Plaintiff (Law Firm Rate, Attorneys So-young et al., Counsel for the plaintiff-appellant)

Head of Yeongdeungpo-si (Attorney Lee Byung-hun, Counsel for the plaintiff-appellant)

June 24, 2008

Suwon District Court Decision 2007Guhap4453 Decided November 14, 2007

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

3. Section 1 of the judgment of the first instance was amended by the reduction of claims in the trial as follows.

The defendant's disposition of imposition of the attached Form 1 against the plaintiff on April 16, 2007 shall be revoked.

1. Purport of claim

It is as stated in paragraph (3) of this Article.

2. Purport of appeal

The judgment of the first instance is revoked, and the plaintiff's claim is dismissed.

1. Details of the disposition;

A. On June 13, 1996, the Plaintiff obtained a construction permit around September 9, 200 after obtaining approval for a business plan to build “Sebro B”, which is a charged welfare facility for the aged, on the parcel of 52 parcels of land, from the Yeongdeungpo-gu, Young-gu (number omitted) from the Young-gu, Young-gu (Sengdong omitted), and completed the construction on December 30, 200, and newly constructed “Sebro A” (hereinafter “the building in this case”). On February 28, 2006, the Plaintiff obtained approval for the use of the “Sebro B” (hereinafter “the building in this case”).

B. On January 17, 2001, the Plaintiff was exempted from the full amount of the acquisition tax and registration tax for the new construction of movement, but notified by the Defendant that only 50% of the acquisition tax and registration tax shall be mitigated for the instant building.

C. On March 15, 2006, the Plaintiff reported acquisition tax and registration tax, etc. on the instant building to the Defendant on March 15, 2006, as follows, and paid it on the 30th of the same month.

본문내 포함된 표 세목 과세표준(원) 세율 감면율 세액(원) 취득세 92,604,332,853 2% 50% 926,043,320 농어촌특별세 취득세액 10% ？ 92,604,330 취득세감면분 농어촌특별세 감면분 취득세액 20% ？ 185,208,660 등록세 92,604,332,853 0.8% 50% 370,417,330 지방교육세 등록세액 20% ？ 74,083,460 등록세감면분 농어촌특별세 감면분 등록세액 20% ？ 74,083,460

D. After that, on May 30, 2006, the Plaintiff calculated the construction cost added as a result of the settlement of the construction cost for the building of this case and paid acquisition tax and registration tax, etc. to the Defendant on May 30, 2006 (hereinafter the Plaintiff’s initial return on March 15, 2006 and each imposition deemed by the revised return on May 30, 2006, 959,963,320 (926,04,320 + 33,920,000) plus the total of acquisition tax 95,96,30 won (92,604,30 +39,392,392,000), 38,539,307,307,306,307,307,307,3746,370,376,370,376,376,376,377,47, etc.

본문내 포함된 표 세목 과세표준(원) 세율 감면율 세액(원) 취득세 3,392,000,000 2% 50% 33,920,000 농어촌특별세 취득세액 10% ？ 3,392,000 취득세감면분 농어촌특별세 감면분 취득세액 20% ？ 6,784,000 등록세 3,392,000,000 0.8% 50% 13,568,000 지방교육세 등록세액 20% ？ 2,713,600 등록세감면분 농어촌특별세 감면분 등록세액 20% ？ 2,713,600

E. In addition, the Plaintiff installed power generating facilities (hereinafter “the instant power generating facilities”) in the instant building as of March 25, 2006 with the power capacity extension construction around March 25, 2006, and on April 14, 2006, the Plaintiff reported acquisition tax, etc. with respect to the instant power generating facilities to the Defendant and paid it on April 24, 2006 as follows (hereinafter “the Plaintiff’s second disposition”), excluding the imposition of special tax for rural development, among each imposition deemed by the Plaintiff’s return and payment as of April 24, 2006.

