Seoul High Court Decision 200Na1447 decided May 1, 200

Market for the United States

July 6, 2011

Suwon District Court Decision 2010Guhap10298 Decided January 20, 201

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

Each property tax and local education tax imposed on the Plaintiff on May 7, 2009 by the Defendant shall be revoked.

2. Purport of appeal

The same shall apply to the order.

1. cite the judgment of the first instance;

The reasoning for the use of this case is as follows: (a) the Plaintiff’s assertion, (b) the relevant laws and regulations, and (c) the allegation that the instant disposition is legitimate; (b) the determination on the Plaintiff’s assertion (1); and (2) the determination on the assertion (2) the relevant Acts and subordinate statutes; and (b) the relevant part of the judgment of the first instance except for the addition of relevant Acts and subordinate statutes to the attached documents (from the second to the fourth to the fourth); and (c) the relevant part of the judgment of the first instance except for the addition of relevant Acts and subordinate statutes to the attached documents. It shall be cited in accordance with Article 8(2)

○ The Local Tax Act (amended by Act No. 10221, Mar. 31, 2010; hereinafter referred to as the “Local Tax Act”) that provides for “the third 12th th th th th th th th th th th th th th

2. Part to be used again; and

(3) Judgment on the third argument

Article 188(1)2 (a) of the Local Tax Act provides that 40/1,00 of the tax base amount shall be the standard tax rate with respect to golf courses under Article 112(2). Article 112(2)2 of the same Act provides that golf courses are land, buildings and standing timber on the land subject to separate registration among real estate for membership golf courses under the Sports Facilities Act.

On the other hand, Article 180 of the Local Tax Act provides that the definitions of the terms used in property tax are as follows, and Article 104 subparagraph 2 provides that "any building shall be defined as "any building pursuant to the provisions of Article 104 subparagraph 4," and Article 104 subparagraph 4 provides that "any building pursuant to the provisions of Article 2 (1) 2 of the Building Act (including any building similar thereto) and leisure facilities, storage facilities, irrigation facilities, landing facilities, conduit facilities, water supply facilities, energy supply facilities, and other similar facilities (including facilities incidental thereto) fixed on the land or installed on the underground or other structures as prescribed by the Presidential Decree.

Article 19(1) of the Sports Facilities Act and Article 20(3) of the Enforcement Decree of the same Act provide that the land and buildings for which a person who intends to register a membership golf course business shall separately register shall be the land and buildings for the purpose of maintaining and managing the golf course concerned (subparagraph 1), the golf course course concerned, parking lots and roads (subparagraph 2), the suspension of operation (subparagraph 3), landscaped land (subparagraph 4), the management facilities (including office rooms, resting facilities, store stores, storages, and all other buildings inside the golf course, but excluding buildings not directly used for the golf course, such as swimming pool, tennis course, golf practice range, training facilities, sewage treatment facilities, and solar-use facilities), and the land annexed thereto (subparagraph 5), and the land used for maintaining and managing the golf course, such as water pipes, seedlings, and flowers and flowers for repair, and land attached thereto (subparagraph 6).

However, comprehensively taking account of the following circumstances such as the circumstances leading to the amendment of the Local Tax Act and the Sports Facilities Act, it is interpreted that the management facilities under Article 20(3)5 of the Enforcement Decree of the Sports Facilities Act include water supply and drainage facilities.

① The separate registration system on the land and buildings of a golf course was first introduced pursuant to Article 4(2) of the Enforcement Decree of the Sports Facilities Act (amended by Presidential Decree No. 14284, Jun. 17, 1994); however, on June 16, 1990, the date of enforcement was announced (Article 1 of the Addenda); and on June 1, 1990, on a golf course registered pursuant to the previous provisions, it is deemed that the land and buildings falling under any subparagraph of Article 4(2) are separately registered (Article 2 of the Addenda) before June 1, 1990.

Meanwhile, the Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 1303, Jun. 29, 190) stipulates that a golf course originally is subject to property tax pursuant to Article 188(1)2 Item 2 of the Local Tax Act (amended by Act No. 5615, Dec. 31, 1998) as one of the proprietary property subject to taxation (Article 84-3(1)1-2). The scope of a golf course subject to heavy taxation by Presidential Decree No. 1303, Jun. 29, 1990 is defined as “any land and building subject to separate registration under Article 4(2) of the Enforcement Decree of the Sports Facilities Act,” and the applicable date was retroactively amended as “any land and building subject to heavy taxation” on June 1, 1990 at the time of the application of the property tax assessment date [Article 84-3(1)1-2 of the Local Tax Act (amended by Act No. 13038, Jun. 1, 2090).

Article 181 of the Local Tax Act, which was enforced at the time (amended by Act No. 4561 of Jun. 11, 1993), provides that buildings, etc. shall be subject to property tax; Article 180 Subparag. 2 of the same Act provides that buildings referred to in Article 104 Subparag. 4 shall mean buildings as provided in Article 104 Subparag. 4; and Article 104 Subparag. 4 of the same Act provides that buildings refer to buildings, structures, and special ancillary facilities of buildings and structures prescribed by Presidential Decree, and special ancillary facilities of buildings and structures. Article 75-2 of the Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 1994, Dec. 23, 193; Presidential Decree No. 1447 of the same Act) provides that buildings shall be subject to property tax. Thus, at the time the local tax was subject to property tax.

