Dongyang Co., Ltd. (Law Firm Ui-Myeon, Attorneys Yellow-gu et al., Counsel for the defendant-appellant)

Southyang Market (Law Firm Dongin, Attorneys Lee Jae-in, Counsel for the plaintiff-appellant)

October 9, 2012

Suwon District Court Decision 2010Guhap4563 Decided October 4, 2011

1. Revocation of a judgment of the first instance;

2. The Defendant’s imposition of acquisition tax of KRW 1,024,323,970 and special rural development tax of KRW 71,386,20 shall be revoked, respectively, on May 20, 209.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

Ⅰ. Imposition of acquisition tax, etc.;

The following facts are not disputed between the parties, or acknowledged by comprehensively considering the overall purport of the arguments in Gap evidence 1 to 6, 37, 39, and Eul evidence 1 and 5 (including paper numbers).

[1]

○ The Plaintiff promoted a new construction project of multi-family housing (hereinafter “instant project”) at the Namyang-si ( Address 1 omitted).

○ However, in most cases, the total area of 95,121 square meters, and 71 square meters, which are included in the site of the instant project, were electric and field, and it was not possible to acquire the said parcel in the name of the same corporation as the Plaintiff under the Farmland Act (hereinafter referred to as “instant land”).

around June 2003, the Plaintiff entered into a business agreement with the representative director of the Plaintiff, Nonparty 1, Nonparty 2, and Nonparty 3 (hereinafter collectively referred to as “the Nonparty”), and jointly carried out the instant business. However, the Nonparty agreed to raise the initial funds necessary for the purchase of the project site and purchase the real estate owned by the Nonparty after a district unit announcement was made, and the Plaintiff entered into an additional agreement on November 2004 and March 2007 (hereinafter referred to as “instant business agreement”).

[2]

During the period from July 23, 2003 to December 13, 2004, the registration of ownership transfer was completed in the name of Nonparty 4, Nonparty 5, the owner of the instant land, from Nonparty 4, Nonparty 5, etc. (hereinafter “branch owners”).

The acquisition tax and special rural development tax on the land of this case were paid under the names of the Nonparty at the time of the above transfer registration.

On February 12, 2007, the decision of the urban management planning was announced publicly regarding the instant project. On March 9, 2007, the registration of transfer of ownership was completed in the name of the plaintiff from the non-party regarding the instant land.

The acquisition tax and special rural development tax on the land of this case were paid in the name of the plaintiff at the time of the above transfer registration.

[3]

○ Then, on May 20, 2009, the Defendant imposed acquisition tax of KRW 1,070,793,000 and special rural development tax of KRW 107,079,30 on the aggregate of 60,000 square meters in the instant land, for which five years have not elapsed since the date of acquisition thereof, on the ground that the Plaintiff acquired the instant land under a title trust with the Nonparty.

On January 15, 2010, the Plaintiff filed an appeal with the Tax Tribunal on January 15, 2010. On August 17, 2010, the Tax Tribunal rendered a decision to revoke the portion of additional tax amounting to the pre-sale transaction.

○ In accordance with the above decision, the Defendant partially reduced the tax amount of the above disposition, and on August 23, 2010, imposed acquisition tax of KRW 1,024,323,970 on the said 60 parcel and KRW 71,386,200 on the special rural development tax (hereinafter referred to as “instant disposition”), and imposed a disposition of KRW 1,024,323,970 on the said 60 parcel (hereinafter referred to as “instant disposition”).

Ⅱ The Plaintiff’s title trust

1. The plaintiff's assertion

The instant business agreement entered into between the Plaintiff and the Nonparty is not a title trust agreement but a business agreement, and the Nonparty purchased the instant land from the prop and transferred it to the Plaintiff, and thus, the instant business was conducted. Therefore, the Plaintiff did not have held title trust with respect to the instant land. Therefore, the instant disposition that imposed the acquisition tax and special rural development tax on the Plaintiff on the part of the instant land on the ground that the Plaintiff actually acquired the instant land under title trust with the Nonparty.

2. Determination

(a) Circumstances which examine Gap's statements in Gap's 3 through 6, 17 through 21, 26 through 29, Eul's 2 through 5, and 8 through 14 (including paper numbers) by integrating the whole purport of the pleadings are as follows:

[1]

(1) Under the instant business agreement, not only the Nonparty’s real estate but also the Plaintiff’s real estate was concluded as a collateral trust agreement, and the Nonparty paid the principal and interest on the loan under the Nonparty’s name for the acquisition of the instant land as a loan under the said collateral trust agreement.

