Local Foundation (Law Firm Masung, Attorneys Shin Jong-sung et al., Counsel for defendant-appellant)

Head of Seocho Tax Office

September 4, 2014

1. The Defendant’s disposition of imposition of KRW 182,979,140 against the Plaintiff on February 13, 2013 is revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On March 5, 2004, the Plaintiff is an incorporated foundation established to carry out “public projects, such as the development of rural communities and communities” through support for research projects, academic and educational activities, etc. for balanced regional development and promotion of rural communities.

B. On June 8, 2007, the Plaintiff received from the Nonparty a donation of 83,107 square meters of forests and fields ( Address 1 omitted) from the Nonparty (hereinafter “instant land”); on June 15, 2007, 25,785 square meters of forests and fields ( Address 3 omitted); and on June 15, 2007, 25,785 square meters of forests and fields (hereinafter “instant land 2”); and on combination with the instant land 1, each of the instant land (However, the date of registration on the registry is all May 17, 2007).

C. The Defendant, on the ground that “the Plaintiff was not directly used for public interest projects within three years from the date of receiving each of the instant land, which was an asset contributed to a foundation,” was identified as June 8, 2010 (the instant land No. 1), and June 16, 2010 (the instant land No. 2), respectively, and determined and notified the Plaintiff of KRW 182,979,140 on February 13, 2013 on the ground that the time of donation was deemed the time of donation (hereinafter “instant disposition”).

D. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on May 10, 2013, but the Tax Tribunal dismissed the appeal on December 27, 2013. The Plaintiff appealed and filed the instant lawsuit on March 24, 2014.

[Ground for Authentication: Facts without dispute, Gap evidence 1 through 3, 12, Eul evidence 1 and 2, the purport of the whole pleadings]

2. The assertion and judgment

A. The plaintiff's assertion

(1) delay of sale due to unavoidable reasons;

The Plaintiff’s disposal of each of the instant lands within three years from the date on which the Plaintiff received the contribution and did not directly use each of the instant lands for public interest entertainment business, etc. is due to “legal or administrative inevitable reasons,” and thus, the gift tax cannot be imposed. Nevertheless, the Defendant issued the instant disposition, which is unlawful.

2) Calculation of assessment base date;

Even if the gift tax can be imposed on each of the instant lands, the base date for the calculation of the gift tax base should be deemed the time of the registration of ownership transfer with respect to each of the instant lands. Nevertheless, in rendering the instant disposition, the Defendant deemed the base date for the calculation of the gift tax base as the time when 3 years elapsed from the date of registration, which is unlawful.

(b) Related statutes;

Attached Form is as shown in the attached Form.

C. Determination

(1) delay of sale due to unavoidable reasons;

Article 48(2) of the Inheritance Tax and Gift Tax Act (amended by Act No. 916 of Jan. 1, 2010; hereinafter “Gift”) provides that “Where a public service corporation, etc. to which property was contributed falls under any of the following subparagraphs 1 through 4 and 5, the value of the property shall be deemed donated to the public service corporation, etc. immediately.” Paragraph 1 of the same Article provides that “Where the land is not used for purposes other than those of direct public services or for public services within 3 years from the date of receiving the contribution, it shall be excluded from cases where the competent Minister reports the fact to the superintendent of the competent tax office with respect to the acquisition of the land for which it was impossible to use the land for the same purpose as that of public services within 3 years from the date of submission of the report under the provisions of paragraph (5) because it was impossible to use the land for the same purpose as that of public services because of unavoidable reasons for which the former Enforcement Decree of the Inheritance Tax and Gift Tax Act (amended by Presidential Decree No. 23591 of Feb. 2, 2019, 2019) provides that it may be directly used for public services.

In light of the above provisions and legal principles, in full view of the following circumstances, the facts and evidence as seen above, Gap evidence Nos. 4 through 7, Eul evidence Nos. 4, and Eul evidence Nos. 4, and the fact-finding results and the whole purport of the pleadings, the fact-finding results of the fact-finding with the regional development of the Ministry of Agriculture, Food and Rural Affairs of this court, and the whole arguments, the plaintiff's failure to use each of the lands of this case for a direct public project within three years from the date of receiving each of the lands of this case cannot be viewed as

① The Plaintiff made various efforts to sell each of the instant lands after receiving the Plaintiff’s contribution, and use the proceeds therefrom for the Plaintiff’s public business purposes. However, according to the facts and evidence as seen earlier, the instant land was not disposed of within three years from the date of receiving the contribution since there exist various statutory and administrative restrictions on each of the instant lands. According to the records and records, it can be acknowledged that the instant land was designated as a preserved mountainous district under the Mountainous Districts Management Act, a preserved mountainous district under the Seoul Metropolitan Area Readjustment Planning Act, a preservation area for the installation of discharge facilities under the Act on the Conservation of Water Quality and Aquatic Ecosystem, a special measures area for the preservation of water quality under the Framework Act on Environmental Policy, and a special measures area for the preservation of water quality as a mountainous district for public interest under the Forest Protection Act, and a listing management area under the Seoul Metropolitan Area Readjustment Planning Act, from May 31, 2006 to May 30, 20

