Open Decision Ledger · Tax & international taxation
A gratuitous contribution of the appraisal difference excluded from the acquisition tax base
Supreme Court, Nov. 28, 2019, 2019Du45074 (judgment)
No holding summary · checked against points at issue. The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Case name: 취득세등부과처분취소
Official text on the National Law Information Center
Question
Where a church exchanged real property with a school foundation and gratuitously contributed the appraisal difference to the foundation, is the acquisition tax base under Article 10(1) of the Local Tax Act the appraisal value of the property it acquired, or the appraisal value of the property it gave in exchange?
Holding
It is the appraisal value of the property acquired, KRW 3,097,556,000. The 'value at the time of acquisition' fixed by Article 10(1) of the Local Tax Act means, in principle, the actual amount it cost to acquire the taxable object. The appraisal difference of KRW 2,645,851,000 that the plaintiff granted to the school foundation was a gift, so it cannot be said to have been incurred in acquiring the school land, and it was not a condition-borne amount under Article 18(1)(v) of the former Enforcement Decree on Local Taxes, nor a comparable cost under Article 18(1)(vii) of that Decree.
Points at issue, verbatim
감정평가 차액 상당액은 갑 교회가 을 법인에 증여한 것으로 위 학교용지 등 부동산을 취득하는 데 들었다고 할 수 없으므로, 취득세 과세표준은 위 학교용지 등 부동산의 감정평가액 상당이라고 보아야 하는데도, 이와 달리 본 원심판단에 법리오해의 잘못이 있다고 한 사례
Unofficial English translation
Inasmuch as the amount equivalent to the difference in appraised values cannot be regarded as having been spent to acquire the school site and other real property because it was a gift made by Church A to B Foundation, and the tax base for acquisition tax must therefore be regarded as the amount equivalent to the appraised value of the school site and other real property, a case in which it was held that the judgment of the court below, which decided otherwise, was in error for misapprehension of legal principles.
Disposition
Reversed and remanded Stated in the decision
원심판결을 파기하고, 사건을 서울고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed, and the case is remanded to the Seoul High Court.
Form of the test
Existing test applied Stated in the decision
이 사건 감정평가 차액 2,645,851,000원 상당액은 원고가 우성학원에 증여한 것으로 이 사건 각 부동산을 취득하는 데 들었다고 할 수 없으므로
Unofficial English translation
The amount equivalent to the difference in appraised values in this case of KRW 2,645,851,000 cannot be regarded as having been spent to acquire the respective real properties in this case because it was gifted by the plaintiff to Useong Academy,
Factors
- 지방세법 제10조 제1항에서 취득세의 과세표준으로 규정한 ‘취득 당시의 가액’의 의미
- 감정평가 차액 상당액은 갑 교회가 을 법인에 증여한 것으로
- 위 학교용지 등 부동산을 취득하는 데 들었다고 할 수 없으므로
- 취득세 과세표준은 위 학교용지 등 부동산의 감정평가액 상당이라고 보아야 하는데도
Unofficial English translation
• The meaning of 'the value as of the time of acquisition' prescribed as the tax base for acquisition tax in Article 10 (1) of the Local Tax Act
• The amount equivalent to the difference in appraised values was a gift made by Church A to B Foundation,
• and cannot be regarded as having been spent to acquire the school site and other real property,
• yet the tax base for acquisition tax must be regarded as the amount equivalent to the appraised value of the school site and other real property.
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2003. 9. 26. 선고 2002두240 판결(공2003하, 2109)
Unofficial English translation
Supreme Court Decision 2002Du240 decided September 26, 2003 (Gong 2003 Ha, 2109)
Decisions referred to
[1] 대법원 2003. 9. 26. 선고 2002두240 판결(공2003하, 2109)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
If the church had owed the appraisal difference to the foundation under the exchange agreement rather than granted it without consideration, would that amount be an indirect cost included in the acquisition price under Article 18(1) of the former Enforcement Decree on Local Taxes?
The remand judgment of the Seoul High Court, once it decides whether the difference was granted without consideration, will show how the tax base was fixed on the facts. Any amendment to Article 10(1) of the Local Tax Act or to Article 18(1) of its Enforcement Decree also requires reading this entry again.
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Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The Seoul High Court, in its judgment of 23 May 2019 (2019Nu37211), held that the acquisition tax base for the school land and the other property the plaintiff acquired was the appraisal value of the exchange-target religious land and religious facility, KRW 5,743,407,000. It reasoned that even if the appraisal value of the acquired property were treated as the direct costs paid to the other party, the appraisal difference of KRW 2,645,851,000 was an amount the plaintiff had to bear as a condition of acquiring the property, and so an indirect cost included in the acquisition price. On that basis it dismissed the plaintiff's claim to reduce the KRW 264,196,710 it had reported and paid by KRW 121,709,140.
