Early High Court Decision 2007J 4683 (No. 25, 2008)

Measures to refuse to correct comprehensive real estate holding tax on forest land preserved in its original form in a golf course are legitimate.

Comprehensive real estate holding tax itself is not unconstitutional, but it does not violate the principle of no taxation without law and the prohibition of comprehensive delegation, and it does not infringe on the equality principle and freedom of occupation selection under the Constitution.

208Guhap6852. Revocation of revocation of revocation of revocation of comprehensive real estate holding tax, etc.

AAAA Corporation

O Head of tax office

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

The disposition rejecting the correction of the disposition of the comprehensive real estate holding tax for the year 2006, which the Defendant rendered to the Plaintiff on September 18, 2007, was revoked.

1. Details of the disposition;

A. The Plaintiff is a company that operates an “E golf course” (hereinafter “instant golf course”), a membership golf course, at the 28-1 daily Dolsan, DBB-GuCC-si, Chungcheongnam-si.

B. On December 15, 2006, the Plaintiff classified forest land preserved in its original form in the instant golf course owned by it as a general aggregate taxation subject to comprehensive real estate taxation (hereinafter referred to as “the original forest land preserved in its original form”) and reported to the Defendant pursuant to Article 11 of the Comprehensive Real Estate Holding Tax Act and Article 182(1)1 and 2 of the former Local Tax Act (amended by Act No. 8864 of Feb. 29, 2008; hereinafter referred to as the “former Local Tax Act”). The Plaintiff issued a request for correction on April 27, 2007 to the Defendant for a return of comprehensive real estate holding tax as a general aggregate taxation subject to comprehensive aggregate taxation. However, on September 18, 2007, the Defendant rendered the instant disposition rejecting the request by the Plaintiff on September 18, 2007.

D. On November 2, 2007, the Plaintiff dissatisfied with the instant disposition, filed an appeal with the Tax Tribunal on November 2, 2007, but was dismissed on April 25, 2008.

[Ground of recognition] Facts without dispute, entry of Gap evidence 1 to 4, purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) unconstitutionality of applicable statutes

(A) unconstitutionality of the Comprehensive Real Estate Tax Act itself

The Comprehensive Real Estate Holding Tax Act violates ① fundamental contents of property rights, ② the objectivity and fairness of the evaluation as a taxation on unrealized gains, ③ the prohibition of double taxation violates the principle of prohibition of double taxation, ④ the local finance right is violated by incorporating taxable items subject to the Local Tax Act into national taxes, ⑤ the discrimination against the person holding real estate and the person holding stocks or deposits, etc., thereby violating the principle of equality, ⑤ the limitation of ‘distribution of income' permitted by the Constitution, and also violates Article 119(2) of the Constitution.

(B) Violation of Article 11 of the Comprehensive Real Estate Holding Tax Act, Article 182(1) of the former Local Tax Act and the prohibition of comprehensive delegation

Article 11 of the Comprehensive Real Estate Tax Act and Article 182 (1) of the former Local Tax Act provide that the subject of taxation shall be classified into general aggregate taxation, special aggregate taxation, and separate taxation; subparagraph 1 provides that the subject of taxation shall be the land excluding the land subject to general aggregate taxation, which is subject to separate aggregate taxation or separate taxation; subparagraph 2 provides that the subject of taxation shall be the land attached to the building prescribed by the Presidential Decree, which is owned by the person liable to pay tax as of the base date for taxation, and the land prescribed by the Presidential Decree, which is the land subject to separate aggregate taxation."

(C) Claim for violation of the principle of equality under Article 131-2(3) of the former Enforcement Decree of the Local Tax Act and infringement of freedom of occupation.

1) Violation of the principle of equality

Article 131-2 (3) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 19817 of Dec. 30, 2006) provides that forest preserved in the original form of a membership golf course shall be subject to general aggregate taxation. This treats forest preserved in the original form of a membership golf course as equal to "land for sports facilities where the nature of the forest preserved in the original form of the golf course is different from that of "land for sports facilities where profit-making is created" and "land for non-business use for speculation purposes", while it treats forest of the same nature differently from "a simple forest connected to a golf course" and thus, it violates the principle

2) Infringement of freedom of occupation selection

The heavy taxation on the forest land preserved in its original form of the golf course infringes on the freedom of choice of occupation by making it virtually difficult to open and operate the golf course due to the significant impact on the profit or loss of the golf course.

