[1] In a case where property tax is imposed on a truster for the trust property after the trust, whether the truster may seize the trust property under the name of the trustee on the basis of the above taxation claim, or receive dividends from the auction procedure of the executing court for the trust property

[2] Whether it is permissible to impose tax liability on a person who is not liable for tax payment under a private contract under the private law or to guarantee such liability (negative)

[1] Article 107(2)5 of the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014); Article 107(2)5 of the same Act provides that a truster who is not a trustee shall be liable for property tax for any trust property registered in the name of the trustee pursuant to the Trust Act; Article 22(1) of the Trust Act allows compulsory execution, auction, preservation measures, national taxes, etc. only when the right arising before the trust or the right arising in the course of performing the trust affairs is based on the right arising out of the trust or the right arising in the course of performing the trust affairs. However, where a trust relationship is established between the parties by transferring the ownership of the real estate to the trustee, the trust property cannot be deemed as the truster’s property after the trust is entirely transferred to the trustee and cannot be deemed as the truster’s property. This does not include any “right arising from the trust affairs before the trust,” as stipulated in Article 22(1) of the Trust Act, in the auction procedure for the trust property.

[2] A tax claim is a right that is recognized as a priority right and a right to self-performance under the National Tax Collection Act, and of which private autonomy is recognized, and its nature is different, and its establishment and exercise can only be determined by Acts and subordinate statutes, and the parties cannot arbitrarily determine its contents, etc. in order to protect the people from unfair tax collection and ensure fairness in tax burden. As a matter of principle, a tax obligation relationship is a legal relation under public law, which is subject to the Administrative Litigation Act in principle, and the tax has characteristics such as public interest and public nature. Accordingly, realizing the final satisfaction of a tax claim by imposing or guaranteeing a tax obligation on a person who is not liable for tax payment under a contract that is not a private law, not only contravenes the inherent nature of the tax as seen earlier, but also it is not permissible for a tax authority to arbitrarily expand the scope of establishment and exercise of a tax claim without statutory provisions for the convenience of tax collection.

[1] Article 107(2)5 (see current Article 107(1)3) of the former Local Tax Act (Amended by Act No. 12153, Jan. 1, 2014); Articles 2 and 22(1) of the Trust Act / [2] Article 105 of the Civil Act; Articles 38 and 59 of the Constitution of the Republic of Korea

[1] Supreme Court Decision 96Da17424 Decided October 15, 1996 (Gong1996Ha, 3388), Supreme Court Decision 2010Da67593 Decided July 12, 2012 (Gong2012Ha, 1409) / [2] Supreme Court Decision 76Da284 Decided March 23, 1976 (Gong1976, 9084), Supreme Court Decision 87Da2939 Decided June 14, 198 (Gong1988, 1027)

Korea Deposit Insurance Corporation and 11 others (Law Firm Mail, Attorneys Kang Jin-jin et al., Counsel for the plaintiff-appellant)

Suwon District Court Decision 201Na1448 delivered on May 2, 201

Seoul High Court Decision 2015Na2070349 decided May 19, 2016

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

The grounds of appeal are examined.

1. Article 107(2)5 of the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014); Article 107(2)5 of the same Act provides that a truster, who is not a trustee, shall be liable for property tax. Article 22(1) of the Trust Act provides that a truster, who is not a trustee, shall be liable for property tax. Article 22(1) of the same Act allows compulsory execution, auction, preservation order, national taxes, etc. for the exercise of a security right, only when the right arising prior to the trust or the right arising from the performance of a trust. However, where a trust relationship is established between the parties by transferring the ownership of real estate to a trustee, the trust property cannot be deemed as the truster’s property after it is entirely transferred to the trustee and externally, and the property tax imposed upon the truster as a taxpayer after the trust cannot be deemed as falling under the “right arising from the preceding cause” under Article 22(1) of the Trust Act, and such property tax does not include the “right arising from the trust business,” under 1960.25.2.

Meanwhile, a taxation claim is a right that is recognized as a priority right and a right to self-performance under the National Tax Collection Act and of which private autonomy is recognized, and its establishment and exercise can only be determined by Acts and subordinate statutes, and the parties cannot arbitrarily determine its contents, etc. in order to protect the people from unfair tax collection and ensure fairness in tax burden. As a legal relationship under public law, an administrative litigation is subject to the Administrative Litigation Act in principle, and a tax is distinguishable from a legal claim under private law in that it has the characteristics of public interest and public nature. Therefore, realizing the ultimate satisfaction of a taxation claim by imposing or guaranteeing a tax obligation on a person who is not liable for tax payment under a private law, not a tax law, is contrary to the inherent nature of the taxation mentioned above, and it is not permissible for a taxation authority to arbitrarily expand the scope of establishment and exercise of a taxation claim without statutory provisions for convenience in tax collection (see, e.g., Supreme Court Decisions 76Da284, Mar. 23, 1976; 29Da3879, Jun. 29, 1988).

2. The court below acknowledged the facts as stated in its reasoning after comprehensively taking account of the evidence adopted. ① The defendant, a local government, cannot be deemed as a taxpayer of the instant trust agreement, ② The defendant cannot be deemed as a taxpayer of the instant trust agreement, ② the defendant cannot be deemed as a taxpayer of the instant trust agreement under Article 22(1)2 of the instant trust agreement, ② the defendant cannot be deemed as a taxpayer of the instant trust agreement, taking into account the following grounds: (a) the trustee, an Asian trust corporation (hereinafter only referred to as “ Asian trust”), as the truster, to have appropriated the pertinent taxes, including the property tax, etc. notified until the disposal price was received; and (b) the defendant cannot be deemed as a taxpayer of the instant trust agreement, based on the fact that the trustee, the trustee, is a taxpayer of the instant trust (hereinafter referred to as “e.g., e., e., e., e., e., e., e., the trust property for the taxpayer of the instant trust agreement; and (c) the defendant cannot seek the amount equivalent to the trust property in the instant auction procedure.

In light of the aforementioned legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine on the determination of tax obligor’s specificness and no taxation without law, and interpretation of the instant trust agreement.

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 Kim Jae-hyung (Presiding Justice)