Plaintiff (Appointed Party)

The head of Gangnam-gu Seoul Metropolitan Government

May 18, 2017

1. On October 4, 2016, the Defendant issued a disposition of imposition of acquisition tax of KRW 28,560,00 in excess of KRW 39,984,00 in the imposition of principal tax on the Plaintiff (Appointed Party) and the remaining designated parties listed in the separate sheet, and revoked each disposition of imposition of KRW 7,96,80 in excess of KRW 5,712,00 in the imposition of penalty tax for failure to file a return of acquisition tax; the portion exceeding KRW 13,254,69 in the imposition of penalty tax for failure to pay acquisition tax; and the portion exceeding KRW 9,467,640 in the imposition of penalty tax for failure to pay acquisition tax; local education tax; KRW 3,042,210 (including penalty tax of KRW 757,410)

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On January 25, 2013, the deceased Nonparty 1 (hereinafter “the deceased”) sold to Nonparty 2 for KRW 2.1 billion the Gangnam-gu Seoul ( Address omitted), ○○○○○ho, and eight households (hereinafter “instant real estate”) but died on March 28, 2013 when Nonparty 2 did not complete the registration of ownership transfer on the instant real estate.

B. The Plaintiff (designated parties, hereinafter “Plaintiffs”) and the remaining designated parties indicated in the separate sheet of the designated parties (hereinafter collectively referred to as “Plaintiffs, etc.”) are the inheritors of the deceased.

C. On April 2, 2013, the Plaintiff et al., based on Article 27 of the Registration of Real Estate Act, completed the registration of ownership transfer of the instant real estate from Nonparty 2 directly due to the sale and purchase stated in the foregoing paragraph A.

D. On October 4, 2016, on the ground that the Plaintiff, etc. acquired the instant real estate due to the death of the Deceased, the Defendant determined and notified the Plaintiff, etc. of the totaling KRW 64,277,700 (including additional taxes, respectively) of acquisition tax and local education tax (including additional taxes) as indicated in the following table (hereinafter “instant disposition”).

The sum of additional taxes for failure to report the principal tax classified in the table (unit: won) included in the main tax within the main sentence shall be 39,984,00 7,996,800 13,254,690 61,235,490 local education tax 2,284,80 757,410 3,042,370 64,277,860

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 6, Eul evidence No. 4, the purport of whole pleadings

2. The assertion and judgment

A. The plaintiff's assertion

Of 28/1,00 of the acquisition tax rate of real estate due to inheritance under the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014), 20/1,00 of the acquisition tax rate of 28/1,00 of the acquisition tax rate of real estate is the acquisition portion related to the acquisition itself, and the remaining 8/1,000 of the real estate is the registration portion related to the acquisition of real estate. Since the registration of ownership transfer of the real estate of this case was made directly from the deceased under Article 27 of the Registration of Real Estate Act and the registration was not made pursuant to the inheritance of the real estate of this case including the plaintiff who is the deceased's heir, etc., the portion corresponding to the registration portion among the acquisition tax of this case and the additional tax and local education tax (including additional tax) shall not be imposed on the plaintiff, etc.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(i) Details of and grounds for amendment to the Local Tax Act regarding acquisition tax, etc.

The former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter “former Local Tax Act”) provides for separate items of acquisition tax, registration tax, and license tax, respectively. ① Acquisition tax is imposed on a person who acquires real estate, vehicles, machinery, equipment, etc. In such cases, “acquisition” refers to sale, exchange, inheritance, gift, contribution, investment in kind to a corporation, construction, repair, reclamation of public waters, creation of land through reclamation, and any other similar acquisition without compensation, including original acquisition, succession acquisition, or acquisition without compensation, even if the registration is not performed under the provisions of the relevant Acts and subordinate statutes, the acquisition is deemed to have been made if it is actually acquired (Article 104 subparag. 8, Article 105 of the former Local Tax Act); ② Registration tax provides that the acquisition of real estate or other rights shall be subject to permission, examination, and license tax (including registration, etc.) imposed on the person who has obtained registration or registration; and ③ No. 16 of the former Local Tax Act shall be subject to permission, inspection, etc. (3).

