[Asia Economy (Suwon) = Reporter Lee Young-gyu] It has been revealed that Gyeonggi Province won 47 out of 55 local tax lawsuits last year, preserving a valuable total of 46.3 billion KRW in resources.
Accordingly, the winning rate was 85.5%, an improvement of 5.5 percentage points compared to 2021. The province is currently handling 134 ongoing lawsuits.
As corporate economic activities such as real estate development through complex ownership trust contracts are becoming increasingly specialized day by day, and high-taxpaying corporations effectively use large law firms and tax firms to avoid or underpay local taxes, the province established the first-ever dedicated local tax legal team in 2019 to respond effectively.
The dedicated team, staffed with professional lawyers, is responsible for jointly handling local tax lawsuits, identifying and supporting cases with identical issues, and providing legal arguments for appeals and higher court responses.
In a representative winning case, a prominent law firm filed a lawsuit against the province regarding the extension of a sunset local tax reduction clause that had been temporarily applied to 17 apartment complexes newly built by Construction Company A using eco-friendly construction methods in several cities and counties. In response, the province, jointly with the relevant cities and counties, argued that the construction company's mere expectation of an extension of the tax reduction is not subject to legal trust protection, winning the first trial and preserving 13.3 billion KRW in resources.
In a large-scale housing development project jointly promoted by Corporation B and others, claims were made that transactions between joint project participants should be subject to lower tax rates when organizing land ownership in the project area. The province responded by proving that land exchanges in the project area are paid contracts subject to higher tax rates, securing a confirmed victory and preserving 29.1 billion KRW in tax revenue.
The province jointly handles all local tax cases involving amounts over 10 million KRW with the cities and counties throughout the entire litigation process. Additionally, when lawsuits involving identical issues are filed across multiple cities and counties, the province provides standard documents or represents the cases to reduce administrative costs.
Choi Won-sam, Director of the Provincial Taxation Division, emphasized, "Through strengthening expertise, we will enhance the consistency and efficiency of local tax litigation work and do our best to realize fair taxation and tax justice in major lawsuits against increasing large law firms and others."
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