[1] Whether the above real estate constitutes “real estate acquired on condition of donation to the State, etc.,” under Article 106(2) of the former Local Tax Act, where the real estate was donated to the State, etc. for the purpose of acquiring other economic benefits, and the State, etc. expressed its intent to accept the donation (affirmative)

[2] The case holding that the above disposition is unlawful in case where Gap corporation established and operated a building for tourism use on the ground that it did not constitute donation under Article 4 subparagraph 3 of the "Act on Public-Private Partnerships in Infrastructure" and imposed acquisition tax, etc. on Gap corporation on the ground that Article 106 (2) of the former Local Tax Act cannot be applied on the ground that it did not constitute donation under Article 4 subparagraph 3 of the "Act on Public-Private Partnerships in Infrastructure"

[1] In light of the fact that the donator expressed his/her intent to donate the property as public property of the State or a local government and the State or a local government did not limit the concept of donation to only a donation without pure consideration under the State Property Act or Article 9 of the State Property Act, which is established by the donor’s declaration of intention to accept the donation, insofar as the purpose of acquiring other economic benefits, such as fulfillment of authorization and permission conditions, acquisition of right of free use, or gratuitous concession, was the form of donation and the State or a local government made a declaration of intention to make a payment with the consent of the donor, the above real estate constitutes “real estate acquired on condition of donation to the State, etc.” under Article 106(2) of the former Local Tax Act (amended by Act No. 9620, Apr. 1, 2009).

[2] The case holding that in a case where Company A imposed acquisition tax, etc. on Company A on the ground that Article 106 (2) of the former Local Tax Act (amended by Act No. 9620 of Apr. 1, 2009; hereinafter “former Local Tax Act”) is not applicable since the establishment and operation of the instant facilities and the instant facilities were made free of charge at the time of the expiration of their operation period, and the subsequent establishment of the instant facilities did not belong to the real estate ownership or donation under Article 106 (2) of the former Local Tax Act (amended by Act No. 9620 of Apr. 1, 2009; hereinafter “former Local Tax Act”), the case holding that the instant facilities did not belong to the real estate ownership or donation under Article 106 (2) of the former Local Tax Act, even if the purpose of acquiring economic benefits arising from the operation of the instant facilities was to acquire, and thus, the instant facilities did not belong to the real estate ownership or donation under Article 106 (2) of the former Local Tax Act.

[1] Article 106 (2) of the former Local Tax Act (amended by Act No. 9620 of Apr. 1, 2009) (see current Article 9 (2)), Article 9 of the State Property Act / [2] Article 106 (2) of the former Local Tax Act (amended by Act No. 9620 of Apr. 1, 2009) (see current Article 9 (2)), Article 9 of the State Property Act, Article 4 subparagraph 3 of the Act on Public-Private Partnerships in Infrastructure

[1] Supreme Court Decision 2005Du14998 decided Jan. 26, 2006 (Gong2006Sang, 348)

Mancheon-Ick Co., Ltd. (Law Firm Epex, Attorneys Lee Dong-seok et al., Counsel for the defendant-appellant)

Spocheon Market

September 27, 2011

1. The Defendant’s imposition of acquisition tax of KRW 61,651,790 on July 14, 2010 and special rural development tax of KRW 6,165,170 shall be 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. On October 24, 2009, the Plaintiff, at the Plaintiff’s expense, set up a tourist mother-day system and a building senior secretary (hereinafter “the owner of the instant facilities”) in accordance with the “Agreement on the Facilities for Convenience of Tourist Conveniences” (hereinafter “Agreement”), which was concluded with the Macheon-si, Macheon-si, Macheon-si, Macheon-si, Macheon-si, 282, located in Macheon-do.

B. The main provisions of the instant agreement are as follows.

Article 1. Purpose of Convention

The purpose of this Convention is to provide for all the matters concerning the projects for transportation convenience of tourists on the Macheon Ballast Sea in relation to the projects for transportation convenience, between the Macheon-si and the Macheon-si.

Article 2 Definitions

(1) “A” means Macheon-si.

(2) The term “B” means Macheon-Mano-ri Corporation.

(3) The term “this project” means a project for convenience facilities for the At Ballast Tourist.

(4) The term "facilities" means all the Mano-day car system and all the Mano-day system, which are tourist transport facilities (such as the Mano-day Vice Minister, subsidiary facilities, etc.).

(5) The term “operating period” means the period from the beginning of the operation of the facility to be operated.

Article 3 General Status of Projects

(a) Business name: A business of transporting convenience facilities for tourists;

(b) Location: Nancheon-si, Nancheon-si, 282

(3) Business scale: Mano-Japanese, the main body of 50 passengers, the main body of 50 passengers - approximately 420 meters, and - 3 building facilities for passengers on board and on board.

Article 4 Operator

(1) The Project shall be operated by Section B.

Article 5 Project Costs Sharing

This project is a kind of private capital inducement project (BOT) to bear in full the project cost (including human and material expenses) required for the installation of the facility.

Article 8 Operation of Facilities

(1) The period of operation of B shall be twenty years.

(2) B shall realize the operating profit of the facility during the operating period.

