[1] In a case where a housing construction business entity registered as a corporation in a large city temporarily acquires officetels for the purpose of sale in lots, whether the registration tax is excessive (affirmative)

[2] Whether Article 102 (2) of the former Enforcement Decree of the Local Tax Act, which provides that the registration tax shall be imposed on all real estate registration for business purposes or business purposes, is invalid beyond the scope of delegation by the mother law (negative)

[3] Whether construction costs for the entire area including the portion of exclusive ownership of an aggregate building to the portion of exclusive ownership shall be calculated as the tax base for the heavy registration tax (affirmative)

[4] Whether the person liable for self-return and registration tax under Article 138 (1) of the former Local Tax Act

[1] If a corporation whose purpose is housing construction business and real estate sale and lease business has completed the registration of the preservation of officetels within five years after its establishment in a large city, this constitutes a "real estate registration after the establishment of a corporation" under Article 138 (1) 3 of the former Local Tax Act (amended by Act No. 4611 of Dec. 27, 1993) where the registration tax is heavy, and in full view of the provisions of relevant Acts and subordinate statutes, such as the Housing Construction Promotion Act, an officetel cannot be deemed excluded from the subject of heavy taxation under the proviso of Article 138 (1) of the same Act because it does not fall under a house, and thus, even if the corporation temporarily acquired the officetel for the purpose of sale, it cannot be excluded from the subject of heavy taxation only for such reason.

[2] The provisions of Article 102 (2) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14041 of Dec. 31, 1993) which provides that the registration tax shall be imposed on any real estate registration without any business, non-business, or non-business, shall not be deemed as a invalid provision beyond the scope delegated by the mother Act.

[3] Since the section for common use in the structure of an aggregate building has the nature of a accessory or accessory to the section for exclusive use, it is reasonable to deem that the cost for acquiring the section for exclusive use is included in all expenses to be paid for the acquisition of the section for exclusive use. Therefore, it is legitimate to impose heavy taxation rate and registration tax, etc. on the total area of the aggregate building including the section for exclusive use, in addition to the section for exclusive use for which registration of preservation of ownership has been actually made.

[4] Article 138 (1) of the former Local Tax Act (amended by Act No. 4611 of Dec. 27, 1993) provides for the obligation to voluntarily report and pay the heavy registration tax with respect to the heavy registration tax and the registration tax under Article 138 (1) of the same Act, and it cannot be deemed that the taxpayer of the registration tax imposed the obligation to voluntarily report and pay the registration tax in the case where the heavy taxation requirements for the registration tax for the establishment, etc. of the branch after the registration of the acquisition of the real estate are satisfied.

[1] Article 138 (1) 3 of the former Local Tax Act (amended by Act No. 4611 of Dec. 27, 1993) / [2] Article 138 (3) of the former Local Tax Act (amended by Act No. 4611 of Dec. 27, 1993), Article 102 (2) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14041 of Dec. 31, 1993) / [3] Article 138 (1) of the former Local Tax Act (amended by Act No. 4611 of Dec. 27, 1993) / [4] Articles 138 (1) and 120 (see current Article 150-2) of the former Local Tax Act (amended by Act No. 4611 of Dec. 27, 193)

Dong Housing Co., Ltd. (Attorney Cho Jong-soo et al., Counsel for the defendant-appellant)

Head of the Busan Metropolitan Government Shipping Authority (Attorney Park Jong-ok, Counsel for the defendant-appellant)

1. The part of the Defendant’s imposition of registration tax of KRW 2,378,210,080 against the Plaintiff on February 24, 1994, which exceeds KRW 1,981,841,730, and the education tax of KRW 36,05,170, which exceeds KRW 396,368,335, shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3. The costs of lawsuit shall be divided into five parts, and four parts shall be borne by the plaintiff, and the remainder by the defendant.

The Defendant’s imposition of registration tax of KRW 2,378,210,080 against the Plaintiff on February 24, 1994, and of KRW 436,05,170 on education tax, shall be revoked.

1. Details of the instant disposition

On March 15, 1989, the Plaintiff was established as its principal office 760-3, Busan Do 1,460-3 on March 15, 1989. On July 31, 1993, Busan Do 1, 760-3, the Plaintiff newly constructed an office 'the 5th underground floor, 20 stories, 69,027.08§³ (hereinafter referred to as the “building in this case”) on July 17, 1993, and filed a revised registration tax of 393,491,500 won on September 36, 198, 300, 396, 396, 296, 209, 396, 496, 296, 296, 209, 296, 209, 396, 296, 296, 2096, 296, 2096, 3696, 2, etc.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

First, the Plaintiff cannot apply heavy taxation rate under Article 138(1) of the Local Tax Act because the Plaintiff merely temporarily constructed a new building for the purpose of sale and did not constitute real estate for business purposes or for business purposes of a corporation. Even if it does not have to apply heavy taxation rate for the registration of the building, it is difficult to determine the scope of the building's "real estate registration after its establishment" under Article 102(2) of the Enforcement Decree of the Local Tax Act as all real estate registrations acquired within five years after its establishment, regardless of whether it is for business purposes or non-business purposes. In light of the legislative intent, Article 138 of the Local Tax Act provides that "the purpose of calculating the tax base of the building's portion for business purposes is to preserve and improve the living environment of the residents of a large city through the imposition of registration tax and to promote balanced development between regions and the regional economy, and it is difficult to determine the tax base of the building's portion to be subject to heavy taxation under Article 102(2)1 of the Enforcement Decree of the Local Tax Act."

