A. Criteria for determining the scope of “direct use” which is subject to acquisition tax exemption according to the usage classification under Article 107 of the former Local Tax Act

(b) Whether the aggregate land tax can be exempted as provided in subparagraph 2 of Article 234-12 of the Local Tax Act if a nonprofit entrepreneur has justifiable reasons for not using directly; and

C. Criteria for determining the scope of “direct use” subject to exemption from aggregate land tax according to the usage classification under Article 234-12 of the former Local Tax Act

A. Article 107 of the former Local Tax Act (amended by Act No. 4415, Dec. 14, 1991) provides for non-taxation of acquisition tax according to the classification of use, one of which is to be acquired by a non-profit entrepreneur, and the proviso of the main text stipulates that acquisition tax shall be imposed on the part of the acquired article if the non-profit entrepreneur does not directly use the whole or part of the acquired article for his business within one year from the date of acquisition without any justifiable reason. In this case, since there is no provision regarding the scope of direct use, the scope of direct use should be objectively determined based on the actual use relationship in consideration of the purpose of business and the purpose of acquisition, and there is no room to apply Article 84-4 of the Enforcement Decree of the Local Tax Act

(b) Unless a non-profit entrepreneur has used land directly for his/her business and has constructed a building to be directly used for his/her business on the aggregate land tax, a non-taxation under subparagraph 2 of Article 234-12 of the former Local Tax Act may not be made even if a non-profit entrepreneur fails to use land directly for his/her business or to construct a building to be directly used for the business

C. Article 234-12 of the former Local Tax Act provides that the land which is exempt from the aggregate land tax according to the classification of use is one of the land which is used directly by a nonprofit entrepreneur under subparagraph 2, and the proviso of the main sentence provides that the land in question is not used directly for its original purpose. In this case, since there is no provision regarding the scope of direct use, it should be objectively determined based on the actual use relation in consideration of the purpose of use and purpose of acquisition, and the ratio of the building under Article 194-14 (2) of the Enforcement Decree of the Local Tax Act or the ratio under Article 84-4 (3) 5 of the Enforcement Decree of the Local Tax Act, which is based on delegation of Article 234-15 of the Local Tax Act concerning the tax base of the aggregate land tax, shall not be applied.

(a) Article 107 (b) of the former Local Tax Act;

B. Supreme Court Decision 92Nu14809 delivered on June 8, 1993, Decision 93Nu22081 delivered on February 8, 1994

Attorney Jeon Jong-gu, Counsel for the Korean National Red Cross

Changwon Market Co., Ltd., Counsel for the defendant-appellant

Busan High Court Decision 92Gu4574,5461 delivered on June 1, 1994

Each appeal shall be dismissed.

The costs of appeal shall be assessed against each party.

1. Part of a claim for revocation of imposition of acquisition tax;

The defendant's grounds of appeal are examined.

Article 107 of the Local Tax Act (amended by Act No. 4415, Dec. 14, 191; hereinafter the same) provides for the non-taxation of acquisition tax according to the classification of use, one of which is to be acquired by a non-profit entrepreneur prescribed by Presidential Decree, who aims at the religious, religious, charity, art, and other public services, to use directly for the relevant business. The proviso of the main text provides that the acquisition tax shall be imposed on the whole or part of acquired articles if they are not used directly for the relevant business without any justifiable reason within one year from the date of acquisition. In this case, since there is no provision regarding the scope of direct use, it shall be objectively determined based on the actual use relationship in consideration of the purpose of use and the purpose of acquisition, and Article 84-4 of the Enforcement Decree of the Local Tax Act, which provides for the scope of non-business land of the corporation

In the same purport, the court below recognized the fact that the plaintiff, a non-profit business operator under Article 107 subparagraph 1 of the Local Tax Act, designated for the purpose of the blood center of the Msan Red Cross among the land in this case as the blood center's floor area and its affiliated parking lot, and recognized it as the area being directly used by the plaintiff for its business, and there is no error of law by misunderstanding the legal principles as to the scope of

