Korea Land Trust Co., Ltd. (Law Firm Rate, Attorney Jeon Young-young, Counsel for defendant-appellant)

The head of Yeongdeungpo-si Office

March 18, 2009

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of acquisition tax on July 22, 2008 by KRW 358,596,480 and special rural development tax of KRW 25,958,480 shall be revoked.

1. Details of the disposition;

A. On July 2, 2003, the Plaintiff completed the registration of ownership transfer on the grounds of trust on July 3, 2003, under a trust of Nonparty 1 with each of the lands listed in the separate sheet of land (hereinafter referred to as “○○ land” in the same list, and the total sum of the lands is referred to as “each of the instant lands”).

B. Next, each of the buildings listed in the separate list of the instant building (hereinafter referred to as “○○ building”) was newly constructed on each of the instant lands by setting up the respective buildings listed in the separate list of the buildings (hereinafter referred to as “each of the instant buildings”) and the building owner, etc. is as follows.

본문내 포함된 표 ？ 건축주 건축대지면적 건축허가일 착공일 임시사용승인일 제1 건물 소외 1 4,214㎡ 2003. 9. 25. 2003. 10. 1. 2005. 9. 7. 제2 건물 소외 2 2,952㎡ 2004. 1. 17. 2004. 3. 15. 2005. 1. 24. 제3 건물 소외 3 4,468㎡ 2003. 9. 25. 2003. 10. 1. 2005. 9. 6.

C. The Defendant: (a) applied the deemed acquisition provision under Article 105(5) of the Local Tax Act to the Plaintiff on July 22, 2008 by deeming that the land category of each of the instant lands was de facto changed to a site on the date of the approval for provisional use of each of the instant buildings (including KRW 135,222,00 + KRW 75,248,540 + KRW 148,125,940 + plus penalty tax; KRW 148,125,940; KRW 25,958,48,480 + + KRW 5,260,460 + + KRW 10,819,290; and penalty tax).

[Ground of recognition] Facts without dispute, Gap's 1, 2, 3, 5 evidence, Eul's 1 to 5 (including additional numbers), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) On July 2, 2003, the Plaintiff and Nonparty 1 agreed that the management and operation of each of the instant lands will be Nonparty 1 while entering into a paper management trust agreement and a disposal trust agreement with respect to each of the instant lands. The Plaintiff only owned the formal ownership of each of the instant lands, and the Plaintiff did not actually participate in the land category change and did not acquire any economic value accordingly. Article 105(5) of the Local Tax Act does not provide for the taxpayers of deemed acquisition tax. In light of the principle of substantial taxation and the legislative intent of imposing deemed acquisition tax, the said taxpayers should be deemed Nonparty 1 who actually acquired the economic value following the land category change.

(2) Even if the Plaintiff is liable to pay the above deemed acquisition tax, the increase in economic value following a land category change may be deemed to constitute the trust property transferred from the trustor to the trustee, so it shall be exempted from taxation pursuant to Article 110 subparagraph 1 (a) of the Local Tax

(3) Even if the imposition disposition of deemed acquisition tax against the Plaintiff is lawful, it is unreasonable to expect the Plaintiff to pay the deemed acquisition tax on the ground that the Plaintiff did not specify the taxpayer of deemed acquisition tax under Article 105(5) of the Local Tax Act, and the Plaintiff did not engage in the act of changing the category of land as a trust company of Class B management trust and disposal trust, and did not know at any time whether the land category of each of the instant land was changed. Therefore, it is unreasonable to expect the Plaintiff to pay the deemed acquisition tax on the date of the timely return, or there is a justifiable reason that it is not attributable to the Plaintiff’s negligence of performing its duty.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Markets:

(1) Determination on the first argument

Acquisition tax is not imposed by taking advantage of the profits that a purchaser can obtain by using, earning, or disposing of goods as a taxable object in the form of the distribution tax, in which the fact that the transfer of the goods is the transfer of the original goods itself and imposes the tax-bearing capacity recognition and imposition (see Supreme Court Decision 2003Du1342, Nov. 25, 2004, etc.). If the registration of ownership transfer is completed in the trust of real estate in the future, the ownership is entirely transferred to the trustee and the ownership is not reserved against the truster in the internal relationship with the truster (see, e.g., Supreme Court Decision 2004Du8767, Jul. 28, 2005).

