[1] The meaning of "the purpose of new construction of a new building" under Article 23 subparagraph 3 of the Enforcement Decree of the former Land Excess Gains Tax Act

[2] The scope of litigation costs deducted from capital expenditures in calculating the tax base of land excess profit tax

[3] The case holding that since the acquisition of idle land, which is the object of taxation of land excess profit tax, includes not only the legal transfer of ownership of land, but also the de facto transfer or de facto transfer of ownership, it is reasonable to view that the acquisition on the date of settlement of price even if the certificate of farmland sale was not issued since the purchase and sale of farmland was fully paid after the purchase

[1] According to the main sentence of Article 23 subparagraph 3 of the former Enforcement Decree of the Land Excess Profit Tax Act (amended by Presidential Decree No. 14470 of Dec. 31, 1994), with respect to the scope of land which is not considered as "unused land," which is subject to the land excess profit tax, it shall not be considered as idle land for one year from the date of acquisition if land is acquired for the purpose of constructing a new building. In this context, "the purpose of constructing a new building" is to restrain idle land, in light of the legislative intent of the Land Excess Profit Tax Act, it shall not be interpreted by applying for a building permit within one year from the date of acquisition of the land or by restricting that such purpose should be recognized within one year from the date of acquisition. However, it refers to the intention to construct a new building within a considerable period of time by preparing a plan to construct a new building and funds.

[2] In calculating the tax base of land excess profit tax, the cost of lawsuit to be deducted as capital expenditure refers to the cost of directly required to secure ownership in the case of litigation after acquiring idle land, etc.

[3] The case holding that since the acquisition of idle land, which is the object of taxation of land excess profit tax, includes not only the legal transfer of ownership of land, but also the de facto transfer or de facto transfer of ownership, it is reasonable to view that the acquisition was made on the date of settlement of price even if the purchase and sale certificate was not issued since the purchase and sale contract for farmland was fully paid.

[1] Article 8(3) of the former Land Excess Gains Tax Act (amended by Act No. 4807 of Dec. 22, 1994); Article 23 subparag. 3 of the former Enforcement Decree of the Land Excess Gains Tax Act (amended by Presidential Decree No. 14470 of Dec. 31, 1994) / [2] Article 11(1)2 of the former Land Excess Gains Tax Act (amended by Act No. 4807 of Dec. 22, 1994); Article 32 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14870 of Dec. 31, 1994); Article 23 subparag. 4 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14814 of Dec. 31, 1994); Article 19(3)4 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14970 of Dec. 14 of Dec. 314, 997)

[1] Supreme Court Decision 93Nu7303 delivered on May 10, 1994 (Gong1994Sang, 1729), Supreme Court Decision 93Nu12022 delivered on June 10, 1994 (Gong1994Ha, 1982), Supreme Court Decision 94Nu5038 delivered on October 28, 1994 (Gong1994Ha, 3152), Supreme Court Decision 93Nu8764 delivered on April 9, 1996 (Gong196Sang, 1436), Supreme Court Decision 93Nu10491 delivered on April 23, 196 (Gong196Sang, 1625), Supreme Court Decision 93Nu1937939 delivered on July 30, 1997 (Gong293979 delivered on July 19397).

Plaintiff 1 and one other

The Director of Incheon Tax Office

Seoul High Court Decision 99Nu16803 delivered on February 13, 2001

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

We examine the grounds of appeal.

1. Regarding ground of appeal No. 1

According to the main sentence of Article 23 subparagraph 3 of the former Enforcement Decree of the Land Excess Profit Tax Act (amended by Presidential Decree No. 14470 of Dec. 31, 1994), with respect to the scope of land which is not considered as "land subject to taxation of the land excess profit tax", if land is acquired for the purpose of constructing a new building, it shall not be deemed idle land for one year from the date of its acquisition. In light of the legislative purport of the Land Excess Profit Tax Act, "the purpose of constructing a new building" is to restrain idle land, it shall not be interpreted by applying for a building permit within one year from the date of acquisition of the land or restricting that such purpose is recognized within one year from the date of its construction. However, in the future, it refers to the intention to construct a new building within a considerable period of time by preparing a new construction plan and funds to construct a new building, not as the temporary intention to construct a new building when it is constructed (see Supreme Court Decision 94Nu5038, Oct. 28, 1994).

In the same purport, the court below is just in holding that the plaintiffs purchased the land of this case for the purpose of constructing a new building on the ground at the time of the purchase of the land of this case in light of the following: the land of this case was where real estate speculation was character and conduct in connection with the Yongdo New Airport; the construction of the land of this case was prohibited or restricted for the purpose of suppressing speculation before the plaintiffs acquired the land of this case; the plaintiffs did not obtain the certificate of farmland sale; and the plaintiffs did not file an application for the registration of ownership transfer; and thereafter, the land of this case was left as a site without filing an application for the construction permit even after the cancellation of the regulation on the land of this case; and there is no error of law such as misunderstanding of facts as to the purpose of new construction of a building, as

2. Regarding ground of appeal No. 2

According to the reasoning of the judgment below, the court below acknowledged facts as follows. The plaintiffs' assertion that the litigation cost of this case 5,00,000,000 won paid in relation to the land of this case constitutes capital expenditure and should be deducted in calculating the tax base of land excess profit tax. In calculating the tax base of land excess profit tax, the litigation cost to be deducted as capital expenditure refers to the cost directly incurred in securing ownership in a case where a lawsuit is instituted after acquiring idle land, etc., and the lawsuit cost claimed by the plaintiffs is paid against the former owner in a lawsuit seeking the implementation of the principal registration procedure based on provisional registration of this case (Seoul District Court 92Da15610). The court below decided that the above lawsuit cost of this case was the litigation cost of this case against the former owner, but the plaintiffs did not complete the registration of ownership transfer pursuant to the above judgment because it was made before the land transaction permission was designated as the land transaction area, and thereafter, the plaintiffs did not constitute the litigation cost of this case directly claimed by the plaintiffs.

In light of the relevant legal provisions and records, the above recognition and determination by the court below is just, and there is no error of law such as misunderstanding of legal principles as to the deduction of capital expenditure in land excess profit tax. We cannot accept the allegation in the grounds of appeal.

3. Regarding ground of appeal No. 3

According to the reasoning of the judgment below, the court below acknowledged the facts as stated in its holding, and determined that the plaintiffs acquired the farmland transaction certificate on the date of settlement, and that the disposition of this case was unlawful on April 3, 1989 on the premise that the plaintiffs acquired the land of this case on the premise that the plaintiffs acquired the land of this case on April 3, 1989, which was the date of settlement of the price, although the plaintiffs could not obtain the certificate of farmland sale because the land of this case was farmland sale, and since the acquisition of idle land, which is subject to taxation of land excess profit tax, includes not only the legal transfer of ownership of the land, but also the de facto transfer or de facto transfer or actual acquisition of ownership, as long as the price was paid in full after the sales contract for the land of this case, it was reasonable to view

In light of the relevant legal provisions and records, the above recognition and judgment of the court below is just, and there is no error of law such as misunderstanding of legal principles as to the time of acquisition of idle land, as otherwise alleged in the ground of appeal. The ground of appeal is

4. Therefore, all appeals are dismissed, and the costs of appeal are assessed against the plaintiffs who have lost them. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Seo-sung (Presiding Justice)