In calculating the land excess profit tax on idle land designated as reserved land between the commencement date of the taxable period and the end date of the taxable period, whether the standard market price at the commencement date of the taxable period shall be calculated based on the area of the previous land

Unless there are special circumstances, such as the collection or delivery of the liquidation money in the replotting plan, when the executor of the compartmentalization and rearrangement project has designated the previous land as the land substitution plan, the land substitution and previous land shall be deemed to correspond with each other. Therefore, in cases where the idle land, etc. subject to the land excess profit tax as of the end of the taxable period is not designated as the land substitution and is designated as at the end of the taxable period as at the end of the taxable period, it is reasonable to calculate the standard market price of such idle land as at the end of the taxable period

Articles 8(1)14(a) and 11(1) of the Land Excess Profits Tax Act

Kim Hong-gu

Head of the Jeonju Tax Office

Gwangju High Court Decision 94Gu3062 delivered on November 17, 1995

The judgment below is reversed, and the case is remanded to the Gwangju High Court.

The plaintiff's grounds of appeal are examined.

Article 11(1) of the Land Excess Profits Tax Act provides that the tax base of the land excess profit tax shall be calculated by lot, and except as otherwise provided in law, the land excess profit tax shall be calculated by deducting the increases in land prices and improvement expenses from the standard market price of the land at the end of the taxable period concerned at the end of the taxable period less the standard market price of the land at the starting date of the taxable period (hereinafter referred to as “the increase in land price”) and then calculating the land excess profit in the taxable period concerned and making the basic deduction under the provisions of Article 11-2 again from the land excess profit.

On the other hand, a land readjustment project means a project for the exchange, division, and consolidation of land, other division of land, change of land category or form and quality, or installation and change of public facilities to improve the utility of land site and maintain public facilities as a site by designating land within an urban planning zone determined under the provisions of Article 12 of the Urban Planning Act or a quasi-urban zone under the Act on the Utilization and Management of the National Territory, which is a project for the execution of a land readjustment and rearrangement project (Article 2 subparagraph 1 and Article 3 of the Land Readjustment and Rearrangement Projects Act), and when the executor of a land rearrangement and rearrangement project completes the construction of a project, in principle, a land substitution plan shall be designated according to the land substitution plan, in consideration of the current state and conditions of the previous land in the zone where the land within the zone where the rearrangement and rearrangement project is performed, and in case where the land substitution is inevitably determined or excluding the land subject to a land substitution by inevitably adjusting the scale of the land substitution due to public interest or technical problems, it shall be decided to liquidate the excess in consideration of the location, land and land substitution.

Therefore, unless there are special circumstances, such as the collection or delivery of the liquidation money in the replotting plan, when the developer of the compartmentalization and rearrangement project designates the previous land as a replotting plan, it shall be deemed that the land substitution plan and the previous land are corresponding to each other. Therefore, in case where the idle land, etc. which is subject to the land excess profit tax as of the end of the taxable period is not designated as a replotting as of the end of the taxable period, and as of the end of the taxable period, it is reasonable to calculate the standard market price of the idle land as of the beginning of the taxable period, the land

According to the facts duly confirmed by the court below, the starting date of the taxable period of this case is January 1, 1990, and the end date of the taxable period of this case is December 31, 1992, and as of the end of the taxable period, the land of this case, which constitutes idle land, was designated as reserved land on December 23, 1990. Thus, in calculating the standard market price of the land of this case as of the starting date of the above taxable period, unless there are special circumstances, such as the collection or delivery of liquidation money to the owner of the previous land in the replotting plan, the land area should be the same as that of the previous land. However, the court below erred in the misapprehension of legal principles as to calculating the tax base of the previous land as of the starting date of the above taxable period, and the land area was calculated as the standard market price of the land of this case as of the previous land as of the starting date of the above taxable period. This error affected the conclusion of the judgment.

Therefore, the judgment below is reversed, and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Shin Sung-sung (Presiding Justice)