The project implementer of the real estate development project is obligated to create public facilities or maintenance infrastructure once the project is approved. The public facilities or maintenance infrastructure created are attributed to the state...
The project implementer of the real estate development project is obligated to create public facilities or maintenance infrastructure once the project is approved. The public facilities or maintenance infrastructure created are attributed to the state or local governments through Gratuitous Contribution or Donation Acceptance. While Gratuitous Contribution is compulsory in accordance with the legal regulations of each development project, Donation Acceptance is a legal act and is made according to the donor's expression of intention to donate and accept payment. Therefore, there is a difference between these two from a legal perspective.
Until 2015, no acquisition tax was imposed on real estate acquired from a Gratuitous Contribution or Donation Acceptance under the Local Tax and thus, there was no need to distinguish between Gratuitous Contribution and Donation Acceptance. However, due to the tax revision in 2016, the “real estate” and infrastructure received for free of charge as "opposite benefits" of Gratuitous Contribution or Donation Acceptance and free use rights received by Donation Acceptance have been excluded from the acquisition tax exemption. As a result, since the acquisition tax payment amount may be incurred, it is necessary to distinguish the two.
However, in order to distinguish the two, it is necessary to clearly interpret the definition of "opposite benefits" in the law. Specifically, it is a question of whether something can be interpreted as "counter benefit" when receiving something in return for Gratuitous Contribution or Donation Acceptance. In addition, when 'real estate' is received, it may be a question of how to distinguish between non-taxable real estate and reduced real estate.
When examining the meaning of the opposite benefit, it is necessary to determine whether the opposite benefit exists in transactions with substantial and economic consideration under the tax law, not limited to bilateral contracts under the jurisdiction. As for Gratuitous Contribution, even if there is a real estate which a project operator received free of charge due to the abolition of the purpose from the administrative agency, it cannot be regarded as an opposite benefit. This interpretation is consistent with the Supreme Court's judgment that public facilities acquired by the project operator due to the abolition of the purpose are free succession acquisition because there is no consideration exchanged between Gratuitous Contribution and the free transfer. Therefore, real estate acquired on the condition of Gratuitous Contribution should be interpreted as being non-taxable, not subject to reduction or exemption.
On the other hand, Donation Acceptance is considered to be in a practical and economic compensation relationship under the tax law if the right to use is acquired free of charge in return even if it takes the legal form of a judicial gift contract. Therefore, if a free use right is provided in exchange for Donation Acceptance, the free use right is an opposite benefit to Donation Acceptance.
However, since acquisition tax is difficult to see as a development profit recovery system, it is desirable to reorganize the development profit recovery system such as development charges if the purpose is to limit development profits because there is a counter benefit. In addition, Donation Acceptance is a system that can expand necessary infrastructure even if the state does not directly invest in infrastructure, so it is necessary to provide benefits to revitalize projects where Donation Acceptance is made. For real estate acquired under the condition of Donation Acceptance, legislative amendments such as returning the acquisition tax to non-taxable are required.
In other words, the conclusion of the paper is that real estate acquired on the condition of Gratuitous Contribution is not subject to acquisition tax from an interpretive point of view, and the acquisition tax on real estate acquired on the cond...