[1] Whether a “multi-family house” under Article 3-5 [Attachment Table 1] subparagraph 1 (c) of the former Enforcement Decree of the Building Act is included in “multi-family housing” exempt from acquisition tax pursuant to Article 31(1)1 of the former Restriction of Special Local Taxation Act, which is a provision that reduces acquisition tax on rental housing, etc. (negative in principle)

[2] Whether a judgment on all the parties' arguments or methods of offence and defense should be indicated on the grounds of the written judgment (negative), and in a case where the court ruling does not indicate a specific and direct judgment on the matters alleged by the parties, but it is possible to find out whether the allegations were cited for the overall purpose of the reasoning of the judgment, or where it is obvious that the allegations should be rejected without making a decision (negative), whether the omission of judgment is an error (negative)

[1] According to Article 31(1)1 of the former Restriction of Special Local Taxation Act (amended by Act No. 13435, Jul. 24, 2015; hereinafter the same shall apply), where a rental business operator under subparagraph 4 of Article 2 of the Rental Housing Act (including cases where a rental business operator is registered as a rental business operator within 60 days from the acquisition date of rental real estate) constructs a multi-family housing pursuant to the former part of December 31, 2015, or sells multi-family housing or officetels for the first time from an owner of a building pursuant to the latter part of Article 2(1)3 of the same Act, acquisition tax shall be exempted if the exclusive use area of the apartment house or officetel does not exceed 60 square meters. Article 2(1)3 of the former Restriction of Special Local Taxation Act regarding the definition of “multi-family housing” in the reduction or exemption provision provides that “a rental business operator is excluded from a dormitory under Article 2 subparag. 2 of the Housing Act, which is a rental business operator’s exclusive use area under Article 20 of the Housing Act.”

Meanwhile, Article 2 subparag. 2 of the former Housing Act (amended by Act No. 13782, Jan. 19, 2016) provides that “multi-family housing” means housing with a structure wherein each household that jointly uses all or part of the walls, corridors, stairs, and other facilities of a building can carry on an independent residential life within one building, and its kind and scope shall be prescribed by Presidential Decree.” Article 2(1) of the former Enforcement Decree of the Housing Act (wholly amended by Presidential Decree No. 2744, Aug. 11, 2016; Presidential Decree No. 26974, Feb. 11, 2016; Presidential Decree No. 26974, Feb. 11, 2016; hereinafter the same shall apply) provides that “multi-family housing” shall be defined as “multi-family housing” as “multi-family housing” and Article 3-5 [Attachment 1] through 2(a) through (c) of the former Enforcement Decree of the Housing Act, and shall be defined as one of multi-family housing.

Under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, barring special circumstances, and it shall not be permitted to expand or analogically interpret it without reasonable grounds, and in particular, it accords with the principle of fair taxation to strictly interpret that it is clearly considered as a preferential provision among the requirements of tax reduction and exemption.

In full view of the language and structure of the aforementioned relevant provisions, the purport of the provision on reduction or exemption, and in particular, the provisions on the “multi-family housing” under the former Restriction of Special Local Taxation Act, etc., the term “multi-family housing” exempt from acquisition tax pursuant to the provision on reduction or exemption refers to apartment houses, tenement houses, and multi-household houses as prescribed in Article 3-5 [Attachment Table 1] 2(a) through (c) of the former Enforcement Decree of the Building Act. Unless there are special circumstances, multi-family houses as prescribed in subparagraph 1(c) of [Attachment Table 1] of Article 3-

[2] The reasoning of a written judgment is sufficient to indicate the judgment on the party’s assertion and other means of offence and defense to the extent that it can be recognized that the text is justifiable, and there is no need to determine all of the party’s allegations or means of offence and defense (Article 8(2) of the Administrative Litigation Act, Article 208 of the Civil Procedure Act). Therefore, even if no specific and direct judgment on the party’s assertion is indicated in a court judgment, it cannot be deemed an omission of judgment if it is possible to find out that the party’s assertion has been cited or rejected in light of the overall purport of the reasoning of the judgment, and even if it is obvious that the assertion would be rejected even if the judgment

[1] Article 2(1)3 and Article 31(1)1 of the former Restriction of Special Local Taxation Act (Amended by Act No. 13435, Jul. 24, 2015); Article 2 subparag. 4 of the former Rental Housing Act (wholly amended by Act No. 13499, Aug. 28, 2015; Article 2 subparag. 7 of the current Special Act on Private Rental Housing; Article 4(1) of the Special Act on Public Housing; Article 2 subparag. 2 of the former Housing Act (Amended by Act No. 13782, Jan. 19, 2016); Article 2 subparag. 3 of the former Enforcement Decree of the Housing Act (wholly amended by Presidential Decree No. 27444, Aug. 11, 2016); Article 2(1)4 of the former Rental Housing Act (wholly amended by Presidential Decree No. 13782), Article 2 subparag. 18, 2016; Presidential Decree No. 216(c) of the former Enforcement Decree of the Building Act / [see Article 28(16)

[1] Supreme Court Decision 2003Du7392 Decided May 28, 2004 (Gong2004Ha, 1096), Supreme Court Decision 2017Du32401 Decided June 15, 2017 (Gong2017Ha, 1494) / [2] Supreme Court Decision 2013Du22482 Decided May 16, 2014 (Gong2017Du48406 Decided September 26, 2019 (Gong2019Ha, 2055)

Plaintiff (Appointed Party)

The head of Dong-gu in Yananan-si

Daejeon High Court Decision 2016Nu12927 decided February 9, 2017

The appeal is dismissed. The costs of appeal are assessed against the Plaintiff (Appointed Party).

