Medical Corporations and the Medical Corporations and the Health Care Foundation (Attorney Shin Young-chul, Counsel for defendant-appellant)

High Military Court Decision 201Na1446 decided May 1, 201

July 18, 2013

Gwangju District Court Decision 2012Guhap3088 Decided December 13, 2012

1. Of judgment of the court of first instance, the part on the claim for cancellation of the disposition imposing acquisition tax on real estate No. 2 and special rural development tax listed in the attached Table 1 shall be revoked, and the plaintiff's claim corresponding

2. The defendant's remaining appeal is dismissed.

3. 5/6 of the total litigation costs shall be borne by the Plaintiff, and the remainder shall be borne by the Defendant.

1. Purport of claim

The Defendant’s disposition of acquisition tax, special rural development tax, registration tax, and local education tax on real estate listed in the separate sheet Nos. 1, 6, 7, and 8, as indicated in the separate sheet No. 1, 2012 against the Plaintiff on February 14, 2012, and disposition of imposition of acquisition tax, special rural development tax, and special rural development tax on real estate No. 2, and imposition of acquisition tax, registration tax

2. Purport of appeal

Of the judgment of the court of first instance, the part of the claim for revocation of each disposition for imposition of acquisition tax, registration tax, and local education tax on real estate listed in the attached Table 3, 4, and 5 as indicated in the attached Table 1 shall be revoked, and the plaintiff's claim

1. Scope of the judgment of this court;

In the first instance court, the Plaintiff sought revocation of the disposition of taxation on the real estate listed in the separate sheet Nos. 1 through 8, and the court of the first instance dismissed the claim for revocation of the disposition of taxation on the real estate listed in the separate sheet No. 1, 6, 7, and 8, and accepted the claim for revocation of the disposition of taxation on the real estate listed in the separate sheet No. 2 through 5. Accordingly, the subject of the judgment by this court is limited to the claim for revocation of the disposition of taxation on the real estate listed in the separate sheet No. 2 through

2. Details of the disposition;

A. On October 26, 2006, the Plaintiff acquired forest land of 11,692 square meters ( Address 1 omitted), forest land of 11,692 square meters (attached Table 1 omitted); and (3) forest land of 2,106 square meters ( Address 4 omitted); and (4) forest land of 2,106 square meters (round February 23, 2007, 2007, forest land of 2,581 square meters ( Address 5 omitted, but the area was indicated as 2,581 square meters in the original registry, but it was corrected as 2,581 square meters in the original registry) and (6) forest land of 2,581 square meters in the same Ri ( Address 6 omitted); and (4) forest land of 217 square meters in a medical corporation, each of which was exempted from acquisition tax under the main sentence of Article 287 of the former Local Tax Act (amended by Act No. 835, Dec. 31, 2007).

B. On March 18, 2007, the Plaintiff: (a) obtained permission for conversion of a mountainous district from the Defendant for the purpose of building a funeral hall and a resting facility; (b) completed the procedures for land division and land category change ( Address 2 omitted); (c) part of 11,692 square meters of a forest ( Address 1 omitted); (d) 2,062,00 square meters of a forest ( Address 5 omitted); (e) 2,581 square meters of a forest in the same Ri ( Address 5 omitted); and (e) 2,106 square meters of a forest in the same Ri, 2,581 square meters of a forest in the same Ri; and (e) 2,106 square meters of a forest in the same Ri, which was acquired on April 18, 2007; and (e) completed the procedures for land division and land category change ( Address 1 omitted); and (e) part of a forest in the same area was changed to 2,062 square meters in the same address.

C. The Plaintiff, around October 7, 201, constructed a new building on the ground of the existing hospital’s affiliated building on the ground of the previous hospital’s affiliated building on the ground of the previous hospital’s affiliated building on the ground of the former, 2007, and started the new construction of a reinforced concrete structure slive roof to the third floor of the elderly’s sanatorium (hereinafter “instant sanatorium”) on October 7, 2010, and operated a sanatorium for the elderly after completing the construction on the ground of the former hospital’s affiliated building on the ground of the former Special Self-Governing Province ( Address 2 omitted).

D. On February 28, 2008, the Plaintiff acquired each real estate listed in [Attachment 1] List 5, 4 on March 6, 2008, and 3 on September 2, 2010, respectively.

E. On April 21, 2008, the Defendant paid to the Plaintiff KRW 18,842,440 in total as acquisition tax, etc. on the building No. 1 listed in the attached Table 1 list.

F. On February 14, 2012, the Defendant imposed and notified the Plaintiff of the tax amount as follows (hereinafter “instant dispositions 1 through 8”).

(1) Acquisition tax shall be KRW 7,347,360 (including additional tax, KRW 890,750, KRW 2,002,850), KRW 734,720 (including additional tax and KRW 289,350), registration tax, KRW 2,815,630 (including additional tax and KRW 341,350, KRW 767,520), and KRW 11,426,690, including local education tax, and KRW 528,980.