(2) On November 24, 2004, the Nonparty offered the instant land acquired in the name of the Nonparty between Korea Bank Co., Ltd. and the Nonparty as collateral, and accordingly, concluded a collateral trust contract with the purport that the Plaintiff obtained a loan of KRW 120 billion from the National Bank of Korea (Evidence No. 10 or 12). The Plaintiff repaid the loan of the principal and interest on the loan under the name of the Nonparty for the acquisition of the instant land as collateral.

(3) According to the instant business agreement, while the Nonparty provided a large amount of funds borrowed for the instant business and acquired the instant land in his/her name as collateral for the Plaintiff’s loan, the Nonparty did not specifically provide for the timing, method, profit distribution, etc. of the Nonparty’s collection of investment funds, in addition to the repayment of the principal and interest on the loan borrowed under the Nonparty’s name, if the collateral trust agreement becomes a sexuality.

(4) Thus, it seems that the Plaintiff actually raised funds from the National Bank of Korea for the purchase of the land of this case. The Plaintiff first used funds borrowed from the National Bank of Korea to repay the principal and interest of the loan in the name of the Nonparty rather than the original purpose of the business in order to promote the project of this case. Meanwhile, the Nonparty decided not to assert the allocation of the interest and interest on the loan in its name from the original date to the early redemption of the principal and interest on the loan in its name, and it seems that the Nonparty’s economic profit and repayment burden following the borrowing of funds in the name of the Nonparty,

[2]

(1) During the period from July 23, 2003 to December 13, 2004, when the registration of ownership transfer is completed in the name of the Nonparty from the props as to the instant land, the Plaintiff appears to have paid the registration fee required therefor, the purchase price of national housing bonds, etc., and according to the results of the tax investigation conducted by the Seoul Regional Tax Office against the Plaintiff of the Seoul Regional Tax Office (Evidence B). The fact that there was a case where the purchase price was paid in the name of the Plaintiff at the time the instant land was purchased in the name of the Nonparty.

The plaintiff asserts that the employee in charge of the above tax invoice, etc. is merely an occupational error, but there is no evidence to acknowledge it.

(2) According to the minutes of the Plaintiff’s board of directors and the corporate accounting books (the president of the separate accounts in 2005), the Plaintiff’s board of directors resolved to handle the instant land to the Plaintiff’s construction site account even if it was not before the Plaintiff’s future ownership was transferred, and it was confirmed that the Plaintiff’s business was dealt with according to the resolution.

As to this, the Plaintiff asserted that the Nonparty did not transfer the ownership of the land of this case to the Plaintiff, unlike the instant business agreement, and that the Plaintiff did so. However, such assertion is difficult to accept as it is because the Plaintiff’s representative director, Nonparty 1, and Nonparty 2, etc., who were his/her ancillary, anticipated the violation of the instant business agreement and carried out business affairs contrary to their interests.

(3) The Defendant imposed a penalty surcharge under the Act on the Registration of Real Estate under Actual Titleholder’s Name on the ground that the registration of transfer of ownership in the name of the Nonparty on the instant land constitutes a title trust. On January 9, 2009, the Plaintiff imposed the penalty surcharge on the Plaintiff, by submitting a written opinion to the effect that “In order to run the instant business, all land in the business site should be acquired in the business site, but it is impossible to acquire the land whose land category is farmland under the Farmland Act, and thus, it was impossible for the Plaintiff to obtain the registration of transfer of ownership under the name of the corporation, and reflected it in the Plaintiff’s corporate account book as a construction site.” The Plaintiff also fell under a title trust person by submitting a written opinion to the effect that the Plaintiff would inevitably have come to a title trust, and the imposition

B. In full view of the above circumstances, the instant business agreement concluded between the Plaintiff and the Nonparty is acknowledged as a title trust agreement that the Plaintiff purchased the instant land under the name of its representative director or director in trust to the Nonparty, and purchased the instant land under the name of the Nonparty in order to avoid the limitation under the Farmland Act, which cannot be acquired under the name of the Plaintiff as a juristic person, and was recognized as a title trust agreement that the Nonparty again transferred the name of ownership on the registry to the Plaintiff, and the transfer of ownership was completed in the name of the Nonparty as to the instant land under the name of the Nonparty is recognized as a title trust agreement. Accordingly, the Plaintiff’s assertion that the Plaintiff did not