However, the Local Tax Act, which was wholly amended by Act No. 10221 on March 31, 2010 and enforced on January 1, 2011 (hereinafter referred to as the "Revised Local Tax Act"), simplifys a complex local tax system and makes it clear for taxpayers to recognize taxpayers' tax burden by enhancing simplification and transparency of the local tax item system, and combines the same tax items and similar items in order to enhance the efficiency of tax administration by reducing tax cooperation costs and tax collection costs. Specifically, in relation to the acquisition tax, registration tax, license tax, and registration tax of the former Local Tax Act, those items related to the acquisition were integrated into acquisition tax, registration tax, and license tax imposed on registration, registration, license, authorization, etc. without the premise of acquisition, such as mortgage and lease on a deposit basis of registration tax, and in the case of the tax rate, the previous acquisition tax and registration tax rate was adjusted by integrating the previous acquisition tax and registration tax rate, and in the case of registration license tax, the registration license tax and registration tax imposed on the subordinate registration.

2) Judgment on the Plaintiff’s assertion

A) Under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted as the text of the law, barring any special circumstances, and shall not be extensively interpreted or analogically interpreted without reasonable grounds (see Supreme Court en banc Decision 2002Du6781, May 27, 2004). However, even with the language and text of the tax laws and regulations itself, if the meaning is unclear or it appears that there is a conflict or conflict between the laws and regulations, the court must naturally state the true meaning of the language and text at issue through harmonious interpretation between the laws and regulations. In this case, a judge can make a combined interpretation of the laws and regulations that consider legislative intent and purpose to the extent that it does not undermine the legal stability and predictability pursued the principle of no taxation without law (see, e.g., Supreme Court en banc Decision 2007Du438, Feb. 15, 2008; 201Du55151, Apr. 16, 2015).

B) Comprehensively taking account of the details of and reasons for the amendment of the amended Local Tax Act, and the following circumstances acknowledged by the purport of the entire pleadings, it is reasonable to interpret that the tax amount should be calculated by applying the base rate for the acquisition tax (20/1,000) corresponding to the previous acquisition tax rate, as in Article 15(2) of the amended Local Tax Act, to the Plaintiff, etc., who did not require registration related to the inheritance of the instant real estate following the death of the deceased. The amount equivalent to 81/1,000 equivalent to the registration tax rate under the former Local Tax Act among the acquisition tax rate of 28/1,000 due to inheritance under the amended Local Tax Act and the local education tax imposed based on the above registration tax rate under the former Local Tax Act is not reasonable. Therefore, the portion equivalent to the registration tax rate under the former Local Tax Act among the acquisition tax in the instant disposition, the local education

(1) In order to clarify taxpayers' awareness of tax burden and reduce tax cooperation costs and tax collection costs by enhancing the efficiency of tax administration through the simplification of a complex local tax system, the amended Local Tax Act combines taxable objects related to acquisition among registration tax into acquisition tax, and combines registration, registration, recording, etc. without the premise of acquisition, such as mortgage, lease on a deposit basis, and registration license tax imposed on licenses, authorization, permission, etc., on the condition that the former tax rate is determined by simply adding the acquisition tax rate and registration tax rate of the former Local Tax Act to maintain the previous level without any additional tax burden due to the integration, and the previous tax rate is maintained in a manner that separates registration and license tax on registration and license tax on the subordinate registration and license.

② Furthermore, the amended Local Tax Act provides for a special provision on the tax rate for those subject to taxation, including “acquisition tax, non-taxation of registration tax, non-taxation of acquisition tax, and registration tax,” under the former Local Tax Act, and stipulates a special provision on the tax rate, and stipulates a non-taxable part, and adjusts the tax rate for the portion subject to heavy taxation (Article 15). In the above special provision, if it was subject to taxation of acquisition tax under the former Local Tax Act but it was not subject to registration tax due to the absence of registration or enrollment, such as acquisition by number and constructive acquisition, the amount calculated by applying the base rate for heavy taxation (20/1,00) corresponding to the previous acquisition tax rate (Article 15(2)).

