Cho-2018-Divisions-611 (Law No. 19, 2018)

It is reasonable to see that the taxpayer of property tax and comprehensive real estate holding tax is the Plaintiff as the actual owner.

It is reasonable to deem that a taxpayer of property tax and comprehensive real estate holding tax is the Plaintiff who is the actual owner of the property tax and comprehensive real estate holding tax, because the details of selling the apartment unsold in lots are clearly stated on the premise of sale and purchase, the registration of ownership transfer is completed, and the actual management is

Article 3 of the Gross Real Estate Tax Act, Article 4 of the Enforcement Decree of the Gross Real Estate Tax Act, exclusion from aggregate taxation

2018Guhap23993 Revocation of Disposition rejecting a request for rectification of comprehensive real estate holding tax, etc.

StateAAAAA

○ Head of tax office

April 4, 2019

May 2, 2019

1. The plaintiff's claim is dismissed.

2. The costs of the lawsuit shall be borne by the Plaintiff.

On October 13, 2017, the Defendant’s rejection of each request for correction of comprehensive real estate tax of 1,789,473,922 won, special rural development tax of 357,894,798 won, comprehensive real estate tax of 2014 and comprehensive rural development tax of 404,332,597 won, special rural development tax of 80,86,519 won, and comprehensive rural development tax of 2014 shall be revoked.

1. Details of the disposition;

A. On January 24, 2013, the Plaintiff entered into a contract with BBB Trust Co., Ltd. (hereinafter referred to as “BB Trust”) and CCC Construction Co., Ltd. (hereinafter referred to as “CCC Construction”), with respect to the unsold 347 households (hereinafter referred to as “ unsold apartment in this case”) among ○○○○○○○○○○○ apartment (hereinafter referred to as “instant apartment”) located in 00,00, 00 ○○○○○○○○ apartment (hereinafter referred to as “instant unsold apartment”), and completed the registration of ownership transfer on April 29, 2013, for the sale of the unsold apartment in this case due to a repurchase agreement.

B. The Plaintiff classified the instant unsold apartment units as taxable objects, and reported the comprehensive real estate holding tax for the year 2013 (the date of taxation, June 1, 2013) and the comprehensive real estate holding tax for the year 2014 (the date of taxation, June 1, 2014) (the date of taxation, etc.) (the comprehensive real estate holding tax for the year 2013, KRW 7,468,594,204), KRW 1,493,493,718,840, KRW 3,922,989,146, KRW 784,597,829), and paid the comprehensive real estate holding tax for the year 2014, respectively.

C. On August 14, 2017, the Plaintiff refunded the Plaintiff’s claim for correction by having included the scope of housing unsold in lots under Article 8(2)2 of the former Gross Real Estate Tax Act (Amended by Act No. 12153, Jan. 1, 2014); Article 4(1)3(a) of the former Enforcement Decree of the Gross Real Estate Tax Act (Amended by Presidential Decree No. 25208, Feb. 21, 2014); Article 4 subparag. 1 (hereinafter “instant exclusion clause”) of the Enforcement Rule of the Gross Real Estate Tax Act (Amended by Ordinance of the Ministry of Strategy and Finance No. 355, Jun. 28, 2013; hereinafter “instant exclusion clause”) in the scope of housing unsold in lots, on the ground that “The subject of comprehensive real estate tax and special rural development tax reverted in 2013; 2,147, 790 won; 2014.

D. On October 13, 2017, the Defendant rendered a disposition rejecting a request for correction (hereinafter “instant disposition”) on the ground that the housing unsold in the instant case cannot be deemed as falling under the housing unsold in lots constructed and owned by the housing construction business operator under the provision excluding the summing-up.

E. Accordingly, the Plaintiff filed an appeal with the Tax Tribunal on January 3, 2018, and the Tax Tribunal dismissed the said appeal on June 19, 2018.

