"Lotte Shopping Faces Administrative Lawsuit Over Cancellation of Property Tax Imposed Due to 'Songdo Lotte Mall Construction Delay'"

[Asia Economy Reporter Park Hyesook] Lotte Shopping has filed an administrative lawsuit, claiming that the taxes imposed on the construction land of 'Lotte Mall Songdo' are excessive.

According to Yeonsu-gu, Incheon, on the 21st, Lotte Shopping filed a lawsuit against the district office at the Incheon District Court on the 4th of last month, seeking the cancellation of the 'property tax and other tax imposition decisions.'

Lotte Shopping took this follow-up action after its tax appeal filed with the Tax Tribunal last year was dismissed.

Previously, Yeonsu-gu found that although Lotte Shopping had reported the start of construction for a complex shopping mall in Songdo International City, no substantial construction work had been carried out.

Accordingly, from 2016 to 2020, instead of applying the separate aggregated tax rate for commercial building land, the comprehensive aggregated tax rate was applied, resulting in an additional property tax of 1.03 billion KRW. Based on this, the National Tax Service also calculated the comprehensive real estate tax, a national tax, increasing Lotte Shopping's tax burden to approximately 32 billion KRW.

According to the Local Tax Act, land under development with a building permit is subject to a lower separate aggregated tax rate, but if construction is halted for more than six months, the comprehensive aggregated tax rate applies.

However, Lotte Shopping has filed an administrative lawsuit, refusing to acknowledge about 400 million KRW in additional taxes for two years, 2016 and 2020, out of the local taxes imposed from 2016 to 2020.

During last year's tax appeal process, Lotte Shopping claimed that it had dispatched personnel to the construction site and continuously proceeded with construction, but this was not accepted.

Lotte Mall Songdo is being developed with four basement floors and 22 above-ground floors, with a total floor area of 288,000 square meters. It is scheduled to open in the second half of 2025.