(D) Sub-determination

Therefore, the instant disposition is unconstitutional and illegal as it is based on the unconstitutional Comprehensive Real Estate Tax Act, Article 182(1) of the former Local Tax Act, and the Enforcement Decree of the instant case.

(2) Illegal in calculating the tax base

Since the decision of officially assessed individual land price of the forest to preserve the original form of this case is unlawful, the disposition of this case premised on the tax base is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Judgment on the ground statute unconstitutionality argument

(1) Determination on the assertion of unconstitutionality of the Comprehensive Real Estate Holding Tax Act itself (Supreme Court Order 2006HunBa112 Decided November 13, 2008, etc.)

(A) Legislative discretion in tax laws and legislative purpose of the Gross Real Estate Tax Act

Today, as well as the original function of the nation's fulfillment of the financial demand, there are various functions such as re-distribution of income, proper distribution of resources, and adjustment of economy. Therefore, in determining the citizens' tax burden, it is necessary to make a comprehensive policy judgment throughout the whole nation, such as finance, economy, and social policies, and to make a specialized technical judgment in determining the requirements for taxation. Therefore, in determining what contents of tax laws are should be determined by the legislators based on accurate data about the actual state of the nation's finance, social economy, national income, and people's lives, so this is left to the policy and technical judgment based on the legislative formation discretion of the legislators (see Constitutional Court Order 2005Hun-Ba75, Jan. 17, 2007). Therefore, determining the requirements for taxation in the tax law belongs to the legislative discretion of the legislator unless the provision is remarkably unreasonable. Therefore, whether the Act on Real Estate Holding Tax in this case is unconstitutional or not should be determined depending on whether it deviates from the legislative discretion.

Meanwhile, the purpose of the Comprehensive Real Estate Tax Act is to contribute to balanced local finance and the sound development of the national economy by imposing comprehensive real estate holding tax on high-amount real estate holders, enhancing fairness in tax burden on real estate holding, and stabilizing the price of real estate (Article 1). In other words, the Comprehensive Real Estate Tax Act is to contribute to resolving income imbalance by imposing taxes conforming to the principle of satisfaction ability burden, restrain the speculation of real estate, change the composition ratio of land holding, while it was the low rate of holding tax at the time of legislation, while the transaction tax was to correct the dial phenomenon, which is high rate of taxation. In accordance with such legislative purpose, comprehensive real estate holding tax takes the form of taxation according to progressive tax rate as national tax to impose taxes corresponding to the owner’s re-performance by taking the amount exceeding a certain amount of tax on housing and land which is the object of taxation of property tax, which is a local tax.

(B) As to whether the essential content of the property right is infringed

In general, the collection of taxes in relation to the relationship between taxes and property rights is based on the duty to pay taxes by the people, and it does not infringe on property rights in principle. However, if the result is caused by the complete denial of the private property system, the gratuitous confiscation of property rights, and the deprivation of property rights by retroactive legislation, it may infringe on the essential contents of property rights. As such, in imposing and collecting taxes for the realization of public interest, the State may impose and collect taxes only to the extent that the taxpayer remains (see Constitutional Court Order 99Hun-Ba3, Feb. 22, 2001).

In the case of the comprehensive real estate holding tax, Articles 35(3) and 122 of the Constitution provide the State with a wide legislative discretion on the right to land and property, and impose an obligation on all the people to endeavor to live a pleasant residential life through housing development policies, etc. The Comprehensive Real Estate Holding Tax Act, which is a concrete method for realizing the above constitutional provisions, is aimed at enhancing tax equity on real estate holding by imposing comprehensive real estate tax on high-amount real estate holders, promoting the balanced financing of local finance and the sound development of the national economy by stabilizing the prices of real estate, and the comprehensive real estate holding tax does not collect all real estate values within a short period in light of its tax rate, not by collecting all real estate values within a short period, but by deducting the property tax imposed on the basis of the comprehensive real estate holding tax, it is difficult to deem that the Comprehensive Real Estate Holding Tax Act infringes on the essential contents of property rights.