Ⅲ. Plaintiff’s tax liability such as acquisition tax

1. The plaintiff's assertion

Even if the Plaintiff actually acquired the instant land by title trust with the Nonparty regarding the instant land, the acquisition tax and the special rural development tax on the instant land were paid from the Nonparty as the ownership transfer registration was completed in the name of the Nonparty, and the acquisition tax and the special rural development tax on the instant land were paid from the Nonparty, and thus, the Plaintiff cannot impose the acquisition tax and the special rural development tax on the instant land on the Plaintiff on the ground that the Plaintiff actually acquired the instant land through title trust. Accordingly, the instant disposition imposed upon the Plaintiff on the ground that it was in fact acquired the instant land through the said title trust is unlawful because it constitutes double taxation or violates the principle of trust protection.

2. Determination

(a) Acquisition tax;

(1) Article 104 Subparag. 8 of the Local Tax Act, which was wholly amended on March 31, 2010 and enforced on January 1, 2011, provides that acquisition means sale, exchange, inheritance, gift, contribution, investment in kind to a corporation, construction, repair, reclamation of public waters, creation of land through reclamation, and any other similar acquisition, which means original acquisition, acquisition by succession, or all other acquisitions with or without compensation.

Article 105 of the Local Tax Act, Article 105 (1) of the Local Tax Act provides that the acquisition tax shall be imposed on the acquisitor of real estate, etc., and Article 102 (2) of the △△△, and the acquisition of real estate, etc. shall be deemed to have been acquired when it is actually acquired even if it is not registered in accordance with the provisions of relevant Acts and subordinate statutes, such as the Civil Act, etc.,

(2) Acquisition tax is a kind of distribution tax that assumes the fact that the transfer of the original goods is the transfer of the goods and imposes the tax-bearing capacity recognizing and imposing the tax-bearing capacity. Since acquisition tax does not impose profits that a purchaser may obtain by using, earning, or disposing of the goods, it is practically a taxable object regardless of whether a acquisitor acquires the ownership of the complete content (Supreme Court Decision 2003Du1342 Decided November 25, 2004).

The term "acquisition of real estate" under Article 105(1) of the Local Tax Act includes all cases of acquisition of real estate through the form of transfer of ownership. This constitutes a case where the registration of ownership transfer is completed due to the registration of ownership transfer due to the registration of title transfer or the termination of title trust (Supreme Court Decision 2000Du9311 Decided July 12, 2002).

In Article 105(2) of the Local Tax Act, the term "actual acquisition" means a case where a person fails to meet the formal requirements for acquisition of ownership such as registration but meets the substantive requirements for acquisition of ownership such as payment of price. It does not change merely because the de facto acquisitor completed the registration of ownership transfer under the name of the trustee pursuant to a three-party title trust agreement, and did not complete the registration of ownership transfer under his name (Supreme Court Decision 2005Du1360 Decided May 11, 2007).

B. Title trust

(1) According to Article 2 of the Act on the Registration of Real Estate under Actual Titleholder’s Name (hereinafter “Real Estate Real Name Act”), a title trust agreement refers to an agreement whereby a person who holds, or actually acquires, ownership or other real rights (real rights to real estate) to a real estate or a person who intends to acquire, such ownership or other real rights (real rights to real estate) and another person agrees to hold or hold the real rights to real estate internally between the other person and the latter person, and the registration thereof is made in the name of the other person.

According to Article 4 of the Real Estate Real Name Act, a title trust agreement is null and void, and any change in a real right to real estate made by registration under a title trust agreement is null and void: Provided, That the same shall not apply where the title trustee becomes one of the parties to the contract for acquiring a real right to real estate and the other party did not know

On the other hand, even though the title trust agreement is null and void, the title trust agreement is deemed valid between the title trustee and the third party who entered into the contract to transfer ownership to the title truster and the third party, and the title truster actually holds ownership and the economic benefit can be maintained to the

In the above case, deeming that a title truster cannot impose acquisition tax on the ground that a title trust agreement or a change in real right made by registration pursuant to the title trust agreement is null and void by the Real Estate Real Name Act is null and void is deemed to be in violation of the tax justice and equity by bringing about a result of non-taxation on the acquisition act in fact treated as valid.

Therefore, in a case where a title truster is treated as effective as the above, and the title truster retains ownership and the economic benefit therefrom remains to be attributed to the title truster, even if a title trust agreement or a change in the real right made by the registration pursuant to the title trust agreement is null and void by the Real Estate Real Name Act, the acquisition tax can be imposed.

