[종합소득세부과처분취소][공1999.11.1.(93),2258]
The meaning of "income by income" under Article 58 (1) and (2) of the former Income Tax Act, and whether any deficit brought forward from business income can be deducted from other global income (negative)
Article 58 (1) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994) provides that the total sum of tax base for global income other than the income deduction by income type shall be separately included in the calculation of tax base for global income, and Article 58 (2) of the same Act, Article 113 (1), (2) and (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994), and Article 4 (1) of the same Act concerning the classification of residents' income, all of the above provisions shall be deemed to refer to "real estate income, business income, and forestry income based on their source," and it shall not be deemed to refer to "amount of global income and forestry income," and in case of a mutual-aid for global income without any provision such as "amount of losses carried forward from losses," it shall not be deemed to be deducted from the amount of global income for the corresponding year.
Article 58 (1) and (2) (see current Article 45 (1) and (2) of the former Income Tax Act (amended by Act No. 4803, Dec. 22, 1994); Article 113 (1), (2), and (3) (see current Article 101 (1) and (2) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467, Dec. 31, 1994) of the former Income Tax Act (amended by Act No. 1467, Dec. 31, 1994)
Plaintiff
Head of the Do Tax Office
Seoul High Court Decision 97Gu39348 delivered on July 30, 1998
The judgment below is reversed and the case is remanded to Seoul High Court.
The grounds of appeal are examined.
Article 58 (1) of the former Income Tax Act (amended by Act No. 4803 of Dec. 2, 1994; hereinafter referred to as the "Act") provides that the amount of losses incurred in the calculation of the income amount by type of income and the amount of income generated in the current year by books kept and recorded by a business operator (referring to a resident who has real estate income, business income, and forestry income) shall be included in the calculation of the income amount by type of income: Provided, That in the calculation of the real estate income amount, losses incurred in the calculation of real estate income shall not be included in the income other than the real estate income in the calculation of the global income amount, and Article 58 (2) of the Enforcement Decree of the Act provides that the amount of losses carried forward which has not been deducted in the calculation of the income amount by type of income under paragraph (1) of the current year after the date of commencement of each year shall be included in the calculation of the global income amount by type of income, and Article 18 (1) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 1467 of Dec. 147, 1998).
Therefore, the deduction of losses carried forward without any aggregate provision of global income such as the deficit amount can be deducted from the income amount, so the losses carried forward at the time of calculating the business income amount can be deducted only from the calculation of the business income amount for the corresponding year, and it should not be deducted from the calculation of the other global income amount.
Nevertheless, the court below held that the defendant's measure was unlawful on the premise that even if the loss incurred at the time of calculating the amount of business income may be deducted from the calculation of the amount of global income other than the business income. The court below erred by misapprehending the legal principles on the deduction of the amount of losses carried forward, which affected the conclusion of the judgment. Thus, there is a ground to point this out.
Therefore, the judgment of the court below is reversed and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.
Justices Park Jong-chul (Presiding Justice)