Seoul Administrative Court 2010Guhap32891 ( October 02, 2011)

The revised Comprehensive Real Estate Tax Act does not violate the principle of no taxation without law or double taxation prohibition.

The amended Gross Real Estate Tax Act and the Enforcement Decree thereof do not unreasonably reduce the amount of property subject to deduction, but have improved the unreasonable deduction of excess amount of property tax pursuant to the previous laws, and thus are regulations to achieve the principle of substantial taxation and the principle of tax equity. Therefore, it does not violate the principle of no taxation without law and the

Article 14 of the Gross Real Estate Tax Act

Enforcement Decree of the Gross Real Estate Tax Act shall deduct property tax of the comprehensive real estate holding tax.

2011Nu21593 Revocation such as the imposition of comprehensive real estate holding tax

XX 24 others

The Head of Gangnam District Tax Office and 16 others

Seoul Administrative Court Decision 2010Guhap32891 decided June 2, 2011

October 20, 2011

December 15, 2011

1. Revocation of a judgment of the first instance;

2. The plaintiffs' claims against the defendants are all dismissed.

3. The costs of the lawsuit are assessed against the Plaintiffs.

1. Purport of claim

“The Defendant’s revocation of the imposition of comprehensive real estate tax and special rural development tax for the pertinent Plaintiffs on the date of each disposition listed in Nos. 1 through 26 of the separate disposition list No. 209, of comprehensive real estate tax and special rural development tax for the pertinent Plaintiffs on the date of each disposition listed in the separate disposition list No. 1 through No. 26, and the imposition of comprehensive real estate tax and special rural development tax for the pertinent Plaintiffs, in excess of the justifiable tax amount column No. 1 through No. 26 of the separate disposition list, and the head of the Defendant’s secondary tax office’s revocation of the correction refusal disposition against the Plaintiff Co., Ltd.

The purport of the appeal is that "No. 6's No. 209, Nov. 20, 2009, No. 13's "No. 13, Nov. 23, 2009, No. 15's " Nov. 25, 2009," No. 16, and No. 21's "No. 23, 2009, Nov. 20, 2009," all "no. 26, Nov. 20, 2009," and No. 2.

The same shall apply to the order.

1. Details of the disposition;

A. The Defendants filed a claim for correction on the ground that they paid the above tax amount to the Defendant on February 12, 2010 on the date of each disposition listed in the [Attachment 1] Nos. 1 through 26, the comprehensive real estate tax and special rural development tax was imposed on the relevant Plaintiffs in 2009, and the Plaintiff Co., Ltd. paid 13,864,378,380 won comprehensive real estate tax, special rural development tax, 2,72,875,670 won to the head of the tax office of the tax office among the Defendants on December 23, 2009, and paid the above tax amount to the Defendant. However, on February 23, 2010, the said Defendant notified the said Plaintiff that there was no ground to rectify the said tax amount (hereinafter “each of the above dispositions and disposition of rejection against the Plaintiffs”) (hereinafter “each of the instant dispositions”).

B. In calculating the amount of property tax deducted in the calculation of the amount of comprehensive real estate holding tax pursuant to Articles 9(3), 14(3) and (6) of the former Enforcement Decree of the Comprehensive Real Estate Holding Tax Act (amended by Act No. 9273, Dec. 26, 2008; hereinafter referred to as the "amended Act") (amended by Act No. 1021, Mar. 31, 201; hereinafter referred to as the "Revised Real Estate Holding Tax Act"), the Defendants calculated the amount of property tax to be deducted in the calculation of the amount of comprehensive real estate holding tax pursuant to Article 9(3), 14(3) and (6) of the same Act (amended by Presidential Decree No. 21293, Feb. 4, 2009; hereinafter referred to as the "Enforcement Decree of the amended Act"), the Defendants made detailed calculation method of property tax to be the amount equivalent to the amount of property tax calculated as the standard tax rate of property tax on the housing or the land subject to comprehensive aggregate taxation x 30.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 26, Gap evidence No. 2-1 and 2, the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The plaintiffs' assertion

1) If property tax and comprehensive real estate tax are imposed concurrently on the same taxable object, it is unlawful as double taxation. Therefore, Articles 9(3), 14(3) and (6) of the amended Act and Articles 4-2 and 5-3(1) and (2) of the amended Enforcement Decree provide that in calculating the amount of comprehensive real estate tax, the amount of tax imposed on the taxable object of comprehensive real estate tax shall be deducted from the amount of property tax. However, in calculating the deducted amount of property tax, the Defendants did not deduct only the amount of tax imposed on the taxable object of comprehensive real estate tax by multiplying the amount of property tax (comprehensive real estate tax or property tax) by the fair market price ratio, and did not deduct the remaining amount of tax.