Meanwhile, the lower court: (a) obtained the approval of the Minister of Health and Welfare, on July 14, 1988, on the land for new construction of a branch office, which is the remainder of the above direct use area; (b) obtained the instant land for the construction of the Red Cross blood center and the Gyeongnam-do Governor, and tried to construct the said two buildings together with the above two buildings; (c) on the budget basis, the branch office house construction corporation, which first built a blood center on the ground of 3,966.9 square meters and requires enormous construction costs, shall be promoted in accordance with the annual plan; (d) obtained construction permission on April 3, 1989 and completed construction on April 9, 199; and (e) obtained the Plaintiff’s application for new construction permission on February 9, 1990, which was the date of completion of the said building; and (e) obtained the Plaintiff’s application for new construction permission on the new construction of a branch office, by reflecting part of the construction permission cost required for the new construction permission’s implementation of the construction permission’s budget within 190.

In light of the records, the above fact-finding and judgment of the court below are considered to be correct, and there is no illegality of misunderstanding of legal principles as to legitimate grounds under the above provision of law.

Therefore, the defendant's appeal against the claim to revoke the acquisition tax imposition of this case is without merit.

2. Part of request for revocation of imposition of aggregate land tax;

A. We examine the Plaintiff’s grounds of appeal.

On the first ground for appeal

In light of the purport that all of the land in this case was used for the Plaintiff’s blood business, and thus, all of the land in this case should be deemed to have been used directly for the Plaintiff’s business. However, in light of the facts and records established by the lower court, among the land in this case, the land planned to be newly built cannot be deemed to have been used directly for the Plaintiff’s business as of June 1, 1991, which is the base date for the imposition of the aggregate land tax in this case. Thus, the lower court’s decision is correct and it cannot be said that there was any error in the misapprehension of the reasoning.

On the second ground for appeal

The Supreme Court's opinion that even if a non-profit entrepreneur does not use the land directly for his business and does not build a building to be directly used for his business on the aggregate land tax, it cannot be exempt from taxation pursuant to Article 234-12 subparagraph 2 of the Local Tax Act (see, e.g., Supreme Court Decisions 92Nu14809, Jun. 8, 1993; 93Nu22081, Feb. 8, 1994). Thus, the argument in the ground of appeal that a non-taxation is non-taxation on the ground that there exists a justifiable ground is no merit.

B. We examine the Defendant’s grounds of appeal.

Article 234-12 of the Local Tax Act provides for the land subject to a non-taxation on the aggregate land tax according to the use classification as above with the same purport as the acquisition tax, and one of the non-profit entrepreneur prescribed in subparagraph 2 refers to the land directly used for his business, and the proviso of the main text provides that the land in question is not used directly for its original purpose if the land is used for a fee. In this case, there is no provision regarding the scope of direct use, so it should be objectively determined based on the actual use relation in consideration of the purpose of the non-profit entrepreneur's business and the purpose of the acquisition, and the provision regarding the ratio of the building under Article 194-14 (2) of the Enforcement Decree of the Local Tax Act or the ratio of the ratio under Article 84-4 (3) 5 of the Local Tax Act or Article 84-4 (3) of the Enforcement Decree of the Local Tax Act as claimed by the Defendant cannot be applied. This applies to the above non-profit entrepreneur.

The court below found that the above 3,966.9 square meters of the land of this case, which the plaintiff designated as a blood center site, was used as the site of the building of the blood center and its affiliated parking lots, and judged that it was used directly for the business and therefore, it is proper to judge that the aggregate land tax is exempted from the aggregate land tax. There is no error of law by misapprehending

3. Ultimately, each of the appeals by the Plaintiff and the Defendant is without merit, and all of the appeals are dismissed, and the costs of appeal are assessed against each appellant. It is so decided as per Disposition by the assent of all participating judges.

Justices Park Jong-ho (Presiding Justice)