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

1. Case summary

A. On April 19, 2015, the Plaintiff (Appointed Party; hereinafter “Plaintiff”) and the Selection Party 2 (hereinafter “Appointed”) purchased 1/2 equity shares of the Plaintiff (hereinafter “the instant building”) from the Nonparty around April 19, 2015 for the purpose of running a housing rental business, the Plaintiff purchased 1/2 equity shares of the instant building (hereinafter “the instant building”). On the other hand, the Plaintiff and the instant building were registered as a multi-family house register from July 14, 2015 to July 14, 2015, the instant building was registered as a multi-family house (the instant building), and the Plaintiff and the instant building was also registered as a multi-family house register as a multi-family house (the instant building was registered as a multi-family house).

B. On May 26, 2015, the Plaintiff and the designated person reported and paid the acquisition tax of KRW 43,050,000,000, which is the tax base of KRW 1,435,000 for the instant building, and KRW 59,90,00 for special rural development tax, and KRW 47,95,00 for local education tax (hereinafter “acquisition tax, etc.”) to the Defendant.

C. On June 15, 2015, the Plaintiff and the designated person filed a request for correction with the Defendant to the effect that “the instant building consists of 18 households in total, so acquisition tax shall be calculated for each household, and acquisition tax shall be applied 10/1,000 as acquisition tax by each household does not exceed 600 million won.” However, on June 25, 2015, the Defendant rejected the said request for correction on the ground that “the instant building is a detached house, and the acquisition tax rate of 10/1,00 shall be calculated based on the total acquisition value of the building, not on the acquisition value by each household, but on the basis of the total acquisition value of the building.” As acquisition value of the instant building exceeds 90 million won, the Defendant rejected the said request for correction on the ground that the said request for correction is governed by acquisition tax rate of 30/1

D. On July 10, 2015, the Plaintiff and the designated person again filed a request for correction, including acquisition tax, with the purport that “the instant building constitutes a multi-family housing, and thus, acquisition tax should be reduced or exempted by applying Article 31(1)1 (hereinafter “instant legal provision”) of the former Restriction of Special Local Taxation Act (amended by Act No. 13435, Jul. 24, 2015).” However, on July 17, 2015, the Defendant rejected the said request for correction on the ground that “the instant building is registered as a multi-family house on the building ledger, and it does not fall under the reduction or exemption under the instant legal provision, and thus does not constitute a multi-family housing” (hereinafter “disposition rejecting the correction of July 17, 2015”).

2. As to the application of the legal provisions of this case (related to a disposition rejecting correction as of July 17, 2015)

A. According to the legal provisions of this case, where a rental business operator under subparagraph 4 of Article 2 of the Rental Housing Act (including cases where a rental business operator is registered as a rental business operator within 60 days from the acquisition date of rental real estate) grants a reduction of or exemption from acquisition tax on a rental house acquired by a rental business operator to December 31, 2015, or where a apartment house or an officetel was first sold from a business owner pursuant to the latter part of Article 2, acquisition tax shall be exempted if the exclusive use area of such apartment house or officetel does not exceed 60 square meters. As to the definition of “multi-family housing” in the legal provisions of this case, Article 2(1)3 of the former Restriction of Special Local Taxation Act provides that “referring to multi-family housing under subparagraph 2 of Article 2 of the Housing Act, and a dormitory is excluded.” As such, the legal provisions of this case grant a rental business operator a reduction of or exemption from acquisition tax on a rental house acquired to promote stability of long-term residential life by facilitating the construction and sale of rental housing, and, in principle, limit the scope of reduction of rental housing.

Meanwhile, Article 2 subparag. 2 of the former Housing Act (amended by Act No. 13782, Jan. 19, 2016) provides that “multi-family housing” means housing with a structure wherein each household that jointly uses all or part of the walls, corridors, stairs, and other facilities of a building can carry on an independent residential life within one building, and its kind and scope shall be prescribed by Presidential Decree.” Article 2(1) of the former Enforcement Decree of the Housing Act (wholly amended by Presidential Decree No. 2744, Aug. 11, 2016; Presidential Decree No. 26974, Feb. 11, 2016; Presidential Decree No. 26974, Feb. 11, 2016; hereinafter the same shall apply) provides that “multi-family housing” shall be defined as “multi-family housing” as “multi-family housing” and Article 3-5 [Attachment 1] through 2(a) through (c) of the former Enforcement Decree of the Housing Act, and shall be defined as one of multi-family housing.

