[1] In a case where facilities, such as water supply and drainage system subject to imposition of acquisition tax, property tax, etc., are directly used for golf courses pursuant to Article 104 subparag. 4 and Article 180 subparag. 2 of the former Local Tax Act, whether it constitutes a building for golf courses to which the heavy tax rate under Article 188(1)2 subparag. 2(a) of the former Local Tax Act applies, regardless of whether it is separately registered (affirmative)

[2] Whether it constitutes double taxation to impose property tax, etc. on the water supply and drainage facilities subject to the imposition of acquisition tax and property tax under the former Local Tax Act, which are subject to separate registration under Article 20(3) of the Enforcement Decree of the Installation and Utilization of Sports Facilities Act

[1] In light of the language and purport of Articles 104 subparag. 4, 112(2), 180 subparag. 2, 181, and 188(1)2 of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter the same), and Article 20(3) of the Enforcement Decree of the Installation and Utilization of Sports Facilities Act, the facilities subject to imposition of acquisition tax, property tax, etc. pursuant to Articles 104 subparag. 4 and 180 subparag. 2 of the former Local Tax Act, regardless of whether they have been used directly for the purpose of a golf course, constitute a golf course subject to heavy taxation and tax rate under Article 188(1)2 subparag. 2(a) of the former Local Tax Act, regardless of whether they have been separately registered.

[2] Articles 187(1) and 111(2) of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter the same shall apply), the former Public Notice of Values and Appraisal of Real Estate Act (amended by Act No. 11690, Mar. 23, 2013); and the Enforcement Decree thereof (amended by Presidential Decree No. 24443, Mar. 23, 2013; hereinafter the same shall apply), which provide for the inspection and assessment methods of the officially announced land price of the standard land (amended by Ordinance of the Ministry of Land, Transport and Maritime Affairs No. 49, Apr. 3, 2008; hereinafter the same shall apply), and it is reasonable to view that the land subject to the imposition of acquisition tax or the installation method of the standard land under Article 20 of the former Enforcement Decree of the Local Tax Act, including the installation cost of the golf course and the installation cost of the golf course, is not subject to be applied separately.

[1] Article 104 subparag. 4 (see current Article 6 subparag. 4), Article 112(2) (see current Article 10(2)), Article 180 subparag. 2 (see current Article 104 subparag. 2), Article 181 (see current Article 105), Article 188(1)2 (see current Article 111(1)1) of the former Local Tax Act (wholly amended by Act No. 1021, Mar. 31, 2010); Article 112(2) and Article 188(1)2 (see current Article 111(1)2) of the Enforcement Decree of the Installation and Utilization of Sports Facilities Act; Article 20(3) of the Enforcement Decree of the Installation and Utilization of Sports Facilities Act / [2] Article 101(1) and (2) of the former Local Tax Act (wholly amended by Act No. 1021, Mar. 31, 2010)

Seoul High Court Decision 200Na14888 decided May 1, 200

Market for the United States

Seoul High Court Decision 2011Nu6990 decided September 7, 2011

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

The grounds of appeal are examined (to the extent of supplement in case of any statement in the supplemental appellate brief not timely filed).

1. As to the assertion that the water treatment facilities of this case are not subject to heavy taxation of property tax

The former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter “Local Tax Act”) provides that “building,” which is subject to taxation of acquisition tax and property tax, shall include not only buildings under the Building Act, but also specific facilities, such as water supply and drainage facilities, which are fixed on land or installed on underground or other structures (Article 104 Subparag. 4, Article 180 Subparag. 2, and Article 181). Furthermore, with regard to the standard tax rate of property tax on a building, the heavy taxation rate shall be applied to a building subject to divisional registration among real estate for membership golf courses under the Installation and Utilization of Sports Facilities Act (hereinafter “Sports Facilities Act”). (Article 188(1)2, and Article 112(2)2).

On the other hand, the Enforcement Decree of the Sports Facilities Act provides that a person who intends to register a membership golf course business among sports facility businesses shall register the golf course among the land of the relevant golf course, parking lots, roads, tides, landscaping areas, and buildings not directly used for the purpose of the golf course shall be excluded from registration (Article 20(3)).