[Ground of recognition] Facts without dispute, Gap evidence 2 through 13, each entry (including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant disposition shall be revoked on the grounds that it is unlawful for the following reasons.

1) In concluding the instant resale agreement, the Plaintiff and BBB trust agreed to repurchase the instant unsold apartment at any time, and to pay taxes and public charges during the period of repurchase. Furthermore, in light of the following: (a) the sale and purchase agreement and the criteria for calculating the purchase price and redemption price of the instant unsold apartment; and (b) the usage of the purchase price is limited, the instant resale agreement is a loan transaction agreement which is not a sales and purchase contract; and (c) the Plaintiff is merely a temporary owner of the instant unsold apartment, not a de facto owner of the instant unsold apartment, and thus, the Plaintiff cannot be deemed a taxpayer of the property tax and comprehensive real estate holding tax on the instant unsold apartment. Therefore, the instant disposition is contrary to the relevant law, as well as against the purpose of legislation and the principle of substantial taxation of the Comprehensive Real Estate Holding Tax Act (the first assertion).

2) Even if the Plaintiff is a de facto owner of the unsold apartment in this case, ① the construction and ownership of the instant unsold apartment are strictly divided and considered as a separate requirement is contrary to the purport of the provision of the exclusion of aggregate taxation benefits by reducing the scope of taxation benefits, and thus, tax benefits should be guaranteed to the relevant housing business entities, including housing business entities, in the case of the unsold housing in lots. ② It is reasonable to deem that the legal effect recognized to BBB trust is transferred to the Plaintiff, as it includes all the persons at risk of imposing taxes on the unsold housing in lots. ③ In light of the fact that the Plaintiff merely acquired the ownership of the unsold apartment in this case for the purpose of security, not the actual sales contract, and thus it cannot be seen as having been sold, the provision of exclusion of aggregate in this case applies to the unsold apartment in lots, and thus, the disposition in this case is unlawful by arbitrarily reducing it beyond the limit of interpretation of the purpose of exclusion exclusion provision in this case. Moreover, the application of the provision of this case to the Plaintiff, which provided government policies for residential stability through the conclusion of the repurchase agreement in this case, violates the principle of excessive prohibition (hereinafter referred to the prohibition principle).

3) The Plaintiff reported and paid comprehensive real estate holding tax on unsold housing unsold in lots acquired with resale agreement between DD Trust Co., Ltd., including the subject matter of comprehensive real estate holding tax, and thereafter filed a request for correction with the Defendant by deeming that the unsold housing unsold in lots is included in the subject matter of comprehensive real estate holding tax exclusion, and the Defendant accepted the said request for correction and refunded the requested tax amount. In addition, in relation to the unsold housing in lots in this case, △△ Director notified the Plaintiff to the BB Trust on November 16, 2014 of the payment of comprehensive real estate holding tax computed including unsold housing unsold in lots transferred from the Plaintiff during the first half of 2014, but revoked ex officio disposition by deeming that the unsold housing unsold in lots was not subject to comprehensive real estate holding tax. In light of the aforementioned circumstances and the previous precedents of interpretation, the instant disposition is illegal retroactive taxation contrary to non-taxation practices (hereinafter referred to as the “third assertion”).

4) The Plaintiff acquired the instant unsold apartment units in accordance with the government policy to resolve the financial difficulties of housing companies, and concluded the instant resale agreement on the premise that there was no reason to pay relevant taxes, and the Defendant imposed comprehensive real estate holding tax on the Plaintiff, thereby infringing on the Plaintiff’s interest. Therefore, the instant disposition violates the principle of trust protection (hereinafter “the fourth assertion”).

