[1] Acquisition tax taxable object of acquisition tax ( de facto acquisition act) and where a constructor executes a land readjustment project and acquires land allotted by the authorities in recompense for development outlay in return for construction cost, the time of acquisition

[2] Whether Article 84-4 (3) 1 (d) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 84-4 (3) 1 (d) provides that where a corporation whose business is the purpose of real estate sales acquires land for sale, whether the land constitutes non-business land (negative), and the standard for determining

[3] In a case where there are justifiable grounds for failing to sell the land under Article 84-4 (2) 7 (c) of the former Enforcement Decree of the Local Tax Act within 3 years, the period of sale, whether the land is excluded from non-business land (affirmative)

[1] Article 105 of the Local Tax Act, Articles 54, 57 (4), and 62 (6) of the former Local Tax Act (repealed by Act No. 6252 of Jan. 28, 200) / [2] Article 112 (2) 6 of the former Local Tax Act (amended by Act No. 6312 of Dec. 29, 2000), Article 84-4 (3) 1 (d) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 17052 of Dec. 29, 200), Article 112 (2) 6 of the former Local Tax Act (amended by Act No. 6312 of Dec. 29, 200), Article 112 (2) 1 (d) of the former Local Tax Act (amended by Act No. 6312 of Dec. 29, 200) (amended by Presidential Decree No. 17148 of Dec. 28, 200)

[1] Supreme Court Decision 94Nu10627 delivered on January 24, 1995 (Gong1995Sang, 1174), Supreme Court Decision 93Da57964 delivered on March 10, 1995 (Gong1995Sang, 15Sang, 1570), Supreme Court Decision 94Da31280 delivered on February 23, 1996 (Gong1996Sang, 1033 delivered on October 23, 1998), Supreme Court Decision 98Da36207 delivered on October 23, 1998 (Gong198Ha, 2739), Supreme Court Decision 98Du1428 delivered on December 8, 1998 (Gong1999, 167) and Supreme Court Decision 200Du362348 delivered on December 23, 205 (Gong20435, Dec. 28, 2003)

Suwon Construction Co., Ltd. (Law Firm Gyeong & Yang, Attorneys Im-soo et al., Counsel for the plaintiff-appellant)

Yangsan Market (Korean Law Firm, Attorneys Cho Jong-chul et al., Counsel for defendant-appellant)

Busan High Court Decision 2002Nu1328 delivered on June 13, 2003

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

We examine the grounds of appeal.

1. Regarding ground of appeal No. 1

Acquisition tax is a taxable object of acquisition tax, regardless of whether or not the acquisitor acquires the ownership of the actual completion of the acquisition tax, because it does not impose profits that can be gained by the acquisitor from the use, profit-making, or disposal of the goods by taking advantage of the distribution tax that sets up the original fact of the transfer of goods and recognizes and imposes tax capacity (see Supreme Court Decision 98Du14228, Dec. 8, 1998, etc.). If the transferee of the land secured by the land secured by the landowner from the land readjustment project implementer satisfies any of the requirements of registration in the land transfer or ledger, he can exclusively use and profit from the land concerned after acquiring the right to use and profit-making in the land secured by the land secured by the landowner secured by the land secured by the land secured by the land secured by the landowner and then dispose of it to a third party, and if a replotting disposition is issued thereafter, it shall be deemed that the person who finally occupies the land secured by the land secured by the land secured by the landowner or registered in the ledger of the land secured by the land secured by the landowner meets the ownership of the land.

In the same purport, the court below is just in holding that the plaintiff acquired each of the land in this case on July 5, 1996 and on January 8, 197 at the time when each of the land in this case was transferred from the Land Partitioning Association as the construction price and registered in the register of land secured for recompense for development outlay, and there is no error of law by misunderstanding the legal principles as to the time of acquisition of land secured for recompense for development

2. Regarding ground of appeal No. 2

Article 84-4 (3) 1 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 17052 of Dec. 29, 2000; hereinafter referred to as the "Enforcement Decree") provides for the renewal of the grace period under Article 84-4 (1) 1 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 17052 of Dec. 29, 200), and where a land readjustment project, etc. is implemented under the related Acts and subordinate statutes, the grace period shall be newly calculated from the date on which the project for the land is actually completed in a unit of partition and becomes possible to be constructed. The above provision provides that where a corporation acquires land for the purpose of housing construction or construction, etc., it is impossible to use the land for the purpose of business in reality until construction is completed in a unit of subdivision and construction, so it cannot be deemed impossible to newly calculate the grace period from the date on which the construction is possible to purchase and sell the land before the completion of the rearrangement and rearrangement project.

Nevertheless, the court below's decision that Article 84-4 (3) 1 (d) of the Enforcement Decree is not appropriate without considering what the purpose of acquiring land is, and it is not appropriate to determine that the provision of Article 84-4 (3) 1 (d) of the Enforcement Decree is to allow the reorganization of the grace period only in the case where a land readjustment project newly started after the acquisition of land. However, in this case, inasmuch as the plaintiff who is engaged in real estate rearrangement project is deemed to have acquired the land of this case for sale, the reorganization of the grace period under the above item (d) does not apply to this case. Therefore, the conclusion of rejecting the plaintiff's argument that the grace period should be newly calculated from the date on which the land rearrangement project is completed and the construction is possible, and there is no error of law by

3. As to the third ground for appeal

A. The court below held that Article 84-4 (2) 7 (c) of the amended Enforcement Decree of the Local Tax Act only provides that a corporation operating a construction business executes construction works under a contract and takes over land from a contractor as compensation for construction costs shall not, in principle, be deemed land for non-business use; however, Article 84-4 (2) 7 (c) of the amended Enforcement Decree of the Local Tax Act provides that the land shall not be excluded from land for non-business use unless it is sold within 2 years from the date of acquisition without justifiable reasons, since Article 84-4 (3) 5 of the amended Enforcement Decree of the Local Tax Act provides that a corporation operating a construction business executes construction works under a contract and takes over the construction cost from a contractor shall not be deemed land for non-business use only if it is sold within 3 years from the date of acquisition. Thus, if a corporation fails to sell the land as provided for in item (c) above within 3 years from the date of acquisition, the land shall not be excluded from land for non-business use regardless of justifiable reasons.

B. However, Article 84-4 (2) 7 (c) of the Enforcement Decree provides that a corporation operating a construction business executes construction under a contract agreement and acquires land from a contractor as consideration for construction costs shall not be deemed land for non-business use only if the corporation sells the land within three years from the date of its acquisition, and does not provide that there are justifiable grounds for not selling the land within three years from the date of its acquisition. However, considering the purport of heavy taxation on non-business land and the fact that Article 84-4 (1) 1 of the Enforcement Decree of the Act, which provides the general provision on non-business land, provides that the corporation operating a construction business carries out construction under a contract and fails to sell the land within three years from the date of grace period for the acquisition of the land from the contractor as consideration for construction costs, it shall be deemed that the land under Article 84-4 (2) 7 (c) of the Enforcement Decree is excluded from land for non-business use (see Supreme Court Decision 2002Du5825, Mar. 12, 2004).

Nevertheless, without examining whether there is a justifiable reason for the Plaintiff to sell the instant land within three years from the date of its acquisition, the lower court erred by misapprehending the legal principles as to the land excluded from non-business land, thereby adversely affecting the conclusion of the judgment. The grounds of appeal assigning this error are with merit.

4. Conclusion

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination as to whether the plaintiff's failure to sell the land of this case within the grace period, and it is so decided as per Disposition by the assent of all participating Justices.

Justices Zwon-won (Presiding Justice)