Cho High Court Decision 201Do2895 (OO1, 2013)

land sold with knowledge of the fact that the land was already designated as an urban environmental improvement area at the time of acquisition;

While the land at issue was leased, it was subject to heavy taxation due to the amendment of the law, but it is not a new legal restriction on the use or disposal of the land at issue, and it is not a case where the land at issue is not used for business purposes due to the amendment of the law. Therefore, the initial disposition imposed on the land at issue is justified

Article 55-2 of the Corporate Tax Act (Special Taxation on Income accruing from Transfer)

2013Guhap17305 Disposition of revocation of imposition of corporate tax

AAA, Inc.

head of Sung Dong Tax Office

April 10, 2014

May 1, 2014

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

On May 6, 2011, the Defendant revoked the imposition of the corporate tax of the Plaintiff on May 6, 201, as the corporate tax of the year 2007.

1. Details of the disposition;

A. The Plaintiff completed the registration of incorporation on November 17, 1962 for the purpose of printing business as a corporation established by the investment of employees belonging to BB bank.

B. On May 23, 1978, the Plaintiff purchased 796m20.3m2, including 22-1m2, 324.6m2, 22-3m2, 22-4m2, and 284m2 (hereinafter “instant land”) from O0.0 to 25m2.0, the Plaintiff was subject to an investigation by the Director of the Regional Tax Office of 2000, 2000 to 3m27m2, and the Plaintiff was subject to an investigation by the Director of the Regional Tax Office of 200, 100, 2000, 200, 2000, 200, 200, 200, 200, 200, 30,000,000,000,000,000,000,000 won.

[Ground of recognition] Evidence Nos. 3 through 7, Evidence Nos. 1 through 4, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Whether the land constitutes non-business land

Since the Plaintiff acquired and owned the instant real estate without speculative purpose and was subjected to a sudden expropriation, it constitutes an inevitable circumstance that does not constitute a non-business land pursuant to Article 55-2(3) of the former Corporate Tax Act and Article 92-11(3)2 or 4 of the former Enforcement Decree of Corporate Tax Act (amended by Presidential Decree No. 21063, Oct. 7, 2008).

The Plaintiff, while leasing the instant land toCC, was newly established on December 31, 2005 under Article 55-2(1)3 of the former Corporate Tax Act, and did not have any opportunity to use the instant land as business land. In addition, if the price of the instant land was included in the rearrangement zone for the urban environment improvement project, and thus, the Plaintiff could not sell it to the project implementer, the price of the instant land would not be determined depending on the project implementation authorization date, the Plaintiff would be subject to any inevitable factors, and thus, the instant disposition is unreasonable. The instant disposition is limited to the principle of self-responsibility and goes against the principle of tax equality.

2) Whether the land constitutes the land for depository

Land annexed to the portion of the instant land, which is used by the ChungcheongCC for the purpose of the ground storage, storage, downstream, etc., constitutes land for business.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

(c) Fact of recognition;

“1) The Plaintiff from December 1, 1984 to place the instant land as its place of business, and the mutual E parking lot.

FUnemployment Co., Ltd. EE parking lot

The FFUnemployment, Inc., changed its place of business to OO, and started parking business. 2) The land in this case was subject to general aggregate taxation under the Local Tax Act from 1997 to 2007.

"3) On June 27, 200, the Plaintiff leased 730.29m29m2 toCC for the purpose of 794.40m2. After July 6, 2001, CC changed the leased area to 794m2.40m2. 4) On July 7, 200, 200, CC had obtained a new construction permit from the head of Jung-gu Seoul Special Metropolitan City (hereinafter referred to as "the head of Jung-gu") on the 2nd floor (448.9m2, 89m2, 897.9m2, 30m2, 200, 100 m2, 200 m2, 100 m2, 200 m2, 100 m2, 200 m2, 200 m2, 100 m2, 200 m2, 200 m2.

