Cho-2017-west-509 (2018.05)

It is reasonable to determine the tax aggregate housing which is the basis for the upper limit of comprehensive real estate holding tax liability based on the relevant year.

The aggregate housing which is the basis for the upper limit of tax burden under Article 10 of the Comprehensive Real Estate Holding Tax Act and Article 5 (2) 2 of the Enforcement Decree of the Comprehensive Real Estate Holding Tax Act shall be determined on the basis of the relevant year.

Article 10 of the Gross Real Estate Tax Act

2018Guhap74020 Revocation of revocation of comprehensive real estate holding tax

○○ ○

○ Head of tax office

July 26, 2019

September 6, 2019

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition rejecting the correction of KRW 0 of comprehensive real estate holding tax and KRW 0 of special rural development tax in 2016, which the Plaintiff rendered on August 0, 2017, shall be revoked.

1. Details of the disposition;

A. The plaintiff's status and trust circumstances

1) Aaa (hereinafter referred to as 'aa') and BB Korea Co., Ltd. (hereinafter referred to as 'bbb') were members of the c urban development project association, which carried out the sales business of 0 block total of 0 blocks out of 6 blocks in the said urban development project district.

2) Aa and BB entered into a real estate security trust agreement with the Plaintiff in 2010, and the registration of ownership transfer in the name of the Plaintiff was completed on the housing located in the 0 block due to trust.

3) Among the trust property (house) under the above trust contract, the completion of the obligation to conclude a sales contract and pay the price after the trust has been completed, the registration of transfer of ownership has been completed to the buyer, and other property (hereinafter referred to as "un-saleed house") remains in the name of the plaintiff.

(b) Return and payment of comprehensive real estate holding tax;

1) In November 2016, the Defendant decided and notified the Plaintiff of the comprehensive real estate holding tax as follows.

2) However, there was omission of taxable items, tax bases, and the amount of property tax to be deducted in the details of the determination and notification under paragraph (1), and the Plaintiff reported and paid the comprehensive real estate holding tax on December 0, 2016, according to the administrative guidance of the Defendant’s person in charge.

C. Plaintiff’s request for correction and refusal disposition

On June 0, 2017, the Plaintiff filed a claim for the reduction of 0 won of comprehensive real estate holding tax and 0 won of special rural development tax for the year 2016, which the Plaintiff reported and paid, and the Defendant rendered a disposition rejecting the Plaintiff’s request for correction (hereinafter “instant disposition rejecting the correction”).

[Ground of recognition] Facts without dispute, entry of Gap 1 to 3 evidence, purport of whole pleadings

2. Relevant statutes;

It is as shown in the attached Form.

3. The parties' arguments and the issues of this case

A. Article 8(2)2 of the former Gross Real Estate Tax Act (amended by Act No. 16109, Dec. 31, 2018; hereinafter the same) and Article 4 of the Enforcement Rule of the Gross Real Estate Tax Act provide that housing unsold in lots owned by a person who has obtained approval of a project plan under Article 16 of the Housing Act, or a person who has obtained permission under Article 11 of the Building Act, and for which five years have not elapsed from the date on which the first liability to pay property tax on housing portion was established after January 1, 2005, shall not be included in the scope of housing subject to summing-up of the tax base of

B. Meanwhile, Article 10 of the former Enforcement Decree of the Gross Real Estate Tax Act (amended by Presidential Decree No. 27836, Feb. 7, 2017; hereinafter the same) provides that the amount of taxes calculated in accordance with Presidential Decree, which is the aggregate of the amount equivalent to the property tax on housing and the amount equivalent to the comprehensive real estate holding tax on housing that a taxpayer subject to comprehensive real estate holding tax has to pay in the relevant year, shall be the maximum of 150/100 of the amount equivalent to the total tax on housing in the immediately preceding year, calculated in accordance with Presidential Decree, and Article 5(1) of the former Enforcement Decree of the Comprehensive Real Estate Tax Act (amended by Presidential Decree No. 27836, Feb. 7, 2017; hereinafter the same shall apply) delegated by the said provision, means the amount equivalent to the total tax on housing in the immediately preceding year and calculated in accordance with Presidential Decree, regardless of whether the taxpayer actually owns housing in the tax base of the year immediately preceding

C. In the instant case, housing unsold in lots among the property the Plaintiff received was included in the subject of exclusion from summing up until 2015 pursuant to Article 8(2)2 of the former Gross Real Estate Tax Act in calculating the assessment standard of comprehensive real estate holding tax, but was excluded from the subject of exclusion from summing up in 2016 after five years from the date on which the tax liability was first established.

