Whether a contract for the sale of land within the land transaction permission area is liable to report and pay acquisition tax where a flexible invalidation is found due to the lack of land transaction permission (negative); and where a contract for the sale of land becomes final and conclusive due to such reasons as obtaining land transaction permission after the date of acquisition under Article 73(1) of the former Enforcement Decree of the Local Tax Act or after the outstanding payment date of the contract, the deadline for filing and paying acquisition tax (=within 30 days from the date the contract for the sale becomes final and conclusive

Article 120(1) of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) provides that a person who acquires an object of taxation of acquisition tax shall file and pay the amount of tax within 30 days from the date of acquisition. In light of the substance and legislative intent of the aforementioned provision, if a sale and purchase contract for land within an area subject to land transaction permission fails to obtain land transaction permission and is in a flexible invalidation state due to a failure to obtain a land transaction permission, it cannot be said that the sale and purchase contract becomes effective upon the actual or contractual payment date determined as the date of acquisition under each subparagraph of Article 73(1) of the former Enforcement Decree of the Local Tax Act (wholly amended by Presidential Decree No. 22395, Sept. 20, 2010). Thus, it is reasonable to interpret that the acquisition tax should be reported and paid from the time when the sale and purchase contract becomes final and conclusive due to such reasons as obtaining a land transaction permission or cancelling the designation of land transaction permission.

Article 120(1) of the former Local Tax Act (wholly amended by Act No. 1021, Mar. 31, 2010; see current Article 20(1)); Article 73(1) of the former Enforcement Decree of the Local Tax Act (wholly amended by Presidential Decree No. 22395, Sept. 20, 2010; see current Article 20(2)) (see current Article 20(2))

[Plaintiff-Appellant] Hank Co., Ltd. and one other (Attorney Jeong Byung-chul et al., Counsel for plaintiff-appellant)

port of destination

Seoul High Court Decision 2012Nu4137 decided June 13, 2012

All appeals are dismissed. The costs of appeal are assessed against each appellant.

The grounds of appeal are examined.

1. Regarding the plaintiffs' grounds of appeal

Articles 106(2) and 126(2) of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) provide that no acquisition tax and registration tax shall be imposed on real estate acquired on the condition that it reverts or donated to the State or a local government.

After compiling the adopted evidence, the court below acknowledged the facts as stated in its holding, and determined that the land at issue of this case did not constitute "real estate acquired on the condition of reversion or donation to the State or a local government" under Articles 106 and 126 of the former Local Tax Act, on the ground that the land at issue of this case was purchased under the conditions that it would not be known that the land at issue of this case would belong to or contributed to the State or a local government before the date of public announcement of the authorization of the implementation plan, and that the time when the plaintiffs concluded a sales contract for acquiring the land at issue of this case and paid the price was purchased under the conditions that it would not be known that the land at issue of this case would belong or contributed to the State or a local government.

In light of the above provisions, legislative purport, and records, although the reasoning of the court below is somewhat insufficient, the above fact-finding and judgment are acceptable. Contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of legal principles as to Articles 106(2) and 126(2) of the former Local Tax Act and the principle of good faith.

2. As to the Defendant’s ground of appeal

Article 120(1) of the former Local Tax Act provides that a person who acquires an object of taxation of acquisition tax shall report and pay the amount of tax within 30 days from the date of acquisition. In light of the aforementioned provisions and legislative intent, if a sales contract for land within an area subject to land transaction permission is under the dynamic invalidation because it did not obtain land transaction permission, even if the actual or contractual payment date stipulated at the time of acquisition under each subparagraph of Article 73(1) of the former Enforcement Decree of the Local Tax Act (wholly amended by Presidential Decree No. 22395, Sept. 20, 2010), it cannot be said that the sales contract has become final and conclusive, and thus, there is no obligation to report and pay acquisition tax. Thus, since acquisition tax and payment under Article 120(1) of the former Local Tax Act should be interpreted within 30 days from the time of reporting and payment of acquisition tax under Article 120(1) of the former Local Tax Act.

In the same purport, the court below is just in holding that the disposition imposing additional tax on the premise that the return and payment of acquisition tax, etc. on the land at issue were made lawfully within 30 days from the date of permission for land transaction or the date of cancellation of designation of land transaction permission, and thus, the disposition imposing additional tax at issue was unlawful, contrary to what is alleged in the grounds of appeal.

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against each appellant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Yong-deok (Presiding Justice)