2013Nu20325 Disposition of revocation of imposition of acquisition tax, etc.

Environment for Corporation:

Law Firm A, a legal entity A

The head of Gangseo-gu Busan Metropolitan Government

[Plaintiff-Appellant] Law Firm B

Busan District Court Decision 2013Guhap452 Decided August 23, 2013

February 26, 2014

March 26, 2014

1. The plaintiff's appeal is dismissed.

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

The judgment of the first instance shall be revoked. Each disposition of imposition of acquisition tax of KRW 103,530,710 against the Plaintiff on April 11, 2011 by the Defendant, of KRW 103,530,710, and special rural development tax of KRW 10,353,050, registration tax of KRW 77,648,020, and local education tax of KRW 14,423,260 (including additional tax) shall be revoked

1. Details of the disposition;

A. The Plaintiff is a corporation established on March 31, 2009 by dividing the final waste treatment business sector of the KOB into the division of waste treatment business sector.

B. On April 30, 2009, the ownership transfer registration under the Plaintiff’s name was completed on March 31, 2009 on the land of Gangseo-gu branch office Dong*** Miscellaneous branch******* (this subparagraph referred to as the “instant land”).

C. On April 28, 2009, the Plaintiff acquired the instant land by division meeting the requirements under each subparagraph of Article 46(1) of the Corporate Tax Act against the Defendant, and applied for the full amount of acquisition tax and registration tax on the instant land, and the Defendant did not impose acquisition tax, special rural development tax, registration tax, local education tax, etc. on the instant land.

D. However, the Defendant, upon conducting a tax investigation on October 20, 2010, imposed KRW 103,53,05,040 on April 11, 201 on the ground that the Plaintiff acquired the instant land and did not belong to the succeeded business from the divided corporation by the end of the business year that belongs to the registration date of the division, on the grounds that the Plaintiff did not belong to the succeeded business (hereinafter “the instant disposition”) by not later than the end of the business year that belongs to the registration date of the division. The Defendant imposed KRW 205,95,040 on April 11, 201 by applying the acquisition tax of the instant land as the tax base and the special rural development tax, KRW 10,353,050,00, registration tax, KRW 77,648,020, local education tax, KRW 14,423,260

[Ground of recognition] Unsatisfy, Gap evidence 1 to 5, Eul evidence 1 (hereinafter referred to as "specific number")

(2) Except as described, each entry, including a branch number, and the purpose of the entire pleading

2. Whether the disposition is lawful;

A. The plaintiff's assertion

1) The Plaintiff met the requirements for reduction and exemption of acquisition tax and registration tax under Articles 119(1)10 and 120(1)9 of the former Restriction of Special Taxation Act (amended by Act No. 19921, Jan. 1, 2010; hereinafter the same) by continuing to operate the waste disposal business succeeded by the Plaintiff from the Plaintiff at the end of the business year in which the registration date of the division falls, and thus, the instant disposition otherwise stated is unlawful (hereinafter referred to as “claim 1”).

2) The instant disposition is a disposition of additional collection for ex post facto collection of acquisition tax and registration tax already reduced or exempted at the time of acquisition of the instant land, and thus, there is a separate basis for additional collection under the relevant statutes. However, the instant disposition, which was collected retroactively by the Defendant by applying the amended Act as seen earlier, was unlawful even though the former Act on Special Cases Concerning Tax Restriction was amended by Act No. 9221 on January 1, 2010, and there was no provision for additional collection under the former Act on Special Cases Concerning Tax Restriction, which was amended by Act No. 9221 on January 1, 2010.

(b) Relevant statutes;

As shown in the attached Table-related statutes.