B. Relevant statutes

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

1) Trust contract, etc. as to the apartment of this case

(A) On March 25, 2010, EEE entered into a contract for the construction of the instant apartment with the CCC Construction, a contractor of the instant apartment on March 25, 2010, and had been doing construction of the instant apartment, and entered into a trust agreement with BBB Trust on October 2010 on the instant apartment, and the “Management-Type Land Trust Agreement” prepared at the time of the said trust agreement includes the following:

Management-type land trust contract document

Title 1 (Trust Purpose)

1. The purpose of this trust is to entrust the apartment site of this case to the BBB Trust, and the BBB Trust is to acquire it and construct the apartment site of this case on the trust land and to sell the land and buildings as trust property.

Title 3 (Transfer, Effects, etc. of Trust Property)

(1) The EE shall, without delay after concluding a trust contract, implement the registration of exhaustion of ownership on the land trusted under the name of the trustee.

Article 13 (Change, etc. of Project Implementer)

The EE shall submit documents related to the matters approved or permitted for the trust business or the matters being promoted to the BBB Trust, and shall transfer or succeed to the external status of the trust project implementation, such as the name of the project operator, to the trustee after the conclusion of the trust contract.

Article 40 (Special Agreement and Other Matters)

(1) If the EE and BBB Trust provide for a separate special agreement that is not provided for in this Framework Agreement, the special agreement shall prevail over this Framework Agreement.

Special Agreement for Management Land Trust

Article 6 (Contract for Construction Works)

(1) The contract for construction works entered into between the EE and the contractor in connection with the trust project shall be concluded by the BBB trust succeeds to the status of the EE and enter into the contract with the contractor on the premise that all the contractor's obligations, such as the obligation to pay construction costs under the succession contract, to submit it to the competent authority upon the change of the project owner, notwithstanding the conclusion of the succession contract.

(B) BBB Trust, EE, and CCC Construction entered into a succession agreement with BB Trust to succeed to the status of the contractor of the instant apartment contract entered into between EE and CCC Construction pursuant to Article 6 of the said trust agreement after the conclusion of the said trust agreement.

2) Conclusion, etc. of the repurchase agreement of this case

(A) On January 24, 2013, the Plaintiff entered into a sales agreement with BBB Trust and CCC Construction with the terms of purchasing the instant unsold apartment units with the resale agreement, and at the time of the repurchase agreement, the terms and conditions as follows are included in the repurchase agreement.

Repurchase Agreement

Sub-paragraph 1 (Purpose)

The purpose of this Agreement is to exercise the right of repurchase within the repurchase period set forth in this Agreement, or to conclude for disposal of the goods purchased by the Plaintiff after the expiration of the repurchase period, and to complete the construction within the period specified in the public notice of invitation of residents.

Article 2 (Declarations)

(2) After the date of conclusion of this contract, BBB trust shall sell unsold apartment units in this case after the payment of the purchase price under Article 13 to the Plaintiff.

Article 5 (Sales Price)

BBB Trust shall sell to the Plaintiff the right to sell the unsold apartment in this case at KRW 82,725,00,000,000, in total, the sale price of the unsold apartment in this case, and shall be purchased by the Plaintiff.

Article 7 (Use of Sales Price)

BBB Trust and the Plaintiff shall preferentially appropriate the purchase price under Article 5 for the remaining expenditure (referring to the remaining construction cost and the cost of removal) of the unsold apartment in this case, and the CCC construction shall be deemed to have consented thereto.

Article 10 (Right of Repurchase)

(1) BB trust may, at any time from the date of conclusion of this contract, repurchase the unsold apartment in this case to each household at the repurchase price determined by the plaintiff from the date of this contract to two years after the date of registration for preservation.

(3) If the BBB Trust is not redeemed during the period of redemption and the period of redemption expires, the BB Trust shall be deemed to have waived the right of repurchase.

④ Upon the expiration of the redemption period, the Plaintiff may dispose of the unsold apartment in this case, and the BBB Trust shall not raise any objection to the said period.

§ 11. Transfer of ownership

BBB Trust, along with the registration of initial ownership, shall, without delay, file for the registration of ownership transfer with the Plaintiff, indicating the special agreement for repurchase, with respect to the households that were not redeemed by BB from among the households subject to purchase and sale of the attached Form.

