Suwon District Court 2009Guhap7920 ( October 13, 2011)

Early High Court Decision 2009Du0579 ( October 24, 2009)

The rejection disposition such as comprehensive real estate holding tax on forest land preserved in its original form is legitimate.

The Comprehensive Real Estate Holding Tax Act itself is not unconstitutional, but is not contrary to the principle of no taxation without law and the principle of no comprehensive delegation prohibition, and it does not infringe on the equality and freedom of occupation under the Constitution, and it cannot be deemed that it discriminates against forest land for membership golf courses located in the Seoul Metropolitan area without reasonable grounds.

Article 11 of the Gross Real Estate Tax Act; Article 182(1) of the former Local Tax Act

2011Nu8026, revocation of revocation of revocation of comprehensive real estate holding tax, etc.

○○ Co., Ltd.

○ Head of tax office

Suwon District Court Decision 2009Guhap7920 Decided January 13, 2011

July 13, 201

August 17, 201

1. All appeals filed by the Plaintiff are dismissed.

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

The judgment of the first instance shall be revoked. The defendant's rejection disposition against the plaintiff on November 20, 2008, including comprehensive real estate tax for the year 2005 and the year 2007, which the defendant rendered on November 20, 2008, shall be revoked. The defendant revoked the part exceeding 2,189,379 won in the disposition of comprehensive real estate holding tax for the year 2008, in excess of 30,834,289 won, and the part exceeding 437,876 won in the disposition of special rural development tax for the year 2008 (the plaintiff partially reduced claims concerning comprehensive real estate holding tax for the year 2008 and special rural development tax for the year 208).

1. Details of disposition;

A. The Plaintiff is a company that operates a “○ Golf course” (hereinafter “instant golf course”), which is a membership golf course, at the ○○○○-ri, ○○-ri, ○○-2, ○○○○-si, ○○○○-si, ○○○.

B. In accordance with Article 11 of the former Gross Real Estate Tax Act (amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) and Article 182(1)1 and 2 of the former Local Tax Act (wholly amended by Act No. 1021, Mar. 31, 2010; hereinafter the same shall apply), the Plaintiff classified the forest land preserved in its original form within the instant golf course (hereinafter “the forest land in this case”) as a general aggregate subject to general aggregate taxation and reported respectively to the Defendant, respectively.

After all, the plaintiff filed a claim for correction to the defendant to the effect that the report and payment made by classifying the forest land of this case as a general aggregate subject to general aggregate taxation are erroneous in accordance with the unconstitutional and unlawful laws and regulations, and that the comprehensive real estate holding tax is refunded, but the defendant rejected the claim for correction as follows. The contents are as follows.

(The following table omitted):

C. On November 20, 2008, the Defendant classified the instant forest into general aggregate taxation and imposed a comprehensive real estate holding tax amounting to 35,760,940 won and special rural development tax amounting to 7,152,180 won. On January 21, 2009, the Defendant reduced the gross real estate holding tax amounting to 35,760,940 won and the special rural development tax amounting to 30,834,289 won and the special rural development tax amounting to 7,152,180 won to 6,16,858 won.

The plaintiff is dissatisfied with the above disposition and filed a tax appeal on February 13, 2009, but was dismissed on April 24, 2009 (hereinafter referred to as the "the disposition in this case". The defendant's disposition of refusal on November 20, 2005 belonging to the plaintiff on November 20, 2008, such as the comprehensive real estate holding tax for the year 2007, and the comprehensive real estate holding tax for the year 2008, and the amount exceeding KRW 2,189,379, and the amount exceeding KRW 6,16,858 (the remaining portion after being reduced), and the amount exceeding KRW 437,876, among the imposition disposition for the special rural development tax for the year 2008.

[Ground for Recognition: Facts without dispute, Gap evidence 1-1, 2, 3, Gap evidence 2, 3, and 4, the purport of the whole pleadings]

2. Relevant statutes;

The entries in the attached Table-related statutes are as follows.

3. The plaintiff's assertion

A. The assertion that the law was based on the unconstitutionality

The instant disposition is unlawful as it is based on the old Comprehensive Real Estate Tax Act and Article 182(1) of the former Local Tax Act, which is unconstitutional as follows.

1) The former Gross Real Estate Tax Act is an unconstitutional law that violates the principle of excessive prohibition and equality by infringing on the essential elements of property rights.

