Where a sports facility business is registered as a membership golf course business pursuant to the Installation and Utilization of Sports Facilities Act, but is actually operated only with a public golf course, whether such land constitutes an object of separate taxation of property tax under Article 182(1)3(c) and Article 112(2)2 of the former Local Tax Act.

In full view of the legislative intent of Articles 182(1) and 112(2)2 of the former Local Tax Act and Article 131-2(3)10 of the former Enforcement Decree of the Local Tax Act (wholly amended by Presidential Decree No. 22395, Sep. 20, 2010), land for a membership golf course subject to the disposition of separate taxation of property tax shall be land actually being used as a membership golf course, barring special circumstances. Even if the registration of a membership golf course as a membership golf course pursuant to the Installation and Utilization of Sports Facilities Act was registered as a membership golf course, land should not be subject to the disposition of separate taxation of property tax as prescribed in Article 182(1)3(c) and Article 112(2)2 of the former Local Tax Act, unless there are special circumstances.

Articles 112(2)2 (see current Article 13(5)2) and 182(1) (see current Article 106(1)) of the former Local Tax Act (wholly amended by Act No. 1021, Mar. 31, 2010); Article 131-2(3)10 (see current Article 101(3)9) of the former Enforcement Decree of the Local Tax Act (wholly amended by Presidential Decree No. 22395, Sept. 20, 2010)

[Plaintiff-Appellant] Plaintiff 1 and 17 others (Law Firm Gyeong, Attorneys Lee Jong-soo et al., Counsel for plaintiff-appellant)

Busan Co., Ltd. (Bae & Yang LLC, Attorneys Seo Gyeong-sung et al., Counsel for the plaintiff-appellant-appellant)

Seopo City (Attorney Seopo-hoon, Counsel for the defendant-appellant)

Gwangju High Court ( Jeju) Decision 2011Nu497 decided May 2, 2012

The judgment below is reversed, and the case is remanded to the Gwangju High Court.

The grounds of appeal are examined.

Article 182(1) of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) provides that “The land for a golf course (the latter part of the part other than each subparagraph of Article 112(2) shall not apply) from among the land owned by a person liable to pay tax as of the tax base date shall be subject to separate taxation, and Article 112(2)2 of the same Act provides that “The land subject to separate registration among real estate for a golf course as a membership golf course under the Installation and Utilization of Sports Facilities Act (hereinafter referred to as the “Sports Facilities Act”) shall apply to golf course” in the latter part of Article 182(1) of the same Act with the exception of each subparagraph.

Meanwhile, Article 182(1)2 of the former Local Tax Act provides for “land prescribed by Presidential Decree as being subject to separate aggregate taxation owned by a person liable to pay taxes as of the tax base date” as “special aggregate taxation,” and Article 131-2(3)10 of the former Enforcement Decree of the Local Tax Act (wholly amended by Presidential Decree No. 22395, Sept. 20, 2010; hereinafter the same) provides for “land for sports facilities under Article 2 of the Enforcement Decree of the Installation and Utilization of Sports Facilities Act, which is used for a business of a person registered as a business operator pursuant to Article 5 of the Value-Added Tax Act, and is actually used for sports facilities (excluding land for sports facilities in land for a membership golf course under the Sports Facilities Act)” as one of “land prescribed by Presidential Decree, for which there is a considerable reason for separate aggregate taxation.”

In full view of the legislative purport of the provisions of relevant Acts and subordinate statutes including the former Local Tax Act and the Enforcement Decree of the former Local Tax Act, language and text, contents of the provisions, and the principle of substantial taxation and the principle of imposition of the status, land for a membership golf course subject to the disposition of property tax shall be the land actually being used as a membership golf course unless there are special circumstances. Even if a sports facility business is registered as a membership golf course pursuant to the Sports Facilities Act, if it is actually operated only as a public golf course, the land shall not be subject to the disposition of property tax under Articles 182(1)3(c) and 112(2)2 of the former Local Tax Act (see Supreme Court Decision 96Nu129, Apr. 22, 197, etc.).

Nevertheless, on different premise, the lower court, solely on the basis that the Plaintiff registered a membership golf course business pursuant to the Sports Facilities Act and registered the instant land as a membership golf course, did not examine whether the instant land is actually used as a membership golf course, and maintained the first instance court’s decision rejecting the Plaintiff’s assertion that the instant land is actually used as a public golf course and constitutes a separate aggregate taxation, thereby adversely affecting the conclusion of the judgment by failing to exhaust all necessary deliberations by misapprehending the legal doctrine on Article 182(1)3(c) and Article 112(2)2 of the former Local Tax Act. The allegation in the grounds of appeal assigning this error is with merit.

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 Kim So-young (Presiding Justice)