Ulsan District Court 2008Guhap2402 (No. 22, 2009)

Cho High Court Decision 2008Da1630 (No. 26, 2008)

Land excluded from non-business land. Land for depository, field yard, yard, etc.

It cannot be deemed that land such as a storage, open storage, storage, etc. excluded from non-business land is necessarily a premise, and it depends on whether land such as a storage, open storage, storage, etc. separately installed for storage and management of goods exists on the ground, regardless of whether a building exists on the ground.

The contents of the decision shall be the same as attached.

1. The plaintiff's appeal is dismissed.

2. The costs of appeal are incidental to the Plaintiff.

Purport of claim and appeal

The judgment of the first instance shall be revoked. The imposition of capital gains tax of KRW 185,532,00 for the Plaintiff on April 1, 2008 by the Defendant shall be revoked.

1. Circumstances of the disposition;

The following facts are not disputed between the parties, or may be acknowledged by taking into account the whole purport of the pleadings in the descriptions of Gap evidence 1, 10, and Eul evidence 1 and 7:

A. The Plaintiff purchased, on March 2, 2004, the 66m2 of the building without permission (hereinafter referred to as “the building in this case”) located on the above ground from the Dong-dong ○○○○-dong 405-10 large scale 210.9m2 (hereinafter referred to as “the land in this case”) and the 66m2 of the building without permission for the assembly of light steel-frame structure on the above ground from the Dong-dong in this case to the 68,000,000, and completed the registration of transfer of ownership on March 3, 2004.

나. 원고는 2005. 12. 16. 이 사건 건물을 원고가 철거하는 것을 조건으로 이 사건 토지를 주식회사 ★★개발에게 700,000,000원에 매도한 후 2007. 7. 20. 위 회사 앞으로 소유권이전등기를 마쳤다.

C. On July 31, 2007, the Plaintiff reported transfer income tax applying 36% of the general tax rate to the transfer margin of the instant land, and paid KRW 86,475,600 on September 28, 2007, and KRW 96,084,00 on December 31, 2007, and KRW 182,559,600 on December 31, 2007.

D. However, on April 1, 2008, the Defendant issued the instant disposition that additionally imposed and notifies capital gains tax of KRW 185,532,00 for the year 207 by applying 60% of the heavy taxation rate under Article 104(1)2-7 of the Income Tax Act (amended by Act No. 9270, Dec. 26, 2008) on the ground that the instant land constitutes non-business land to the Plaintiff.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff leased the instant land and buildings to thisA, and thisA used the instant land for the manufacture of control facilities and for the piling and piling up of control facilities or for wholesale street processing equipment, etc. on the instant building, on the premise that the instant land falls under the land for storage, etc. under Article 168-11 (1) 7 of the Enforcement Decree of the Income Tax Act or the land for non-business use under subparagraph 14 of Article 168-11 (1) through (14) of the Enforcement Decree of the Income Tax Act, including the land for storage, etc., but is excluded from the land for business use under Article 168-11 (1) through (14) of the Enforcement Decree of the Income Tax Act, on the ground that the instant land does not fall under the land which is not the storage or storage place, but directly related to the business, the Defendant’s disposition of imposing capital gains tax by applying the tax rate of 60% to the land for non-business use is unlawful.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) In imposing capital gains tax, Article 104-3 (1) 4 of the Income Tax Act provides that in principle, 60% tax rate shall apply to land other than farmland, forest land, and stock farm land, which is non-taxable or exempted from property tax pursuant to the provisions of the Local Tax Act or related Acts, land which is subject to separate aggregate taxation or separate taxation of property tax pursuant to the provisions of Article 182 (1) 2 and 3 of the Local Tax Act, land which is prescribed by Presidential Decree as being directly related to residence or business in consideration of the situation of use of land, etc., shall be excluded from land for non-business, and Article 168-1 (1) 7 of the Enforcement Decree of the same Act provides that the land of the depository, field yard, storage yard, etc. (including the land of a building constructed without permission or authorization and the land to be reported under the Building Act) which is installed and used separately for the keeping and management of the goods, and Article 168-11 (1) 1 through 13 of the Enforcement Decree of the same Act prescribes

The principle of no taxation without law is a requirement for taxation, or a requirement for non-taxation or tax exemption, and the interpretation of tax laws shall be interpreted as the text of the law unless there are special circumstances, and it shall not be extensively interpreted or analogically interpreted without reasonable grounds.