C. Determination

1) Judgment as to the Plaintiff’s assertion

A) Articles 119(1)10 and 120(1)9 of the former Restriction of Special Taxation Act provide that “The registration of the property acquired through division meeting the requirements under each subparagraph of Article 46(1) of the Corporate Tax Act (Article 47(1) of the same Act in the case of spin-off) shall be exempted from acquisition tax and registration tax.” Article 46(1) of the former Corporate Tax Act (amended by Act No. 9898, Dec. 31, 2009; hereinafter the same shall apply) provides that a domestic corporation which has operated the business continuously for five years or more as of the registration date of the division shall be divided under the conditions as prescribed by the Presidential Decree (Article 1). Article 119(1)10 and 120(1)9 of the former Restriction of Special Taxation Act provides that the whole division received from a divided corporation or extinguished counterpart corporation to a division and merger shall be allocated to the stockholder of the divided corporation or extinguished counterpart corporation to the business (Article 28(3) of the former Enforcement Decree) of the Corporate Tax Act).

On the other hand, the interpretation of tax laws and regulations is to be interpreted in accordance with the principle of no taxation without the law, or to prevent the requirements for tax exemption or tax exemption, barring any special circumstance, and it is not permitted to expand or analogically interpret it without reasonable grounds. In particular, it accords with the principle of fair taxation to strictly interpret the provisions that clearly state preferential provisions among the requirements for tax exemption or exemption (see, e.g., Supreme Court Decision 2002Du9537, Jan. 24, 2003).

B) In light of the above provisions and legal principles, comprehensively taking account of the overall purport of pleadings as to this case’s health room, evidence as mentioned above, Gap’s evidence, and evidence Nos. 6 through 18, 1 YU, a divided company, concluded a service contract for the design of landfill facilities, measurement and geological survey, change of contents of consultation, and authorization between Han-gu Corporation and the operator of the instant land on December 29, 2006. ② The plaintiff was established by dividing the waste disposal business sector into the waste disposal business sector from 203rd on March 31, 2009, and the Busan Free Economic Zone No. 400 on April 30, 2009. 3rd on March 1, 2009. 20, 200 Busan Free Economic Zone No. 973rd on May 20, 2009. 3rd on the project plan to establish the ownership transfer plan in the name of the plaintiff on March 31, 2009

According to the above facts, the plaintiff, a corporation established through division, succeeded to waste disposal business from the sources of the divided corporation as a divided corporation to December 31, 2009, which was the end of the business year to which the registration date of the division belongs, entered into a service contract with Sam Young-Tech Co., Ltd. on the civil engineering and implementation plan for the land of this case, and submitted only the application for the designation of the project implementer and the application for the approval of the implementation plan to the relevant administrative agency for the designation of the urban planning facility project (waste disposal facilities). Not only did the construction for the construction of the land of this case have not commenced, but also did not obtain the designation of the project implementer and the authorization of the implementation plan from the relevant administrative agency. Thus, it is difficult to view that the plaintiff directly used the land of this case by December 31, 2009, which is the end of the business year to which the registration date of the division belongs.

Therefore, the acquisition of the land in this case does not meet the requirements for reduction or exemption of acquisition tax and registration tax under Articles 119(1)10 and 120(1)9 of the former Restriction of Special Taxation Act. Thus, this part of the Plaintiff’s assertion is without merit.

2) Judgment on the Plaintiff’s assertion

A) If the requirements for reduction or exemption are met, the disposition of additional collection is defined in the aspect of post management as to whether it is appropriate to use the original reduction or exemption after reduction or exemption of the tax amount, and it is a separate disposition that differs from the original disposition of additional collection. If the disposition of additional collection fails to meet the requirements for additional collection as prescribed in the pertinent Act, the disposition of additional collection becomes an unlawful disposition. Even if it fails to meet the requirements for additional collection, it cannot be deemed a legitimate disposition of additional collection (see, e.g., Supreme Court Decision 97Nu1846, Aug. 21, 1998).

In light of the above legal principles, the preliminary issue of this case is whether the tax amount already reduced or exempted is an additional collection or an additional collection after the ex post facto collection of the tax amount, which is ultimately an interpretation issue of Articles 119(1)10 and 120(1)9 of the former Restriction of Special Taxation Act, etc. In order to make the judgment, it should be comprehensively considered such factors as the reduction and exemption of acquisition tax, etc. and additional collection, the entire contents, form, legislative purpose, and purport of the provisions under the Act on the Payment of Tax Amount, etc.

