Seoul High Court Decision 201Na1448 delivered on May 1, 201

Guang-si Market

Suwon District Court Decision 2010Guhap4316 Decided September 8, 2010

June 10, 201

1. All appeals filed by the plaintiff and the defendant are dismissed.

2. The costs of appeal shall be borne by each party.

1. Purport of claim

Each disposition taken by the defendant against the plaintiff in the attached list of the first instance judgment shall be revoked.

2. Purport of appeal

A. The plaintiff

The part against the plaintiff in the judgment of the court of first instance shall be revoked. The defendant's disposition of imposition Nos. 3 and 4 in the separate sheet against the plaintiff shall be revoked.

B. Defendant

The part against the defendant in the judgment of the first instance shall be revoked, and the plaintiff's claim corresponding to the revoked part shall be dismissed.

1. Quotation of judgment of the first instance;

The reasons to be stated in this decision are as follows: (a) the provisions of Section 2-D. of the reasoning of the judgment of the court of first instance are used as follows; and (b) the new arguments of the defendant in the trial of the court of first instance are as stated in the reasoning of the judgment of the court of first instance, except for the parts additionally determined in Section 3 below.

2. Parts to be dried;

Determination as to the illegality of dispositions Nos. 3 and 4

First, in light of the Plaintiff’s health stand, the facility of this case, and the structure and location of the facility of this case, and the relation between the use of the building corresponding to its location, the form, purpose, and usage, it is reasonable to deem that the facility of this case constitutes an accessory facility to the part of the new building of this case. However, the facility of this case can not be separated or removed easily because it forms the building, and it is currently being used as a financial establishment. However, it is due to the circumstance that the Plaintiff installs cash payment equipment within the said facility and uses it as an independent shop that can be used at night or on holidays. Since it can be used for the whole building of this case due to the replacement or alteration of the inside facility, the installation cost of the facility of this case can not be excluded from the construction cost of the new building of this case, as long as it can be used for the whole building of this case only for the location or use of the facility of this case. Accordingly, the Defendant’s measure that included the expenses incurred in the construction of the new building of this case in the tax base of this case is justifiable

Next, in light of the following circumstances: (a) the Plaintiff newly constructed the new building of this case and obtained a building permit for retail stores which are Class I neighborhood living facilities different from those of the financial establishments; (b) the Plaintiff paid registration tax, acquisition tax, etc.; (c) the retail stores were not used for the business prescribed in Article 28(1)1 through 4 of the Community Credit Cooperatives Act until one year after the completion of the new building of this case; and (c) the Plaintiff’s officers before the completion of the new building of this case discussed whether the retail stores will rent out the retail stores; (c) there were discussions on whether the Plaintiff would use the retail stores as welfare facilities of community credit cooperatives or neighboring residents at the time of the acquisition of the new building of this case; or (d) the Plaintiff’s assertion that the part of the new building of this case should not be directly used for the retail stores for the retail stores of the local community practice or the retail stores of the local community facilities of this case is difficult to view that the Plaintiff’s new building of this case is legitimate for the Plaintiff’s 2 of the above 3rd new building of this case.

Finally, under Article 138 (1) 3 of the former Local Tax Act and Article 102 (2) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 21498 of May 21, 2009), the tax rate for all real estate registrations acquired prior to the establishment of a branch or sub-branch in a large city shall be 300/100 of the relevant tax rate. The term "all real estate registrations" refer to the registration of real estate acquired prior to the establishment of the branch office, and the entire real estate is not necessarily used for the business of the branch office (see Supreme Court Decision 2005Du4205, Sept. 8, 2006). Since the Plaintiff acquired new building for the purpose of establishing the rice branch, the part of the newly constructed building of this case including the small retail store and the part of the newly constructed building of this case which are subject to exemption cannot be used directly for the business of the branch office of this case as provided in Article 138 (1) 3 of the former Local Tax Act.

3. Additional determination

A. The plaintiff's assertion and judgment on this issue

In addition, the Plaintiff asserts that, if the retail store part of the new building of this case is not considered as “real estate acquired to use directly for the safe business,” the registration of the above part does not constitute “all real estate registrations acquired before the establishment of the branch.” Thus, the registration of the retail store part is merely subject to the payment of registration tax under the general tax rate, and it cannot be subject to heavy taxation.

As seen earlier, Article 102(2) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 21498 of May 21, 2009) applies to the newly constructed building of this case only provides that "All real estate acquired before the establishment of a branch or sub-office in a large city" is "real estate register" and thereafter amended Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 21498 of May 21, 2009) (amended by Presidential Decree No. 21498 of May 21, 2009) provides that "real estate register acquired to be used directly for the use of a branch or sub-branch in a large city is different from its expression; the provision on exemption of acquisition tax, etc. for real estate used for the unique business of a community credit cooperative, etc.; and the provision on heavy registration tax following the establishment of a branch office in a large city does not coincide with its legislative intent; and some of the buildings subject to the imposition of registration tax can be imposed on the remaining tax portion."

B. The defendant's assertion and judgment

In addition, even if the court below determined that the plaintiff had justifiable reasons for the late commencement of the new building of this case, the court below asserted that the retail store part of the land of this case should be revoked by the proportion corresponding to the part of the financial industry among the land of this case, so long as the retail store part does not fall under the purpose of reduction or exemption, and that the exemption of acquisition tax, etc. for the whole land of this case

Tax issues arise as to exemption in relation to dispositions 1, 2, is acquisition tax, registration tax, etc. for the instant land and existing building acquired by the Plaintiff for the purpose of opening a valley branch by constructing a new building. Since acquisition tax, registration tax, etc. is separately imposed on a building newly constructed by the Plaintiff, it is reasonable to view that there is no reason or need to consider the use of the building newly constructed on the instant land or whether to exempt the acquisition tax, registration tax, etc., imposed at the time when the Plaintiff acquired the instant land or existing building. Accordingly, the Defendant’s above assertion is rejected.

4. Conclusion

Therefore, the judgment of the court of first instance is just, and the defendant's appeal is without merit, and all of the appeals are dismissed. It is so decided as per Disposition.

Judges Kim Jae-sik (Presiding Judge)