A person who serves as a basis for determining whether the requirements for non-taxation or reduction of acquisition tax under the proviso of Article 105(6) of the former Local Tax Act are met at the time of deemed acquisition by an oligopolistic stockholder (i.e.

Article 105 (6) of the former Local Tax Act (amended by Act No. 5406, Aug. 30, 1997) which provides for a person liable to pay acquisition tax shall be deemed to have acquired real estate, vehicle, construction, machinery, standing timber, aircraft, golf membership, or condominium membership of the juristic person in question if the person becomes an oligopolistic stockholder pursuant to subparagraph 2 of Article 22 by acquiring the stocks or shares of the juristic person from the stockholders or members of the juristic person. The proviso of the same paragraph provides that the same shall not apply to the portion of non-taxation or reduction of acquisition tax pursuant to this Act and other Acts and subordinate statutes. Thus, the term "cases where acquisition tax is non-taxation or reduction" refers to cases where deemed an oligopolistic stockholder falls under the requirements for non-taxation or reduction under the provisions of the Local Tax Act or other Acts and subordinate statutes. Thus, since the juristic person is exempted from acquisition tax while acquiring real estate, it does not immediately exempt the person liable to pay

Articles 22 subparag. 2 and 105(6) of the former Local Tax Act (amended by Act No. 5406 of Aug. 30, 1997)

Plaintiff (Attorney Lee Jong-soo et al., Counsel for plaintiff-appellant)

Budget Head of budget

Seoul High Court Decision 98Nu14688 delivered on May 27, 1999

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

Article 105 (6) of the former Local Tax Act (amended by Act No. 5406, Aug. 30, 1997; hereinafter referred to as the "Act") which provides for a person liable to pay acquisition tax shall be deemed to have acquired real estate, vehicles, construction, machinery, standing trees, aircraft, golf membership rights, or condominium membership rights of the relevant corporation when the person becomes an oligopolistic stockholder pursuant to subparagraph 2 of Article 22 by acquiring the stocks or equity shares of the relevant corporation from a stockholder or employee. The proviso of the same paragraph provides that the same shall not apply to the portion of non-taxation or reduction of acquisition tax pursuant to this Act and other Acts and subordinate statutes. Thus, the "cases where acquisition tax is non-taxation or reduction" under the above proviso refers to cases where the acquisition by an oligopolistic stockholder meets the requirements for non-taxation or reduction under the provisions of the Local Tax Act or other Acts and subordinate statutes, so the relevant corporation is exempted from acquisition tax while acquiring real estate, etc., and thus, is not exempted from the liability to pay acquisition

In the same purport, the judgment of the court below that the disposition of this case is legitimate on the ground that the plaintiff, who is deemed to have acquired the real estate of this case as an oligopolistic shareholder, is not subject to exemption from acquisition tax as prescribed by the Ordinance on Tax Reduction and Exemption, is just, and there is no misapprehension of legal principles as to the proviso of Article 105 (6) of the same Act, as otherwise alleged in the ground of

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Seo-sung (Presiding Justice)