Article 4(2) of the Enforcement Decree of the Sports Facilities Act provides the same content as that of Article 20(4) even after the amendment by Presidential Decree No. 14284 on June 17, 1994. Along with the amendment by Presidential Decree No. 15003 on May 28, 1996, Article 20(4)3 through 5 of the Enforcement Decree of the Sports Facilities Act was amended as of May 28, 1996, and Article 20(4)6 was newly established. The reason for the amendment is to exclude facilities, which are not mandatorily installed and used directly for the purpose of golf course from among the facilities for membership golf course, to be subject to separate registration subject to imposition of local tax.

In light of the Enforcement Decree of the Sports Facilities Act, the Enforcement Decree of the Local Tax Act, and the amendment process, the separate registration system on the membership golf course under the Enforcement Decree of the Sports Facilities Act is to clarify the land and scope of the golf course subject to heavy taxation by classifying and registering the land and buildings subject to heavy taxation at the time of registration of the membership golf course business, while the scope of “land and buildings within all golf courses” was unclear, as well as the facilities not directly used for the purpose of the golf course, which are subject to heavy taxation under the Local Tax Act. From the beginning, there is no reason to exclude the heavy property tax from the subject of heavy property tax by newly establishing the separate registration system.

(2) The water supply and drainage facilities of golf courses constitute management facilities under Article 20 (3) 5 of the Enforcement Decree of the Sports Facilities Act because they are directly used for golf courses as facilities discharging water necessary for managing golf courses, such as golf courses, which are buildings under the Local Tax Act.

(3) Article 20 (3) of the Enforcement Decree of the Sports Facilities Act provides that “A person who intends to register a membership golf club business among the persons who intend to register a sports facility business shall apply for registration by classifying the following land and buildings within the relevant golf club, among the relevant golf club land.” However, Article 20 (3) 5 of the Enforcement Decree of the said Act provides that “a person shall register only the land and buildings shall be subject to registration.” However, it is difficult to view that a person shall be subject to registration only to a building, including a swimming pool, tennis, tennis, golf practice range, training facility, sewage treatment facility, and all other buildings within a golf club, but excluding buildings which are not directly used for the purpose of a golf club, such as a swimming pool, tennis, tennis, etc., which are not a building, and are not directly used for the purpose of a golf club.” In light of the registration under each subparagraph of paragraph (3) of the said Article, a person who intends to register a golf club and its attached facilities are neither a building nor a building to be used for the purpose of registration.

(4) The instant disposition that applied 40/1,00 [50/1,000 under Article 188 (2) 2 of the former Local Tax Act (amended by Act No. 7332 of Jan. 5, 2005)], the standard tax rate under Article 188 (1) 2 (a) of the Local Tax Act, on the ground that the water pipes of this case are water supply and drainage facilities and management facilities under Article 20 (3) 5 of the Enforcement Decree of the Sports Facilities Act, is legitimate.

3. Judgment on the plaintiff's assertion added in the trial room

A. The plaintiff's assertion

Even if the instant water treatment facilities constitute “management facilities” under Article 20(3)5 of the Enforcement Decree of the Sports Facilities Act, Article 188(1)2(a) of the Local Tax Act provides that property tax heavy on golf courses under Article 112(2) of the Local Tax Act shall be imposed on golf courses (the latter part of the main sentence of Article 112(1)2(a) and that “where the instant water treatment facilities are actually used for a golf course without registration” differently from the acquisition tax, property tax and heavy tax rate shall be excluded. Therefore, where the instant water treatment facilities constitute a building subject to separate registration among real estate for a membership golf course pursuant to the latter part of Article 112(2) of the Local Tax Act, it shall be subject to heavy taxation only where the relevant building is registered under the provisions of the Sports Facilities Act pursuant to the latter part of Article 112(2) of the Local Tax Act. Where the instant water treatment facilities have not been actually divided and registered, it shall not be subject to heavy taxation pursuant to the latter part of Article 112(2)

B. Determination

Under Article 188 (1) 2 (a) of the Local Tax Act, the heavy taxation rate of the property tax shall apply to the membership golf courses under Article 112 (2) of the Local Tax Act, but the heavy tax rate shall not apply to the "where the golf courses are used for a de facto golf course without registration" different from the acquisition tax.

However, Article 112(2) of the Local Tax Act provides that the provisions of Article 112(2) shall apply not only to a golf course subject to heavy acquisition tax, but also to a golf course where it is actually used as a golf course even if it is not registered, with the relevant facilities installed. Article 112(2) of the Local Tax Act applies to a golf course where a golf course is acquired without registration. As such, “registration” refers to “registration of a golf course business” in accordance with Article 19 of the Sports Facilities Act, and “registration of a golf course business” does not mean “registration of a golf course business” and “registration of a building, etc. subject to separate registration.” The purport of the system for separate registration of land and buildings is to clarify the scope of land and buildings subject to heavy property tax. In cases of a golf course registered as a sports facility business, each facility, such as each building, is subject to separate registration within a golf course. It is not subject to heavy property tax unless it is separately registered. The Plaintiff’s assertion is without merit.

4. Conclusion

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

[Attachment]

Judges Kim Jong-dae (Presiding Judge)