② However, according to the facts and evidence examined earlier, when referring to the confirmation of land use plan for each land of this case, the Plaintiff appears to have sufficiently known the restrictions under each of the above laws and regulations regarding each of the land of this case at the time of receiving the contribution of each of the land of this case (the Plaintiff did not assert that the Plaintiff was unaware of the restrictions under each of the above laws and regulations at the time of receiving the contribution of the land of this case), and the Plaintiff itself was unable to dispose of each of the land of this case and use the land of this case for the purpose of public works, etc. because of the limitations under such laws and regulations. Thus, the Plaintiff’s contribution of each of the land of this case should be deemed to constitute “a case where the Plaintiff acquired the land of this case within three years after acquiring the land of this case under the conditions that it could easily have known the existence of such obstacles if he was aware of the fact that he was aware of it,” and it should be deemed to constitute “a case where the Plaintiff did not directly use the land for public works within three years after acquiring the land of this case.”

(3) Therefore, barring special circumstances, such as “the Plaintiff’s failure to use each of the instant lands for public works within three years,” unless it is proven that there was a possibility that the cause of disability under the Act and subordinate statutes existed prior to the acquisition of each of the instant lands might be sufficiently resolved, and that the Plaintiff was unable to use each of the instant lands for the relevant business due to any unexpected reason, even if it was resolved by making efforts to solve it,” it cannot be said that there is an inevitable reason for the Plaintiff to not use each of the instant lands for public works purposes, etc.

④ In addition, according to the above provisions of the Inheritance and Gift Tax Act and the Enforcement Decree of the above Inheritance and Gift Tax Act, in order to recognize that there are inevitable reasons to recognize that the contributed property is not used for the purpose of the direct public interest project within three years, there should be inevitable reasons and the competent Minister (the Minister of Agriculture, Food and Rural Affairs in the case of this case). The plaintiff was not recognized by the Minister of Agriculture, Food and Rural Affairs that "the plaintiff is not used for the purpose of the public interest project within three years from the date of receiving the contribution of each of the land of this case." In addition, according to the results of the fact inquiry with regard to regional development of the Ministry of Agriculture, Food and Rural Affairs of this Court, the plaintiff was extended by the Minister of Agriculture, Food and Rural Affairs for other land which is not the land of this case, which is not the

Ultimately, this part of the Plaintiff’s assertion cannot be accepted.

2) Calculation of assessment base date;

In rendering the instant disposition, the Defendant considered the base date for calculating the gift tax base of each of the instant land as the time when three years elapsed from the date when the cause for registration of transfer of ownership on each of the instant land was the date when the ownership transfer registration was registered ( May 17, 2010), which is deemed to be unlawful for the following reasons.

① Article 48(2) of the Inheritance and Gift Tax Act provides, “Where a public service corporation, etc. to which the property is contributed falls under any of subparagraphs 1 through 4 and 6 of the following subparagraphs, the head of a tax office, etc. shall deem the value prescribed by Presidential Decree to have been donated to the public service corporation, etc. and, in cases falling under subparagraph 5, an additional tax shall be imposed pursuant to Article 78(9).” However, Article 37 of the Enforcement Decree of the Inheritance and Gift Tax Act delegated by the public service corporation, etc. does not separately determine the point of time for calculating the tax base in cases where the property is contributed to the public service corporation, etc.

② However, Article 60(1) of the Inheritance Tax and Gift Tax Act provides that “The value of property on which inheritance tax or gift tax is levied under this Act shall be the market price as of the date of commencing an inheritance or of donation.” Article 23(1)1 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act provides that “in case of property requiring a registration or enrollment in a transfer or exercise of the right, the date of registration shall be the time of acquisition.” Thus, in calculating the gift tax due to the Plaintiff’s inheritance of each land of this case, the tax base shall be calculated as of the time when the Plaintiff acquired each land of this case and the ownership of each of the land of this case is changed, namely, when the ownership transfer is registered.”

Therefore, the instant disposition, which was conducted by calculating the tax base on a different premise, is unlawful.

D. Sub-committee

Ultimately, unlike the above determination, the amount of tax calculated and paid based on the gift tax base as of May 17, 2010 among the disposition of this case shall be calculated after deducting it. Thus, the data submitted by the parties alone cannot be calculated as a legitimate amount of tax, and the disposition of this case shall be revoked in the end.

3. Conclusion

If so, the plaintiff's claim is reasonable, and it is decided as per Disposition.

[Attachment]

Judges Kim Jong-jin (Presiding Judge)