Seoul High Court Decision 200Na1448 delivered on August 1, 200

Market for the United States

December 23, 2010

1. The imposition disposition of each property tax and local education tax by the Defendant on May 7, 2009 against the Plaintiff is revoked.

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 operating a membership golf club in the Dong-si, U.S., U.S., U.S., U.S. (number omitted).

B. On the underground of the golf course in the above golf course, water sprinkler facilities (hereinafter “water sprinkler facilities of this case”) are installed to spread water for turf management.

C. On May 7, 2009, the Defendant deemed that the instant slaughter facilities constituted water supply and drainage facilities, separate from the said golf course’s land, and rendered the instant disposition imposing property tax and local education tax on the Plaintiff on May 7, 2009, as shown in the attached Table, from the portion reverted to the year 2004 to the portion reverted to the year 2008.

D. On July 28, 2009, the Plaintiff filed an appeal seeking the revocation of the instant disposition with the Tax Tribunal, but was dismissed on April 19, 2010.

[Ground of recognition] Facts without dispute, entry of Gap evidence 1-3, and evidence Nos. 1-2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The instant slaughter facility is an accessory to the land of a golf course, and is merely a part of the land, not subject to independent property tax (hereinafter “principal 1”).

(2) The Plaintiff paid the property tax on the land of the golf course, and the property tax on the land of the golf course includes the amount equivalent to the property tax on the water intake facilities of the instant case, thus, imposing the property tax on the water intake facilities of the instant case constitutes double taxation (hereinafter “main place”).

(3) The instant sprinkler facilities are not subject to the classification registration under the Installation and Utilization of Sports Facilities Act (hereinafter “Sports Facilities Act”), and thus are not subject to the heavy taxation of property tax (hereinafter “principal”).

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Judgment on the assertion No. 1

Article 181 of the Local Tax Act provides that property tax shall be subject to assessment of a building. Article 180 Subparag. 2, Article 104 Subparag. 4, and Article 75-2 Subparag. 5 of the Enforcement Decree of the same Act include water pipes, water supply pipes, water supply and drainage facilities, including connecting facilities. Therefore, water supply pipes, water supply and drainage facilities of this case constitute a building subject to assessment of property tax. As alleged by the Plaintiff, the water treatment facilities of this case cannot be said to be a building subject to assessment of property tax on the ground that it is difficult for the water treatment facilities of this case to significantly or independently sell land, contribute to the valuation of land, or it is an consumable facility that cannot create any separate profit. Ultimately, the assertion ① is without merit.

(2) Judgment on the assertion 2

Article 181 of the Local Tax Act provides that the land shall be subject to property tax, and Articles 187(1) and 111(2) of the same Act provide that the land, the price of which is publicly announced under the Public Notice of Values and Appraisal of Real Estate Act (hereinafter “Real Estate Appraisal Act”) shall be determined based on the publicly announced price considering the trend of the real estate market, the conditions of local finance, etc. In addition, Article 41(1) of the Standard Land Appraisal and Assessment Act provides that the site for a golf course shall be assessed according to the cost method, and the construction cost and its incidental expenses shall be calculated by subtracting the amount equivalent to the amount required for the installation of management facilities (referring to all buildings within a golf course, such as a golf club, warehouse, and sewage treatment facility) within a golf course that is not solid in the land.

According to the above provisions, expenses incurred in installing water pipes, water pipes, and water supply and drainage facilities, which cannot be deemed as management facilities in the instant golf course area, are included in the construction cost of the site for golf course and incidental expenses, thereby affecting the officially assessed land price of the site for golf course. However, even if such influence is affected, the expenses incurred in installing water pipes, water supply and drainage facilities as above are merely one means to determine the officially assessed land price of the site for golf course, i.e., the increase of the officially assessed land price of the site for golf course, and it is difficult to view that the tax base of the property tax for water pipes, water supply and drainage facilities is included in the tax base of the

Therefore, there is no reason to argue that the instant disposition is a double taxation.

(3) Judgment on the assertion No. 3

Article 18 (1) 2 (a) of the Local Tax Act provides that 40/1,00 of the tax base amount shall be the standard tax rate in the case of golf courses under the provisions of Article 112 (2) of the same Act. Article 112 (2) 2 of the same Act provides that golf courses are land, buildings and standing timber subject to classification registration among real estate for membership golf courses under the Sports Facilities Act.

However, Article 19(1) of the Sports Facilities Act and Article 20(3) of the Enforcement Decree of the same Act provide that a person who intends to register a membership golf course business shall register the land and buildings, including golf courses in the relevant golf course, parking lots and roads, tidal suspension, landscaping areas used for the operation, maintenance, and management of the golf course, management facilities (including office rooms, resting facilities, shops, stores, warehouses, and all other buildings within the golf course, but excluding buildings not directly used for the golf course, such as swimming pools, tennis courts, golf practice ranges, training facilities, sewage treatment facilities, and solar-use facilities, etc.), and land annexed thereto, and land used for the maintenance and management of the golf course, including water pipes, water supply pipes, water supply and drainage facilities, and buildings with water supply and drainage facilities, which are not subject to separate registration, and such construction is not subject to strict interpretation under Article 104(4)2 of the Local Tax Act, and such construction is not subject to strict interpretation under Article 57-2 of the Enforcement Decree of the Local Tax Act.

Therefore, the standard tax rate under Article 188 (1) 2 (a) of the Local Tax Act (Article 188 (1) 2 (d) of the Local Tax Act (amended by Act No. 7332 of Jan. 5, 2005) shall apply to the property tax belonging to the year 2004).

Ultimately, each of the property taxes and local education taxes imposed by the Defendant calculated and imposed by applying 40/1,00 (50/1,000 in the case of property tax belonging to year 2004) which is the standard tax rate under Article 188(1)2(a) of the Local Tax Act on the premise that the instant water treatment facilities are subject to separate registration is subject to separate registration is unlawful, and the allegation is justified.

3. Conclusion

Thus, the plaintiff's claim of this case is justified and accepted.

[Attachment]

Judges Lee Jin-hun (Presiding Judge)