(2) With respect to the change of land category of the second real estate listed in the attached Table 1 list, the sum of KRW 573,932,00,000 for the civil engineering costs verified by the contract to change the contract for the construction of facilities among the total construction costs of KRW 1,517,721,290 for the land category of the second real estate and KRW 187,932,00 for the civil engineering costs verified by the president of each account, and KRW 17,000 for the funeral hall civil engineering costs of KRW 17,00 for the funeral hall civil engineering costs of KRW 77,932,00 for the change of land category shall be deemed as the tax base, and the acquisition tax shall be deemed as the tax base, and the sum of KRW 25,671,740,

(3) Acquisition tax of KRW 1,421,60, registration tax of KRW 1,421,60, and registration tax of KRW 1,421,60, and local education tax of KRW 263,220, as stated in the attached list 1st 3,106,420, respectively

(4) Acquisition tax shall be 1,492,80 won, registration tax shall be 1,492,880 won, and local education tax shall be 280,170 won, and the total amount of 3,265,930 won, including local education tax.

(5) Acquisition tax of KRW 617,080, registration tax of KRW 617,080, and local education tax of KRW 115,810, and KRW 1,349,970, respectively, shall be imposed on real estate specified in attached Table 1’s list.

(6) Acquisition tax shall be 280,370 won, special agricultural income tax shall be 28,020 won, registration tax shall be 280,370 won, and local education tax shall be 52,680 won, and 641,440 won, respectively, for 6 real estate listed in the attached Table 1 list.

(7) Acquisition tax on the 7 real estate listed in the attached list 1st 4,79,140 won in total, including acquisition tax of 2,097,820 won, agricultural special tax of 209,770 won, registration tax of 2,097,820 won, local education tax of 393,730 won, etc.

(8) With respect to the area of 4,421 square meters in Gyeyang-gu, Seoul Special Metropolitan City ( Address 2 omitted), 1,793 square meters in the same Ri ( Address 4 omitted), 142 square meters in the same Ri ( Address 8 omitted), 183 square meters in the same Ri ( Address 9 omitted), 452,070 won in the acquisition tax, 45,180 won in the agricultural special tax, 452,070 won in the agricultural special tax, 84,910 won in the total of 1,034,230 won in the local education tax, etc.

[Ground of recognition] Facts without dispute, Gap evidence 1 through 5, Eul evidence 1 and 6 (including each number, hereinafter the same shall apply), the purport of the whole pleadings

3. Whether dispositions referred to in subparagraphs 2 through 5 are legitimate.

A. The plaintiff's assertion

The plaintiff asserts that the disposition Nos. 2 through 5 of this case is unlawful for the following reasons.

1) Disposition No. 2 of this case: It is unlawful to impose acquisition tax, etc. on all of the real estate listed in the separate sheet No. 2 of this case, even though only a part of the real estate listed in the separate sheet No. 2 of this case was changed, it was rejected on the ground that the Plaintiff applied for approval of the business of the welfare facility for the aged immediately after the Plaintiff acquired the above real estate, but failed to secure the relevant site. The land was additionally acquired and completed after completing the category change and completed the civil engineering work, and received a subsidy and received the project approval. Thus, it can be deemed that the above real estate was directly used for the medical service in itself, and even if not, it should be viewed that the Plaintiff had to undergo the procedure until the commencement

2) Disposition Nos. 3 through 5 of this case: Real estate Nos. 3 through 5 of the attached list Nos. 1 is acquired by the plaintiff to use as a lodging place for the employees such as doctors and nurses belonging to the plaintiff, and is currently used as a lodging place for the current employees. This constitutes a case where it is directly used for medical services.

B. Relevant statutes

Attached Form 2 shall be as listed in attached Table 2.

C. Determination as to the legitimacy of the second disposition

1) According to the statement No. 6-1 to 4 of evidence No. 6, the Plaintiff calculated acquisition tax, etc. based on the total cost of civil construction works for building site under Article 111(5)3 of the former Local Tax Act and Article 82-3(1)2 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 22395, Sept. 20, 2010) as the tax base. The Defendant imposed acquisition tax, etc. only on the part of forest land No. 11,692 square meters, the land category of which has been changed to the same Ri, 77,932,00, among forest land No. 1 omitted) and land No. 7506 square meters. Thus, the Plaintiff’s assertion that acquisition tax has not been imposed even on the remainder of forest land No. 22395, Dec. 20, 201.