7) The instant land and its daily price were designated as an urban environmental improvement zone on September 6, 1973 (Public Notice No. 368 of the Construction Part), and the decision was made on July 14, 1976 to change the designation of an urban environmental improvement zone and the approval of a project plan (Public Notice No. 104 of the Construction Part). On April 12, 2007, there was a change in the designation of an urban environmental improvement zone of the OO zone and the OO zone No. 6 districts, and the head was designated as the project implementer around that time. D was subject to the project implementation authorization on December 20, 207 (Public Notice No. 2007-97 of the Jung-gu Seoul Metropolitan Government Public Notice No. 2008-26 of the Construction Part) and the management and disposal plan on April 21, 2008 (Public Notice No. 2008-26 of the Jung-gu Seoul Special Metropolitan City Public Notice).

[Ground of recognition] The types of Gap evidence Nos. 1 through 7, 10, Eul evidence Nos. 4 through 11, Gap evidence Nos. 8 and 9 (tentative number Nos. 8 and 9) and the purport of the whole pleadings

D. Determination

1) Whether the land constitutes non-business land

Article 55-2 (1)-2 (2) of the former Corporate Tax Act provides that "The land, other than farmland, forest land, and wooden agents, for which the property tax is exempt or exempted, the land which is subject to separate aggregate of property tax or separate taxation, the land which is reasonably related directly to the corporation's business, excluding the land prescribed by Presidential Decree, shall be paid by adding 30/10 to the income from the transfer of land, etc." (Article 55-2 (3) of the former Corporate Tax Act provides that "if the land falls under the land for non-business due to prohibition of use due to the provisions of Acts and subordinate statutes after the acquisition of the land and other inevitable reasons prescribed by Presidential Decree, it may not be deemed the land for non-business use as prescribed by Presidential Decree." Accordingly, Article 92-1 (3) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 20720, Feb. 29, 2008; hereinafter the same shall apply) shall be purchased by consultation or expropriated in accordance with the Act and the Compensation Act for 20.

4. In addition, considering the statutory restrictions due to public interest or inevitable reasons, the current status of land, the reason for its acquisition, or the situation of its use, etc., the land falling under the inevitable reasons prescribed by the Ordinance of the Ministry of Finance and Economy shall not be deemed the land for non-business use. B) Article 92-11(3)2 of the former Enforcement Decree of the Corporate Tax Act, which was in force at the time of the transfer of the land of this case, excluded the land from the land for non-business use before December 31, 2006, which was prior to the enforcement of the heavy taxation provision on the land for non-business use. D is authorized to implement the project on December 20, 207, and D is the same as in the above facts of recognition. Accordingly, the land of this case does not fall under Article 92-11(3)2 of the former Enforcement Decree of the Corporate Tax Act.

On the other hand, the Plaintiff had already been designated as an urban environmental rearrangement zone at the time of acquiring the instant land. The Plaintiff acquired the instant land with the knowledge of such circumstance. However, the case where the Plaintiff may not be deemed as a non-business land pursuant to Article 92-11(3)4 of the former Enforcement Decree of the Corporate Tax Act refers to the case where the land cannot be used for business due to changes in circumstances after acquiring the relevant land. As such, even if the Plaintiff acquired the instant land after the designation of the rearrangement zone, it cannot be deemed as a case where the use of the instant land was restricted due to the acquisition of the instant land and thus, it cannot be deemed as a case where there is a statutory restriction similar to the instant land prohibited or restricted pursuant to the statutes after acquiring the instant land. Moreover, there is no evidence to recognize that the Plaintiff was unable to use the instant land for business purposes, even though the Plaintiff was subject to heavy taxation due to the amendment of the statutes during the lease of the instant land, and it does not constitute a case where the instant land was transferred for business purposes. Therefore, it does not fall under Article 92-13(4).

C) Article 92-11(3)2 of the former Enforcement Decree of the Corporate Tax Act was amended as follows.

Enforcement Date

Details of the amendments

January 1, 2007 (Presidential Decree No. 19255, December 31, 2005)

Land which is purchased by consultation or expropriated pursuant to the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor and other Acts, and of which business authorization is published before December 31, 2006.