2) Article 182(1) of the former Local Tax Act provides that taxable objects shall be classified into general aggregate taxation, special aggregate taxation, and separate taxation. Article 182(1)1 provides that "land excluding the land subject to general aggregate taxation, which is subject to separate taxation," and subparagraph 2 provides that "land attached to a building prescribed by the Presidential Decree, which is owned by a person liable to pay tax as of the date of taxation, and land prescribed by the Presidential Decree, as being subject to separate taxation." Of the above provision, Article 182(1) of the former Local Tax Act comprehensively delegates its contents to subordinate statutes even though it is a provision on important contents of separate aggregate taxation and general aggregate taxation, which is contrary to the principle of no taxation without law and the principle of prohibition of comprehensive delegation.

B. The assertion that the former Enforcement Decree of the Local Tax Act is unconstitutional or unlawful

The Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 19817, Dec. 30, 2006; Presidential Decree No. 1 of the Local Tax Act (hereinafter referred to as the "Enforcement Decree of the Local Tax Act") which applies to the disposition of this case, is amended by Presidential Decree No. 19817, Dec. 30, 2006; Presidential Decree No. 20887, Jun. 25, 2008 (hereinafter referred to as the "Enforcement Decree of the Local Tax Act") is amended by Presidential Decree No. 20887, Jun. 25, 2008; Presidential Decree No. 20887, Sept. 20, 2010; Presidential Decree No. 3155, Jun. 31, 2010).

However, in the whole or part of the Enforcement Decree of the Local Tax Act, ① land for sports facilities among land for public golf courses shall be treated differently from forest land for public golf courses without reasonable grounds, ② treated differently from forest land for membership golf courses and forest land for public golf courses without reasonable grounds, ③ treat forest land within land for membership golf courses located in the Seoul Metropolitan area and forest land for membership golf courses outside the Seoul Metropolitan area differently without reasonable grounds, thereby violating the principle of equality under the Constitution.

4. Determination

A. Judgment on the assertion that the statute was based on the unconstitutionality

1) First, we examine the argument that the former Gross Real Estate Tax Act itself infringes on the essential contents of property rights and thus is unconstitutional because it violates the excessive prohibition principle, the equality principle, etc.

The imposition of taxes, such as property tax imposed on the owner of assets, itself, is recognized as justifiable in the Constitution. However, the basis, scope, or limitation of the imposition of taxes is merely problematic. The former comprehensive real estate holding tax does not impose all the value of real estate within a short period of time in light of its tax rate, but is provided with a device that deducts property tax to the tax base of the former comprehensive real estate holding tax. In full view of the fact that the provisions of the former comprehensive real estate holding tax do not violate the substance of property rights or violate the excessive prohibition principle or equality principle (see Constitutional Court en banc Decision 2006Hun-Ba12, 207Hun-Ba71, 207Hun-Ba71, 88, 94, 208Hun-Ba3, 62, 208Hun-Ba12, Nov. 13, 2008).

The above assertion made by the Plaintiff is without merit.

2) Next, we examine the allegation that the instant legal provision violates the principle of no taxation without law and the prohibition of comprehensive delegation, and thus, is unconstitutional.

The principle of no taxation without law, which is stipulated in Articles 38 and 59 of the Constitution, is the core content of the principle of no taxation requirements and the principle of clarity of taxation requirements, and is to ensure people's property rights and at the same time to ensure people's legal stability and predictability in their economic life. However, while complying with the principle of no taxation without law, detailed matters that must be followed by changes in economic reality or the development of professional technology, should be delegated to administrative legislation with more scarcity than the formal law enacted by the National Assembly.

The separate cumulative taxation stipulated in Article 182 of the former Local Tax Act is a system to correct unreasonable outcomes from the uniform application of the combined taxation, and it can be assumed that the economic activity should be used for normal economic activities as a common appearance of the relevant land. However, when determining whether certain land is included in the special aggregate taxation in relation to a specific economic activity, various variables, such as the economic activity in question and relation with the relevant land, the appropriate size of the land owned in accordance with the type of business, should be taken into account. Furthermore, the issue of whether certain land is subject to separate aggregate taxation should be flexibly and flexible in response to changes in economic situation, the direction toward land policies, and the amendment of relevant statutory regulations.

Therefore, it is inappropriate for the National Assembly to list the above matters in the laws enacted by the National Assembly, as well as the work of selecting the subject matter is professional, technical, and variable, so it is necessary to delegate it to the subordinate laws and regulations. Article 182 of the former Local Tax Act provides that “The land prescribed by Presidential Decree as being subject to a separate taxation by considering the above points, is the land that should be added up.” Thus, the provision of the instant law does not violate the principle of no taxation without law or the principle of prohibition of comprehensive delegation (see Constitutional Court en banc Decision 2008Hun-Ga27, 2010Hun-Ba365, Dec. 28, 2010).”

