The meaning of persons eligible for exemption from acquisition tax prescribed in Article 107 (1) of the Local Tax Act and the standards for recognition as to whether the management of hospital is a nonprofit business.

A person who is eligible for exemption from acquisition tax under Article 107 subparagraph 1 of the Local Tax Act is a nonprofit business operator who operates a business for religious services, religion, charity, science, art, or other public interest and operates the business in the form of the business, not only is the business, but also is the corporation or individual in the case that the actual state of its management is not limited to profit-making even in the real aspect, and the establishment and management of the hospital are not carried out for profit-making, and it is recognized that the actual state of its management is not actually for profit-making by examining the actual state of its management individually by the purpose of its establishment.

Attorney Yong-jin, et al., Counsel for the defendant-appellant

Attorney Park Jae-hoon, Counsel for the defendant-appellant

Seoul High Court Decision 74Gu283 delivered on February 10, 1976

The original judgment is reversed, and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. The court below held that the plaintiff corporation is a foundation established for the purpose of medical research and improvement and development of medical business, which obtained permission to establish a non-profit medical institution pursuant to Article 40 of the former Medical Service Act in order to achieve its objectives, provided considerable number of patients free of charge or discounted medical treatment in operating the hospital, and paid some of its revenue as scholarships and research expenses, etc., so it can be recognized as a non-profit public corporation. The court below held that even if the plaintiff corporation failed to provide free medical treatment up to 30 percent of the total patient with the care provided by the father at the time of permission to establish a non-profit medical institution from the Seoul Special Metropolitan City Mayor, the ground for exercising the right of administrative supervision should not be the reason for exercising the right of administrative supervision, but it does not lose the nature of the plaintiff's non-profit public corporation as a non-profit foundation

The above judgment of the court below is without merit since it is decided as to the defendant's assertion that the plaintiff's interest hospital management was not a non-profit business aimed at the public interest.

2. However, according to the provisions of Article 107 subparagraph 1 of the Local Tax Act, with respect to property acquired by a non-profit entrepreneur who runs a business for religious purposes, religion, charity, art, or public interest as prescribed by the Presidential Decree, the acquisition tax shall not be imposed on it within six months from the date of its acquisition unless the non-profit entrepreneur uses the whole or part of the property directly for his business without any justifiable reason. Meanwhile, Article 79 of the Enforcement Decree of the Local Tax Act provides that the above non-profit entrepreneur means a nonprofit corporation or individual whose business is for religious purposes, charity, charity, science, art or art and other public interest and whose business is exempted from acquisition tax pursuant to subparagraph 1 of Article 107 of the Local Tax Act, it is reasonable not only to establish a non-profit entrepreneur as well as to establish a non-profit entrepreneur as an individual business for the purpose of management purpose but also to establish a non-profit corporation or individual for the purpose of profit-making purpose in reality as well as to establish a non-profit entrepreneur for the purpose of management purpose of the local Tax Act.

3. In this case, the court below is a foundation established for the same purpose as the plaintiff's original judgment and obtained permission to establish a non-profit medical institution to achieve its purpose, and it can be recognized that a considerable number of actual patients were treated free of charge or at discount, and part of its revenue was paid as scholarships and research expenses, etc. Accordingly, the plaintiff decided that the plaintiff is a non-profit corporation subject to exemption from local tax pursuant to Article 107 of the Local Tax Act, Article 79 of the Enforcement Decree of the Local Tax Act. Thus, as mentioned above, the plaintiff's establishment and the purpose of establishing the hospital are non-profit and its actual operation should not be determined as non-profit business operation without examining the actual substance of the hospital's operation, and it cannot be determined that the plaintiff's actual operation of the hospital should not be determined as non-profit business operation without examining whether the plaintiff's actual operation of the hospital should be non-profit, and it can be determined that the plaintiff's non-profit business operation cannot be determined as non-profit business operation without any specific statement of the present situation of its operation.

4. Therefore, since the original judgment cannot be reversed, it shall be reversed in accordance with Article 14 of the Administrative Litigation Act, Articles 400 and 406 (1) of the Civil Procedure Act, and the case shall be remanded to the Seoul High Court which is the original judgment. It is so decided as per Disposition by the assent of all participating Justices

Justices Hong Man-hee (Presiding Justice)