Supreme Court standard: The Supreme Court held that the appraisal difference was a gift the plaintiff made to the school foundation, so it cannot be said to have been incurred in acquiring the property, and it cannot be an amount the acquirer had to bear under Article 18(1)(v) of the former Enforcement Decree on Local Taxes, nor a comparable cost under Article 18(1)(vii). The court below had thereby misread the law on the acquisition tax base, and that error affected the judgment. The Court set the judgment aside and remanded the case to the Seoul High Court for a fresh hearing and decision, on the unanimous opinion of the participating Justices.
Distinguishing conditions
- An amount the plaintiff had to pay to the other party as part of the price for the acquired property, since the decision rested on the difference being granted without consideration.
- A burden amount that falls under Article 18(1)(v) of the former Enforcement Decree on Local Taxes as an amount the acquirer had to bear by agreement, or under Article 18(1)(vii) as a comparable cost.
- A transaction governed by Article 18(1) of the Enforcement Decree as amended by Presidential Decree No. 28211 of 26 July 2017, since the Court applied the version before that amendment.
Record verification notes
Read the exchange contract of 30 November 2016 against the Minister of Education's approval of 20 January 2017, which made the gratuitous contribution of the KRW 2,645,851,000 difference a condition of the plan, to see whether the amount was a gift or a price obligation. Set the two appraisal figures, KRW 3,097,556,000 and KRW 5,743,407,000, against the reported and paid tax and the reduced amount claimed. Confirm which version of Article 18(1) of the Enforcement Decree applied on the acquisition date of 2 February 2017.
From the official text
Points at issue
[1] 지방세법 제10조 제1항에서 취득세의 과세표준으로 규정한 ‘취득 당시의 가액’의 의미 [2] 갑 교회가 을 학교법인과 을 법인 소유의 학교용지 등 부동산과 갑 교회 소유의 종교용지 등 부동산을 교환하되, 감정평가액의 차액을 을 법인에 무상출연하는 내용의 계약을 체결하고, 위 학교용지 등 부동산에 관한 소유권이전등기를 마쳤는데, 그 후 갑 교회가 병에게 위 부동산을 양도하고, 지방세특례제한법 제50조 제1항 단서 제3호 등에 따라 취득세 과세표준을 종교용지 등 교환대상 부동산의 감정평가액으로 하여 취득세 등을 신고·납부하였다가, 취득세 과세표준이 위 학교용지 등 부동산의 감정평가액임을 전제로 위 신고·납부 세액과의 차액을 감액하여 달라는 취지의 경정청구를 하였으나, 관할 구청장이 이를 거부한 사안에서, 감정평가 차액 상당액은 갑 교회가 을 법인에 증여한 것으로 위 학교용지 등 부동산을 취득하는 데 들었다고 할 수 없으므로, 취득세 과세표준은 위 학교용지 등 부동산의 감정평가액 상당이라고 보아야 하는데도, 이와 달리 본 원심판단에 법리오해의 잘못이 있다고 한 사례
Unofficial English translation
[1] The meaning of 'the value as of the time of acquisition' prescribed as the tax base for acquisition tax in Article 10 (1) of the Local Tax Act [2] A case in which Church A entered into a contract with School Foundation B to the effect that Church A would exchange the school site and other real property owned by B Foundation for the religious site and other real property owned by Church A and contribute the difference between the appraised values to B Foundation without consideration, and completed the registration of transfer of ownership of the school site and other real property, and thereafter Church A transferred the said real property to C, and filed and paid acquisition tax and other taxes by setting the tax base for acquisition tax at the appraised value of the religious site and other real property exchanged as the counterpart pursuant to the proviso to Article 50 (1), subparagraph 3 of the Restriction on Special Local Taxation Act, etc., and then filed an application for correction seeking a reduction of the amount different from the tax amount so filed and paid on the premise that the tax base for acquisition tax was the appraised value of the school site and other real property, but the head of the competent district office rejected it, in which it was held that the judgment of the court below, which decided otherwise, was in error for misapprehension of legal principles, inasmuch as the amount equivalent to the difference in appraised values cannot be regarded as having been spent to acquire the school site and other real property because it was a gift made by Church A to B Foundation, and the tax base for acquisition tax must therefore be regarded as the amount equivalent to the appraised value of the school site and other real property.
Summary of the holding
The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Order
원심판결을 파기하고, 사건을 서울고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed, and the case is remanded to the Seoul High Court.
Provisions referred to
[1] 지방세법 제10조 제1항 [2] 지방세법 제10조 제1항, 구 지방세법 시행령(2017. 7. 26. 대통령령 제28211호로 개정되기 전의 것) 제18조 제1항 제5호, 제7호(현행 제18조 제1항 제10호 참조), 지방세특례제한법 제50조 제1항 제3호
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