(C) As to the taxation issue of unrealized gains

The basic nature of the comprehensive real estate holding tax is to be imposed on the basis of the fact that the real estate holding tax is owned by recognizing the capacity to pay the tax on the property in the holding stage, that is, it is difficult to regard it as a profit tax that is imposed on the unrealized acquisition (price increase). Even though the comprehensive real estate holding tax has the nature of profit-making tax, and it has the nature of taxation on unrealized acquisition, whether to impose tax on unrealized acquisition is a legislative policy issue that is determined by considering the purpose of taxation, the characteristics of taxable income, the problems in taxation technology, etc., and it does not conflict with the concept of tax under the Constitution (see, e.g., Constitutional Court Order 92Hun-Ba49, Jul. 29, 194).

(D) Whether the prohibition of double taxation violates the prohibition of double taxation

Since comprehensive real estate holding tax recognizes the capacity to pay taxes in itself over a certain value, not only the items of property tax but also the legislative purpose and object of taxation are different from those of property tax, but also the transfer income tax imposed on the profit (value increase) accrued during the period of possession differs from those of the transfer income tax, taxation requirements and taxation purposes, so it cannot be deemed as double taxation in relation to the property tax and the transfer income tax.

(E) As to whether local finance rights are infringed

The issue of whether the comprehensive real estate holding tax should be a national tax or a local tax depends on the purpose of taxation and legislative policy of the relevant tax, and there is no inevitable reason that the comprehensive real estate holding tax should be a local tax. Moreover, the comprehensive real estate holding tax should be a local tax, because the comprehensive real estate holding tax has been separately established for the portion exceeding a certain value while maintaining property tax, which is a local tax, it cannot be deemed that the right

(F) Whether the principle of equality is violated or not

The Gross Real Estate Tax Act imposes comprehensive real estate holding tax only on a person holding a high-amount real estate property, thereby discriminatings against those holding property rights, such as deposits or stocks of the same value. However, in light of the following: (i) Land or housing is subject to restrictions on supply unlike stocks, etc.; (ii) housing problems are serious; (iii) price increase or speculation phenomenon is significant compared to deposits or stocks, etc. due to imbalance in supply and demand of land and housing; and (ii) land or housing problems lead to the issue of the right to live a decent life as an essential goods for a living; and (iii) land or housing issues are intrinsic differences from other goods in that the public nature of the land or housing is significant; thus, such discriminatory treatment cannot be deemed to violate the principle of equality.

(G) As to the violation of Article 119(2) of the Constitution

In full view of the above various circumstances, it is difficult to view the Comprehensive Real Estate Tax Act as a prior regulation beyond the “regulation and coordination on the economy for maintaining the adequate distribution of income pursuant to Article 119(2) of the Constitution.”

(2) Determination on Article 11 of the Gross Real Estate Tax Act and Article 182(1) of the former Local Tax Act

(A) As to the assertion against the principle of no taxation without law and prohibition of comprehensive delegation

1) Article 11 of the Gross Real Estate Tax Act provides that the comprehensive real estate holding tax on land located in Korea shall be imposed separately from the general aggregate taxation subject to Article 182(1)1 of the Local Tax Act and the special aggregate taxation subject to Article 182(1)2 of the Local Tax Act. The Plaintiff claims the unconstitutionality of the part related to Article 182(1)1 and 2 of the former Local Tax Act.