However, Article 168-11(1)7 of the Enforcement Decree of the Income Tax Act, which provides for land excluded from non-business land, provides that "land for storage, open storage, storage, etc. installed and used separately for the storage and management of goods" includes land for which a building permit is obtained or a report is required under the Building Act, and land annexed to a building for warehouse constructed without any permission or authorization. In cases where a building for warehouse is installed and used for the storage and management of goods, land for storage is excluded from land for non-business as a matter of course from land for non-business, so it cannot be deemed that it is premised on whether land for storage, open storage, storage, etc. excluded from land for non-business use is necessarily a land for non-business use, regardless of whether a building exists on the ground, such as land for temporary storage, open storage, storage, etc., installed and used separately for the storage and management of goods.

(2) First, as to whether the instant land constitutes the land for storage purpose under Article 168-11 (1) 7 of the Enforcement Decree of the Income Tax Act, according to the health team, the evidence Nos. 3-1, 2, 4, 7, and 8 of the evidence Nos. 3-2, the evidence Nos. 4, 7, and the witness testimony of the first instance court, the Plaintiff leased the instant building to thisA on March 3, 2004, and thisA had operated the manufacturing and wholesale business of the control facilities and electrical equipment in the instant building until July 2007. However, the above facts alone are insufficient to recognize that the instant building, which is an unauthorized building on the instant land, was used as a warehouse for storing or managing the control facilities or electrical equipment, and further, it is insufficient to recognize that the remainder of the land was used as a separate open storage or storage for keeping and managing the goods.

The plaintiff's assertion on this part is without merit.

(3) Next, with regard to whether the land of this case falls under Article 168-11 (1) 14 of the Enforcement Decree of the Income Tax Act, it is stipulated that "the land which is deemed to be directly related to the business as prescribed by Ordinance of the Ministry of Strategy and Finance in consideration of the situation of the use of the land and the implementation of relevant laws and regulations" as the land similar to subparagraphs 1 through 13 of Article 168-1 of the Enforcement Decree of the Income Tax Act. However, although the Ordinance of the Ministry of Strategy and Finance has not yet been enacted, it shall not be immediately determined that the land of this case does not fall under this Article."

Article 131-2 (1) of the Enforcement Decree of the Local Tax Act provides that "land annexed to a building as prescribed by the Presidential Decree" among land subject to separate aggregate of property tax under Article 182 (1) 2 of the Local Tax Act that is excluded from land for non-business under Article 104-3 (1) 4 (b) of the Income Tax Act shall be excluded from land for non-business under Article 131-2 (1) of the Enforcement Decree of the Local Tax Act, and the above provisions of Article 168-11 (1) 7 of the Enforcement Decree of the Income Tax Act provide that the storage, open storage, storage, etc. separately installed and used for the purpose of keeping and managing goods excluded from the land for non-business under Article 168-11 (1) 7 of the Income Tax Act shall include only the land annexed to a building for warehouse in the case of a non-business building. In light of the above provisions, not merely using the building of this case, which is an unauthorized building as a warehouse, but merely by simply manufacturing and wholesale business, it does not constitute any other evidence.

The plaintiff's assertion on this part is without merit.

(4) Therefore, the Defendant’s disposition of this case, which reported the instant land as non-business land, is lawful.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and the judgment of the court of first instance is dismissed as it is without merit, and it is so decided as per Disposition.