Therefore, each disposition of this case is illegal as it imposes comprehensive real estate holding tax without deducting part of the amount of property tax, and the preparation of the enforcement rules of the above amendment, which provides for the calculation method, does not fully deduct the amount of property tax for the same taxable object subject to comprehensive real estate holding tax, so it is invalid as it is against the Constitution in violation of the principle of no taxation without the law

2) The Ministry of Finance and Economy stated that when imposing a comprehensive real estate holding tax on September 3, 2003 through the explanation of the title " how to change the taxation system of real estate holding", the total amount of the property tax imposed by local governments is deducted from the total amount of the property tax imposed by local governments, so it is not double taxation, and there is no possibility of unconstitutionality, but only part of the property tax paid by the plaintiffs through each of the dispositions of this case was deducted, but each of the dispositions of this case is in violation of

B. Relevant statutes

Attached Table 4 shall be as stated in the relevant statutes.

C. Determination

1) The major amendments to the laws and regulations of the comprehensive real estate holding tax are as follows with respect to the scope of the amount of property tax deducted when calculating the amount of comprehensive real estate holding tax.

(1) The former Gross Real Estate Tax Act

(2) The formula for calculating the property tax to be deducted under the Enforcement Decree of the former Gross Real Estate Tax Act

(3) The formula of the standard amount of property tax in attached Form 3(2) of the Enforcement Rule of the Comprehensive Real Estate Holding Tax.

(4) Property tax base under the Local Tax Act

B) According to the above-mentioned Acts and subordinate statutes and their amendments, in calculating the amount of comprehensive real estate holding tax up to the portion of 2008, the previous Acts and subordinate statutes determine the amount in excess of the tax base amount for housing or land subject to aggregate taxation (limited to 600 million won by aggregating the construction cost of housing, 300 million won by aggregating the publicly notified prices of land subject to aggregate taxation, 4 billion won by aggregate of the publicly notified prices of land subject to aggregate taxation; hereinafter referred to as '60 million won, etc.') as the tax base; and ultimately, the specific formula for calculating the amount of property tax to be deducted from the amount exceeding the tax base amount of property tax, such as the relevant housing subject to comprehensive real estate holding tax, as prescribed by the previous Enforcement Decree and the previous Enforcement Rule x the amount of property tax to be imposed on the portion exceeding the standard tax base of property tax [the aggregate of the construction cost of housing x 600 million won by the amended standard tax rate of property tax imposed on the amount exceeding the property tax base, such as the property tax rate of x 900 billion won.

C) As to this, the plaintiffs argued that the formula setting the tax base of comprehensive real estate holding tax under the previous Act and the amended Act is nothing more than the change that the amount calculated by multiplying the amount obtained by deducting 600 million won from the publicly announced price by the annual application rate instead of the annual application rate, and that the amount of tax shall, in principle, be multiplied by the tax base. Thus, the "amount of property tax, such as housing, etc. subject to taxation," should be interpreted as the amount (tax base) calculated by applying the standard tax rate to the amount (tax base) calculated by multiplying the amount (i.e., the amount of property tax to be deducted by the amended Act and the Enforcement Decree of the amended Act, which is the content of the amended Act, by the fair market price ratio (whether it means the fair market price ratio under the amended Act, and whether it means the fair market price ratio under the amended Local Tax Act)

(2) If the revised Local Tax Act prescribes the concept of "standard amount of taxation" differently from the previous laws, and stipulates the amount which is the basis for the amount of property tax deducted from "tax base amount" to "tax base amount". Article 4-2 and Article 5-3 (1) and (2) of the amended Enforcement Decree of the Local Tax Act provides the property tax rate calculated according to the standard of property tax, such as housing, etc. in the formula for calculating the amount of property tax to be deducted, the revised Local Tax Act provides the differential tax rate by the property tax base under Article 187 of the amended Local Tax Act (the value calculated by multiplying the standard amount of the property by the fair market price ratio), so it is clear that the amount [the fair market price - 60 million won x the fair market price ratio of comprehensive real estate holding tax under the amended Local Tax Act x the fair market price ratio x the fair market price ratio of the plaintiffs' property tax base is not applied. It is also clear that the revised Local Tax Act does not stipulate the fair market price ratio as otherwise stated in the revised formula.

