[1] Legislative purport of Article 112 (2) of the former Local Tax Act, and grace period for non-business land to be excluded from non-business land where a non-profit corporation under Article 84-4 (4) 1 of the former Enforcement Decree of the Local Tax Act sells land for the purpose of preparing expenses necessary for its

[2] The purport of Article 112-3 of the former Local Tax Act and Article 84-4 (1) 2 of the Enforcement Decree of the same Act, and whether the above provisions are subject to consideration in determining the grace period under Article 84-4 (4) 1 of the same Act (negative)

[1] The legislative intent of Article 112 (2) of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998) is to prevent non-productive speculation and to seek efficient use of land by acquiring land other than its original purpose. Thus, interpreting that the land sold for the purpose of raising necessary expenses under Article 84-4 (4) 1 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15835 of Jul. 16, 1998) is excluded from the land for non-business purpose regardless of the time of sale without regard to the time of sale can not be accepted. However, in light of the fact that Article 84-4 (1) 1 (d) of the former Enforcement Decree of the Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998), a non-profit corporation shall be excluded from the land for non-business purpose under Article 84-4 (1) 1 (d) of the same Act where it acquires the land and sells the land for its own purpose within three years.

[2] Article 112-3 of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998) and Article 84-4 (1) 2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 15835 of Jul. 16, 1998) mean that a corporation is exempted from a heavy taxation of acquisition tax by using its land for corporate business purposes within the grace period after its acquisition, but is not used for business purposes or is sold for non-business purposes within 5 years from the date of its acquisition. The above provision differs from Article 112 (2) of the same Act, Article 84-4 (1) 1 and (4) 1 of the Enforcement Decree of the same Act, which provides that acquisition tax shall be imposed if it is not used for business purposes within the grace period after its acquisition. Thus, the grace period prescribed in Article 84-4 (4) 1 of the same Act shall not be considered in consideration of Article 112-3 and Article 84 (1) 2 of the Enforcement Decree.

[1] Article 112 (2) of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998), Article 79, Article 84-4 (1) 1 (d) (current deletion), and Article 84-4 (4) 1 (current Deletion) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15835 of Jul. 16, 1998) / [2] Articles 112 (2) and 112-3 (current Deletion) of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998), Article 79, Article 84-4 (1) 1 (d) (current Deletion), and (4) 1 (current deletion) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15835 of Jul. 16, 1998)

[1] Supreme Court Decision 94Nu1784 delivered on February 24, 1995 (Gong1995Sang, 1497), Supreme Court Decision 97Nu9468 delivered on January 23, 1998 (Gong1998Sang, 635), Supreme Court Decision 98Du1659 delivered on April 28, 1998 (Gong198Sang, 1554), Supreme Court Decision 99Du356 delivered on June 22, 199 (Gong199Ha, 1535) / [2] Supreme Court Decision 91Nu9015 delivered on May 12, 1992 (Gong192, 1908), Supreme Court Decision 94Nu984989 delivered on February 24, 1995 (Gong1992, 1984Du984985 delivered on April 1985)

A private teaching institute (Attorney Final White-gu, Counsel for defendant-appellee)

Pyeongtaek-gun Gun

Seoul High Court Decision 99Nu10430 delivered on April 20, 2000

The judgment below is reversed and the case is remanded to Seoul High Court.

1. The court below determined that a non-business corporation's sale of land under Article 84-4 (4) 1 through 79 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15835, Jul. 16, 1998; hereinafter the same) excluded a non-business corporation from non-business property when it performs its own business, and that a non-business corporation's sale of land acquired to run a profit-making business shall be excluded from non-business property; on the other hand, there are certain limits on the operating time and income amount of profit-making business; on the other hand, there is no limitation on the selling time of the land for the purpose of preparing expenses necessary for performing its own business; on the other hand, the acquisition tax of non-business property and the acquisition tax of non-business property of a non-business corporation shall be excluded from the sale of the land under Article 112 (4) 1 of the former Local Tax Act within 15 years from the acquisition date of the land under Article 84-4 (4) 1 of the former Enforcement Decree of the Local Tax Act.

2. The legislative purport of Article 112(2) of the former Local Tax Act is to prevent unproductive speculation and to seek efficient use of land by a corporation that owns land other than its own purpose (see Supreme Court Decision 94Nu1784, Feb. 24, 1995). Thus, the court below’s interpretation that the land sold for the purpose of preparing necessary expenses under Article 84-4(4)1 of the former Enforcement Decree of Local Tax Act is excluded from all non-business land regardless of the time of sale can not be accepted. However, the above legislative purpose is to interpret Article 84-4(1)1(d) of the former Enforcement Decree of Local Tax Act as 14 of the Local Tax Act, and Article 79 of the former Enforcement Decree of the Local Tax Act provides that a non-profit corporation under Article 84-4(1)1(d) of the former Enforcement Decree of the Local Tax Act shall be excluded from acquisition tax and Article 84-4(1)1(d) of the former Enforcement Decree of the Local Tax Act within three years after the grace period of Article 19 of the former Local Tax Act.

Nevertheless, the decision of the court below otherwise is erroneous in the misapprehension of legal principles as to non-business land under Article 84-4 (4) 1 of the former Enforcement Decree of the Local Tax Act, and this does not affect the conclusion of the judgment.

3. Therefore, the judgment of the court below shall be reversed and the case shall be remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices.

Justices Cho Cho-Un (Presiding Justice)