2) Whether Article 182(1)1 of the former Local Tax Act of the Gross Real Estate Tax Act is unconstitutional

Article 182 (1) 1 of the former Local Tax Act provides that the land, except the land subject to a separate aggregate taxation or separate taxation among the land owned by a person liable to pay tax as of the base date of taxation, shall be subject to general aggregate taxation, and does not comprehensively delegate the general aggregate taxation to the Enforcement Decree of the same Act. Thus, the argument that the above provision violates the principle of

3) Whether Article 11 of the Comprehensive Real Estate Holding Tax Act is unconstitutional on Article 182(1)2 of the former Local Tax Act

A) Since it is difficult to view the forest land to be preserved in its original form as falling under “land annexed to a building as prescribed by the Presidential Decree” under the main sentence of Article 182(1)2 of the former Local Tax Act, the legal provision directly related to this case is the part of “land as prescribed by the Presidential Decree, which has a considerable reason to be subject to separate taxation” under the main sentence of Article 182(1)2 of the former Local Tax Act (hereinafter “instant legal provision”).

B) The purport of Article 182(1) of the former Local Tax Act, which separates property tax imposed on the land as above, is to establish the ability to taxation principle, facilitate the supply and demand of land, and promote the stability of land price and the expansion of the base of land ownership by establishing a period for a sound life of citizens, and to provide for the subject of comprehensive aggregate taxation with high cumulative tax rate on the land which does not require the land appurtenant to the building, etc. to be subject to separate aggregate taxation as a special aggregate taxation, is to prevent excessive possession of the land subject to general aggregate taxation, and to supplement unreasonable points derived from the comprehensive aggregate taxation by imposing tax in accordance with separate standards, in that it is unnecessary to allow small-scale possession of the land.

Although land prescribed by the Presidential Decree is somewhat abstract and comprehensive, it is difficult to find common signs that can properly classify its kind and scope due to the institutional nature of separate aggregate taxation because the land subject to such taxation is very diverse and different factors. Furthermore, it is inappropriate to regulate flexibly and flexiblely in response to changes in the economic situation, changes in land policies, and changes in relevant laws and regulations, etc. Therefore, it is inappropriate to regulate individual and detailed matters as prescribed by the Presidential Decree by the National Assembly, as it is necessary to establish a somewhat detailed standard. In light of the above, there is an inevitable reason that the comprehensive delegation legislation is unnecessary in order to properly cope with changes in the society where the administrative area expands, and it is also difficult to determine the scope of the golf course in light of the legislative purpose and policy of the Constitution, and it is also unreasonable to ensure that the comprehensive delegation of the Presidential Decree of the Republic of Korea can be carried out in accordance with the legislative principle of the Republic of Korea's comprehensive taxation system as well as the comprehensive delegation of the law system of golf courses in light of the legislative purpose of this case.

(B) As to the assertion regarding the violation of the principle of no taxation without law and infringement of property rights

The plaintiff asserts that the legal provision of this case is in violation of the principle of no taxation without law, infringes property rights, is a double taxation, is a taxation on unrealized profits, infringes on the local finance right, infringe on the freedom of choice, infringe on the freedom of occupation, violates the principle of equality, and is also in violation of Article 119(2) of the Constitution.

In determining the unconstitutionality of a legal provision, the basis of whether the legal provision itself contains unconstitutional contents should be determined. The relevant underlying legal provision cannot be deemed unconstitutional solely on the ground that the enforcement decree or enforcement decree enacted pursuant to the constitutional provision contains unconstitutional contents.

In this case, the legal provision of this case itself does not provide any disadvantage to the plaintiff in relation to the relation with the plaintiff. It is only decided whether the enforcement decree enacted later provides the preserved forest for the original form of a membership golf course as a general aggregate subject to general aggregate taxation or as a special aggregate subject to separate taxation. Ultimately, the effect of the plaintiff's violation of the principle of no taxation without representation, infringement of property rights, etc. is caused by the provisions of the Enforcement Decree of this case. Therefore, the plaintiff's assertion that the unconstitutionality of the legal provision of this case, which is the basis of the unconstitutionality of the Enforcement Decree of this case, is without merit.

