The Korea-U.S. S. S. S. S. S. S. S. S. S. S. S. S. S. S. S. S. S

Head of the tax office

May 24, 2011

1. The plaintiff's claim is dismissed.

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

The imposition of comprehensive real estate holding tax for the year 2008 and special rural development tax for the plaintiff who was imposed on November 24, 2008 and corrected on January 15, 2009 shall be revoked, respectively.

1. Details of the disposition;

A. The Plaintiff is a traditional temple under the Korean Traditional Temples Preservation Act and is the owner of the land of 37,965.62 square meters in total (hereinafter “instant land”). On the ground of the instant land, 194 lots of housing constructed without permission by local residents are located at 194, a collective village.

B. On November 24, 2008, the Defendant issued a disposition of imposition of gross real estate tax for the year 2008 under Article 7(1) of the former Gross Real Estate Tax Act (amended by Act No. 9273, Dec. 26, 2008; hereinafter “ Gross Real Estate Tax Act”) and special rural tax for KRW 16,746,490, on the ground that the land in this case was land annexed to a local resident’s house and the total amount of the published price exceeds 60 million (hereinafter “the disposition of imposition of KRW 83,732,490, and special rural tax for the year 2008”), but on January 15, 2009, the Defendant issued a disposition of imposition of KRW 73,983,960, and special rural development tax for the rural development tax for KRW 14,796,790, and each of the disposition of imposition of KRW 73,98,96,790.”

C. The Plaintiff, who was dissatisfied with the disposition of imposition of comprehensive real estate holding tax on November 24, 2008, filed a request with the Tax Tribunal for a trial on December 10, 2008, but the said request was dismissed on May 24, 2010.

[Reasons for Recognition] Gap evidence 1 to 4, Eul evidence 1, Eul evidence 2-1 and Eul evidence 2

2. Related statutes;

The indication of the former Act shall be omitted in the indication of the attached Form (hereinafter referred to as the "Act").

3. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Claim that the non-taxable property constitutes “in-land” (i.e., land)

The instant land is designated as a traditional temple preservation zone connected without the main facilities of the temple, and falls under the category of “in-depth land” of the property subject to non-taxation provided by Article 6(1) of the Comprehensive Real Estate Holding Tax Act, Article 186 subparag. 5 of the Local Tax Act, Article 137(2)5 of the Enforcement Decree of the Local Tax Act, Article 2 subparag. 3 of the Traditional Temple Preservation Act, and Article 2(1)5 or 6 of the Enforcement Decree of the Preservation of Traditional Temples Preservation Act, and the Plaintiff is not using the instant land for profit-making business. The instant disposition that imposes comprehensive real estate tax, etc. on the instant land, which falls under the non-taxable property

(ii) argument of lack of taxation requirements (ii)

The aggregate of the published prices of each building and the relevant annexed land, which constitute housing, is subject to comprehensive real estate holding tax for housing exceeding KRW 600 million. Since the aggregate of the published prices of each building on the ground of the instant land and the relevant annexed land does not exceed KRW 600 million in total, the instant disposition is unlawful.

(iii) argument that the land does not correspond to the land annexed to the building (III)

Article 11 of the Comprehensive Real Estate Tax Act, Article 182(1)2 of the Local Tax Act, and Article 131-2(1)2 of the Enforcement Decree of the Local Tax Act, the Defendant deemed that the instant disposition was rendered on the ground that the instant land falls under the land annexed to a building. However, the proviso of Article 131-2(1) of the Enforcement Decree of the Local Tax Act provides that “However, the instant disposition is unlawful since the instant land is a building for which permission, etc. is required under the provisions of relevant Acts and subordinate statutes, such as the Building Act, and which is not subject to permission, etc. and is not subject to approval for use (including approval for temporary use).” Since the instant land’s housing does not fall under the “land annexed to the building.”

B. Determination

1) Judgment on (1) Claim

Article 186 of the Local Tax Act, which applies mutatis mutandis to Article 6 (1) of the Comprehensive Real Estate Tax Act, provides that "if the property is used for profit-making business prescribed by the Presidential Decree and a fee is charged for the use thereof, and a part of the property is not used directly for its original purpose, the same shall not apply to the property or part thereof."

In full view of the purport of each statement in Eul evidence Nos. 9 and Eul evidence Nos. 11-3, the plaintiff can recognize the fact that the plaintiff received fees for the use of the land from the residents of the housing on the land of this case once a year. Thus, it is reasonable to view that the land of this case constitutes the "property used for profit-making business" as stipulated in the proviso of Article 186 of the Local Tax Act because the land of this case is used for the residential purpose of the residents of the area. Even if so, as seen earlier, since the land of this case is used for the residential purpose of the residents of the area, it falls under the "cases where it is not used directly for the purpose" of the Buddhist Temple Preservation Act as stipulated in Article 2 (1)-5 of the Enforcement Decree of the Korean Traditional Temple Preservation Act, and as alleged by the plaintiff, it is difficult to view it as the "land owned by temple, which is used for the preservation of the dignity or scenic view of inspection or the land closely related to the inspection concerned" as the land within the temple management.

Therefore, this case’s land does not constitute property subject to non-taxation under Article 186 of the Local Tax Act, and thus, the Plaintiff’s above assertion is without merit.

(2) Judgment on the claim

Article 7(1) of the Gross Real Estate Tax Act provides that “the aggregate amount of published prices of all houses subject to property tax in Korea shall exceed 600 million won,” which is a requirement for the liability to pay property tax on housing. Thus, if the aggregate amount of published prices of all houses subject to property tax in Korea owned by the relevant owner exceeds 600 million won, the liability to pay property tax on housing shall arise. Although the owners of each building constructed on the land in this case are different, it cannot be interpreted that the liability to pay property tax on housing should exceed 60 million won, as alleged by the Plaintiff, even if the owners of each building constructed on the land in this case are different. Therefore, the Plaintiff’s above assertion

3) Judgment on the claim

The instant disposition is merely the “comprehensive real estate holding tax on housing” under Article 7(1) of the Comprehensive Real Estate Holding Tax Act, and it is difficult to view that the proviso of Article 131-2(1) of the Enforcement Decree of the Local Tax Act is applicable since the “comprehensive real estate holding tax on land” based on Article 11 of the Comprehensive Real Estate Holding Tax Act, Article 182(1)2 of the Local Tax Act, and Article 131-2(1)2 of the Enforcement Decree of the Local Tax Act is not the “comprehensive real estate holding tax on land,” as alleged by the Plaintiff. In addition, in full view of the purport of the entire pleadings in each entry of Gap evidence No. 2, Eul evidence No. 3-3, and Eul evidence No. 5-1 and 5-10, it can be recognized that the Plaintiff paid property tax on the ground that there are many buildings permitted under relevant statutes on the instant land exist on the instant land

4. Conclusion

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

[Attachment Form 5]

Judges Lee Jae-hee (Presiding Judge)

Judges cannot sign and seal by leave of absence