Article 79-2 (1) [Attached Table 7] 26 of the Enforcement Decree of the Restriction of Special Taxation Act where real estate for public works within a speculative designated area is transferred pursuant to the former Tourism Promotion Act (=the date of designation of tourist destination)

Article 85 subparag. 1 (current Elimination), subparag. 2 (current Elimination), subparag. 3 (current Elimination), and subparag. 4 (current Elimination), and subparag. 5 (current Elimination), Article 79-2(1) [Attachment 7] subparag. 2 (current Elimination), and subparag. 26 (current Elimination) of the former Enforcement Decree of the Restriction of Special Taxation Act (Amended by Presidential Decree No. 19888, Feb. 28, 2007); Article 16 of the former Tourism Promotion Act (Amended by Act No. 2285, Jan. 18, 197); Article 52 of the former Tourism Promotion Act (Amended by Act No. 3910, Dec. 31, 1986; see current Amended by Act No. 3910, Dec. 4, 2007); Article 46(5) of the former Tourism Promotion Act (see current Amended by Act No. 3910, Dec. 39, 2007)

Plaintiff (Law Firm LLC, Attorneys Lee Dong-ho et al., Counsel for plaintiff-appellant)

Decree of the National Tax Service

Daejeon High Court Decision 2012Nu2694 decided April 18, 2013

The judgment of the court below is reversed, and the case is remanded to Daejeon High Court.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Article 85 of the former Restriction of Special Taxation Act (amended by Act No. 8146 of Dec. 30, 2006; hereinafter the same shall apply) provides for "The date (referring to the date publicly notified by the head of the relevant administrative agency in the Official Gazette or the Official Gazette; where the date of public notification is within 2 years retroactively from the date of public notification; where the date of notification falls within 3 years retroactively from the date of designation of the speculative area, referring to the date of designation of the speculative area; where the date of notification arrives after the date of designation of the speculative area, referring to the date of designation of the speculative area); where a resident transfers real estate to a project operator under the Act on Acquisition of and Compensation for Land, etc. for Public Works (hereinafter referred to as the "Public Works Act") or other Acts (including cases of expropriation), the transfer value and acquisition value of such real estate in accordance with the provisions of the Income Tax Act; where the real estate in question is transferred to the project operator under the relevant Act, the date of designation of a planned area under the Housing Site Development Promotion Act (hereinafter referred to the Housing Development Promotion Act);

In addition, Article 79-2 (1) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 19888, Feb. 28, 2007; hereinafter “former Enforcement Decree of the Special Taxation Act”) upon delegation of Article 85 subparag. 5 of the former Special Taxation Act provides that “the date prescribed by Presidential Decree as similar to the above date” refers to the standard market price under attached Table 7. Article 79-2 (1) of the former Enforcement Decree of the Restriction of Special Taxation Act provides that “The date of authorization of implementation plan under the National Land Planning and Utilization Act (No. 2)” and “the date of designation of planned area, authorization of implementation plan, and formulation of basic plan, etc. (No. 26) are similar to the date prescribed under subparagraphs 1 through 25 in cases of Acts other than subparagraphs 1 through 25.”

2. Comprehensively taking account of the evidence adopted, the lower court: (i) designated and publicly announced as a tourist destination by Article 16 of the former Tourism Promotion Act (amended by Act No. 2285, Jan. 18, 197); (ii) designated and publicly announced as a tourist destination by Article 28 of the former Tourism Promotion Act (amended by Act No. 3910, Dec. 31, 1986; hereinafter the same shall apply); and (iii) designated and publicly announced as a tourist destination by Article 46 of the former Tourism Act (amended by Act No. 3910, Dec. 31, 1986; hereinafter the same shall apply); and (iv) designated and publicly announced as a tourist destination by Article 16 of the former Tourism Promotion Act (amended by Act No. 1065, Jul. 5, 191; 198 square meters; hereinafter the same shall apply); and (iv) designated and publicly announced as a new tourist destination development plan by Article 281 of the same Act.

Furthermore, under the former Tourism Promotion Act, the court below presumed that the date of approval for the plan for the creation of tourist resorts, which is similar to the date of authorization for an implementation plan under the National Land Planning and Utilization Act, should be the standard market price under Article 79-2 (1) [Attachment Table 7] 26 of the former Enforcement Decree of the Special Act on the Development of Agricultural and Fishing Villages, when the Plaintiff acquired the real estate in this case on July 5, 1991; January 27, 1995; and January 30, 2001, when the date of acquisition is the standard market price under Article 55 subparagraph 13 of the former Tourism Promotion Act; the court below determined that the transfer price of the real estate in this case should be calculated on August 10, 2005, when the date of approval for the change of the plan for the creation of tourist resorts in the third district to which the real estate belongs, and that the transfer price of the real estate in this case shall be calculated on August 28, 2005 to the standard market price of the real estate in this case.

3. However, we cannot agree with the judgment of the court below for the following reasons.

Article 79-2(1) [Attachment 7] subparag. 1, 3, 4, and 5 of the Enforcement Decree of the former Enforcement Decree of the Special Act on the Development of Tourism (amended by Presidential Decree No. 20135, Jan. 1, 201; Presidential Decree No. 2014, Jan. 1, 2011; Presidential Decree No. 2015, Jan. 2, 2011; Presidential Decree No. 2015, Jan. 2, 2011; Presidential Decree No. 2015, Jan. 2, 2011; Presidential Decree No. 20135, Feb. 31, 2011; Presidential Decree No. 20144, Feb. 26, 2011; Presidential Decree No. 20130, Feb. 24, 201).

Therefore, the acquisition date of the real estate of this case shall be deemed to be after November 28, 1983, which is the date of the designation and public notice of a tourist destination falling under the standard market price under Article 79-2 (1) [Attachment 7] 26 of the Enforcement Decree of the former Enforcement Decree of the Act on Special Assistance, but the court below erred by misapprehending the legal principles on the interpretation of Article 79-2 (1) [Attachment 7] 26 of the Enforcement Decree of the former Enforcement Decree of the Act on Special Assistance, which affected the conclusion of the judgment, on August 10, 2005, as the standard market price under Article 79-2 (1) [Attachment 7] 26 of the former Enforcement Decree of the Act on Special Assistance, if the real estate is transferred within an speculative designated area under the former Tourism Promotion Act. The ground for appeal pointing this out is with merit.

4. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)