B. The meaning of “transfer value” under Article 55-10(1) of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act

B. Article 55-10 (1) of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 13545 of Dec. 31, 191) provides that the new factory's value is exempted from capital gains tax equivalent to the ratio of the value of the new factory to the value of the old factory, namely, the disposal price of the old factory to the amount invested in the new factory among the disposal price of the new factory, and that the value of the new factory is "transfer value" in response to the book value (which refers to the actual transaction value). If the new factory's value is "transfer value", it is reasonable to deem that the above "transfer value" refers to the actual transaction value among the transfer price under the Income Tax Act, and if the above "transfer value" refers to the standard market price, the value of the old factory is excessively counted as the value of the new factory, and thus the excessive ratio of exemption is unreasonable.

The costs of appeal are assessed against the plaintiff.

Article 67-12 (1) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4451 of Dec. 27, 1991) provides that capital gains tax shall be exempted in cases of a transfer for the purpose of relocating a factory. The purport of Article 67-12 (1) of the former Regulation of Tax Reduction and Exemption Act lies in supporting the relocation of a factory so that the factory may continue to operate the factory even after the relocation by giving benefits from income tax reduction and exemption to the transferor of the building site, building, etc. of the previous factory in order to relocate the ownership of the factory (see, e.g., Supreme Court Decision 91Nu8487, Apr. 28, 1992). In order to examine such intent, Article 55-10 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 13545 of Dec. 31, 191) provides that "the value of the new factory in this case shall be the value of the new factory under consideration of the transfer value."

In the same purport, the court below's rejection of the plaintiff's claim on the premise that the above "transfer value" means the standard market value is just, and there is no error of law by misapprehending the legal principles on the meaning of "transfer value" and "transfer value" as in the lawsuit.

There is no reason to discuss this issue.

Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Yong-hun (Presiding Justice)