(a) Whether land under a construction plan deliberation falls under the category of non-taxation on the aggregate land tax as provided in subparagraph 2 of Article 234-12 of the Local Tax Act (negative);

(b) Where the aggregate land tax is not imposed pursuant to subparagraph 1 of Article 234-12 of the same Act, whether the aggregate land tax shall be exempted in whole during the relevant year even if the period used for official or public use falls short of one year (affirmative)

A. “Land directly used for business” or “construction of a building” under Article 234-12 subparag. 2 of the Local Tax Act shall not be deemed to include cases where the building is actually being directly used for the intended business or is under construction, and where the building is prepared to be directly used for the intended business. Thus, even if it was under deliberation after filing an application for deliberation of a construction plan as a pre-stage stage, it is merely a preparatory work for constructing a building to be directly used for the intended business, and it shall not be deemed to have been directly used for the business, or that the building was under construction. Even if the land was not directly used for the intended business without any special reason by the permitting authority, it shall not be deemed to have been exempt from the aggregate land tax, unless it is actually used for the business.

(b) In determining whether or not a land falls under the land subject to a non-taxation on the aggregate land tax as provided in subparagraph 1 of Article 234-12 of the same Act, the aggregate land tax to be imposed in the current year shall be judged according to the current status of land as of the tax base date, but if it is used for official or public use for a considerable

Article 234-12 subparagraph 1, and Article 234-12 subparagraph 2, of the Local Tax Act

Attorney Choi Jong-won, Counsel for the defendant-appellant

The head of Yeongdeungpo-gu Seoul Metropolitan Government

Seoul High Court Decision 91Gu23440 delivered on August 18, 1992

The judgment below is reversed and the case is remanded to Seoul High Court.

(1) We examine the first ground for appeal.

According to the reasoning of the judgment below, the court below rejected the plaintiff's claim that the land under the construction plan deliberation cannot be deemed to be a "land annexed to a building under construction" subject to non-taxation under the above provision, since the plaintiff's land is being used directly for the plaintiff's unique business and is being used for the plaintiff's own business, and thus, the land under construction plan deliberation cannot be deemed to be a "land annexed to a building under construction" under Article 234-12 subparagraph 2 of the Local Tax Act.

The provisions on the requirements for non-taxation or tax reduction and exemption are established precedents that result in a result contrary to the principle of tax equity, and thus strict interpretation as well as the provisions on the requirements for taxation. (See Supreme Court Decision 83Nu213, Dec. 27, 1983; Supreme Court Decision 83Nu709, Jun. 26, 1984; Supreme Court Decision 89Nu7191, May 22, 1990). Article 234-12 of the Local Tax Act and the Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 13536, Dec. 31, 1991) stipulate that the land under construction cannot be directly used for the same business as the land for which the non-taxation or non-taxation business operator directly uses the building for the same purpose, and thus, it cannot be viewed that the land is not directly used for the purpose of construction of the building, or that the land is not directly used for the purpose of construction of the building.

(2) We examine the second ground for appeal.

According to the reasoning of the judgment of the court below, the court below rejected the plaintiff's assertion that since the Ministry of National Defense used the land of this case as a site for accommodation and auxiliary facilities of the Armed Forces for the commemorative event from May 1, 1990 to December 31, 199, for eight months from May 1, 1990 with the plaintiff's consent, it shall be exempted pursuant to Article 234-12 subparagraph 1 of the Local Tax Act, since the plaintiff acquired the land of this case for a long time, it cannot be viewed that the above temporary use of the land of this case constitutes a non-taxable land tax of the above provision

Article 234-12 subparag. 1 of the Local Tax Act provides that the aggregate land tax shall not be imposed on “land used for public or public purposes” by the State, Do, Si, Gun, or local organization associations, as property tax with a revenue-free nature, which recognizes the capacity to pay taxes on the land owned by them, during each year’s possession of the land (see Supreme Court Decision 92Nu1568, Dec. 22, 1992). However, as long as the aggregate land tax is of the nature as profit-making tax, there is no basis for imposing aggregate land tax equivalent to the profit-making capacity during the period in which the land owner is subject to the restriction on the right to use, and as such, it cannot be interpreted that it excludes a minimum period of time to be used for public or public purposes under the principle of no taxation without law, it cannot be interpreted that the land is exempt from taxation for a period of less than 1 year under Article 234-14 of the Local Tax Act, and if the land is used for a considerable period of time during the current year, it shall not be imposed on the aggregate land tax for 19 years.

(3) Therefore, we reverse and remand the judgment below. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Final Young-young (Presiding Justice)