D. However, it is reasonable for the Plaintiff to calculate the maximum amount of tax burden by applying the law of 2015 with respect to housing unsold in the year 2015. The Plaintiff asserts that the amount of comprehensive real estate holding tax unsold in the year 2016 is as follows, since comprehensive real estate holding tax is not imposed on housing unsold in the year 2015 because it falls under the housing unsold in the year 2015.

E. Meanwhile, the Defendant asserts that the upper limit of the tax burden should be calculated by applying the law of 2015 to the aggregate housing for tax base 2016. Since the unsold housing was included in the housing unsold in 2016, the instant disposition that calculated the upper limit of the tax burden by applying the law of 2015 to the housing unsold in lots is lawful.

F. Ultimately, the key issue of the instant case is whether the aggregate housing, which serves as the basis for the upper limit of the tax burden, is determined based on the year 2016, which is the pertinent year, or whether it is determined based on the year 2015, which is the immediately preceding year

4. Determination

A. In light of the following, it is reasonable to determine the tax base cumulative housing, which serves as the basis for the upper limit of tax burden under Article 10 of the former Gross Real Estate Tax Act and Article 5(2)2 of the former Enforcement Decree of the Gross Real Estate Tax Act, based on the relevant year.

1) Article 5(2) of the former Enforcement Decree of the Gross Real Estate Tax Act provides that the law of the immediately preceding year shall apply to the “house aggregate for the pertinent year” by means of calculating the upper limit of the tax burden. According to the language and text of the above provision, the legislator itself seems to have planned to determine whether the aforementioned provision constitutes a house aggregate for the pertinent year (if the purpose of the above provision was to determine whether the pertinent house is added to the tax base for the immediately preceding year, the law of the immediately preceding year shall be applied to the house aggregate for the immediately preceding year).

2) Article 5(2) of the former Enforcement Decree of the Gross Real Estate Tax Act provides that the upper limit of the tax burden on housing shall be determined on the basis of the relevant year regardless of whether the relevant house was actually owned at the tax base date for the immediately preceding year. Article 5(3) of the Enforcement Decree of the same Act provides that, where there is no tax base for the year immediately preceding the relevant year due to new construction, expansion, etc. of housing, the aggregate housing for the pertinent year shall be deemed to exist as of the tax base date for the immediately preceding year. In addition, Article 5(4) of the Enforcement Decree of the same Act provides that where the aggregate housing for the pertinent year is not subject to, or is subject to, property tax reduction or separate taxation pursuant to Article 6 of the former Gross Real Estate Tax Act, it shall be deemed that it is not subject to, or is subject to, application in the immediately preceding year. From an organic interpretation of the relevant provision as seen above, it is reasonable to determine

3) The legislative purport of Article 8(2)2 of the former Gross Real Estate Tax Act is to prevent a rental housing business entity from imposing a sudden comprehensive real estate tax and to provide a rental housing business entity with an opportunity to dispose of a house unsold in lots in the consecutive order by prescribing a transitional provision on the exclusion from summing-up. However, the comprehensive real estate holding tax is a requirement for taxation of ownership of real estate by recognizing a taxable capacity in holding a house unsold in lots above a certain value. Thus, the Act uniformly limits the period of exclusion from summing-up rather than uniformly excluding a house unsold in lots if a rental housing business entity owns a house unsold in lots.

However, in 2016, if a house unsold in lots, which became the basis for the upper limit of tax burden, is interpreted to be excluded from the subject of taxation, even though the house unsold in lots after the lapse of the period of exclusion from summing-up due to the lapse of the period of time in 2016, based on the previous year, the maximum amount of tax burden would be zero and the five-year period prescribed by the Act would not be imposed on the house unsold in lots even though the house unsold in lots was more than the lapse of the five-year period prescribed by the Act. Such interpretation would give excessive benefits to the rental business operator in violation of the legislative intent of Article 8(2)2 of the former Gross Real Estate Tax Act.

4) On February 7, 2017, the Enforcement Decree of the Gross Real Estate Tax Act was amended by Presidential Decree No. 27836, and the provision was newly established to the effect that if a house aggregate for the pertinent year is not included in a house aggregate for tax base under Article 8(2) of the Act in the immediately preceding year, it shall be deemed that the house aggregate for the immediately preceding year is included in the house aggregate for tax base (Article 5(5)). This seems to be an amendment to confirm and clarify the interpretation of Article 5(2) of the Enforcement Decree

B. Therefore, in light of the relevant year’s 2016, housing unsold in lots, which was entrusted by the Plaintiff, is added to the tax base pursuant to Article 8(2)2 of the former Gross Real Estate Tax Act and Article 4 of the Enforcement Rule of the Gross Real Estate Tax Act, since five years have elapsed since the first liability to pay taxes was established after being entrusted with the said housing, the Plaintiff’s assertion on a different premise is groundless

5. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.