Cho High-2016-Seoul Government-0596 ( December 16, 2014)

In the case of a taxpayer of comprehensive real estate holding tax on trust, a trust property under the Trust Act, a legal premise of calculating the tax base for each truster.

The legal principle that "in the case of trust property under the Trust Act, the tax base shall be calculated separately for each truster" applies to the case where the trust property is separately classified for each truster by being entrusted with each trustee based on an individual trust relationship with multiple trusters.

Article 7 of the Gross Real Estate Tax Act

2014Guhap68027 Demanding revocation of the imposition of comprehensive real estate holding tax

AA Regional Housing Association

BB Director of the Tax Office

June 21, 2016

July 14, 2016

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s imposition of KRW 00,00,000 of the comprehensive real estate holding tax for the year 2013 on November 16, 2013 against the Plaintiff and the imposition of KRW 00,00,00,00 of the comprehensive real estate holding tax for the year 2013 on February 5, 2014 shall be revoked.

1. Details of the disposition;

A. The Plaintiff was established for the purpose of carrying out apartment development projects (hereinafter referred to as the “project in this case”), which build 24 square meters and 34 square meters apartment units from the Seoul CCCD DD 000 land (hereinafter referred to as the “project site in this case”). However, there was no lack of authorization for the establishment of a regional housing association under the Housing Act.

B. On August 28, 2012, the Plaintiff reported and paid acquisition tax on 49 real estate including 33 lots of land, the Seoul CCCD 000, and the head of the ECE CCC imposed property tax, etc. on the Plaintiff on September 24, 2013 on the total of 58 lots of land, including the above 49 piece of land (hereinafter “each piece of land”).

C. On November 16, 2013, the Defendant issued each disposition of KRW 00,00,000 of the comprehensive real estate holding tax for 200,000,000 for the Plaintiff on the basis of the notification data on the assessment of property tax by the head of a local government (hereinafter “instant disposition”), and on February 5, 2014, the comprehensive real estate holding tax for 200,000,000 for 2013 (hereinafter “total real estate holding tax for 2013”).

D. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Director of the Tax Tribunal on September 25, 2014, but the appeal was dismissed on December 16, 2014.

[Reasons for Recognition] Facts without dispute, entry in Eul evidence Nos. 1 through 5 (including each number in the case of additional number) and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

The taxpayer of comprehensive real estate holding tax is the taxpayer of property tax and the taxpayer of property tax of trust property is the truster. Each of the instant land is a trust property registered in the name of EEE Trust Co., Ltd. (former trade name: EEEE Real Estate Trust Co., Ltd.; hereinafter “EEEE Trust”), a trustee, according to the Trust Act, and is a trust relationship between the Plaintiff and the Plaintiff’s members, and thus, the Plaintiff’s members are the taxpayer of comprehensive real estate holding tax as the actual truster. Even if the Plaintiff and the Plaintiff’s members are deemed the taxpayer, if a trust relationship exists between the Plaintiff and the Plaintiff’s members, as in the instant case, the property tax should be calculated separately by classifying the Plaintiff’s members as the truster, and the disposition of this case should be added up, and the tax rate higher

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether the Plaintiff is a truster

A) The main text of Article 107(1) of the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014; hereinafter the same) provides that a person who actually owns property as of the tax base date for property tax shall be liable for property tax. The main text of Article 107(2)5 provides that a truster shall be liable for property tax in the case of trust property registered in the name of trustee pursuant to the Trust Act, notwithstanding the provisions of paragraph (1). However, in the case of trust property purchased in money paid by a district housing association under Article 2(11) of the Housing Act, the relevant regional housing

B) We examine who is the actual truster of each of the instant lands.

