Freeboard District Housing Association (Law Firm Won, Attorneys O Sung-jin et al., Counsel for the plaintiff-appellant)

The Nam-gu Incheon Metropolitan City

April 15, 2010

1. The Defendant’s imposition of acquisition tax of KRW 263,50,980 against the Plaintiff on May 11, 2009 and additional tax of KRW 869,570, respectively, and the imposition of KRW 26,350,780 and additional tax of KRW 86,950 shall be revoked in entirety.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff is a regional housing association established pursuant to Article 32 of the Housing Act for the purpose of a joint housing construction project. The Plaintiff purchased a parcel of land 184 (hereinafter “the entire project site of this case”) from February 24, 2004 to March 9, 2006, including land number 1 omitted), which was contributed by the Plaintiff’s members (hereinafter “members”) and completed the registration of transfer due to the disposal of trust property in the Plaintiff’s name. The Plaintiff reported and paid all acquisition tax and registration tax on the above land every time. The entire project site of this case was completed the division adjustment on three lots of land, such as land number 2 omitted), lot number 3 omitted (number 3 omitted), and lot number 4 omitted on May 19, 2009, and each registration of ownership transfer was completed due to the trust of the Plaintiff in the name of the Plaintiff on the same day.

B. The Plaintiff completed the construction of new apartment units and obtained approval for use on March 31, 2009, and transferred part of the land of the above three parcels of land partitioned and adjusted on May 29, 2009, which is part of the site of the newly constructed apartment, to the association members for reasons of attribution of trust property by share.

C. On April 23, 2009, the Defendant imposed acquisition tax of KRW 263,50,350,780 and special rural development tax of KRW 26,350 and KRW 26,780 on the land for sale in general (number 2 omitted) remaining after transferring to the union members as above among the land for sale in common (number 2 omitted) in the Nam-gu Incheon Metropolitan City (number 2 omitted) and KRW 14,494 square meters of land for sale in common (number 2 omitted) and the land for sale in common (hereinafter “land for sale in common in this case”) on the Plaintiff, but imposed acquisition tax of KRW 263,50,980 and additional tax of KRW 869,570 and special rural development tax of KRW 263,50,980 on May 11, 2009, and additional tax of KRW 266,350,780 and penalty tax of KRW 86,950 on it (hereinafter “instant”).

[Ground of recognition] Facts without dispute, Gap evidence 2 through 7, Eul evidence 1 and 8 (including each number), Gap evidence 1-1, the purport of the whole pleadings

2. Whether the disposition of this case is legitimate

(a) Related Acts and subordinate statutes;

It is as shown in the attached Table related statutes.

B. Determination

1) The Plaintiff, when acquiring the entire project site of this case from a third party, shall not be deemed to have already acquired the land for general sale of this case among the project site of this case by the Plaintiff, not the association members. Since then, the Plaintiff cannot be deemed to have newly acquired the land for general sale from the association members when the Plaintiff transferred all the land for general sale of this case to the association members due to the reversion of trust property. The Plaintiff asserts that the disposition of this case, on the premise that the Plaintiff had already paid the acquisition tax on the land for general sale of this case after the completion of the transfer of the land for general sale of this case, is contrary to

The defendant asserts that the disposition of this case on the premise that the plaintiff newly acquired the land of this case for general sale after the completion of the transfer of the land for general use of this case for the plaintiff's association members, as well as the land for general use of this case for general sale of this case, shall be deemed to have been acquired by the union members when the plaintiff acquired the land of this case from a third party. Thus, the plaintiff newly acquired the land for general sale of this case from the union members only when the plaintiff transferred all of the land for common use of this case to the union members due to the reversion of trust property. Thus, the plaintiff's acquisition tax, etc. paid for the land of this case for general sale of this case on the land of this case for general use of this case on the premise that the plaintiff newly acquired the land for common use of this case after the transfer of

2) In general, “acquisition”, which is subject to acquisition tax, is a formal or actual acquisition. However, according to Article 110 subparag. 1 of the Local Tax Act, among exceptions to the acquisition of trust property under a trust under the Trust Act by a trustee due to the concurrent registration of a trust, the acquisition tax is not imposed on ① acquisition where a truster transfers the trust property to a truster due to the completion or termination of the trust, ② acquisition where a trustee transfers the trust property to a truster due to the trustee’s replacement, ③ acquisition of the trust property, ③ transfer of the trust property to a new trustee due to the replacement of the trustee. However, acquisition of real estate between a housing association and its members shall be excluded from acquisition tax exemption: Provided, That under Article 105(10) of the Local Tax Act, real estate for association housing (referring to multi-family housing, incidental facilities, welfare facilities, and land annexed thereto) acquired by a housing association for its members, but the association is deemed to have acquired real estate not attributable to its members.

(2) Comprehensively taking account of the above provisions under the Local Tax Act, the land ultimately reverted to the association members among the land newly built in the housing construction project implemented by the housing association (hereinafter referred to as “land for the association members”; the housing association acquires the project site from a third party in money invested by the association members; and the housing association additionally registers the project site from a third party; and the housing association, as a trustee, acquires the land for the association members as a result of the conversion of money used for the association into the project site by subrogation, the housing association is deemed to have acquired the land for the first time under the proviso to Article 105(10) of the Local Tax Act, so it shall be deemed that the land for the association members acquired the land for the first time in the name of the association members, and thus, it shall be deemed that the land for the association members acquired the land for the first time in the name of the association members to acquire it from the first third party; thus, it shall be deemed that the land for the first time to acquire the land for the association members and the association are not subject to imposition of acquisition tax under the proviso to Article 10 of the Local Tax Act.

Therefore, as to the instant case, it is deemed that the Plaintiff acquired the land for general sale in the instant case from the first third party, so the Defendant’s assertion premiseding that the first purchaser of the land for general sale in the instant case is a partner is without merit. The fact that the Plaintiff paid acquisition tax, etc. on the entire project site including the land for general sale in the instant case when the Plaintiff acquired the entire project site from the first third party is identical as seen earlier. Therefore, the disposition of this case imposing acquisition tax, etc. on the land for general sale in the instant case is unlawful since it was a double taxation.

3. Conclusion

Therefore, the plaintiff's claim is reasonable and acceptable, and it is so decided as per Disposition.

[Attachment Form 5]

Judges Embunwon (Presiding Judge) Cho Young-ho et al.