D) Furthermore, since the amended Act and the Enforcement Decree of the amended Act stipulate that the amount of the property tax imposed on the land subject to comprehensive real estate holding tax shall be deducted from the corresponding housing portion, the amount of the property tax to be imposed on the land subject to comprehensive real estate holding tax, it is reasonable to interpret that the amount of the property tax subject to deduction multiplied by the fair market value ratio applicable to the property tax (tax base) is "amount calculated by applying the standard tax rate to the property tax (tax base)" and that such interpretation can prevent double taxation problem in which the comprehensive real estate holding tax on the same taxable object as the property

In light of the principle of no taxation without the law, the interpretation of tax laws and regulations shall be interpreted in accordance with the law, barring any special circumstances. It is not permitted to expand or analogical interpretation without reasonable grounds. In particular, it is also consistent with the principle of fair taxation (see, e.g., Supreme Court Decision 97Nu20090, Mar. 27, 1998). Unlike the previous law and the previous Enforcement Decree, the amended Act provides that the tax base amount shall be the portion exceeding the tax base amount by multiplying the fair market value ratio (the previous law and the previous Enforcement Decree) and the tax base amount, and it is clearly stated that the tax base amount shall be the amount deducted from the above "tax base amount, such as housing", and thus, it shall not be deemed that the interpretation, as alleged by the plaintiffs, is clearly contrary to the language and text of the tax laws and regulations, and it shall not be deemed that the entire portion of the revised Enforcement Decree and the amended Enforcement Decree of the Enforcement Decree of the Housing Act, which is subject to comprehensive taxation, such as the whole portion of the tax base amount deducted from the tax base amount exceeding 600 million won.

2) Whether the amended Enforcement Rule violates the principle of no taxation without the law

The method of formulating the amended Enforcement Rule is that the method of calculating the amount of property tax to be deducted under the previous Act and the previous Enforcement Decree, depending on the change of the standard of property tax to the "standard of tax base for the amount of property tax to be deducted", and the method of calculating the amount of property tax to be deducted under the previous Act and the previous Enforcement Decree, the application of the property tax base ratio and the property tax rate to the excess amount of the tax base under the previous Act and the previous Enforcement Decree, again is changed to the tax base amount multiplied by the fair market price ratio and the property tax rate, and the amount of property tax to be deducted under the amended Act and the amended Enforcement Decree, and it does not unreasonably reduce the amount of property tax to be deducted under the previous Act and the amended Enforcement Decree. As seen below, the above amendment is a provision for the improvement of the unreasonable deduction of the excessive amount of property tax

B) Whether the prohibition of double taxation is in violation of the principle

The plaintiffs are in violation of the principle of double taxation. Since the nature of the burden on the same taxable object is identical to the property tax and the comprehensive real estate tax are imposed concurrently for the same taxable object, the problem of double taxation is inevitably caused, and the Comprehensive Real Estate Holding Tax Act stipulates that the Enforcement Rule of the Comprehensive Real Estate Holding Tax shall partially deduct the property tax already paid in calculating the tax amount so that the problem of double taxation is adjusted, and it is unconstitutional and invalid because the Enforcement Rule of the Comprehensive Real Estate Holding Tax is in violation of the principle of double taxation, but it is not justified for the following reasons.

① The system of tax credit for property tax is to prevent double taxation by deducting property tax from the amount of the comprehensive real estate tax imposed on the tax base of the comprehensive real estate tax in order to prevent double taxation for the same property. The problem of double taxation is to be resolved if the comprehensive real estate tax is deducted from the amount of the comprehensive real estate tax to pay the property tax on the portion on which the comprehensive real estate tax is imposed. However, the comprehensive real estate tax is to be imposed on the person who owns real estate in excess of the tax base amount, but the amount of the comprehensive real estate tax is to be deducted from the amount of the comprehensive real estate tax imposed on the house, etc. not in excess of the amount of the tax base of the amount on which the comprehensive real estate tax is imposed, but in excess of the amount of the tax base of the amount of the comprehensive real estate tax imposed on the house, etc., 60 million won is deducted from the total amount of the publicly notified price, and then it is not necessary to calculate the amount of the comprehensive real estate tax credit for the portion excluded from the fair market.