In the instant case, as seen above, once the Plaintiff received a trust from Nonparty 1 and completed the registration of transfer of ownership, ownership of each of the instant lands shall be deemed to have been entirely transferred to the Plaintiff, the trustee inside and outside of the country. Although the Plaintiff did not directly change the land category of each of the instant lands, the act of land category change by Nonparty 1, etc., such as Nonparty 1, the Plaintiff, the owner, made Nonparty 1 manage each of the instant lands of this case. As such, the ownership of each of the instant lands, the land category of which has been changed actually, is deemed to have been owned by the Plaintiff. As such, deemed purchaser of the instant land due to the change of land category is also deemed to have been deemed to have been the Plaintiff. Accordingly, the Plaintiff

(2) Judgment on the second argument

Since the principle of strict interpretation derived from the ideology of no taxation without law and fair taxation applies not only to cases meeting taxation requirements, but also to cases meeting the requirements for non-taxation and tax exemption, it is not allowed to expand or analogically interpret the requirements for non-taxation or tax exemption as favorable to taxpayers without reasonable grounds (see Supreme Court Decision 2005Du15021, Jul. 12, 2007, etc.).

Article 110 Subparag. 1 (a) of the Local Tax Act (amended by Act No. 7843 of Dec. 31, 2005; hereinafter the same) provides that "acquisition of trust property from a trust (limited to the case where a trust registration is accompanied by a trust registration as a trust under the Trust Act; hereinafter the same shall apply) and where the truster transfers the trust property from the truster to the trustee" shall be exempted from taxation. However, as seen earlier, the purchaser of each land of this case shall be immediately the Plaintiff, and Nonparty 1 shall acquire the ownership of the land de facto land category changed, and shall not transfer it to the Plaintiff, the trustee, as alleged by the Plaintiff, after acquiring the ownership of the land category changed as above. As such, deeming that the increase in value resulting from the change of land category constitutes trust property under the above provision of the Local Tax Act cannot be allowed as an extended interpretation. Therefore, the Plaintiff's deemed acquisition shall not be deemed a non-taxation object under the above provision. Therefore, the Plaintiff

(3) Judgment on the third argument

Under the tax law, in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim, where a taxpayer violates various obligations, such as a return and tax payment, as prescribed by the Act without justifiable grounds, the taxpayer’s intentional or gross negligence is not considered, and the site, mistake, etc. of statutes does not constitute justifiable grounds that do not cause the breach of duty (see Supreme Court Decisions 2001Du4689, Nov. 13, 2002; 2002Du10780, Jun. 24, 2004, etc.).

Article 105 (1) of the Local Tax Act provides that "acquisition tax shall be imposed on the person who acquires real estate, etc." Article 105 (2) of the same Act provides that "acquisition tax shall be deemed to have been acquired when it is actually acquired even if the owner or transferee of the article does not comply with registration, etc. under the provisions of related Acts and subordinate statutes, such as the Civil Act, in acquiring real estate, etc., and Article 105 (5) of the same Act provides that "if the value increases due to a de facto change of land category of the article, the acquisition shall be deemed to have been acquired," and Article 105 (5) of the same Act provides that "Where the person who acquired the article in question acquires the real estate, etc., the owner or transferee of the article in question shall be deemed to have failed to obtain the acquisition tax, etc., and since Article 105 (1) of the Local Tax Act does not explicitly provide that the owner or transferee of the article in question is a person liable to pay acquisition tax, it cannot be deemed that the Plaintiff did not have any other legitimate reason or legitimate reason for the change of land category of this case.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment]

Judges Cho Jong-sik (Presiding Judge)