In full view of the language and purport of the above provisions, it is reasonable to view that facilities subject to imposition of acquisition tax, property tax, etc. pursuant to Article 104 subparag. 4 and Article 180 subparag. 2 of the Local Tax Act, such as water supply and drainage facilities, are buildings for golf courses subject to heavy tax rate under Article 188(1)2(a) of the Local Tax Act, regardless of whether they have been actually separately registered if they are used for the purpose of a golf course.

The lower court, based on its findings of fact as indicated in its holding, determined that the instant water-saving facilities installed for the management of turdddys underground in the golf course of “○○○○○○○○○○○○,” a membership golf course operated by the Plaintiff, constitute a building for membership golf courses to which the above heavy tax rate applies, regardless of whether the instant water-saving facilities were registered separately under Article 20(3) of the Enforcement Decree of the Sports Facilities Act, as they are directly used for the purpose of golf courses.

In light of the aforementioned legal principles and records, the judgment of the court below is just and acceptable. In so doing, it did not accept the allegation in the grounds of appeal that there were errors in the misapprehension of legal principles as to the scope of the subject matter of separate registration under Article 20(3)5 of the Enforcement Decree of the Sports Facilities Act, the principle of statutory interpretation, and the scope of “golf course building” under Article 188(1)2(a) of the Local Tax

2. As to the assertion that the disposition of imposition, such as the instant property tax, is double taxation

The tax base of property tax on land under the Local Tax Act shall be calculated on the basis of the publicly announced individual land price under the Public Notice of Values and Appraisal of Real Estate Act (hereinafter “Real Estate Public Notice Act”), but where the publicly announced individual land price is not publicly announced, the Minister of Land, Transport and Maritime Affairs (amended by Act No. 8864, Feb. 29, 2008); using the land price ratification table provided by the Minister of Land, Transport and Maritime Affairs (Article 187(1) and Article 111(2)).

Meanwhile, Article 41(1) of the former Public Notice of Values of Real Estate Act (amended by Act No. 11690, Mar. 23, 2013) and its Enforcement Decree (amended by Presidential Decree No. 24443, Mar. 23, 2013) provide that “The former Public Notice of Values of Standard Land (amended by Ordinance of the Ministry of Land, Transport and Maritime Affairs No. 49, Apr. 3, 2008) shall be the standard for the investigation and evaluation of standard land values (amended by Ordinance of the Ministry of Land, Transport and Maritime Affairs No. 642, Nov. 9, 2010; hereinafter referred to as “standard for the investigation of standard land”) shall be evaluated as the cost method, but the standard construction cost and expenses incidental thereto shall be determined by subtracting the amount equivalent to the amount required for the construction of management facilities (referring to all buildings in a golf club, sewage treatment facility, warehouse, etc.) within a golf course which is not embodied in the land.”

In light of the language and purport of these regulations, and the purport of the standard land survey that provides that “the amount equivalent to the cost of installing management facilities within a golf course which is not embodied in the land” shall be deducted from the cost of creating the golf course site, etc., it would also be considered that such facilities are subject to the imposition of acquisition tax and property tax, etc. separate from the site of golf course in the case of such facilities. In light of the fact that the facilities subject to separate registration under Article 20(3) of the Enforcement Decree of the Sports Facilities Act, which are subject to the imposition of acquisition tax and property tax under the Local Tax Act, are not embodied in principle in the application of the Local Tax Act, at least in the case of applying the separate registration system or the individual land price system, etc., it is reasonable to deem that the cost of installing facilities for water supply and drainage facilities or the price thereof subject to the imposition of acquisition tax and property tax under the Local Tax Act cannot be included in or affected by the tax base for the property tax on the site of golf course, barring any special circumstance.

Therefore, the lower court’s conclusion that the disposition of imposing the property tax, etc. on the water intake facilities of this case does not constitute double taxation is justifiable. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on double taxation, etc

3. Conclusion

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 on the bench.

Justices Kim Chang-suk (Presiding Justice)