The above assertion made by the Plaintiff is without merit.

B. Determination on the assertion that each enforcement decree of the Local Tax Act is unconstitutional or unlawful

1) The Enforcement Decree of the Local Tax Act applicable to the instant disposition

Article 131-2 (3) of the Enforcement Decree of the Local Tax Act provides that "land for sports facilities among essential facilities to be installed by a public sports facility business entity under the Installation and Utilization of Sports Facilities Act in accordance with the facility standards for public sports facilities" as one of "land prescribed by the Presidential Decree," and Article 131-2 (3) of the Enforcement Decree of the Local Tax Act provides that "land for sports facilities in land for public golf courses or land for membership golf courses shall not be designated as land for separate taxation." However, in the Enforcement Decree of the Second Local Tax Act amended by Presidential Decree No. 19817, Dec. 30, 2006, Article 131-2 (3) 14 of the Enforcement Decree of the Installation and Utilization of Sports Facilities Act provides that "land for skiing ground and land for golf courses, the original form of which is preserved" among land for a golf course under Article 12 of the Enforcement Decree of the Installation and Utilization of Sports Facilities Act was excluded from land for membership golf courses."

Article 1, Paragraph 2 of the Addenda to the Enforcement Decree of the Local Tax Act provides that the above Enforcement Decree shall enter into force on January 1, 2007, and the previous provisions shall apply to local taxes imposed, reduced or exempted, or to be imposed, under the previous provisions at the time of the enforcement of the above Enforcement Decree.

The proviso of Article 131-2 (3) 14 of the Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 20887, Jun. 25, 2008) provides that, by December 31, 2009, only the forests within the land for a membership golf course located in the Seoul Metropolitan area under Article 2 subparagraph 1 of the Seoul Metropolitan Area Readjustment Planning Act among the forests for a membership golf course, shall be excluded from the special aggregate taxation; until then, the forests within the land for a membership golf course excluded from the Seoul Metropolitan area shall be regarded as the special aggregate taxation; Article 3 of the Addenda provides that the amended provisions of the proviso to the part other than each item of Article 131-2 (3) 14 of the Local Tax Act shall apply from the portion for which the tax liability becomes effective as of June 1, 2008.

Meanwhile, according to Article 2 subparagraph 1 of the Seoul Metropolitan Area Readjustment Planning Act and Article 2 of the Enforcement Decree of the Seoul Metropolitan Area Readjustment Planning Act, Gyeonggi-do with the instant forest is included in the Seoul Metropolitan Area, and according to Article 3 of the former Gross Real Estate Tax Act and Article 190 of the former Local Tax Act, the tax base date of comprehensive real estate holding tax is June 1 of each year and according to Article 21(1)10-5 of the Framework Act on National Taxes

Therefore, the Enforcement Decree of the Local Tax Act of 2005 applies to the comprehensive real estate holding tax for 2005, the Enforcement Decree of the Local Tax Act of 2007 to the comprehensive real estate holding tax for 2007, and the Enforcement Decree of the 3 Local Tax Act of 2008 to the comprehensive real estate holding tax for 2008.

2) Determination

According to Article 131-2(3) of the Enforcement Decree of the Local Tax Act, the forest of this case is all excluded from the land subject to special aggregate taxation; while the land for sports facilities (applicable both to the Enforcement Decree of the Local Tax Act), forest land for public golf course (applicable both to 1, 2, and 3) within the land for public golf course; and forest land for membership golf course outside the Seoul Metropolitan area (applicable to the Enforcement Decree of the Local Tax Act) within the land for public golf course located outside the Seoul Metropolitan area (applicable to the Enforcement Decree of the Local Tax Act 3) is imposed

The above division takes into account the characteristics of the membership golf course with limited use for the general public, the characteristics of the land where the size of the land is short of the population, and the characteristics of the national land where it is impossible to create the membership golf course without substantial damage to the mountainous districts and forests, and the purpose of the Seoul Metropolitan Area Readjustment Planning Act to properly rearrange the Seoul Metropolitan area and to ensure balanced development of the national land by inducing the excessive concentrated population and industries in the Seoul Metropolitan area. Therefore, it cannot be deemed that the instant forest corresponding to the forest land located within the land for the membership golf course without any reasonable grounds

The above assertion made by the Plaintiff is without merit.

5. Conclusion

The judgment of the first instance is justifiable. All appeals filed by the Plaintiff are dismissed.