[1] The purport of Article 27 (3) (main sentence) of the former Enforcement Decree of the Local Tax Act stipulating the scope of heavy taxation of registration and license tax is that where a general provision of Article 27 (3) (main sentence) of the former Enforcement Decree of the Local Tax Act transfers the headquarters, etc. to a large city outside the Seoul Special Metropolitan City, it shall be deemed that the transfer to the Seoul Special Metropolitan City is particularly a case where the headquarters, etc. is transferred to the Seoul Special Metropolitan City (affirmative)

[2] The case holding that in a case where Gap foundation established by Sungnam-si as its principal office reported and paid registration and license tax, etc. to the head of Sungnam-si under Article 28 (2) 2 of the former Local Tax Act at the time of establishment, and reported and paid registration and license tax, etc. to the head of the Gu having jurisdiction over Seoul-gu Seoul Special Metropolitan City pursuant to Article 28 (2) 2 of the former Local Tax Act, Gap corporation's principal office was transferred to Seoul Special Metropolitan City and reported and paid to the head of the Gu under the jurisdiction of Seoul Special Metropolitan City, and Gap corporation did not be subject to heavy registration and license tax, and it rejected a request to correct the reduction of registration and license tax, etc., on the ground that Gap corporation's principal office was transferred to Sungnam-gu Seoul Special Metropolitan City, which is a large city other than Seoul Metropolitan

[1] Article 28(2) of the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014) stipulates that a large city shall be designated as an over-concentration control region under Article 6 of the Seoul Metropolitan Area Readjustment Planning Act (excluding an industrial complex subject to the Industrial Cluster Development and Factory Establishment Act) and registration license tax rate shall be more severe than that of ordinary corporate registration. Article 28(2) of the former Local Tax Act provides that “registration following the establishment of a corporation in a large city or the establishment of a branch or branch office in a large city” under subparagraph 1 of the same Article, and subparagraph 2 (hereinafter “Act”) provides that “registration following the relocation of a corporation outside a large city into a large city of its head office or principal office.”

Meanwhile, Article 45(4) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 27710, Dec. 30, 2016) provides that “Article 27(3) shall apply mutatis mutandis to the scope of transfer to a large city in applying Article 28(2)2 of the Act,” and the main sentence of Article 27(3) of the former Enforcement Decree (amended by Presidential Decree No. 27710, Dec. 30, 201) provides that “The scope of transfer to a large city shall apply mutatis mutandis in applying Article 28(2)2 of the Act,” and Article 27(3) of the former Enforcement Decree (amended by Presidential Decree No. 27(3) of the Local Tax Act shall be construed as “the relocation to a large city in the case of the Seoul Metropolitan area.”

The legal provision regulates the transfer of a corporation’s head office, etc. to a large city on the same ground as that of establishing a corporation’s head office, etc. in a large city. As such, the requirement of “transfer of a corporation’s head office, etc. outside a large city” means a place outside a new large city, which is naturally premised on the transfer of a corporation’s head office, etc. from an existing place to a new place. As such, the requirement of “transfer to a

The comprehensive protection clause based on the delegation clause that sets the scope of heavy taxation of registration and license tax is regarded as the transfer of a large city to Seoul Special Metropolitan City in a case of transfer from a large city outside the Seoul Special Metropolitan City, which is exceptionally established to prevent the destruction due to the population concentration or economic concentration in the Seoul Special Metropolitan City among the large cities by embodying the purpose of the provision of the law.

Therefore, only corporations located outside a large city shall not be subject to the provisions of law, and where their headquarters, etc. are moved to Seoul Metropolitan Government even if they are located in a large city outside the Seoul Metropolitan City, registration and license tax shall be excessive in accordance with the provisions of law.

[2] The case holding that in a case where Gap foundation established with Sungnam-si as its principal office reported and paid registration and license tax, etc. to the head of Sungnam-si under the Local Tax Act at the time of its establishment, and reported and paid registration and license tax, etc. to the head of the competent Gu in Seoul Special Metropolitan City pursuant to Article 28 (2) 2 of the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014; hereinafter the same) and Gap corporation did not constitute subject to heavy registration and license tax, asserting that the principal office of the corporation Gap was transferred to the head of the competent Gu in a large city and thus Gap did not constitute subject to heavy registration and license tax, and rejected a request for correction to refund the above registration and license tax, the corporation Gap transferred its principal office from Seongbuk-si, which is a large city to Seoul Special Metropolitan City, to be subject to heavy taxation pursuant to Article 27 (3) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 2710, Dec. 30, 2016).