B. Relevant statutes

Article 138 (1) of the former Local Tax Act (amended by Act No. 4611 of Dec. 27, 1993; hereinafter the same shall apply) provides for registration falling under any of the following subparagraphs: Provided, That this shall not apply to the types of business prescribed by Presidential Decree; subparagraph 3 provides for real estate registration and real estate registration after its establishment, establishment, and transfer; Article 101 (1) of the Enforcement Decree of the Act (amended by Presidential Decree No. 14041 of Dec. 31, 1993; hereinafter the same shall apply); Article 138 (1) of the former Local Tax Act provides for all real estate acquired within 3 years from the date of establishment, establishment, or transfer of its main office, main office, or branch office in a large city; Article 138 (1) of the Act provides for registration of real estate for non-business purposes; Article 138 (1) of the Act provides for the following matters within 10 years from the date of establishment, establishment, or transfer to a large city (hereinafter referred to the same shall apply).

Furthermore, Article 120 (Voluntary Return and Payment) of the Act shall be made voluntarily (hereinafter referred to as "voluntary return and payment") the amount of tax calculated by applying the tax rate under Article 112 to the returned tax base within 30 days from the date of its acquisition: Provided, That if the object of taxation of the acquisition tax is subject to the tax rate under the provisions of Article 112 (2) (Application of 750/1,000 which is the ordinary tax rate if the object of taxation is acquired as a separate place, etc. as prescribed by the Presidential Decree), or (3) (limited to the case of acquiring real estate for business in a large city for the new construction or extension of a factory, and the tax rate under the provisions of 50/100 of the ordinary tax rate, including the acquisition of real estate for business within 50/100 of the ordinary tax rate, and the tax rate under the provisions of 112 (2) or (3) shall be collected within 30 days from the date prescribed by the Presidential Decree, or the tax rate for voluntary return and payment shall be made within 15/19/10 days from the original tax base.

Meanwhile, Article 3 subparag. 2 of the Housing Construction Promotion Act provides that the term “house” means a part of the building or structure with which a household member may carry on an independent residential life for a long time, and it shall be divided into detached houses and apartment houses; subparagraph 3 shall apply; the term “multi-family housing” means a house with a structure in which each household who jointly uses all or part of the walls, corridors, stairs, and other facilities of the site and building, may carry on an independent residential life within one building, respectively; its kind and scope shall be prescribed by the Presidential Decree; Article 2 of the Enforcement Decree provides that the types and scope of multi-family housing (five or more stories), apartment houses (a house with a total floor space exceeding 660 square meters per house), multi-household houses (a house with a total floor space not exceeding 660 square meters per house).

(c) Markets:

In full view of the provisions of relevant Acts and subordinate statutes, so long as the plaintiff has completed the preservation registration of the building of this case within five years after the establishment of the corporation in Busan Metropolitan City, which is a large city (the name and zone was changed to Busan Metropolitan City thereafter), it constitutes "real estate registration after the establishment of the corporation" under Article 138 (1) 3 of the Act where the registration tax is levied. Even if the plaintiff temporarily acquired the building of this case for the purpose of sale, it cannot be excluded from the application of heavy taxation only for such reason. Article 102 (2) of the Decree provides that the scope of the real estate registration subject to heavy taxation shall be the real estate registration for business, non-business, or non-business, but the above provision shall not be deemed as an invalid provision beyond the delegation scope of the mother law, considering the reasons alleged by the plaintiff. Furthermore, since the section for common use in the aggregate building has the nature of appurtenant or accessory property to the section for exclusive use, even if it is possible to separately calculate the cost for acquiring the section for exclusive use, this shall be paid for the acquisition of the portion of this case (see Supreme Court Decision 206.2.6.

Furthermore, considering the whole purport of the argument in the statement No. 2, it is recognized that the Plaintiff is a housing construction business operator under Article 6 of the Housing Construction Promotion Act, but considering the provisions of related Acts and subordinate statutes, such as the Housing Construction Promotion Act, it is apparent that the instant building does not fall under the housing, and thus, it cannot be deemed that it is excluded from the application of heavy tax rate pursuant to the proviso of Article

Therefore, the plaintiff's first or third argument that the building in this case does not fall under the heavy subject of registration tax, or that the calculation of the tax base was wrong, shall not be accepted as it is without merit.

However, in order to impose the additional tax on the portion of the additional tax, it is under the premise that the taxpayer has the obligation to voluntarily report and pay the tax. With respect to the registration tax which is in excess of the tax amount, the proviso of Article 120 of the Act provides for the obligation to voluntarily report and pay the tax amount among the acquisition tax, and it cannot be deemed that the taxpayer of the registration tax has the obligation to voluntarily report and pay the registration tax in the case where the requirements for heavy taxation of the registration tax, such as the establishment of the branch after the registration of the acquisition of the real estate, are satisfied (see Supreme Court Decision 91Nu10619 delivered on May 12, 192). Accordingly, since the portion of the disposition of the additional tax in this case was imposed without any legal basis, Article 151 of the Act provides that the tax amount shall be collected by adding 20/100 to the calculated tax amount or the underpaid tax amount if the above ordinary collection is not always incidental to the above ordinary collection, it shall not be deemed that the above obligation to voluntarily report and pay the registration tax should not be imposed.

3. Conclusion

Therefore, the part of the disposition of this case which exceeds the registration tax of 1,981,841,730 won (2,378,210,080 won - additional 396,368,350 won) and education tax of 396,368,335 won (436,005,170 - additional 39,636,835 won) is illegal, and it is so decided as per Disposition by the assent of all participating Justices.

Judges Kim Jong-soo (Presiding Judge)