ENGLISH

- The acquisition tax refers to the local tax imposed on those who acquire real estate, vehicle, golf membership, condominium membership, etc. in the province where the relevant real estate is located (Article 7(1) of the “Local Tax Act”).

- The acquisition tax is calculated by applying the tax rates under Articles 11 through 15 of the “Local Tax Act” to the tax basis under Article 10 of the same Act.

- The tax basis for acquisition tax is the value at the time of acquisition; provided, however, that if the acquisition is made in annual installment, the tax basis for acquisition tax shall be the amount of the annual installment (referring to the actual amount paid each time, and including the contract deposit which is included in the amount acquired) (Article 10 of the Local Tax Act).

- In the case of gratuitous acquisition of real estates, etc., the value at the time of acquisition shall the value (value decided in a comparable trade, appraised value, or public sale value, etc.) generally deemed to be accepted in a transaction executed freely between an unspecified number of persons at the time of such acquisition (Article 10-2(1) of the Local Tax Act).

- In the case of derivative acquisition for value of real estates, etc., (referring to a transaction where the compensation is paid for acquisition, such as sale and exchange), the value at the time of acquisition shall be the actual acquisition price, including any and all expenses paid or payable to the counterparty or a third party for the acquisition of the object before the time of acquisition (Article 10-3(1) of the Local Tax Act).

- In the case of original acquisition of real estates, etc., the value at the time of acquisition shall be the actual acquisition price (Article 10-4(1) of the Local Tax Act).

- Notwithstanding Articles 10-2 and 10-3 of the Local Tax Act, the value at the time of acquiring a motor vehicle or mechanical equipment shall be the price or the value subject to the following classification (Article 10-5(1) of the Local Tax Act):

- The value at the time of acquisition shall be the actual acquisition price equivalent to the value increased as a result of any of the following changes (Article 10-6(1) of the Local Tax Act):

- When real estate is inherited, the acquisition tax for the real estate is calculated by applying the standard tax rate to the tax basis (Articles 11 and 12 of the “Local Tax Act” and Article 23(3) of the “Enforcement Decree of the Local Tax Act”).

- If any real estate such as a golf course, a high-end residential house, or a high-end recreation center is acquired, the amount calculated by applying the above standard tax rates plus 400/100 of the base rate for heavy taxation (20/1,000) (Article 13(5) of the Local Tax Act).

- The tax rates for the acquisition tax may be adjusted according to the relevant municipal ordinance within the extent of 50/100 of the tax rates (Article 14 of the “Local Tax Act”).

- A person who has inherited an object subject to acquisition tax shall report the calculated amount of acquisition tax within six months (nine months for each inheritor whose place of domicile is in a foreign country) from the commencement of inheritance (judicial declaration of disappearance for any disappeared persons) (Article 20(1) of the “Local Tax Act”).

- If a person obligated to pay acquisition tax fails to fulfill his/her duty to pay taxes, he/she will be subject to the collection of the calculated amount of acquisition tax or the tax shortfall in addition to the following additional taxes by means of ordinary collection (Article 21(1) of the “Local Tax Act,” Articles 53 through 56 of the “Framework Act on Local Taxes,” and Article 34 of the “Enforcement Decree of the Framework Act on Local Taxes”).