Article 12 (Liability for Taxes, Taxes, etc.)

(1) Where the tax base date is in the period of repurchase, BB trust shall be borne by the taxpayer. In such cases, taxes and public charges of acquisition tax, etc. to be borne shall be calculated in accordance with relevant Acts and subordinate statutes, such as the Local Tax Act, and municipal ordinances of the relevant local government, but the

1. Comprehensive real estate holding tax: Amount equivalent to the ratio of the unsold apartment in this case to the amount of the plaintiff's comprehensive real estate holding tax additionally generated due to unsold housing purchase business;

2. Value-added tax, such as special rural development tax, etc. accrued from the payment of comprehensive real estate holding tax: An amount equivalent to the ratio occupied by the unsold apartment in this case to the additional tax amount additionally incurred by the purchase

(2) The plaintiff shall be borne by the tax base date after the redemption period.

Article 14 (Liability for Defects)

BBB trust shall be liable for the following matters, along with the defect repair liability arising during the defect repair obligation period pursuant to the Housing Act after the date of inspection of use for the unsold apartment in this case:

Article 15 (Delivery or Vindication)

1. The name of the unsold apartment in the instant case shall be borne by the BB trust.

Matters of special agreement

Article 3 (Business Performance and Scope)

(1) The scope of duties and roles of each party to facilitate the purchase business shall be as follows:

2. A plaintiff: Management of funds for remaining revenues, consent to the management of spending of funds for remaining expenditures, verification of authenticity, etc., and management of works and processes;

(2) BB Trust and CCC Construction shall obtain prior consent from the Plaintiff when it is intended to change all or part of the work scope and scope or delegate it to a third party.

(B) On April 29, 2013, BBB trust completed the registration of ownership preservation on the unsold apartment in this case, and completed the registration of ownership transfer based on the sales agreement with the special agreement for repurchase to the Plaintiff on the same day. At that time, the Plaintiff paid the purchase price pursuant to the sales agreement with the special agreement for repurchase to BB trust.

(C) BBB trust had sold the instant unsold apartment unit during the period from January 23, 2014 to July 11, 2014, and completed the registration of ownership transfer due to repurchase in the name of BBB trust, and completed the registration of ownership transfer under the name of BB trust, and completed the registration of ownership transfer in the name of each purchaser.

D. Determination

1) Determination on the first argument

(A) Article 7(1) of the former Gross Real Estate Tax Act provides that a taxpayer of comprehensive real estate holding tax on housing shall be liable to pay property tax on the relevant land, and Article 107(1) of the Local Tax Act provides that a person who actually owns the relevant property as of the property tax base date shall be liable to pay property tax. Here, a “person who actually owns the relevant property” refers to a person who actually owns the relevant property regardless of whether it is registered as an owner on the public register (see Supreme Court Decision 2005Du15045, Mar. 23, 2006). Article 107(1) of the Local Tax Act provides that a taxpayer of comprehensive real estate holding tax on housing who is not an owner on the public register or a legal owner who actually owns the relevant property shall be liable to pay property tax to comply with the substance over form principle by prescribing a taxpayer who actually has the capacity to pay property tax, regardless of the form and appearance of a legal owner under private law, and thus, it does not necessarily require a complete owner or a person who actually owns to use the relevant property.

(B) In light of the following circumstances acknowledged by the aforementioned evidence and the purport of the entire pleadings, it is reasonable to view that the taxpayer of the property tax and comprehensive real estate holding tax for the housing unsold in the instant case for the 2013 and 2014 as the Plaintiff, a de facto owner.

① The contract prepared at the time of the instant repurchase agreement explicitly states that the seller sold the instant unsold apartment unit to the Plaintiff on the premise that the instant repurchase agreement constitutes a sales contract.

