Cho Jae-2018-Mining-122 (2018.07)

It is reasonable to view the provisions of the Income Tax Act, which provide for land excluded exceptionally from non-business land, not as an example provision, but as a limited provision.

Article 168-11 (1) of the Enforcement Decree of the Income Tax Act, which prescribes land excluded exceptionally from non-business land, and Article 83-4 of the Enforcement Rule of the Income Tax Act based on its delegation, shall be deemed not as an example provision, but a limited provision.

Article 104-3 of the Income Tax Act [Non-business Land]

2018Guhap12626 global income and revocation

UCH

SC Head of the Tax Office

August 22, 2019

September 26, 2019

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 76,717,550 against the Plaintiff on June 1, 2017 is revoked.

1. Details of the disposition;

A. On May 24, 2002, the Plaintiff acquired a total of 00 square meters, 00 square meters, 00 square meters, 416 square meters, 201-7 square meters, 952 square meters, 201-8, 589 square meters, 201-9 square meters, and 1,970 square meters (hereinafter referred to as “each of the instant lands”) in total. On August 208, 2008, the Plaintiff newly constructed a building (264 square meters, 33 square meters, hereinafter referred to as “instant building”) on the land of 201-7, 201-9, and sold each of the instant lands and buildings to C for KRW 2 billion on April 26, 2016.

B. On June 5, 2017, the Defendant deemed that each of the instant land exceeds 1,188 square meters as land annexed to the instant building (201-1 large 193 square meters and 589 square meters before 201-8), and determined and notified the Plaintiff of KRW 76,717,50 of the transfer income tax reverted to the year 2016.

C. Although the Plaintiff filed an objection, the Plaintiff was dismissed on November 16, 2017, and the Tax Tribunal’s petition for a trial was dismissed on June 7, 2018.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, Eul evidence Nos. 2, 5, and 6 (including paper numbers, hereinafter the same shall apply), the purport of the whole pleadings

2. The plaintiff's assertion

(a) relating to 201-1 land:

In the land of 00 △△-gun, Busan, 00 Do-201-1 (hereinafter “201-1 land”), there was a well-beingful power plant, which is a building, and a facility ancillary to a building, so the area equivalent to four times the horizontal projection area of 130 square meters shall be deemed land for business as land attached thereto.

(b) relating to land 201-8

The land used as access road to the building of this case for the Busan △△-gun 00 Do 00 Do 201-8 201-8 (hereinafter referred to as '201-8 land'), which is the land prescribed by Ordinance of the Ministry of Strategy and Finance and deemed as being directly related to the business of this case, in consideration of the "land prescribed by Presidential Decree as being directly related to the business" under Article 104-3 (1) 4 (c) of the Income Tax Act, "Article 168-1 (1) 14 of the Enforcement Decree of the Income Tax Act" and other land similar to subparagraphs 1 through 13 of Article 168-1 (1

3. Relevant statutes;

It is as shown in the attached Form.

4. Whether the disposition is lawful.

(a) relating to 201-1 land:

(i) land annexed to the good faith;

Article 104-3 (1) 4 (b) of the Income Tax Act provides that land subject to property tax aggregate assessment pursuant to Article 106 (1) 2 of the Local Tax Act shall be deemed land for business, while Article 106 (1) 2 of the Local Tax Act (amended by Act No. 15292, Dec. 26, 2017; hereinafter the same shall apply) and Article 101 of the Enforcement Decree of the Local Tax Act define the scope of land subject to special aggregate assessment, and the land annexed to a building for which permission, etc. has not been granted is excluded from land subject to special aggregate assessment. Meanwhile, Article 6 (4) of the Local Tax Act provides that "the leisure facilities, storage facilities, irrigation facilities, landing facilities, conduit facilities, water supply facilities, energy supply facilities, and other similar facilities prescribed by Presidential Decree" are defined as "the leisure facilities, storage facilities, waterworks facilities, water supply facilities, energy supply facilities, and other similar facilities fixed on the building and land under Article 2 (1) 2 of the Local Tax Act or installed on the underground or other structures."