In full view of the purport of Gap evidence No. 4-1 through 3, Gap evidence No. 5 and the whole arguments, ① FFF (hereinafter "FF"), EE trust, etc. entered into an agreement with the plaintiff on May 28, 2004 to purchase the instant project site and dispose of and trust to EE trust; ② FF purchased each of the instant land and other real estate belonging to the instant project site from November 2002 to June 2005; ② EEE trust completed the registration of trust in accordance with the above trust agreement; ③ the seller of each of the instant land was fully paid the purchase price from FFF (hereinafter "FF"), and the seller of each of the instant land prepared a real estate trust agreement in the name of the beneficiary waiver and beneficiary column with the trust agreement, and issued the trust agreement to the EGE trust, ④ the trust agreement was concluded and issued to the beneficiary of each of the instant land, and the plaintiff was confirmed as the beneficiary of each of the above trust agreement to modify the trust registration procedure and the beneficiary of each of the trust agreement.

In light of these facts, the FF merely purchased trust property, such as each of the instant lands, and thus, the effect of the purchase of real estate is substantially attributable to the Plaintiff. However, the FF purchased trust property under the name of the Plaintiff, without registering the trust property in the name of the Plaintiff, and concluded a trust agreement with the EE Trust and the trust agreement with the truster and beneficiary. However, it is not clear whether the Plaintiff, who did not obtain authorization for the establishment of the association, has the ability to register it, and there was concerns that double tax burden, such as acquisition tax, will occur. Thus, since the seller, who is the truster of each of the instant lands, is not a party to the trust agreement, the truster of each of the instant lands, and thus cannot be deemed as the truster who is the taxpayer. The Plaintiff is the actual truster of each of the instant lands, and the beneficiary, the other party, is

C) Furthermore, we examine the Plaintiff’s assertion that the Plaintiff’s members should be the actual truster.

According to the evidence No. 11, Article 45 of the plaintiff's articles of association provides that "members shall register the business site to the plaintiff for the smooth promotion of the business, and the plaintiff shall exercise the property right entrusted to the plaintiff in compliance with the purpose of the business, and when the business is completed, the trust shall be immediately cancelled and return the property right to the members."

However, according to the above evidence, it is recognized that the supplementary decree of the Plaintiff’s association stipulates that “the association shall enter into force on the date when the association establishment was authorized.” Since the Plaintiff did not obtain authorization for the establishment of the regional association, it shall not apply to the Plaintiff and the Plaintiff’s association members. In addition, there is no evidence to confirm that the Plaintiff entered into an individual trust contract with the union members. Therefore, the Plaintiff is not actually entrusted with each of the instant land from the union members, but actually acquired and owned each of the instant land from a third party on the basis of funds or real estate invested from the union members, and thus, the substantial truster of each

D) Furthermore, the Plaintiff’s taxpayer of comprehensive real estate holding tax on each of the instant land is a person who actually owns the property as of the tax base date, and thus, the Plaintiff’s members, who actually own each of the instant land, which is the partnership property, are liable for tax payment. However, according to the overall purport of the statement and pleadings as to the evidence Nos. 9 through 15, the Plaintiff has an organization as an organization, such as having the unique purpose of the organization formation of collective housing among its members, and having a representative elected at a general meeting and a general meeting, which is a decision-making body that is a member, and an executive body elected at a general meeting. The Plaintiff is recognized as an organization that was registered as the owner of each of the instant land on the registry as an organization that was granted a registration number for real estate holding the registration number, and therefore, the Plaintiff is deemed to have an organization and substance of an association with no legal capacity to engage in social activities and transactions (see, e.g., Supreme Court Decision 2008Du19864, Dec. 23, 2010).

E) Therefore, since the taxpayer liable to pay global income tax on each of the instant land is the Plaintiff, the truster, the Plaintiff’s member is the taxpayer. This part of the Plaintiff’s assertion is without merit.

2) Whether there was an error in calculating the tax base and applying the tax rate to the instant disposition

The legal principle that "in the case of trust property under the Trust Act that the plaintiff asserts that the trust property should be applied to this case, the trust property should be calculated separately for each truster, by receiving the trust property from a large number of trusters based on an individual trust relationship, from each truster. As seen earlier, the above legal principle does not apply to this case, since the trust relationship between the plaintiff and the plaintiff's union members is not recognized. Therefore, the plaintiff's assertion on this part is without merit

D. Sub-committee

The instant disposition to the same purport is lawful.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.