Requirements to apply the previous provisions favorable to taxpayers in order to protect taxpayers' vested rights or trust on the basis of Article 6 of the Addenda to the former Local Tax Act ( January 1, 2010)

Article 6 of the Addenda of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter “former Local Tax Act”) (amended by Act No. 1021, Jan. 1, 2010) provides that “The previous provisions shall apply to the local tax imposed, reduced, or exempted in accordance with the previous provisions at the time of the enforcement of this Act)” (Article 6 of the former Local Tax Act (amended by Act No. 1021, Jan. 1, 2010) where the previous provisions that are favorable to taxpayers for the purpose of protecting the taxpayer’s vested right or trust, even if there are cases where the previous provisions that are applicable to the taxpayer for the purpose of protecting the taxpayer’s vested right or trust, even if the previous provisions that have already been effective at the time of the act of cause prior to the establishment of the tax liability are not expressly provided for in the previous provisions that the taxpayer has trusted the tax reduction or exemption, etc. under the previous provisions, it cannot be deemed as merely a simple expectation

Article 6 of the Addenda to the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010) (wholly amended by Act No. 1021, Jan. 1, 2010)

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Han, Attorneys Han-soo et al., Counsel for plaintiff-appellant)

Albnb Co., Ltd.

The head of Gangdong-gu Seoul Metropolitan Government

Seoul High Court Decision 2011Nu38300 decided May 17, 2012

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

Article 6 of the Addenda of the former Local Tax Act (amended by Act No. 9924, Jan. 1, 2010; Act No. 10221, Mar. 31, 2010; hereinafter "the amended Local Tax Act") provides that "the previous provisions shall apply to the local tax imposed, reduced, or exempted in accordance with the previous provisions at the time this Act enters into force, and imposed, or to be imposed, or exempted in accordance with the previous provisions shall be applicable." Even if the previous provisions that are applicable in favor of the taxpayer for the purpose of protecting the taxpayer's vested interest or trust, even if the previous provisions that were effective at the time of the act of cause before the establishment of the tax liability are already applicable for a limited period of time in the future, unless otherwise expressly provided that the taxpayer has trusted the tax exemption, exemption, or postponement of the tax based on the act of cause, it shall be deemed that the mere expectation is merely substituted for the acquisition right, and it shall not be deemed that it should be protected (see, e.g., Supreme Court Decision 2013Du37, May 198).

According to the reasoning of the lower judgment, the lower court determined that Article 138(1)3 of the former Local Tax Act (amended by Act No. 9924, Jan. 1, 2010; hereinafter “former Local Tax Act”) does not explicitly stipulate that a person liable for duty payment will not impose registration tax for a certain period in the case of acquisition of a dormant corporation, and accordingly, Article 138(1)3 of the former Local Tax Act does not include any provision on the establishment of a corporation in a large city where a dormant corporation takes over a dormant corporation. Thus, Article 138(1)3 of the former Local Tax Act does not include any provision on the registration or enrollment of property rights and other rights acquired before January 1, 2010, even if the registration or enrollment was made after January 1, 2010, even if it was trusted that the registration or enrollment was not taxed pursuant to Article 138(1)3 of the former Local Tax Act, and thus, Article 138(1)3 of the Addenda of the Local Tax Act cannot be applied.

In light of the above legal principles and records, Article 138 (1) 3 of the former Local Tax Act cannot be viewed as a provision that does not impose heavy taxation in any case after the establishment of the corporation (five years). Thus, even if the above provision was amended to extend heavy taxation for a limited period in the future, it cannot be seen as a substitution of vested rights, and it cannot be deemed as a violation of trust to the extent that it should be protected. Since the Plaintiff was notified that Article 138 (1) 3 of the amended Local Tax Act will take effect from January 1, 2010, the Plaintiff did not err by misapprehending the legal principles on the above amendment of Article 138 (1) 3 of the Local Tax Act and Article 138 (1) 3 of the amended Local Tax Act, since the payment was completed on November 24, 2009 and the registration of transfer of ownership pursuant to the provision of Article 138 (1) 3 of the Addenda of the Local Tax Act shall not be deemed to have been avoided from the time of liquidation.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Poe-dae (Presiding Justice)