(3) B is to contribute facilities free of charge after the expiration of the operating period to A without any condition.

Article 9 Transfer of Ownership and Right

(1) The ownership of the facility belongs to B.

(2) B shall contribute ownership to A after the expiration of the period of operation of the facility.

(3) In the event that the Art Ballast is closed or its function has been lost during the operating period, A shall promptly take over the facility from B at the time of the appraisal value (including value added).

Article XIDuties

(3) B must provide thorough management of the facility and provide technology and information necessary for its operation so that A may not interfere with the operation of the facility after the end of the operating period.

C. On November 20, 2009, the Plaintiff was exempted from acquisition tax, etc. on the real estate acquired on the condition of donation to local governments pursuant to Article 106(2) of the former Local Tax Act (amended by Act No. 9620, Apr. 1, 2009; hereinafter the same) with respect to the instant facilities to the Defendant.

D. However, on July 14, 2010, the Defendant imposed acquisition tax of KRW 61,651,790 and special rural development tax of KRW 6,165,170 (hereinafter “instant disposition”) calculated based on acquisition value of KRW 3,082,589,99 and KRW 61,65,165,170 on the Plaintiff on the ground that the instant facilities do not fall under the contribution acceptance by the method prescribed in Article 4 subparag. 3 of the “Public-Private Partnerships Act on Infrastructure” and cannot be applied to the Plaintiff (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap evidence 1, 2, 5 through 9, Gap evidence 17-1 to 9, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Since the instant facilities are real estate acquired on the condition of reversion or donation at the time when the Plaintiff was a local government, it constitutes an object of exemption from acquisition tax under Article 106(2) of the former Local Tax Act. Therefore, the Defendant’s disposition of imposition, such as acquisition tax, etc., of this case, should

B. Relevant statutes

[Attachment] The entry in the relevant statutes is as follows.

C. Determination

(1) Article 106(2) of the former Local Tax Act provides that no acquisition tax shall be imposed on real estate acquired on the condition that it reverts or donated to the State, a local government, or a local government association (including the case to which such real estate belongs by the method under Article 4 subparag. 3 of the Act on Private Participation in Infrastructure).

In light of the fact that the donator expresses his/her intent to donate his/her own property as public property of the State or a local government and the State or a local government does not limit the concept of donation without pure consideration under the State Property Act or Article 9 of the State Property Act, even if there was the purpose of acquiring other economic benefits, such as fulfillment of authorization or permission conditions, acquisition of right to use, or gratuitous concession, in granting real property to the State or a local government, the donation itself forms the form of donation. As long as the State or a local government has declared its intent to make payment without consent, it constitutes “real estate acquired on condition of donation to the State, etc.” subject to non-taxation under Article 106(2) of the former Local Tax Act (Supreme Court Decision 2005Du14998 Decided January 26, 2006).

(2) According to the facts acknowledged above, the facilities of this case acquired by the plaintiff shall be deemed real estate as one of the real estate at the time of the main day, the Maurday, the Maurday, the building for the Haurk, etc., and furthermore, even if the plaintiff had the purpose of obtaining economic benefits from the operation of the facilities of this case during the operation period, the facilities of this case shall be deemed to be real estate acquired on condition of donation at the time of Madcheon-si, as long as the plaintiff agreed to give free donation at the time of the expiration of the operation period, so long as the facilities of this case were to be donated to the Madcheon-si, the facilities of this case shall be deemed to be acquired on condition of donation (On the other hand, even if the facilities of this case are depreciated at the rate of 5% per year, the value of the facilities of this case after 20 years shall be deemed to be 0 won on the account book, so it is revealed that it cannot be deemed as actual donation, in light of the above facts that the plaintiff continued management period of this case and the facilities of this case should not be terminated.

(3) Therefore, the instant facilities fall under “real estate acquired on the condition of reversion or contribution to a local government” as prescribed by Article 106(2) of the former Local Tax Act and are subject to non-taxation of acquisition tax (Article 106(2) of the former Local Tax Act merely provides that “it shall include the case to be reverted by the method as prescribed by Article 4 subparag. 3 of the Act on Public-Private Partnerships in Infrastructure” subject to non-taxation of acquisition tax, and does not stipulate that it shall not be subject to non-taxation of acquisition tax in the case of real estate not falling under infrastructure or not reverted to the method as prescribed by the above provision. Ultimately, even if the instant facilities are not infrastructure or are not attributed to the method as prescribed by the above provision, it cannot be deemed that it is not subject to non-taxation of acquisition tax solely on the ground that they

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition.

[Attachment] Relevant Statutes: omitted

Judges Kim Su-cheon (Presiding Judge) Na Jong-hun

(1) As a complex re-createdd as a cultural and artistic creative space for content-centered artistic activities, such as public performance, exhibition, and experience programs, 150,000 square meters of the entire site, there are three buildings for public performance, three outdoor performance halls, outdoor performance halls, observation clubs, lakes, etc.

Note 2) The instant facilities consisting of about 420 meters in total, about 17∑ slopings, and all of the instant facilities consisting of a line, including a line, a line, and a line, a line, a line, and a line, in which the space of experience rest is located in the innch of the International Art Ballast.