[법인세부과처분무효확인청구사건][고집1972특,295]
Whether evaluation marginal profit of a non-profit domestic corporation is subject to taxation under the Corporate Tax Act.
In light of the provisions of Article 1 and Article 2 (2) of the Corporate Tax Act, the evaluation marginal profits of a non-profit domestic corporation from the evaluation of fixed assets does not fall under any of subparagraphs 1 through 4 of Article 1 of the same Act, so it shall not be subject to corporate tax.
Articles 1 and 2 of the Corporate Tax Act, Article 1 of the Korean Racing Association Act
Korean Racing Association
Head of Dong Tax Office
The defendant confirmed that the disposition of imposition of 38,196,649 won and additional 3,819,664 won for the above tax on May 19, 1970 against the plaintiff and the disposition of imposition of 3,819,664 won for the above tax is null and void.
Litigation costs shall be borne by the defendant.
The same shall apply to the order.
During the business year from January 1, 1968 to December 31, 1968, the Plaintiff entered the total book value of KRW 271 information, previous 5,538 square meters, response 705 square meters, large 274 equal (hereinafter the above land simply referred to as "a short-term land") on the books of account for 151,725,850 won and KRW 232,724,200, which are fixed assets owned by Seongdong-gu Seoul, Seongdong-gu, Seoul, which are fixed assets, as 667, and KRW 271 information, previous 5,538 square meters, and approximately 70,98,350 on the books of account, and no dispute exists between the Plaintiff and the Plaintiff on May 5, 1970, the Defendant did not impose additional tax on KRW 38,196,596, and the above amount of tax as additional tax imposed on KRW 1965,294.65.65
Although the Plaintiff’s attorney operates a horse as a type of business, it is operated as a proper purpose business of the Plaintiff corporation as prescribed by the Korean Marina Act. Thus, it cannot be viewed as the business under Article 1(1)1 of the Corporate Tax Act. Even if the above horse is a business and part of the land owned by the Plaintiff was provided for the horse, it is not reasonable to impose tax on the Plaintiff’s fixed assets evaluation marginal profit, which is a non-profit corporation, as it is not based on the law. The Defendant’s attorney claims that the above horse is null and void as its main business even though the Plaintiff was a non-profit corporation. The Plaintiff’s fixed assets, which are the Plaintiff’s fixed assets, are used as the raising of horse and horse race racing, which is a profit-making business, except for the Plaintiff’s proper purpose business, is deemed to belong to the profit-making business pursuant to the proviso of Article 2(2) of the Enforcement Decree of the Corporate Tax Act and the evaluation marginal profit of assets belonging to a non-profit corporation, it is justified to impose tax on the Plaintiff’s fixed assets evaluation marginal profit.
Therefore, I will examine whether the horse operated by the plaintiff corporation is subject to taxation and whether the evaluation marginal profit of fixed assets owned by the non-profit corporation is subject to taxation under the Corporate Tax Act.
According to the provisions of the Korean Racing Association Act (Act No. 1012, Jan. 20, 1962), the Plaintiff is a nonprofit corporation established with the aim of contributing to the improvement and proliferation of mails, the promotion of marinas and the development of the livestock industry. The Plaintiff is a non-profit corporation established with the aim of contributing to the import, production, fostering and improvement of 1. Mail for the said purpose; 2. Guidance on the distribution and use of mails; 3. Mail’s implementation of the project on the sanitation of Mails (Article 17 of the above Act); and 5. Research and study, etc. on Mail(Article 17 of the above Act). Thus, the Plaintiff’s horse management is interpreted as an essential business purpose
Therefore, the income earned by the plaintiff through the above horse business is the income earned from the plaintiff's proper purpose business. Thus, it does not constitute the income earned from the continuous act of obtaining the business or price stipulated in Article 1 (1) 1 through 4 of the Corporate Tax Act, which is the income subject to a non-profit corporation's taxation.
Therefore, the disposition of taxation on the plaintiff's above fixed assets is unlawful on the premise that the plaintiff's main land provided for profit-making business under the Corporate Tax Act is a profit-making business which is subject to the corporate tax, and the disposition of taxation is imposed on the plaintiff's above fixed assets on the premise that the plaintiff's main land provided for this business is an asset provided for profit-making business. Even if the plaintiff's horse operation is not a proper business, but a business for profit-making business under Article 1 of the Business Tax Act, and part of the land, which is the plaintiff's fixed assets, is provided for the horse business under Article 2 (2) of the Enforcement Decree of the Corporate Tax Act, Article 1 of the Corporate Tax Act provides that the non-profit corporation shall only impose income tax on profit-making business and revenue under subparagraphs 1 through 4 of Article 2 of the Corporate Tax Act, and Article 2 (2) of the same Act provides that the non-profit corporation shall not impose corporate tax on other income. Thus, the plaintiff's above evaluation profits of fixed assets as a non-profit corporation shall not be imposed on the corporate tax.
In this case, since the disposition imposing corporate tax on the Plaintiff corporation becomes subject to taxation on evaluation marginal profits of its fixed assets which are not subject to taxation under the Corporate Tax Act, it shall be deemed that there is a significant and apparent defect, and thus, the Plaintiff’s claim seeking confirmation of invalidity of such a claim is justified, and the litigation cost shall be assessed against the losing party and it shall be decided as per the disposition.
Judges Lee Tae-tae (Presiding Judge)