② The Plaintiff completed the registration of ownership transfer of the unregistered apartment in the instant case by paying the sales price to BBB trust in accordance with the instant repurchase agreement.

③ According to the description of the above contract, the Plaintiff is in charge of managing the construction and process, such as confirmation of existence, and the BBB Trust and CCC Construction are deemed to have agreed to manage the apartment unsold in this case in an economic and substantial aspect, by obtaining prior consent from the Plaintiff, if it is intended to modify the scope of work and work in charge.

④ In the event of repurchase under Article 12 of the Agreement on the Contracts for the Repurchase Agreement in the instant case, the fact that the CoBBB Trust stated that the CoBB Trust bears the tax and public charges on the unsold apartment in this case in relation to the instant unsold apartment, is recognized, but it specified that the amount of comprehensive real estate holding tax on the unsold apartment in this case in relation to the comprehensive real estate holding tax is the amount equivalent to the percentage occupied by the unsold apartment in this case in the Plaintiff’s comprehensive real estate holding tax

⑤ According to Article 34(2) of the former Restriction of Special Local Taxation Act (Amended by Act No. 12175, Jan. 1, 2014); Article 16(1) of the former Restriction of Special Local Taxation Act (Amended by Presidential Decree No. 25060, Jan. 1, 2014); Article 107(1) of the former Enforcement Decree of the Housing Act (Amended by Presidential Decree No. 24909, Dec. 4, 2013) of the former Enforcement Decree of the Housing Act (Amended by Presidential Decree No. 24909, Jul. 1, 2015), with respect to housing purchased until December 31, 2011, it appears that the said provision is a de facto owner of housing unsold in lots under construction, based on the premise that the actual owner of housing unsold in lots is a stock company with respect to housing unsold in lots under construction.

④ The mere fact that the instant repurchase agreement limited the use of the purchase price in the instant repurchase agreement, set the repurchase period of two years, and did not limit the specific repurchase period, or that the BBB trust agreed to assume liability for defects or surrenders, it is difficult to view the instant repurchase agreement as a loan transaction agreement, not a sales contract.

7) As seen earlier, it is reasonable to see that the owner of the instant unsold apartment unit is the Plaintiff. Therefore, it is difficult to view the instant disposition as contrary to the legislative intent and substance over form principle of the Gros

(C) Therefore, the Plaintiff’s assertion on this part is without merit.

2) Judgment on the second argument

(A) According to Articles 7(1) and 8(1) of the former Gross Real Estate Tax Act, the tax base of comprehensive real estate holding tax on housing is the aggregate of publicly notified prices of housing by each taxpayer, and if the aggregate of publicly notified prices of housing subject to property tax as of the tax base date exceeds 600 million won, it shall be subject to comprehensive real estate holding tax: Provided, That Article 8(2)2 of the former Gross Real Estate Tax Act provides that "in cases of housing prescribed by Presidential Decree, such as housing unsold in lots, etc. constructed by a housing construction business operator, which is not in conformity with the purpose of imposing comprehensive real estate holding tax" does not include the scope of housing subject to such aggregate, and Article 4(1)3 of the Enforcement Decree of the former Gross Real Estate Tax Act provides that "houses unsold in lots prescribed by Ordinance of the Ministry of Strategy and Finance, which are owned by a person falling under any of the following items as of the tax base date," and Article 4(1)3 of the former Enforcement Rule of the Gross Real Estate Tax Act provides that "house unsold in lots prescribed by the approval of the first five years after the date of the Housing Act."

On the other hand, the interpretation of tax laws and regulations is to be interpreted in accordance with the principle of no taxation without the law, or to prevent the requirements of tax exemption or tax exemption, barring special circumstances, and it is not allowed to expand or analogically interpret without reasonable grounds, and in particular, it accords with the principle of fair taxation to strictly interpret that the provisions of tax exemption or exemption are clearly preferential provisions (see, e.g., Supreme Court Decision 2003Du7392, May 28, 2004).

