impose profits that a purchaser may gain by using, earning, or disposing of the goods. As such, since real estate acquisition tax is a tax-oriented act, a tax claim is naturally created upon the existence of a taxation requirement that is an act of acquiring real estate. On the other hand, even if a sales contract is rescinded after the lawful acquisition or becomes retroactively effective by the fulfillment of the conditions of rescission or the exercise of the right to cancel, etc., such act may not affect the exercise of the already established tax claims.

In light of the nature and nature of acquisition tax, etc., even if a decision in lieu of conciliation becomes final and conclusive on the premise that a contract was rescinded by the exercise of the right to rescission due to delay after the completion of registration of transfer of ownership according to a sales contract, as long as lawful acquisition existed, the aforementioned grounds cannot affect the exercise of tax claims established based on the tax base at the time of acquisition unless there are special circumstances. Therefore, a request for ordinary correction pursuant to Article 51(1)1 of the former Framework Act on Local Taxes (wholly amended by Act No. 14474, Dec. 27, 2016) or a request for the latter correction pursuant to Article 51(2)1 and 30 subparag. 2 of the former Enforcement Decree of the Framework Act on Local Taxes (wholly amended by Presidential Decree No. 27958, Mar. 27, 2017) cannot be filed solely on the ground as above.

[2] Where Company A filed a registration of ownership transfer under a sales contract and filed a return and payment of acquisition tax, etc., and the decision was made in lieu of a sales contract cancellation in a lawsuit claiming the seller’s transfer of ownership due to delay in the balance of Company A, and the head of the competent Si/Gun/Gu rejected the request for correction of acquisition tax, etc. at zero won, the case affirming the judgment below holding that the aforementioned grounds do not constitute grounds for filing an application for correction under Article 51(1)1 of the former Framework Act on Local Taxes (wholly amended by Act No. 14474, Dec. 27, 2016); and that it does not constitute grounds for filing an application for correction under Article 51(2)1 and 3 of the former Framework Act on Local Taxes (wholly amended by Presidential Decree No. 27958, Mar. 27, 2017) and Article 30 subparag. 2 of the former Enforcement Decree of the Framework Act on Local Taxes

[1] Article 7 (1) of the Local Tax Act, Article 51 (1) 1 of the former Framework Act on Local Taxes (wholly amended by Act No. 1474, Dec. 27, 2016; see current Article 50 (1) 1 of the Framework Act on Local Taxes), Article 51 (2) 1 of the former Framework Act on Local Taxes (see current Article 50 (2) 1 of the Framework Act on Local Taxes), and Article 50 (2) 3 of the Framework Act on Local Taxes (see current Article 50 (2) 3 of the Framework Act on Local Taxes), Article 30 subparagraph 2 of the former Enforcement Decree of the Framework Act on Local Taxes (wholly amended by Presidential Decree No. 27958, Mar. 27, 2017; / [2] Article 7 (1) of the Local Tax Act, Article 51 (1) 1 of the former Framework Act on Local Taxes (wholly amended by Act No. 14474, Dec. 27, 2016);

[1] Supreme Court Decision 95Nu12750 Decided February 9, 1996 (Gong1996Sang, 999), Supreme Court Decision 98Du1428 Decided December 8, 1998 (Gong199Sang, 167), Supreme Court Decision 99Du6651 Decided April 10, 2001, Supreme Court Decision 2015Du49696 Decided June 8, 201 (Gong2017Ha, 1485), Supreme Court Decision 2015Du44363 Decided June 15, 2017

Alternative Steel Co., Ltd. (Law Firm Dongin, Attorneys Lee Han-tae et al., Counsel for the defendant-appellant)

The head of Dong-gu Incheon Metropolitan City

Seoul High Court Decision 2017Nu76717 decided February 13, 2018

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

The grounds of appeal are examined.

1. Acquisition tax is a kind of distribution tax that assumes the fact that the transfer of the original goods is the transfer of the goods and imposes tax on the person having a duty to pay taxes by recognizing and imposing the person having a duty to pay taxes, and does not impose profits that may be gained by the acquisitor by using, earning, or disposing of the goods (see, e.g., Supreme Court Decision 2015Du49696, Jun. 8, 2017). As such, since real estate acquisition tax is an act of acquiring real estate as a taxable object, a tax claim is naturally created upon the existence of a taxation requirement that the acquisition is an act of acquiring real estate. As long as the acquisition is lawfully made, even if a sales contract is concluded after the acquisition, or if it becomes retroactively invalidated by the fulfillment of the conditions of rescission or the exercise of the right to cancel, etc., it does not affect the exercise of the already established tax claim (see, e.g., Supreme Court Decision 9Du651, Apr.

In light of the nature, nature, etc. of acquisition tax, even if a decision in lieu of conciliation was made on the premise that a contract was rescinded by the exercise of the right to rescission due to delay after the completion of registration of transfer of ownership pursuant to a sales contract, so long as there was a legitimate acquisition, the aforementioned grounds cannot affect the exercise of tax claims established based on the tax base at the time of acquisition unless there are special circumstances. Therefore, a request for ordinary correction pursuant to Article 51(1)1 of the former Framework Act on Local Taxes (wholly amended by Act No. 14474, Dec. 27, 2016; hereinafter the same shall apply) or a request for subsequent correction pursuant to Article 51(2)1 and 30 subparag. 2, etc. of the former Enforcement Decree of the Framework Act on Local Taxes (wholly amended by Presidential Decree No. 27958, Mar. 27, 2017; hereinafter the same shall apply) cannot be filed solely on the ground as above.

2. A. Comprehensively taking account of the adopted evidence, the lower court acknowledged the following facts: (a) on February 25, 2013, the Plaintiff purchased from the Nonparty on December 28, 2012, without paying all the remainder of the instant real estate, including the land located in Dong-gu, Incheon, and four parcels of land, etc., and filed a lawsuit claiming the registration of ownership transfer (Seoul District Court 2014Gahap51592), the seller filed a lawsuit claiming for the registration of ownership transfer of the instant real estate due to the cancellation of a sales contract on the grounds of the Plaintiff’s delay; and (b) on the above lawsuit, the lower court determined that the decision substituting for adjustment was finalized on December 12, 2015, and that the Plaintiff claimed the Defendant to rectify acquisition tax, etc. as KRW 00 on January 25, 2016, but rejected the Defendant’s disposition.

B. Next, the lower court determined that: (a) at the time of the acquisition of the instant real estate, taxation claims, including acquisition tax, have already been established; and (b) even if the instant sales contract was rescinded, it does not constitute grounds for filing a request for correction under Article 51(1)1 of the former Framework Act on Local Taxes, and thus, did not constitute grounds for filing a request for correction; and (c) furthermore, even if a decision in lieu of adjustment was finalized to confirm that the sales contract was rescinded, it did not result in changes in the basis for calculating the tax base and the amount of tax; and (d) did not constitute grounds under Article 51(2)

C. In light of the above legal principles and records, such determination by the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to the grounds of appeal for correction

3. 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 on the bench.

Justices Noh Jeong-hee (Presiding Justice)