2) Article 287(2) of the former Local Tax Act provides that a medical corporation shall be exempted from acquisition tax on real estate acquired by the medical corporation to use directly for medical services. Although the Plaintiff newly constructs and operates a medical care facility for the aged as stated in the attached Table 1, there is no dispute over the fact that the Plaintiff is operating the medical care facility for the aged, Article 3 of the Medical Service Act defines “medical service” as the business of medical treatment and assistance for the public or many specific persons, and only lists a member, dental clinic, herb clinic, midwifery clinic, hospital, dental hospital, oriental medical hospital, hospital, general hospital, etc. as the “medical institution”, and a medical care facility for the aged is one of the medical care facilities for the aged under Article 34 of the Welfare of the Aged Act, and the Medical Service Act provides that the Plaintiff’s assertion that the establishment and operation of a medical care facility for the aged may be operated as a “incidental business other than medical services” under Article 49(1)3 of the same Act, the Plaintiff’s establishment and operation of a medical care facility for the aged may not be separately prescribed in accordance with Article 28(1).

3) Even if the operation of a sanatorium for the aged constitutes a medical service, Article 287(2) of the former Local Tax Act provides that a medical corporation shall be exempted from acquisition tax on real estate acquired by the medical corporation to use directly for the medical service, and where such real estate is not used directly for the medical service without justifiable grounds within one year from the date of acquisition, exempted acquisition tax on the corresponding portion shall be additionally collected. As such, the fact that the Plaintiff acquired real estate listed in the separate sheet No. 2 in the separate sheet No. 1 on October 26, 2006 and operated after the commencement of construction of the sanatorium for the aged on October 7, 2010 after the completion of construction of the sanatorium for the elderly on October 30, 209 is legitimate (the Plaintiff asserts that the process of applying for approval of the business of a sanatorium for the elderly shall be deemed to have been used directly for the medical service. However, there is no ground to acknowledge this).

As the Plaintiff asserts that there was a justifiable reason for the construction of a new medical facility within 1 year from the acquisition date of 20 years, it includes not only an external reason, but also an internal reason for the construction of a sanatorium for 1 year since there was no time to use it. In determining whether there was a justifiable reason for the construction of a sanatorium for 2 years after the commencement of 10 years, it should be determined individually according to specific circumstances, including the long-term period required for the direct use of the facility for 20 years, the de facto disability and degree of disability, and the considerable effort for the construction of the facility for 10 years after the commencement of 20 years from the acquisition date of the land (see Supreme Court Decisions 9Nu1304 delivered on Jan. 26, 196, 200Du1300 delivered on May 12, 200), and there were no other justifiable reasons for the Plaintiff to use the land directly for the construction of the facility for 2 years from the acquisition date of the land.

4) Therefore, the disposition of this case No. 2 by the Defendant imposing acquisition tax, etc. on the Plaintiff regarding the real estate No. 2 listed in the separate sheet No. 1 is legitimate, and the Plaintiff’s assertion

D. Determination as to the legitimacy of dispositions Nos. 3, 4, and 5

1) Article 107 Subparag. 1 and Article 127(1)1 of the Local Tax Act provide that no acquisition tax and registration tax shall be imposed on the acquisition and registration of the real estate to be used for the business by a non-profit entrepreneur prescribed by Presidential Decree, who conducts activities for religious, religious, charity, academic, art, and public services. Under each of the above provisions, the term “use of the real estate” refers to the actual use of the real estate directly for a non-profit entrepreneur. The scope of “use of the real estate for the business” refers to the use of the real estate directly for a non-profit entrepreneur. The scope of “use of the real estate” should be objectively determined based on the actual use relationship in consideration of the purpose of the non-profit entrepreneur’s business and the purpose of the acquisition (see Supreme Court Decisions 200Du3238, Apr. 26, 2002; 201Du15183, May

2) The fact that the Plaintiff is operating the medical service at a medical institution called ○○○ Hospital is without dispute between the parties, and if the purport of the entire pleadings is added to the evidence No. 8, evidence No. 13-1, 2, 3, and evidence No. 14, and evidence No. 15-1, and evidence No. 15-10, the real estate No. 3 as indicated in the separate list No. 1 is the real estate No. 3 from June 2010 to June 201, Nonparty 1, the head of the above hospital, and the head of the above hospital, the head of the above hospital, and the head of the above 4 from June 2008 to June 201, the real estate No. 4 was used for the above hospital, and the real estate No. 5 from June 2008 to June 2013, the head of the above hospital and the head of the above 201-2, each of which were located in the hospital.

4. Conclusion

Therefore, the part of the plaintiff's claim for cancellation of the dispositions of the Nos. 3, 4, and 5 of this case is justified, and the part of the claim for cancellation of the disposition of this case No. 2 of this case is dismissed as it is without merit. Since the part of the claim for cancellation of the disposition of this case of this case of this case of this case of this case of the judgment No. 2 of the judgment of the court of first instance is unfair, it is revoked, and the plaintiff's claim for cancellation of the disposition of this case of this case No. 3, 4, and 5 is just, and

[Attachment]

Judge Sick-Woo (Presiding Judge)