Go to Content Area :::

Decisions

Home > Decisions > Docket Search > Before 2022
:::
:::
  • Interpretation
  • No.286
  • Date
  • 1991/11/29
  • Issue
    • The Equalization of Land Rights Act and the Enforcement Rules of this Act provide that the land value which has automatically increased shall be calculated on the basis of the remainder of the total amount of the increased land value by subtracting the expenses for land improvement, and the land value increment tax shall be thus levied. Is this provision in conflict with the Constitution?
  • Holding
    •        Paragraph 3 of Article 143 of the Constitution provides: “If the value of a parcel of land has increased, not through the exertion of labor or the employment of capital, the State shall levy thereon a land value increment tax, the proceeds of which shall accrue to the public.”  This provision is for the purpose of implementing the policy of accruing the automatically increased land value to the public.  Article 35, and Paragraphs 1 and 2 of Article 36 of the Equalization of Land Rights Act, which was amended and promulgated on February 2, 1977, and Article 53 of the Enforcement Rules of this Act issued by the Executive Yuan on April 1 in the same year provide that, the land value which has automatically increased after the landowner declared the land value shall be calculated on the basis of the remainder of the total amount of the increased land value by subtracting all of the expenses for land improvement already paid by the landowner, and the land value increment tax shall thus be levied; though this remainder might include the value which has increased because of the improvement on the land, this calculation of the automatically increased land value is still not in conflict with the intent of Article 15 and Paragraph 3 of Article 143 of the Constitution, for this value which has increased because of the improvement on the land is not easily recognized and calculated, is hard to clearly distinguish from the value which has automatically increased, and the interests of the landowner have to be taken into account because the land value increment tax is not levied on the full amount of the increased land value.
      
  • Reasoning
    •        Paragraph 3 of Article 143 of the Constitution provides: “If the value of a parcel of land has increased, not through the exertion of labor or the employment of capital, the State shall levy thereon a land value increment tax, the proceeds of which shall accrue to the public.” This provision is for the purpose of implementing the policy of accruing the automatically increased land value to the public.  The first part of Article 35 of the Equalization of Land Rights Act, which was amended and promulgated on February 2, 1977, provides: “In order to implement the policy of accruing the increased land value to the public, the land value increment tax shall be levied on the land, the value of which has automatically increased after the landowner declared the land value.”  Paragraph 1, the first part, and Paragraph 2 of Article 36 of the same Act provide: “The levy of land value increment tax shall be calculated on the basis of the total amount of the increased land value and shall accrue to the public at every transfer of land ownership or at creation of the right of dian”; and “From the total amount of the increased land value as referred to in the preceding paragraph, there shall be subtracted all of the expenses for land improvement already paid by the landowner.”  Paragraph 1, the first part, and Paragraph 2 of Article 53 of the Enforcement Rules on this Act issued by the Executive Yuan on April 1 in the same year further provide: “The expenses which shall be subtracted according to Paragraph 2 of Article 36 of this Act include the expenses for land improvement, construction benefit charge, and the costs of land consolidation”; and “The expenses subtracted according to the preceding paragraph shall be proved by a receipt of payment of the construction benefit charge, a certificate of expenses for land improvement made by the engineering (construction) office, or a certificate of costs of land consolidation made by the land administration office, and these receipts or certificates shall be submitted by the landowner before paying the land value increment tax.”  Therefore the land value which has automatically increased after the landowner declared the land value shall be calculated on the basis of the remainder of the total amount of the increased land value by subtracting all of the expenses for land improvement already paid by the landowner, and the land value increment tax shall be thus levied.  Though this remainder might include the value which has increased because of the improvement on the land, this calculation of the automatically increased land value is still not in conflict with the intent of Article 15 and Paragraph 3 of Article 143 of the Constitution, for this value which has increased because of the improvement on the land is not easily recognized and calculated, is hard to clearly distinguish from the value which has automatically increased, and the interests of the landowner have to be taken into account because the land value increment tax is not levied on the full amount of the increased land value.  As to how to actually set the standard for the subtraction of expenses for land improvement during the calculation of the amount of the automatically increased land value, it could be set strictly or leniently, and it should be closely related to the adjustment of the value increment tax rate and the question of whether another income tax should be levied. We hereby additionally point out that it shall be comprehensively reviewed and improved in time by the authority concerned, accompanied with improvements in the tax levying procedure and be within the range of delegation of the statute.
      
    • *Translated by Jer -Shenq Shieh.
      
Back Top