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  • Interpretation
  • No.460
  • Date
  • 1998/07/10
  • Issue
    • Does the Ministry of Finance directive declaring that a structure on land used as a "house of worship" is not a "residence" as defined in Article 9 of the Land Tax Act for tax exemption purposes constitute discrimination against any particular religion and is it thus in violation of the Constitutional provision guaranteeing the people*s freedom of religion?
  • Holding
    •        Under Article 6 of the Land Tax Act, reasonable tax reduction or exemption may be allowed for land used for such purposes as religion and reasonable homesteads, in order to develop the economy, encourage land utilization and promote social welfare. The second sentence of the Article grants the administrative authorities the power to establish the criteria of and procedure for such reduction or exemption. While the term "homestead land" is explicitly defined in Article 9 of said Act, the law is silent on the meaning of "residence." The view expressed by the Ministry of Finance in its directive Tai-Tsai-Shui-Tze No. 31627 (March 14, 1983) that “a structure on land used as a house of worship is not land used for *residence* for own use as defined in Article 9 of the Land Tax Act” is a negative construction of the term "residence" made by the competent authority in applying the aforesaid statute, and is consistent with the legislative purposes of the Land Tax Act, without going beyond the scope of the concept of residence. It is thus not in conflict with the doctrine of taxation by law as embodied in the Constitution. Furthermore, the directive is applicable to all religions without distinctions, and does not bring about any discrimination in taxation between different religions. It is therefore not contrary to the intent expressed in Articles 7 and 13 of the Constitution.
  • Reasoning
    •        That the people have the duty to pay tax as prescribed by law is explicitly provided in Article 19 of the Constitution. The expression "to pay tax as prescribed by law" means that the ranges of both tax payment and tax exemption are subject to explicit prescription of law. When any doubt occurs in connection with the application of any statutory provision, however, the competent authority is certainly empowered to make interpretation in accordance with the legislative purposes of the law. This has been clearly explicated in our Interpretation No. 267. It is also held by this Yuan in Interpretation No. 420 that laws involving taxation should be construed in light of the essence of the principle of  taxation by law and the respective legislative purpose of the law, with due consideration to be given to the economic significance and the principle of equality of actual taxation.     
      
    •        The Land Tax Act provides in Article 6 that "in order to develop the economy, encourage land utilization and promote social welfare, reasonable tax reduction or exemption may be allowed for land used for national defense, government agencies, public facilities, covered sidewalks, research institutes, education, transportation, irrigation, water supply, salt production industry, religions, medical care, sanitation, graveyards and cemeteries, charitable or public welfare organizations, reasonable homesteads, and other purposes, and for rezoned, reclaimed, and improved land; the criteria of and procedure for such reduction or exemption shall be established by the Executive Yuan." Article 9 of the same Act provides: "The term *homestead land* in this Act refers to the land used for a residence for which the landowner or his spouse or any linear relative thereof has effectuated household registration and which is not held by any lease or used for commercial purposes." Although no definition is given by the law of the term "residence," it must be noted that the application of any law and regulation is not only governed by the text of the law but also subject to the intrinsic limits of the nature of the matter, and that as a general concept a "residence" is a fixed structure on land that serves as a place for people*s daily living and is usually equipped with basic functional facilities for living, with space controllable and manageable by the residents as well as privacy. The view expressed by the Ministry of Finance in its directive Tai-Tsai-Shui-Tze No. 31627 (March 14, 1983) that a structure on land used as a house of worship is not "residential" land for own use as defined in Article 9 of the Land Tax Act, and that no preferential tax rate may be allowed under Article 34 of the Act for the purpose of assessment of land value increment tax thereon, is a negative construction of the term "residence" made by the competent authority in applying Article 9 of the Land Tax Act, and is consistent with the legislative purposes of the Land Tax Act, without going beyond the scope of the concept of residence. On the ground of the essence of this Interpretation as stated above, the directive is, thus, not in conflict with the doctrine of taxation by law as embodied in the Constitution. 
      
    •        Article 13 of the Constitution provides that "the people shall have the freedom of religious belief." This means that people have the freedom to believe in or not to believe in any religion and the freedom to participate in or not to participate in any religious activities. In addition, the state may not grant any aid or award to or impose any restraint on any particular religion, nor shall the state confer any privilege on any person or place any person at a disadvantage because of his religious belief. Under Article 6 of the Land Tax Act, tax on land for religious uses may be reduced or exempted. The provision is applicable insofar as the land meets the criteria for tax reduction or exemption specified in the Regulations Governing the Reduction or Exemption of Land Tax, Article 8, Paragraph 1, Subparagraph 9, established by authority granted under the same article of the act, with no distinction between religions. Where a house of worship has not effectuated the registration as a foundation or temple, the land tax reduction or exemption accorded to religious organizations under said subparagraph is not available thereto, and this has nothing to do with the freedom of religion. Furthermore, to the extent that a "house of worship" is a place where an altar is freely set up by believers to offer sacrifices to gods and for the followers to pay to worship, it is distinguishable by nature from a residence, which is characterized by privacy. The Ministry of Finance directive mentioned above, which declares that a structure on land used as a house of worship is not a "residence" under Article 9 of the Land Tax Act, does not bring about any discrimination in taxation between different religions, and is therefore not in conflict with the intent expressed in Articles 7 and 13 of the Constitution.  
      
    • *Translated by Raymond T. Chu.
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