(3) Determination as to the assertion of violation of the principle of equality and freedom of occupation under the Enforcement Decree of the instant case

(A) As to the violation of the principle of equality

The principle of equality under Article 11(1) of the Constitution of the Republic of Korea is the principle of tax equality to be implemented in the tax law area. The imposition and collection of taxes must be conducted fairly and equally commensurate with the taxpayer’s ability to pay taxes, and it is not allowed to discriminate against or give preferential treatment to a specific taxpayer unfavorably without reasonable grounds (see Constitutional Court Order 98Hun-Ma55, Nov. 25, 1999; Constitutional Court Order 93Hun-Ba2, Jun. 26, 1996). However, in a case where reasonable grounds exist, discrimination among taxpayers should be exceptionally permitted. In determining the contents of the tax law, the freedom of broad formation is recognized to the legislators, and today, the tax legislators may consider various points to achieve the national economy and the purpose of social policy (see Constitutional Court Order 2002Hun-Ba43, Oct. 31, 2002).

The enforcement decree of this case deals with the "land for sports facilities where the original preservation forest of a golf course needs to be preserved as it is without any artificial alteration in its form and nature," and treats it differently from the " simple forest connected to a golf course". The "forest preserved in the original form of a golf course" is essentially the same as the "land for sports facilities where the profit is created" in that the "land for sports facilities where the profit is created" is essentially different from the "land for sports facilities where the profit is created" that is irrelevant to a golf course business, in that it has an effect of separating it from a hole or an outer area as land which should be legally held for the golf course business, which is to be legally forced, and is to prevent accidents and to create and maintain beautiful landscape of the golf course and increases its utility by combining it with a golf course. Therefore, the enforcement decree of this case does not violate the principle of equality.

(B) As to whether freedom to choose an occupation is infringed

It is difficult to view that only heavy taxation on the forest land preserved in its original form of a golf course does not have a decisive impact on whether it has accrued a golf course’s profit or loss, and as well as other companies under the free market economic order, the issue of whether it has accrued profit or loss depends on the reasonableness of economic choice and the efficiency of corporate management. Therefore, even if the comprehensive real estate holding tax on the forest land preserved in its original form, even if it bears such economic burden, it is a matter of economic choice to decide whether to acquire and operate a golf course even if it takes over such economic burden, and the comprehensive real estate holding tax itself does not legally or actually prohibit the operation of the golf course, and therefore, the Enforcement Decree of the instant case cannot be deemed as infringing on the freedom of occupation (see, e.g., Constitutional Court Order 9Hun-Ba64, Feb. 25,

(4) Conclusion

Therefore, the Plaintiff’s assertion that the instant disposition was unconstitutional, based on the Comprehensive Real Estate Tax Act, the instant legal provision, and the Enforcement Decree provision, is unlawful is without merit.

D. Determination as to whether the calculation of the tax base is illegal

The purpose of the determination of the officially assessed individual land price is to separate and separate legal effects from those of other taxation based on it. However, it is difficult to premise that the landowner or interested party knew of the determination of the officially assessed individual land price individually, and it is not easy to anticipate that the determined individual land price will act in favor of himself/herself or would act at a disadvantage. Furthermore, it is reasonable to find the way for remedy of rights only in cases where specific disadvantages such as a long-term taxation have actually appeared in reality. Considering that it is a public right consciousness, it is reasonable to view the landowner, etc. to view the price of the land at all times in preparation for the erroneous determination of the officially assessed individual land price, and to demand correction thereof through the procedure of correction cannot be deemed to impose a high-quality duty of care, and it is reasonable to interpret that the determination of the officially assessed individual land price cannot be asserted in the subsequent administrative disposition, such as the imposition of the publicly assessed individual land price, based on the reason that it did not demand correction of the determination through the procedure of the determination of the publicly assessed individual land price, as well as the right to seek revocation of administrative disposition.

25. See Supreme Court Decision 93Nu8542, etc.)

Under the premise of this legal doctrine, the Plaintiff merely asserts that the officially assessed individual land price of the forest that has been preserved in its original form is illegal, as the officially assessed individual land price of the forest that has been significantly higher than that of the neighboring forest is significantly higher than that of the neighboring forest, and does not prove any unlawful ground therefor. Therefore, the Plaintiff’s above assertion is without merit, unless there is any evidence to deem it illegal.

3. Conclusion

Thus, the plaintiff's claim of this case is dismissed as it is without merit.