Gyeonggi-do Preserves 35.9 Billion KRW in Resources Following Last Year's Victory in Provincial Tax Administrative Lawsuit

Gyeonggi Provincial Government

Gyeonggi Province won 45 out of 55 administrative tax lawsuits last year. As a result, it was able to preserve financial resources amounting to 35.9 billion KRW.

Gyeonggi Province announced on the 22nd that it has maintained a winning rate of over 80% annually in provincial tax lawsuits over the past four years.

In a major victory case, Company A filed a lawsuit against Gyeonggi Province for 10.6 billion KRW, claiming that it should install substations and wastewater treatment plants necessary for its corporate-affiliated research institute, and argued for the application of the general tax rate along with acquisition tax reductions under the Local Tax Special Cases Restriction Act.

In response, Gyeonggi Province argued that these were not recognized as ancillary facilities of the research institute, were not indispensable facilities, and that the timing and address of the research institute installation were different, winning the case at the Supreme Court.

Company B filed a lawsuit against Gyeonggi Province, claiming that the additional land acquired through urban development commercial land readjustment (land redistributed to owners after land readjustment, requiring payment of liquidation money) should be subject to the original acquisition tax rate (2.8%) rather than the general acquisition tax rate (4%) because it was an original acquisition (new acquisition regardless of existing rights).

However, Gyeonggi Province argued that since the new rights did not contribute to social production and wealth, and there was a consideration between the additional land and the liquidation money, it was a paid succession acquisition, securing 3.6 billion KRW in financial resources through the court ruling.

Earlier, in 2019, Gyeonggi Province became the first local government nationwide to establish a dedicated local tax legal team and hired professional lawyers as responsible officials to jointly handle all cases involving provincial taxes over 10 million KRW together with city and county governments. As a result, the winning rate, which had been in the 60-70% range, rose to over 80% starting in 2020.

Choi Won-sam, head of the Taxation Division of Gyeonggi Province, explained, "We plan to do our best to enhance the professionalism to improve the consistency and efficiency of local tax litigation work and to ensure fair taxation and tax justice in major lawsuits against large law firms, which are increasing."

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