2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The defendant's rejection disposition against the plaintiff on October 0, 2016 against the plaintiff shall be revoked.

A. On October 0, 2014, pursuant to the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor, the Plaintiff clan transferred 00 parcels of land in total,00,000 (hereinafter the name is omitted, and only the lot number is specified) to ○○○ City Corporation and received KRW 000 as compensation for the said land.

B. The Plaintiff clan reported the corporate tax base at around October 2015, including only 000 won transfer margin on each of the above lands when it reported the corporate tax base for the business year of 2014. However, around October 2015 (hereinafter “instant land”) and 000 capital gains on transfer, the Plaintiff clan additionally added KRW 000 to the corporate tax base for the business year of 2014 and filed a revised corporate tax return.

If this vote is arranged, it shall be as follows:

C. On October 0, 2016, the Plaintiff’s clan directly used the instant land for the proper purpose business for at least three consecutive years as of the date of the disposition, as the land was prepared to cover expenses incurred in the removal of the door or its related work, and the income from the disposition of the instant land was excluded from the income subject to taxation, and thus, the Plaintiff’s claim for correction of 00 won out of the corporate tax already paid for the business year 2014, but the Defendant rejected the Plaintiff’s claim for correction on October 0, 2016 (hereinafter “instant disposition”).

D. On October 0, 2017, Plaintiff clan filed an appeal against the instant disposition, but the Tax Tribunal rendered a decision to dismiss the appeal on October 0, 2017.

[Ground of recognition] Facts without dispute, Gap evidence 0 to 0, Eul evidence 0 and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff clan's assertion

Since around 1900, the plaintiff clan managed the memorial and cemetery by going through the land of this case and the 000 land, and from around 1900, the plaintiff clan deposited with AAA in charge of preparation for memorial affairs, the room and cemetery maintenance and repair, portraits, taxes (public charges) every year instead of having AA cultivate the above land. From around 2011, AA has been located far away from other land for health reasons, and the land of this case, the area of which is large, has been cultivated on behalf of BB for three years, and was paid for so doing. The above tenant was used as expenses such as preparation for religious services of the plaintiff clan, preparation for religious services, maintenance and repair, graveyard, portraits, taxes (public charges). Accordingly, since the land of this case was used directly for the protection of graves, which are the proper purpose business of the plaintiff clan, continuously for three years or longer at the time of the disposition, it constitutes a fixed asset subject to non-taxation of corporate tax.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Article 3(3)5 of the former Corporate Tax Act (amended by Act No. 12850, Dec. 23, 2014) provides that, among profit-making businesses that are subject to taxation of non-profit domestic corporations, income generated from the disposal of fixed assets shall, in principle, be subject to taxation. Article 2(2) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 27828, Feb. 3, 2017) provides that “The fixed assets used directly for the proper purpose business excluded from corporate tax are assets used directly for the proper purpose business prescribed by statutes or the articles of incorporation for at least three consecutive years as of the date of disposal of the fixed assets.”

This is a principle to treat income generated by disposing of fixed assets owned by a non-profit corporation as income subject to taxation generated from profit-making business, but if objective facts are acknowledged that the fixed assets have been used directly for the proper purpose business for three years as of the date of disposal, it would be exceptionally exempted from taxation by respecting the purpose of the activity of the non-profit corporation. Such exceptional provisions of reduction and exemption conform to the principle of tax equity.

2) In full view of the descriptions of Gap's evidence 0 and Nos. 0 and the purport of the whole arguments and arguments of the plaintiff clan, the purpose of the plaintiff clan's union's rules is to read the friendship among the clans and to cultivate the ○○○○ thought of descendants by enhancing the prestige of the clan, and to achieve that purpose, the plaintiff clan provides that the plaintiff clans shall conduct religious services, preservation of the tombstones, management of the clan property, lecture association, scholarship association, friendship association, friendship association, and other businesses for the achievement of that purpose. The land of this case can be recognized that the plaintiff clans leased the plaintiff's clan to Eul, not the plaintiff clans, from 200 to 200 to ○○ City Corporation and BB cultivated the ○○○, etc. from the land of this case.

3) As long as the lease of farmland is not included in the proper purpose business of the Plaintiff clan, it cannot be deemed that the farmland of this case was used directly for the proper purpose business of the Plaintiff clan, and if the land of this case was leased to a third party and used regardless of the proper purpose business of the Plaintiff clan, even though the rent, etc. for the land of this case was used for the proper purpose business of the Plaintiff clan, it is merely an indirect contribution to the operation of the proper purpose business of the Plaintiff

On the contrary, if the business to cover expenses falls under the proper purpose business as alleged by the plaintiff clan, all profit-making businesses are deemed the proper purpose business, and this would result in the unfair result, which, in principle, be treated as taxable income generated from profit-making business in case of revenue by disposing of the fixed assets owned by the non-profit corporation. However, if the business is directly used for the proper purpose business for three years as of the date of disposal of fixed assets

Therefore, the plaintiff's assertion cannot be accepted.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.