[Exclusive] Tax Tribunal rejects Lotte Shopping’s petition against W32.3 billion taxes

By Park Gyu Jun

Lotte’s shopping complex is currently under construction in Songdo, Incheon.

Due to a prolonged delay of the construction, however, the central and local governments imposed around 30 billion won ($21 million) worth of real estate taxes on the company last year.

Crying foul over the taxation, Lotte filed a petition with the Tax Tribunal. But it was confirmed that its appeal had been dismissed.

In other words, Lotte has been unable to get the money back.

On Oct. 6, the Tax Tribunal rejected Lotte Shopping’s request to order Incheon’s Yeonsu-gu Office to return the tax it collected from the retailer.

The decision came a year and three months after Lotte Shopping filed the petition with the Tax Tribunal in July last year.

Following the delay in its shopping mall’s construction in Songdo, Incheon, Lotte Shopping was forced by the Yeonsu-gu Office in June last year to pay a 1.04 billion won property tax.

Based on the local government’s taxation, the National Tax Service also imposed a comprehensive real estate holding tax on the company. As a result, Lotte Shopping had to pay a combined 32.3 billion won worth of real estate taxes.

If a construction has been suspended on a plot of land for over six months, the land is subject to the general aggregate taxation with higher tax rates, not the special aggregate taxation.

The Tax Tribunal ruled in favor of the local government, as the former considered the latter’s general aggregate taxation to be reasonable.

Lotte Shopping is said to be deliberating on countermeasures, as the company received a letter lately on the Tax Tribunal’s decision.

Given that Lotte is on the brink of losing all the taxes it paid regarding the shopping mall’s site, Yeonsu-gu Office expects a lawsuit from the company.

Meanwhile, Lotte Shopping has accelerated the construction of Lotte Mall Songdo after the taxation.

By beginning the main construction from the second half of next year, Lotte plans to open the 22-story shopping mall with four basements during the second half of 2025.

*This was translated from the article originally written in Korean. For more accurate information, please refer to the original version by using the link below. In case of discrepancies between the two versions, the Korean version shall prevail.

https://n.news.naver.com/mnews/article/374/0000308141?sid=101

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