(B) In light of the language and purport of the provision of this case, and relevant legal principles, it is difficult to interpret that the provision of this case applies only to housing unsold in lots owned by a housing construction business operator who is liable to pay the tax after obtaining a building permit directly. Furthermore, it is difficult to interpret that the provision of this case also applies to the case where a person liable to pay the housing unsold in lots acquired ownership after obtaining a building permit for housing unsold in lots. In other words, the status of a housing construction business operator for unsold in lots of this case as follows: ① the status of a housing unsold in lots of this case as a housing construction business operator under the trust agreement with EBB trust was changed to BBB trust by succeeding to the status of an operator from EBB trust, and the Plaintiff acquired only the housing unsold in lots of this case without succession to the status of a housing construction business operator; ② the provision of this case's housing unsold in lots of this case can not be deemed as a person who obtained approval of the housing construction plan under Article 16 of the Housing Act, and the provision of this case's housing construction business operator's exclusion or exclusion of this case's housing construction.

(C) Therefore, the Plaintiff’s assertion on this part cannot be accepted.

3) Judgment on the third argument

(A) Article 18(3) of the Framework Act on National Taxes provides for non-taxable practices. Such non-taxable practices shall be applied only to cases where there are special circumstances that are deemed to be consistent with the justice to protect taxpayers’ trust, even if they sacrifice the principle of legality. The interpretation of the tax-related Act or the practices of national tax administration generally accepted by taxpayers under that provision means, even if erroneous interpretation or practices are done, it would be recognized to the extent that it is not unreasonable for taxpayers to believe such interpretation or practices. The mere fact that there was a public opinion on the standards for interpretation of the tax-related Acts cannot be deemed as having been expressed. The burden of proving such interpretation or practices is the taxpayer (see, e.g., Supreme Court Decisions 200Du1652, Feb. 8, 2002; 2005Du2858, Jun. 29, 2006).

(B) The mere fact that: (a) the tax authority’s non-taxation measures indicated in each of the statements in Gap evidence Nos. 14 through 18, namely, the Plaintiff filed a claim for rectification of KRW 2,141,148,960 of the comprehensive real estate holding tax reported and paid on July 15, 2016 to the Defendant; and (b) the head of △△△ Tax Office imposed the comprehensive real estate holding tax and special tax for rural development on the BBB trust on November 16, 2014, and revoked it ex officio, it is difficult to view that the general taxpayer constituted a non-taxable practice with trust in relation to the comprehensive real estate holding tax related to the instant disposition, and there is no other evidence to acknowledge it otherwise.

(C) Therefore, the Plaintiff’s assertion on this part cannot be accepted.

4) Judgment on the fourth argument

(A) In general, in order to apply the principle of trust and good faith to a tax authority’s act in a tax law relationship, the tax authority must issue a public opinion list that is the subject of trust to taxpayers, and the taxpayer has no reason attributable to the taxpayer to believe that the tax authority’s opinion list is justifiable, and there is no reason attributable to the taxpayer. The taxpayer should act in trust and what is, and the tax authority should make a disposition contrary to the opinion list, thereby infringing the taxpayer’s interest (see, e.g., Supreme Court Decision 2001Du9103, Nov. 26, 2002).

(B) According to the purport of Gap evidence No. 5 and all pleadings, although the plaintiff acquired a unsold apartment unit in this case in accordance with the government policy to resolve the financial difficulties of the housing company, it is recognized that the above circumstance alone is difficult to view that the defendant issued a public opinion list that is trusted to the plaintiff in relation to the exemption from taxation of the comprehensive real estate holding tax in this case, etc. on the unsold apartment unit, and there is no other circumstance or evidence sufficient to deem that the requirements for the application of the principle of trust protection are satisfied.

(C) Therefore, the Plaintiff’s assertion on this part cannot be accepted.

3. Conclusion

Therefore, the disposition of this case is legitimate, and the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.