(2) In a case where the registration of ownership transfer was completed under the name of the title trustee pursuant to the above title trust agreement, the title trustee is deemed to have acquired the ownership transfer under the name of the title trustee, and thus, the liability to pay acquisition tax is established. On the other hand, the title truster was not completed the registration of ownership transfer under his/her name, but the title truster did not complete the registration of ownership transfer under his/her name, and thus

If the ownership transfer registration is completed in the name of the title truster following the termination of the title trust, the title truster will be able to acquire the ownership transfer in the form of the title registration title transfer.

However, as seen earlier, the title truster had already been an act of acquiring ownership, such as payment, which satisfies the practical requirements for the acquisition of ownership, and if an act of acquiring ownership through the form of transfer of ownership, which is the title holder, is different following the termination of title trust, the title truster shall satisfy the substantive requirements and formal requirements for the acquisition of ownership, thereby completing his/her acquisition of ownership.

(3) As seen earlier, acquisition tax is a kind of distribution tax, based on which the fact that the transfer of goods is made, and recognized and imposed the tax-bearing capacity.

If so, in the event that acquisition by the form of transfer of ownership of the title in the name of registration becomes different following the cancellation of the title trust as above, the title truster has the ability to pay to the title truster ① to pay the tax at the stage of the acquisition by the actual requirements for the acquisition of ownership, such as payment, and ② to pay the tax at the stage of the acquisition by the form of transfer of ownership of the title in the name of registration, depending on the termination of the title trust.

However, in the above cases, while the object of ownership and the subject of ownership are the same, the substantive requirements for the acquisition of ownership are added, and the taxable capacity is the economic ability for the taxpayer to pay taxes to a certain degree individually. Thus, it cannot be deemed that the taxable capacity of the title truster, which is based on the above two stages, is separate.

(4) If so, as long as the ability to pay acquisition tax was detected at the stage of the acquisition of ownership, such as payment, which satisfies the practical requirements for acquisition of ownership, to the title truster, and the duty to pay acquisition tax was performed, the title truster cannot be held liable to pay acquisition tax on the grounds that the tax force was separately discovered at the stage of the acquisition of ownership transfer, which is registered in the name of the title, following the title truster’s termination of the title trust.

C. Disposition of this case

(1) According to the facts and evidence seen earlier, between the Plaintiff and the Nonparty, during the period from July 23, 2003 to December 13, 2004, the ownership transfer registration was completed under the title trust agreement between the Plaintiff and the Nonparty with respect to the instant land, and the acquisition tax and special rural development tax on the instant land were paid in the name of the Nonparty. The Nonparty, the title trustee, or the Nonparty, who was the seller of the instant land, did not assert the ownership of the instant land against the title truster. Thus, the Plaintiff maintained the status that the Plaintiff actually owned the instant land and economic benefits accrue to the Plaintiff. Accordingly, upon the title trust termination between the Plaintiff and the Nonparty on March 9, 2007, the ownership transfer registration was completed in the name of the Plaintiff, and the acquisition tax and special rural development tax on the instant land were paid in the name of the Plaintiff. After that, the Defendant imposed the acquisition tax and special rural development tax on the instant land on May 20, 2009 on the ground that the Plaintiff acquired the instant land under title trust.

(2) If so, the Plaintiff, a title truster, was aware of the tax-bearing force at the stage of acquisition of the ownership transfer title, upon the termination of the title trust between the Nonparty and the Nonparty, and the duty to pay acquisition tax was performed. Therefore, the Plaintiff cannot be deemed to bear another tax liability for acquisition tax on the instant land, as the Plaintiff, who had been separately aware of the tax-bearing force at the stage of acquisition of the ownership, such as payment, to the Plaintiff, who was the title truster, prior to the △△△△△△.

(3) Therefore, the instant disposition, which was imposed at the same time on the Plaintiff on the ground that the transfer registration of ownership was completed in the name of the Nonparty, and the acquisition tax and the special tax for rural development was actually acquired in the name of the Plaintiff after the payment of the acquisition tax and the special tax for rural development was made in the name of the Plaintiff, is unlawful

IV. Conclusion

Therefore, the plaintiff's claim seeking the cancellation of the disposition of this case is justified, and the judgment of the court of first instance is unfair with different conclusions, so the judgment of the court of first instance is cancelled and the plaintiff's claim is accepted, and it is so decided as per Disposition.

Judges intentionally (Presiding Judge) and in the order of the highest order