Whether the acquisition of real estate acquired by a special purpose company by filing an application for a direct purchase at an auction procedure for real estate for the collection of bonds after the transfer of secured collateral bonds, which are securitization assets, does not constitute acquisition tax reduction or exemption under Article 120 (1) 9 of the Restriction of Special Taxation Act (affirmative)

Articles 119(1)13 and 120(1)12 of the former Restriction of Special Taxation Act (Amended by Act No. 10406, Dec. 27, 2010); Article 120(1)9 and Article 52 of the former Restriction of Special Taxation Act (Amended by Act No. 12853, Dec. 23, 2014); Article 2(6) and Article 52 of the Addenda to the Restriction of Special Taxation Act (Amended by Act No. 12853, Dec. 27, 2010);

Infant Lee & Lee LLC (Law Firm LLC, Attorneys Jeong Young-mo et al., Counsel for the defendant-appellant-appellee)

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Daejeon High Court (Cheongju) Decision 2014Nu5119 decided January 28, 2015

The judgment of the court below is reversed, and the case is remanded to Daejeon High Court.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Articles 120(1)12 and 119(1)13 of the former Restriction of Special Taxation Act (amended by Act No. 10406, Dec. 27, 2010) provide that “Where a special purpose company acquires, operates, or disposes of securitization assets from an originator or another special purpose company in accordance with an asset-backed securitization plan, the acquisition tax on real estate acquired by the originator or another special purpose company by December 31, 2012 shall be reduced by 50/100.” However, Article 120(1)9 of the Restriction of Special Taxation Act (hereinafter “special purpose company”) of the same Act (amended by Act No. 10406, Dec. 27, 2010) excluded the acquisition tax on real estate acquired by the special purpose company from the asset-backed securitization plan or from the asset-backed securitization company to the effect on January 1, 201, the special purpose company acquired by the special purpose company from the acquisition on or from 10/100 of real estate acquired by the special purpose company.”

In light of the language and structure of the aforementioned provision, and the provisions of the amended special provisions, in order to reasonably coordinate the scope of special taxation cases against a special purpose company and promote the equity of taxation with general creditors, the “real estate acquired by a special purpose company for the management, operation, and disposal of the acquired securitization assets by the transfer of the securitization assets,” as stipulated in the former special provisions, can be excluded from the acquisition tax reduction or exemption. Thus, the secured real estate acquired by the special purpose company by directly filing an application for purchase at the auction procedure of the secured real estate for the collection of the claims after the transfer of the secured securitization assets, which is the securitization assets, shall not be deemed as the “real estate acquired by a special purpose company for the management, operation,

The judgment below to the same purport is just, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on the interpretation of the amended special provisions.

2. Regarding ground of appeal No. 2

Based on its stated reasoning, the lower court determined that the Plaintiff cannot be deemed to have acquired the instant real estate due to the Plaintiff’s belief that acquisition tax would be reduced or exempted in acquiring the instant real estate without any cause attributable to the Plaintiff’s public opinion.

In light of the relevant legal principles and records, the above determination by the court below is just, and contrary to the allegations in the grounds of appeal, there is no error of law by misapprehending the legal principles on the principle of

3. Regarding ground of appeal No. 3

A. According to Articles 2(1)15 and 55(1) of the Framework Act on Local Taxes and Article 36 of the Enforcement Decree of the Framework Act on Local Taxes, a local tax payment notice shall be based on a tax payment notice stating the taxable year and items of the local tax to be paid, the Acts and ordinances of the relevant local government, the taxpayer’s address and name, tax base, tax rate, amount of tax, time limit for payment, place for payment, measures to be taken when the local tax is not paid by the time limit for payment, and methods of remedy for the illegality or mistake of the imposition. The above provisions purport to ensure fairness in tax administration by having the tax authority take careful and reasonable measures in accordance with the principle of no taxation without representation, and at the same time, to provide the taxpayer with detailed information about the details of the taxation disposition, and to provide convenience in filing an objection. As such, in principle, a tax payment notice shall specify the taxpayer’s property to be subject to taxation in detail so that the taxpayer can be aware of the details of the taxation disposition, and the basis for calculation of the tax base amount to be applied.

On the other hand, if it is evident that a taxpayer was not affected by the decision on whether to object to the disposition or by the notice of tax notice sent by the tax authority prior to the taxation disposition, the defect of the tax notice should be cured. However, the document that can supplement the defect of the tax notice should be delivered to the taxpayer prior to the tax notice in accordance with the statutes, etc., so that the document that can supplement the defect of the tax notice can be integrated with the tax notice because it can be delivered to the taxpayer prior to the tax notice (see Supreme Court Decision 2005Du5505, Oct. 13, 2005, etc.).

B. According to the reasoning of the lower judgment and the evidence duly admitted by the lower court, ① the tax amount of acquisition tax, local education tax, and special rural development tax (hereinafter “acquisition tax, etc.”) and the tax base of acquisition tax are only stated in the instant tax payment notice, and the basis for calculation of acquisition tax, etc. is not indicated properly. ② The notice of prior notice of taxation sent by the Defendant to the Plaintiff prior to the instant tax payment notice also includes the acquisition tax, special rural development tax, and the tax base of acquisition tax, but the tax rate of acquisition

Examining these facts in light of the legal principles as seen earlier, the instant notice of tax payment of acquisition tax, etc. was partially omitted, and even if the Plaintiff had already known the acquisition tax rate and tax base at the time of reporting acquisition tax, etc., it cannot be deemed that the defect was corrected or cured. Thus, the instant disposition of tax payment of acquisition tax, etc. was unlawful.

Nevertheless, the lower court determined that the instant disposition of acquisition tax, etc. was lawful solely based on its stated reasoning. In so determining, the lower court erred by misapprehending the legal doctrine on the duty payment notice, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds of appeal on

4. Conclusion

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)