Where a corporation purchases land from a local government ( Gyeonggi-do) and pays any balance (in excess of 30 million won) as a per unit schedule, the time of acquisition that serves as the basis for calculating acquisition tax.

According to Article 111(5) of the former Local Tax Act (amended by Act No. 4794 of Dec. 22, 1994) and Article 73(1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14878 of Dec. 30, 1995), acquisition tax on onerous succession from the State, Do, Si, and Gun shall be the actual payment date of the acquisition. If a corporation issues a check of shares exceeding 30 million won by the method of paying the purchase price of the land from Gyeonggi-do, it shall be deemed that the payment of the balance was made when the check is settled, barring any special circumstance. Thus, the time of acquisition of the land shall be the payment date of the check of the balance.

Article 111(5) of the former Local Tax Act (amended by Act No. 4794 of Dec. 22, 1994); Article 73(1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14878 of Dec. 30, 1995); Article 46(1) and (2) of the Enforcement Decree of the Local Finance Act; Article 39 of the Gyeonggi-do Financial Accounting Rules; Articles 1(1) and 4 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14911 of Feb. 12, 1996)

Samcheon Housing Co., Ltd. (Attorney Lee Byung-soo, Counsel for the defendant-appellant)

Suwon-si Head of Suwon-si (Attorney Jin-hun, Counsel for the defendant-appellant)

Seoul High Court Decision 95Gu17870 delivered on December 7, 1995

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

We examine the grounds of appeal.

According to Article 111(5) of the former Local Tax Act (amended by Act No. 4794 of Dec. 22, 1994) and Article 73(1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 14878 of Dec. 30, 1995), the acquisition time shall be the actual payment date for acquisition tax for the acquisition by onerous succession from the State, Do, Si, Gun (Gu, Do, Si/Gun).

According to the court below's determination, the plaintiff corporation entered into a sales contract with the non-party 6,687,351,720 won for the purchase of the land in this case from the non-party Do on July 8, 1994, and paid the remaining amount of KRW 947,351,720 for the balance of July 21, 1994, with a face value as the payment of KRW 947,351,720, and the above face value table was settled on July 22, 1994 on the following day. Thus, if the check was delivered by the payment method of purchase balance, the payment of the balance was made at the time of the settlement of the check, that is, the time of acquisition of the land in this case shall be July 22, 1994.

Article 46 (1) of the Enforcement Decree of the Local Finance Act provides that payment of local taxes and other revenues may be made in lieu of cash. Articles 4 through 6 of the Enforcement Decree of the former Enforcement Decree of the Revenue Payment of Securities Act (amended by Presidential Decree No. 14911 of Feb. 12, 1996; hereinafter the same shall apply) provides that when the securities to which payment has been made are defaulted, the payment procedure such as the amount of the receipt and the cancellation of the amount of the receipt shall be the case. According to the above provisions, the date on which the plaintiff paid the check shall be the actual payment day. However, Article 46 (2) of the Enforcement Decree of the Local Finance Act provides that the kinds of securities that can substitute cash shall be determined by the rules of the local government concerned in case of paragraph (1) and Article 39 of the Gyeonggi-do Financial Accounting Rules provides that the payment of the total amount of securities to which payment can be made in lieu of cash can not exceed the amount of the above bill of tax revenue under the name of Article 1 (1) of the Enforcement Decree of the Local Finance Act.

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 Ahn Yong-sik (Presiding Justice)