[1] The requirements to be excluded from the subject of gift tax in cases where there are unavoidable reasons to exclude the property for public interest from the subject of gift tax, in which it is not used for contribution

[2] Where the competent Minister retroactively extends the period of use of the contributed property for public interest to the extent of the period of use and the transfer thereof, whether the application for an extension is excluded from the subject of the gift tax even if the application was later extended (affirmative)

[1] The purpose of Article 8-2(1)1 and (4), and Article 34-7 of the former Inheritance Tax Act (amended by Act No. 4662 of Dec. 31, 1993), Article 3-2(7)1 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 14471 of Dec. 31, 1994), etc. is not to include in the taxable value on the condition that the property contributed to public works should be used for the purpose of contribution within a certain period after the contribution, but if the conditions are not met, gift tax shall be again imposed: Provided, That even in this case, if the competent Minister recognizes that the use requires a long period of time, it shall be excluded from the subject of gift tax, while the competent Minister shall report the fact recognized by the competent Minister to the head of a tax office along with the submission of documents, such as a list of contributed property, etc., to be used for the purpose of follow-up management. Thus, if the competent Minister recognizes the fact requiring a long period of

[2] In a case where the competent Minister uses the property contributed to the public works for the purpose of full contribution within the project implementation period approved by the competent Minister, even if the competent Minister did not report the approval of extension to the head of the competent tax office, it is excluded from the subject of gift tax, and the competent Minister’s application for extension is not different since the period of use was retroactively extended by the Do and transfer

[1] Articles 8-2 (see Articles 16 and 48 of the current Inheritance Tax and Gift Tax Act), 34-7 (see Article 48 of the current Inheritance Tax and Gift Tax Act), Article 3-2 (7) 1 of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 14471 of December 31, 1994), Article 3-2 (2) 2 (see Article 48 (2) 1 of the current Inheritance Tax and Gift Tax Act, Article 38 (3) of the Inheritance Tax and Gift Tax Act) of the former Inheritance Tax Act (amended by Act No. 4662 of December 31, 1993) / [2] Articles 8-2 (see Articles 16 and 48 of the current Inheritance Tax and Gift Tax Act), 34-7 (see Article 48 of the current Inheritance Tax and Gift Tax Act), Article 3-1 of the former Enforcement Decree of the Inheritance Tax Act (amended by Presidential Decree No. 14831 of December 37, 1948)

[1] Supreme Court Decision 91Nu9114 delivered on October 27, 1992 (Gong1992, 3026), Supreme Court Decision 94Nu8600 delivered on March 3, 1995 (Gong195Sang, 1639)

Medical Corporation and Beneficiary Foundation (Attorney Kim Young-jin, Counsel for the defendant-appellant)

Head of Dong Tax Office

Seoul High Court Decision 95Gu16860 delivered on January 17, 1996

The appeal is dismissed. The costs of appeal are assessed against the defendant.

As to the Grounds of Appeal

Article 8-2 (1) 1 of the Inheritance Tax Act (amended by Act No. 4662 of Dec. 31, 1993; hereinafter the same shall apply) provides that property shall not be included in the taxable amount of inheritance taxes for religious projects, charity projects, academic projects and other public projects operated under the conditions as prescribed by the Presidential Decree (Article 3-2 (2) 11 of the Enforcement Decree of the same Act (amended by the Presidential Decree No. 14471 of Dec. 31, 1994; hereinafter the same shall apply). Article 8-2 (1) 1 of the same Act provides that if a person who has received property not included in the taxable amount of inheritance taxes under the provisions of paragraph (1) 1 fails to use the donated property for a long time within the period determined by the Presidential Decree, it shall be excluded from the taxable amount of inheritance taxes for which the competent Minister recognizes that the property should be donated to the head of a tax office within the scope of time limit, and Article 34-7 of the same Act provides that the above provisions shall not apply mutatis mutandis.

According to the reasoning of the judgment below, the court below held that the plaintiff corporation's foundation's act of using the above land and cash for the purpose of opening a special hospital on the land of this case owned by the president Kim Jong-gun and his wife, and applied for permission to establish a hospital on September 3, 1990, but the application was rejected due to the opposition of residents in neighboring areas, etc., and thereafter, the plaintiff's act of using the above land and cash was extended from the Minister of Health and Welfare on July 10, 1993 to August 8, 1994. Since the plaintiff corporation's act of using the above land and cash was changed from the land of this case for the purpose of opening the special hospital on its land of this case, and the non-party's act of using the above land and cash, etc. was rejected by the competent Minister, the court below did not find that the period of using the land of this case was extended to the Minister of Health and Welfare on July 10, 1993 to the extent that the plaintiff was not subject to the approval of the basic property, land and land.

Therefore, the appeal is dismissed and the costs of appeal are assessed against the losing defendant. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jong-sik (Presiding Justice)