본문내 포함된 표 세목 과세표준(원) 세율 감면율 세액(원) 취득세 94,622,000 2% 50% 946,220 농어촌특별세 취득세액 10% ？ 94,620 취득세감면분 농어촌특별세 감면분 취득세액 20% ？ 189,240

F. On the other hand, around May 16, 2006, the Plaintiff leased the whole "Ssung B" including the instant building and the instant power generation facilities (the combination of the instant building and the instant power generation facilities) to the social welfare foundation ○○○○○○○ Public Foundation. On the ground that the Plaintiff’s lease of the instant building to ○○○ Public Foundation constitutes the proviso to Article 9 of the Gyeonggi-do Ordinance on Tax Reduction and Exemption, the Defendant, on April 16, 2007, additionally collected 50% of the acquisition tax and registration tax related to the instant building, etc., and added the amount of local education tax and special tax for rural development according to the above additional collection, added the amount of acquisition tax and registration tax reduction and exemption amount to be refunded according to the above additional collection to the amount of taxes offset by the special tax for rural development and special tax for rural development, as well as the amount of acquisition tax and special tax reduction and exemption amount to be imposed to ○○ Public Foundation by adding the acquisition tax and special tax reduction and exemption amount to 1,1270,497,10.

- A list of additional disposal of the instant building

본문내 포함된 표 세목 과세표준(원) 세율 감면율 세액(원) 감면되었던 취득세 95,996,332,853 2% 50% 959,963,320 취득세 추징에 따른 농어촌특별세 취득세액 10% ？ 95,996,330 추징에 따라 환급하여야 할 취득세감면분 농어촌특별세 감면분 취득세액 20% ？ -191,992,660 가산세 ？ ？ ？ 263,469,650 취득세 추징액 ？ ？ ？ 1,127,436,640 감면되었던 등록세 95,996,332,853 0.8% 50% 383,985,330 등록세 추징에 따른 지방교육세 등록세액 20% ？ 76,797,060 추징에 따라 환급하여야 할 등록세감면분 농어촌특별세 감면분 등록세액 20% ？ -76,797,060 가산세 ？ ？ ？ 113,763,850 등록세 추징액 ？ ？ ？ 497,749,180

- A list of the disposal of additional collection for the instant power generation facilities

본문내 포함된 표 세목 과세표준(원) 세율 감면율 세액(원) 감면되었던 취득세 94,622,000 2% 50% 946,220 취득세 추징에 따른 농어촌특별세 취득세액 10% ？ 94,620 추징에 따라 환급하여야 할 취득세감면분 농어촌특별세 감면분 취득세액 20% ？ -189,240 가산세 ？ ？ ？ 253,860 취득세 추징액 ？ ？ ？ 1,105,460

G. On June 16, 2006, the Plaintiff filed a request for review on the first and second dispositions with the Board of Audit and Inspection on June 16, 2006, but was dismissed on February 23, 2007.

[Reasons for Recognition] Unsatisfy, each entry of Gap1 through 7 evidence (including paper numbers), the purport of the whole pleadings

2. Determination on the legitimacy of the disposition

A. The plaintiff's assertion

(1) The Plaintiff’s lease of the instant building, etc. to the ○○○○ Public Foundation is merely one method using the instant building as a welfare facility for the aged. As long as the instant building, etc. is actually used as a welfare facility for the aged, it does not fall under the proviso to Article 9 of the Gyeonggi-do Ordinance on Reduction and Exemption of Do Taxes. Therefore, acquisition tax and registration tax on the instant building, etc.

Therefore, the Defendant’s third disposition is unlawful on the premise that the Plaintiff’s lease of the instant building to the ○○○ Public Interest Foundation falls under the proviso of Article 9 of the above Ordinance and the acquisition tax and registration tax on the instant building do not constitute reduction and exemption.

Even if it is not so, the defendant's third disposition is illegal because there is a defect that does not specifically distinguish the items and amount of tax in the notice of the third disposition.

(2) According to the main sentence of Article 9 of the Gyeonggi-do Ordinance on Tax Reduction and Exemption (amended by Ordinance No. 3307 of Dec. 29, 2003; hereinafter referred to as the “current Ordinance”) in force as of February 28, 2006 or March 25, 2006, the time when the Plaintiff acquired the instant building, etc., 50% of the acquisition tax and registration tax for real estate to be used as a pay welfare facility like the instant building, etc. is merely reduced. However, according to the main sentence of Article 9 of the Gyeonggi-do Ordinance on Tax Reduction and Exemption (amended by Ordinance No. 3307 of Dec. 29, 2003; hereinafter referred to as the “former Ordinance”), the acquisition tax and registration tax shall be exempted for real estate to be used as a paid welfare facility for the elderly. Meanwhile, according to Article 9 (4) of the Addenda of the current Ordinance, the previous regulations are followed with respect to the taxes reduced or exempted under the previous provisions at the time of the enforcement of the previous Ordinance.