Under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted in accordance with the text of the law, barring special circumstances, and shall not be extensively or analogically interpreted without reasonable grounds. In particular, it accords with the principle of fair taxation with the principle of fair taxation (see Supreme Court Decision 2003Du7392, May 28, 2004).

In full view of the language and structure of the aforementioned relevant provisions, the purport of the instant legal provisions, especially the fact that the former Restriction on Special Local Taxation has separate provisions on “multi-family housing” as to “multi-family housing,” the “multi-family housing” exempted from acquisition tax pursuant to the instant legal provisions refers to apartment, tenement house, and multi-family housing as prescribed in Article 3-5 [Attachment Table 1] 2(a) through (c) of the former Enforcement Decree of the Building Act, and barring any special circumstance, multi-family housing as prescribed in Article 3-5 [Attachment Table 1] 1(c) of the former Enforcement Decree of the Building Act shall not

B. Examining the aforementioned facts in light of the aforementioned legal principles, it is reasonable to view that the Plaintiff and the designated person satisfied the requirements for multi-family houses under Article 3-5 [Attachment Table 1] subparag. 1(c) of the former Enforcement Decree of the Building Act and acquired the entire building of this case, which is a detached house, by 1/2 shares from the Nonparty as a single house. Thus, at the time of acquisition, the building of this case cannot be deemed to constitute a “multi-family housing” under Article 2(1)3 of the former Restriction of Special Local Taxation Act, and thus, it does not constitute an object of

C. In the same purport, the lower court determined that the instant building constitutes a multi-family house as a multi-family house, and that the multi-family house corresponding to a multi-family house cannot be deemed to be the same as a multi-household house corresponding to a multi-family house, and that the instant legal provision does not go against the principle of fair taxation to exclude a multi-family house from the object of exemption from acquisition tax, unlike a multi-household house, is justifiable. In so doing, the lower court did not err by misapprehending the legal doctrine on the scope of “multi-family house” and the principle of fair taxation.

On the other hand, the Supreme Court precedents cited in the grounds of appeal by the Plaintiff are either decisions that did not have a separate definition provision in the relevant statutes, or different cases, and thus are inappropriate to be invoked in the instant case.

3. With respect to the tax base and tax rate of acquisition tax (related to disposition rejecting correction on June 25, 2015);

According to the reasoning of the judgment below, the court below determined to the effect that the Plaintiff and the selected purchased the instant building in KRW 1,435,00,000, and that the instant building is a multi-family house that constitutes a single house and its entire is a single house, applying 30/1,000 to the acquisition tax rate of KRW 1,435,00,000, which is the acquisition price of the entire building of this case, is consistent with the literal interpretation of Article 11(1)8 of the former Local Tax Act (amended by Act No. 13427, Jul. 24, 2015; hereinafter the same).

Examining the record in accordance with the relevant legal principles, such determination by the lower court is justifiable. In so doing, it did not err by misapprehending the legal doctrine under Article 11(1)8 of the former Local Tax Act.

4. As to the omission of judgment

In the reasoning of a written judgment, it is sufficient to indicate the judgment on the party’s allegations and other means of offence and defense to the extent that it can be recognized that the text is fair, and there is no need to determine all allegations by the parties or methods of offence and defense (Article 8(2) of the Administrative Litigation Act, and Article 208 of the Civil Procedure Act). Therefore, even if the specific and direct judgment on the matters alleged by the parties is not indicated in the judgment of the court, if it is possible to find out that the assertion is quoted or rejected in light of the overall purport of the reasoning of the judgment, it cannot be deemed an omission of judgment, and even if it is obvious that the assertion is rejected even if the judgment was not actually made, there is no error of omission of judgment due to the lack of influence on the outcome of the judgment (see, e.g., Supreme Court Decision

Examining the reasoning of the judgment below in light of the records, the court below rejected the plaintiff's assertion that the act of excluding multi-family houses from acquisition tax exemption against the principle of fair taxation is unlawful. In the case of a new construction of a multi-family house, the plaintiff's assertion that it is unfair to treat multi-family houses as a single-family house in determining acquisition tax exemption, considering the same as that of multi-family houses. Even if the court below did not make an explicit decision on it, the above plaintiff's argument cannot be accepted and it cannot be seen as having affected the conclusion of the judgment, and there is no error of omission in the judgment of the court below. In addition, in applying Article 11 (1) 8 of the former Local Tax Act, the court below indirectly rejected the plaintiff's argument that the calculation of acquisition tax rate based on the total acquisition value of a multi-family house violates equity compared to that of multi-household houses. Thus, it cannot be said that there is no error of omission in the judgment of the court below as alleged in such judgment.

5. 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.

[Attachment] List of Appointeds: Omitted

Justices Min You-sook (Presiding Justice)