(3) In addition, the former Local Tax Act provides for the amount of local education tax calculated by multiplying the amount of registration tax by 20/100 (Article 260-3 (1) 1), the former Act on Special Rural Development (amended by Act No. 10422, Dec. 30, 2010) provides for an amount calculated by multiplying the amount of acquisition tax to be paid under the former Local Tax Act by 10/100 (Article 5 (1) 6), and the amended Local Tax Act also provides for an amount equivalent to the registration tax amount of the former Local Tax Act (the amount calculated by applying the tax rate of Articles 11 and 12 of the Local Tax Act subtracting 20/1,000 from the tax rate of Article 10 of the amended Local Tax Act) by the amount of local education tax (Article 151 (1) 1); Article 10 of the former Local Tax Act provides for the amount of local education tax calculated by multiplying the amount of registration tax to be paid under the former Local Tax Act by 10/100 of the same Act (amended by Act).

④ Taking into account the details and reasons of the amendment of the amended Local Tax Act, the acquisition tax and registration tax rates under the former Local Tax Act, the acquisition tax and registration license tax rates under the former Local Tax Act, the regulatory method thereof, special provisions on the tax rate of the amended Local Tax Act, the local education tax base and tax rate under the amended Local Tax Act, the tax base and tax rate of the amended Local Tax Act, and the tax rate and tax rate of the amended Special Rural Development Tax Act, etc., in order to increase the efficiency of tax administration, the legislators’ intent is to combine the subject of taxation related to acquisition with acquisition tax under the amended Local Tax Act, and to combine registration tax and license tax imposed on license, authorization, permission, etc. without the premise of acquisition.

⑤ After entering into a sales contract with Nonparty 2, the Deceased died without completing the registration of transfer of ownership. Accordingly, the Plaintiff et al., etc., upon entering into Article 27 of the Registration of Real Estate Act, stating that “if any inheritance or other general succession takes place to the person entitled to registration or the person liable for registration after the cause for registration occurred, he/she may apply for the registration of transfer of ownership directly from Nonparty 2, who is entitled to file an application for the registration of transfer of ownership.” In cases of the former Local Tax Act, where acquisition tax and registration tax are governed by separate tax items, the Plaintiff et al. is only liable to pay acquisition tax according to the tax rate of 20/1,00 in relation to the acquisition of the real estate of this case by inheritance, and there is no need to file for the registration following the acquisition of the real estate of this case by inheritance. Therefore, the Plaintiff et

(6) Furthermore, in principle, the registration of ownership transfer is completed in order to acquire real estate, and the acquisition of real estate under the provisions of laws, such as inheritance, does not require registration to be made even if it is required to dispose of the real estate. Thus, even if the revised Local Tax Act combines taxable objects related to acquisition with acquisition tax under the revised Local Tax Act, in most cases, only the time of tax payment for the acquisitor’s registration tax, and there is no problem related to tax liability itself. However, there may be cases where a registration is made directly with a third party without undergoing an heir under the provisions of laws such as the Plaintiff, etc. In such cases, the taxpayer would eventually bear an additional tax amount equivalent to the registration tax rate under the former Local Tax Act, which does

3) Calculation of the amount of political party tax

Ultimately, it is reasonable to interpret that the acquisition tax following the instant disposition is the amount calculated by applying the base rate for heavy taxation (20/1,00) corresponding to the previous acquisition tax rate under Article 15(2) of the amended Local Tax Act. As such, the portion corresponding to the registration tax of the former Local Tax Act and the local education tax and each additional tax related thereto should be revoked unlawfully. ① In the case of the principal tax of KRW 39,984,00,000, the amount exceeding 28,560,000, which is the amount equivalent to the tax rate of KRW 20/1,000 (39,984,000 x 20/208), ② In the case of the failure to file a return on acquisition tax 7,96,800, the amount exceeding 5,712,000,000 won (=7,96,800 x 200,800 x 204,2946,2754,2946, etc.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition.

[Attachment List of Appointeds and Exemption of Related Acts and Subordinate Statutes]

Judges Yoon Jin-do (Presiding Judge) Kim Jong-chulon J.