② Under the previous laws, the amount of property tax equivalent to the total amount of tax base (amount in excess of the standard amount of taxation) minus the total amount of property tax (amount in excess of the standard amount of taxation) should be deducted from the total amount of the standard amount of taxation (amount in excess of the standard amount of taxation). In real, when the comprehensive real estate tax is imposed, the amount of property tax equivalent to the total amount of the standard amount of taxation (amount in excess of the standard amount of taxation) should be deducted from the tax base of the comprehensive real estate tax (amount in excess of the standard amount of taxation) by deducting the amount of property tax equivalent to the total amount of the standard amount of taxation from the total amount of the standard amount of taxation (amount in excess of the standard amount of taxation). However, in accordance with the previous laws, the amended Act amended the amount of property tax amount to be deducted from the total amount of the standard amount of taxation from the total amount of comprehensive real estate tax (amount in subparagraph 1) to the tax base of comprehensive real estate tax (see subparagraph 1).

③ As such, the amount of comprehensive real estate holding tax under the Comprehensive Real Estate Holding Tax Act is calculated by deducting the amount of tax imposed as property tax on real estate subject to the same taxation, even in cases where real estate subject to the same taxation is divided into the portion imposed as property tax by a local government and the portion imposed as property tax by the State, and thus, the amount of comprehensive real estate holding tax is not paid again for the portion paid as property tax. Thus, the issue of double taxation does not arise between the comprehensive real estate holding tax and property tax (see Constitutional Court en banc Decision 2006Hun-Ba12, Nov. 12, 2008; 2006Hun-Ba71,88,94, 207Hun-Ba71,

④ In accordance with the amended Enforcement Rule, even if the amount of property tax on the subject of the comprehensive real estate holding tax is not partially deducted, in imposing the comprehensive real estate holding tax, any constitutional order that the amount of property tax already paid should be deducted in full cannot be deemed to have been granted to legislators. Moreover, the amended Enforcement Rule merely provides the specific formula of the amount of property tax subject to deduction under the amended Enforcement Rule and the amended Enforcement Decree, and thus does not violate the principle of no taxation without the law. As seen earlier, even if the Plaintiffs’ assertion that the contents of the amended Enforcement Rule and the amended Enforcement Rule are unconstitutional, the legislators have legislative discretion as to whether to exclude or relax the imposition of taxes on the same subject of taxation, and how to adjust them. Thus, in imposing the comprehensive real estate holding tax and property tax, it cannot be deemed a arbitrary legislative measure that significantly deviates from the limit of legislative discretion solely on the ground that there was no deduction of some tax amount.

3) Whether the principle of protection of trust is violated

A) In general in administrative legal relations, in order to apply the principle of the protection of trust to an act of an administrative agency, first, the administrative agency should name the public opinion that is the object of trust to an individual; second, the administrative agency's statement of opinion is justified and there is no cause attributable to the individual; third, the administrative agency should have conducted any act based on the individual's statement of opinion; fourth, the administrative agency's disposition contrary to the above statement of opinion should lead to an infringement of the individual's interest in trust; fourth, if any administrative disposition satisfies these requirements, it is against the principle of the protection of trust unless it is likely to seriously undermine the public interest or legitimate interests of a third party (see, e.g., Supreme Court Decisions 9Du19070, Mar. 9, 199; 2004Du466, Jun. 9, 2006).

B) According to the evidence evidence No. 5, when imposing a comprehensive real estate holding tax through the explanatory material of the title " how the Financial Economic Department differs from the real estate holding taxation system?" of September 3, 2003, the amount of the property tax imposed by the local government is deducted from the total amount of the property tax imposed by the local government, so it is not subject to double taxation, and thus, it is acknowledged that there is no possibility of unconstitutionality. However, as seen earlier, since the amount of the property tax on the portion on which the comprehensive real estate holding tax is imposed is deducted from all the amount of the property tax imposed after the amendment was implemented, it cannot be said that the Defendants made a disposition against the above statement

3. Conclusion

Therefore, the plaintiffs' claims in this case are all dismissed due to the lack of reasons, and the judgment of the court of first instance is unfair, so the judgment of the court of first instance is revoked, and all of the plaintiffs' claims are dismissed. It is so decided as per Disposition.