Therefore, with respect to the instant building, etc., the Defendant’s primary and secondary dispositions that were conducted under the premise that only 50% of the acquisition tax and registration tax should be reduced due to the application of Article 9 of the current Ordinance are unlawful.

(b) Relevant statutes and ordinances;

Attached Form 2 shall be as shown in attached Table 2.

C. Determination

(1) Whether the Plaintiff’s lease of the instant building to the ○○○ Public Interest Foundation falls under the proviso to Article 9 of the former Ordinance or the current Ordinance

The proviso of Article 9 of the former Ordinance and the proviso of Article 9 of the current Ordinance stipulate that real estate shall not be used directly as welfare facilities for the aged after acquiring such real estate, or acquisition tax and registration tax shall not be reduced or exempted for the purpose of using such real estate for other purposes. As seen above, the Plaintiff leased the instant building, etc. to ○○○○ Public Foundation as seen above, but considering the overall purport of oral argument as to the provision of evidence No. 7 of the Insurance Business Act that prohibits the Plaintiff from running a business other than insurance business, it is sufficient for the ○○○○ Public Foundation, which is a lessee of the instant building, etc., to directly use the building, etc. for the purpose of welfare and incidental business, and it is difficult for the Plaintiff to directly use the building, etc. or to directly use it for the above purpose without the Plaintiff’s prior consent. Thus, it is difficult to view that the Plaintiff did not directly use the building, etc. for other than the above purpose of rent of the building, etc. to ○○○ Public Foundation, which is a lessee of the instant building, etc.

Therefore, under the premise that the Plaintiff’s lease to the ○○○○ Public Interest Foundation after acquiring the instant building, etc. falls under the proviso of Article 9 of the current Ordinance, the Defendant’s third disposition was unlawful.

(2) Whether Article 9 of the former Ordinance applies to the instant building, etc. in accordance with Article 4 of the Addenda to the current Ordinance

In principle, in cases where the Do tax was amended by the Municipal Ordinance on Taxation or Reduction or Exemption of Do tax, it shall be applied to the Do tax before and after the revision, but if the revised Municipal Ordinance provides for unfavorable provisions to taxpayers for the purpose of acquiring rights or protecting trust in taxpayers, the previous provisions should be applied accordingly. Notwithstanding the general principle that the former provisions apply to the tax liability at the time of completion of the tax requirements under each tax law, the previous provisions shall be applied as they are favorable to taxpayers on the basis of the special reasons such as acquisition rights or protection of trust. Thus, the above legal principles are naturally premised on the case where the tax requirements are completed only after the revision of the previous Municipal Ordinance (see Supreme Court Decision 9Da23284, Jul. 27, 199; Supreme Court Decision 9Da23284, Jul. 27, 199; Supreme Court Decision 2009Da23286, Nov. 16, 201).

Therefore, since the building, etc. of this case is a fee welfare facility for the elderly, the defendant's primary and secondary dispositions conducted under the premise that only 50% of the acquisition tax and registration tax shall be mitigated pursuant to the main sentence of Article 9 of the current Ordinance are unlawful.

(3) Sub-determination

Therefore, the first and the third dispositions of the defendant are all illegal, and the first and second dispositions are deemed to be absorbed into the third disposition, which is the increased disposition. Therefore, the plaintiff's claim seeking revocation of the third disposition, such as the attached Table 1, is justified.

3. Conclusion

Therefore, the judgment of the court of first instance is just in its conclusion, and the defendant's appeal is dismissed as it is without merit. However, the decision of the court of first instance is delivered with the decision of the court of first instance since it was modified by the reduction of the plaintiff's claim from the court of first instance as stated in paragraph (3

[Attachment]

Judges Jeong Ji-hee (Presiding Judge)