"Property Tax Not Imposed on Walkways" IBK Wins 1.7 Billion KRW Local Tax Lawsuit

The court ruled that the tax imposed on IBK Industrial Bank's private land in Euljiro should be canceled because "it is a road that anyone can freely pass through."

This ruling implies that even if the land is private, if it is used as a pedestrian path freely accessible to the general public, there is no need to pay property tax.

Seoul Administrative Court, Seocho-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

According to the legal community on the 17th, Judge Kim Jeong-woong of the Administrative Division 3 at the Seoul Administrative Court recently ruled in favor of the plaintiff in the first trial of the lawsuit filed by IBK Industrial Bank against the Mayor of Jung-gu, Seoul, seeking cancellation of the property tax imposition.

Previously, the Jung-gu Office of Seoul imposed taxes amounting to over 1.7 billion KRW in September 2018 on the land in Euljiro, Jung-gu, Seoul, where IBK Industrial Bank's headquarters and Finance Tower are located.

IBK Industrial Bank argued that since the road is used as a pedestrian path for citizens, it should not be subject to taxation. According to the Local Tax Act, private roads used for the free passage of the general public are exempt from taxation because exclusive and monopolistic use and profit activities by the landowner are difficult.

The Tax Tribunal recognized some of the land as a private road but deemed the property tax imposition on the parts between IBK Industrial Bank's headquarters and Euljiro and Samil-daero, and between Finance Tower and Samil-daero to be justified. The reason given was "to secure openness and stability of the IBK building and to attract customers."

IBK Industrial Bank challenged this taxation as well by appealing to the administrative court, which ruled in favor of IBK Industrial Bank.

The court stated, "Various high-rise buildings and office facilities are gathered here, and there are subway station entrances, bus stops, and crosswalks installed nearby," adding, "Overall, this land is a passage freely used by an unspecified large number of people without any restrictions."

Furthermore, the court judged, "It seems unlikely that IBK Industrial Bank will monopolize and exclusively use this land in the future, risking damage to its image."

The court added, "Nearby public pedestrian paths are obstructed by street trees, flower beds, and bus stops," and "It is practically difficult to use only the public pedestrian paths for passage, so these pedestrian paths have not properly functioned as thoroughfares from the beginning. Therefore, it is reasonable to consider the entire land in question as a private road exempt from taxation."

This content was produced with the assistance of AI translation services.