[종합소득세부과처분취소][공2006.2.15.(244),263]
In order for a national who operates a small or medium enterprise to be subject to special tax reduction or exemption under Article 7 of the former Restriction of Special Taxation Act, whether he/she has to operate the business at the end of the taxable period subject to reduction
The special tax reduction system for small and medium enterprises under Article 7 (1) of the former Restriction of Special Taxation Act (amended by Act No. 6538 of Dec. 29, 2001) is to support the improvement of financial structure and investment in facilities of small and medium enterprises so that it can be achieved smoothly by granting temporary reduction of or exemption from income tax and corporate tax to protect and foster domestic small and medium enterprises with weak competitiveness. In light of the fact that the amount equivalent to the tax reduced or exempted is a special tax system that assumes that it should be used for the prescribed purpose of the same Act, a national operating a small and medium enterprise is required to operate the relevant business at least at the end of the taxable period subject to the reduction or exemption.
Articles 7(1), 145(5)(current deleted) and 146 subparag. 4(current Deletion) of the former Restriction of Special Taxation Act (amended by Act No. 6538, Dec. 29, 2001)
Plaintiff
Head of the Daegu Tax Office
Daegu High Court Decision 2004Nu1323 delivered on December 10, 2004
The appeal is dismissed. The costs of appeal are assessed against the plaintiff.
We examine the grounds of appeal.
Article 7 (1) of the former Restriction of Special Taxation Act (amended by Act No. 6538 of Dec. 29, 2001; hereinafter "the Act") provides that a small or medium enterprise operating a manufacturing business shall be subject to reduction or exemption of an amount equivalent to the tax amount calculated by applying the reduction or exemption rates under the classification of subparagraphs of the same paragraph to the income tax or corporate tax on income accrued from the relevant business not later than the taxable year ending on or before December 31, 2003. Articles 145 (5) and 146 (4) of the Act provide that a resident whose tax amount has been reduced or exempted under the above provision shall use the amount equivalent to the reduced or exempted tax amount for the redemption of fixed assets or long-term loans under the conditions as prescribed by the Presidential Decree. In order to use them for such purpose or short of the above purpose, a national shall pay the amount equivalent to the interest amount calculated under the conditions as prescribed by the Presidential Decree at the time of filing the tax base of the taxable year whereto belongs the date of such cause by adding it to the prescribed reduction or exemption rate to the tax amount.
In the same purport, the court below is just in holding that the plaintiff who had engaged in the manufacturing business under Article 7 (1) of the Act was not subject to special tax reduction or exemption under the above provision because he had already discontinued his business before December 31, 2001, which is the end of the taxable period of global income tax for the year 2001, which belongs to the application for tax reduction or exemption under Article 7 (1) of the Act, and there is no error in the misapprehension of legal principles as to the subject of special tax exemption under Article 7 (1)
Therefore, the appeal is dismissed, and the costs of appeal are assessed against the plaintiff. It is so decided as per Disposition by the assent of all participating Justices.
Justices Lee Hong-hoon (Presiding Justice)