Comprehensively taking account of the overall purport of images and arguments as to Gap evidence 6, 7, 17, 26, and 27, it is reasonable to view that the good faith on the land is a building under the Building Act in the form of a roof and wall. Since the above good faith is not subject to permission, etc. under the Building Act, there is no dispute between the parties, the land annexed to the good faith shall be excluded from the land subject to special aggregate taxation pursuant to the proviso of Article 101(1) of the Enforcement Decree of the Local Tax Act. Accordingly, the plaintiff's assertion on this issue is without merit.

(ii) land annexed to power generators;

Article 6 subparagraph 4 of the Local Tax Act defines "building" as "a leisure facility, storage facility, Docking facility, landing facility, conduit facility, water supply and drainage facility, energy supply facility, and other facilities similar thereto prescribed by Presidential Decree" under Article 2 (1) 2 of the Building Act, or installed underground or on other structures. Article 5 of the Enforcement Decree of the Local Tax Act provides the scope of the above facilities, and Article 6 provides the types and scope of the facilities attached to the building as follows. Thus, in order for a power generator's land to constitute a land for business, it shall be a building under the Local Tax Act (including facilities under Article 5 of the Enforcement Decree of the Local Tax Act) or a facility attached to the building under Article 6 of the Enforcement Decree of the Local Tax Act.

Comprehensively taking account of the overall purport of evidence Nos. 7, 18, and 22, the development of steel-frame structure on the land of 201-1, but there was no roof or wall, not a building under the Building Act, but a building under the Local Tax Act, since the said power generation does not fall under the facility under Article 5 of the Enforcement Decree of the Local Tax Act. The said power generation is installed far from the building of this case, and thus, it does not constitute a building attached to a building under Article 6 of the Enforcement Decree of the Local Tax Act. Therefore, since the said power generation does not fall under a building prescribed by the Local Tax Act, its appurtenant land is excluded from the land subject to separate taxation, the Plaintiff’s assertion

(b) relating to land 201-8

1) Article 104-3 (1) 4 of the Income Tax Act provides that land, other than farmland, forest land and stock farm land, which is subject to heavy taxation, shall be excluded from land for non-business in exceptional cases, and in exceptional cases, the land excluded from land for non-business purposes shall be prescribed by Presidential Decree in consideration of the status of use of land, the fulfillment of relevant Acts and subordinate statutes, and the amount of income, etc. in addition to the land limited to items (a) and (b) of the same subparagraph among such exceptional cases, as prescribed by Presidential Decree. Article 168-11 (1) of the Enforcement Decree of the Income Tax Act delegated by the Minister of Strategy and Finance lists the land excluded from the land for non-business purposes under subparagraphs 1 through 13 of the same Article, and Article 168-1 of the Enforcement Decree of the Income Tax Act lists the land, which is similar to the land under subparagraphs 1 through 13 of the same subparagraph and the land under subparagraphs 1 through 13 of the same Article, and delegates to Ordinance of the Ministry of Strategy and Finance.

2) In light of the principle of no taxation without the law, or the requirements for tax exemption or exemption, the interpretation of tax laws shall be interpreted as the text of the law, barring any special circumstances, and it shall not be permitted to expand or analogically interpret without reasonable grounds. In particular, it accords with the principle of fair taxation to strictly interpret that the provisions that can be obviously considered as preferential provisions among the requirements for tax exemption or exemption accords with the principle of fair taxation (see, e.g., Supreme Court Decision 2002Du9537, Jan. 24, 2003).

3) In light of the aforementioned relevant statutes, their purport, and relevant legal principles, it is reasonable to view that Article 168-11(1) of the Enforcement Decree of the Income Tax Act, which prescribes land excluded exceptionally from non-business land, and Article 83-4 of the Enforcement Rule of the Income Tax Act based on its delegation, is not an exceptional provision, but a limited provision. The entries or images of evidence Nos. 9, 11, 23, 24, and 25 of the Income Tax Act and Article 168-11(1)4 (c) of the Enforcement Decree of the Income Tax Act, which provide for land excluded exceptionally, do not constitute land stipulated in Article 168-1(1)4 (c) of the Income Tax Act

5. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.