[1] Article 28(2) and (5) of the former Local Tax Act (Amended by Act No. 12153, Jan. 1, 2014); Articles 27(3) and 45(4) of the former Enforcement Decree of the Local Tax Act (Amended by Presidential Decree No. 27710, Dec. 30, 2016); Article 6 of the Seoul Metropolitan Area Readjustment Planning Act / [2] Article 28(2) and (5) of the former Local Tax Act (Amended by Act No. 12153, Jan. 1, 2014); Articles 27(3) and 45(4) (e) of the former Enforcement Decree of the Local Tax Act (Amended by Presidential Decree No. 2710, Dec. 30, 2016); Article 6 of the Seoul Metropolitan Area Readjustment Planning Act

[1] Supreme Court Decision 2001Du10974 decided Aug. 19, 2003 (Gong2003Ha, 1885)

East America Foundation (Law Firm LLC, Attorneys Park Yong-dae et al., Counsel for the defendant-appellant)

The head of Gangnam-gu Seoul Metropolitan Government (Law Firm Bai, Attorneys Cheong-seok et al., Counsel for defendant-appellant)

Seoul High Court Decision 2016Nu37364 decided November 24, 2016

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

The grounds of appeal are examined.

1. Article 28(2) of the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014) defines a large city as an over-concentration control region under Article 6 of the Seoul Metropolitan Area Readjustment Planning Act (excluding an industrial complex subject to the Industrial Cluster Development and Factory Establishment Act) with the requirement that the registration license tax rate is more severe than that of ordinary corporate registration. Article 28(2) of the former Local Tax Act provides that “registration following the establishment of a corporation, or the establishment of a branch or branch office in a large city” under subparagraph 1 of the same Article, and subparagraph 2 (hereinafter “instant legal provision”) provides that “registration following the relocation of a corporation outside a large city into a large city of its head office or principal office.”

Meanwhile, Article 45(4) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 27710, Dec. 30, 2016) provides that “Article 27(3) shall apply mutatis mutandis to the scope of transfer to a large city in applying Article 28(2)2 of the Act,” while the main sentence of Article 27(3) (hereinafter “main sentence of the Enforcement Decree of the instant case”) provides that “The scope of transfer to a large city shall apply mutatis mutandis to the scope of transfer to a large city in applying Article 28(2)2 of the Act.”

The purpose of the instant legal provision is to regulate the transfer of a corporation’s head office, etc. to a large city on the same ground as that of establishing a corporation’s head office, etc. in a large city, and as such, the requirement of the transfer is based on the premise of the transfer of a corporation’s head office, etc. to a new place. As such, the requirement of the transfer of a corporation’s head office, etc. to a place outside a large city can be deemed to be an incidental explanation

The General Protection Clause of the Enforcement Decree of this case, based on the delegation clause stipulating the scope of heavy taxation of registration and license tax, is regarded as the transfer of a large city to Seoul Special Metropolitan City. This is exceptionally established among the large cities by specifying the purpose of the provision of this case, in order to prevent the abolition due to population concentration or economic concentration in the Seoul Special Metropolitan City (see Supreme Court Decision 2001Du10974, Aug. 19, 2003).

Therefore, the legal provision of this case does not apply to only a corporation outside a large city that moves its headquarters, etc. to a large city, but also a corporation located in a large city outside the Seoul Special Metropolitan City, if its headquarters, etc. is relocated to Seoul Special Metropolitan City, registration license tax shall be deemed to be more

2. Review of the reasoning of the lower judgment and the record reveals the following facts.

A. On April 30, 2012, the Plaintiff was a corporation established with the Gyeonggi-si ( Address 1 omitted) as its principal office as its main office. At the time of its establishment, the Plaintiff reported and paid registration license tax of 433,284,790 won and local education tax of 86,656,950 won to the head of the Sung-nam-si branch office in accordance with the heavy taxation provisions on the establishment of a corporation in a large city under the Local Tax Act.

B. On August 22, 2013, the Plaintiff transferred the principal office to Gangnam-gu Seoul ( Address 2 omitted) and reported and paid registration license tax of KRW 620,784,790 and local education tax of KRW 124,156,950 to the Defendant on September 5, 2019 pursuant to the instant legal provision.

C. On May 13, 2015, the Plaintiff asserted that the Plaintiff’s principal office was transferred to the Defendant within a large city, and that the Plaintiff does not fall under the subject of heavy registration and license tax, and that the Plaintiff filed a claim to refund registration and license tax of KRW 620,709,79,790 and local education tax of KRW 124,141,950 among the registration and license tax initially reported and paid and the local education tax, but the Defendant issued the instant disposition rejecting the Plaintiff’s request for correction on July 2, 201

3. Examining these facts in light of the legal principles as seen earlier, since the Plaintiff’s principal office is deemed to be transferred to a large city pursuant to the General Protection Clause of the Enforcement Decree of the instant case as long as it moved to the Seoul Metropolitan City, which is a large city other than Seoul Metropolitan City, the Plaintiff constitutes subject to heavy taxation of registration and license tax pursuant to the instant legal provisions. Nevertheless, the lower court determined that the instant disposition was unlawful solely on the ground that the Plaintiff’s principal office was not subject to heavy taxation. The

4. 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 Lee Ki-taik (Presiding Justice)