Application from the first transfer after this Decree enters into force (Presidential Decree No. 21063, October 7, 2008)

Land which is purchased by consultation or expropriated pursuant to the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor and other Acts, and of which business authorization is published before December 31, 2006 or of which acquisition date is ten years before the business authorization is published;

Application from the first report filed after this Decree enters into force (Presidential Decree No. 21302, February 4, 2009, amended and enforced)

Land which is purchased by consultation or expropriated pursuant to the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor and other Acts, and of which business authorization is published before December 31, 2006 or of which acquisition date is five years before the business authorization is published;

Article 5-2 of the former Corporate Tax Act (amended by Act No. 7838, Dec. 31, 2005) which provides for heavy taxation on capital gains on non-business land was enforced on January 1, 2007, and the former Enforcement Decree of Corporate Tax Act (amended by Presidential Decree No. 19255, Dec. 31, 2005) related to the criteria for recognition of non-business land was enforced on January 1, 2007. Following the amendment of Article 92-11(3)2 of the former Enforcement Decree of Corporate Tax Act, the land subject to reporting of corporate tax in March 2009 has been transferred during the business year of 208, and the land subject to reporting of corporate tax in March 2009 has also been extended from the date of acquisition to the date of public announcement of the acquisition.

The legislative purpose of imposing corporate tax on capital gains on non-business land is to classify land transferred by a corporation without using it for productive purposes according to its actual demand and impose corporate tax on capital gains from the transfer of land (see Supreme Court Decision 2010Du17281, Oct. 25, 2012). Meanwhile, the legal provision that does not impose or reduce taxes or imposes new obligations on the legislative person, unlike restricting the rights of the people, is recognized as a more broad legislative formation freedom, so the legislators are entitled to do so by themselves, taking into account the legislative purpose, situations of beneficiaries, national budget, etc., and the law so enacted cannot be deemed as unconstitutional unless its content is clearly lacking in rationality (see Supreme Court Decision 201Hun-Ba206, Apr. 26, 2007; 2010Hun-Ba206, Jul. 24, 2019). 201).

In addition, it is a reasonable means to achieve the purpose of determining whether the land is subject to heavy taxation on the basis of non-business land that reasonably reflects the difference in direct relations between the land and the business of a corporation. Even if the land held for a long time is not related to the business, it falls under the land for non-business, and is basically included in the scope of land for non-business for a long time under Article 92-11 (3) 2 of the former Enforcement Decree of the Corporate Tax Act. Under the interpretation of statutes, the legislators cannot be said to have a legislative duty to recognize exceptions to the land held for a long time. The heavy taxation on the transfer of land for non-business is a heavy taxation on the acquired portion of the land acquired by the corporation by transferring the land for non-business, and thus does not go against the principle of self-responsibility under the Constitution.

The principle of equality is to prohibit a legislative person from arbitrarily treating the same essentially differently from what is essentially different in nature. Although the transfer according to an urban rearrangement project has distinct characteristics, the heavy taxation provision on non-business land is to restrain the acquisition of non-business land, and there is a difference in determining the timing of transfer, and it is not an essential element that should be treated differently from the general transfer in that it does not use land in relation to the business.

2) Whether the land constitutes the land for depository

Article 92-8 (1) 7 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 20720 of Feb. 29, 2008) provides that "land not exceeding 120/100 of the maximum area used for storing and managing goods is land for storing and managing goods during the pertinent business year, such as a storage, open storage, storage, storage, etc., which is installed and used separately for storing and managing goods, and there is a reasonable ground to recognize that it is directly related to the corporation's business"; and (1) under the following circumstances recognized in the above recognition, the Plaintiff leased the land toCC, namely, ① the Plaintiff leased the land of this case to the second floor and the second floor used the land as a storage, ② the Plaintiff did not report the land of this case to the storage, ③ the Plaintiff leased the entire land of this case, not divided into the land of this case, ④ the land of this case into the storage, etc., under the premise that the land of this case was partially moved into the storage."

3. Conclusion

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