B) Articles 119(1)10 and 120(1)9 of the former Restriction of Special Taxation Act provide that "property acquired through division meeting the requirements under each subparagraph of Article 46(1) of the Corporate Tax Act (Article 47(1) of the same Act in the case of spin-off) shall be exempted from acquisition tax and registration tax, and Article 46(1)3 of the former Corporate Tax Act provides that "a corporation newly established by division or a counterpart corporation to a division and merger shall continue to conduct business acquired by succession from a divided corporation or extinguished counterpart corporation to a division and merger by the end of the business year in which the registration date of the division falls."

In full view of the contents and the form of the above provisions of the statutes, the exemption from acquisition tax and registration tax pursuant to Articles 119(1)10 and 120(1)9 of the former Special Taxation Restriction Act is the property acquired by a corporation established through division from the corporation to the end of the business year in which the date of the registration of the division falls. Only when the newly incorporated law continues to engage in the business succeeded from the divided corporation until the end of the business year in which the date of the registration of the division falls, the relevant property becomes subject to reduction and exemption, and it is deferred until the expiration of the period. On the other hand, if the corporation does not continue to engage in the business until the expiration of the period, it is consistent with the principle of strict interpretation of the tax law. In other words, it is difficult to view that the "whether the newly incorporated law corporation continues to engage in the business succeeded from the divided corporation until the end of the business year in which the date of division, etc. belongs to the requirements for reduction and exemption of acquisition tax and other tax exemption or exemption from the acquisition tax.

Therefore, if a corporation established through division fails to continue to conduct the business succeeded from the company before the division by the end of the business year which includes the registration date of the division, the land concerned is excluded from the reduction and exemption of acquisition tax, etc. from the beginning, as it is subject to Article 119(1)10 and Article 120(1)9 of the former Restriction of Special Taxation Act. In this case, the tax authority's imposition disposition, such as acquisition tax, etc., is not the disposition of additional collection.

C) Ultimately, the instant disposition constitutes an original disposition that imposed and notified acquisition tax and registration tax on the instant land subject to imposition of acquisition tax and registration tax pursuant to Articles 119(1)10 and 120(1)9 of the former Restriction of Special Taxation Act, as the Plaintiff, a corporation established as a corporation, was unable to continue to engage in the waste disposal business succeeded from the Plaintiff, a divided corporation, by December 31, 2009, which is the end of the business year to which the registration date of the division belongs. Thus, the Plaintiff’s assertion on this portion of the instant disposition based on the premise that the instant disposition is a separate collection disposition on the tax already reduced or exempted, is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.

Gunam-do (Presiding Judge)

Lives and worship

Freeboard Kim

Relevant statutes

(1) The former Restriction of Special Taxation Act (amended by Act No. 9921, Jan. 1, 2010)

Article 119 (Exemption, etc. from Registration Tax)

(1) Registration tax on the registration or enrollment falling under any of the following subparagraphs shall be exempted ( subparagraphs 13 and 13):

50/100 shall be reduced or exempted in the cases of subparagraphs 28 and 29. In such cases, Article 138 (1) of the Local Tax Act shall apply.

The tax rate under paragraph (1) shall not apply.

10. Division satisfying the requirements under subparagraphs of Article 46 (1) of the Corporate Tax Act (Article 47 (1) of the same Act, in case of physical division);

registration of the property acquired by such

Article 120 (Exemption, etc. from Acquisition Tax)

(1) Acquisition tax on the acquisition of any of the following property shall be exempted ( subparagraphs 12 and 24):

50/100 shall be reduced or exempted in the case of subparagraphs 25 and 25.

9. Division satisfying the requirements under subparagraphs of Article 46 (1) of the Corporate Tax Act (Article 47 (1) of the same Act, in the case of physical division);

property acquired by such corporation due to such corporation

(1) The former Corporate Tax Act (amended by Act No. 9898 of Dec. 31, 2009)

Article 46 (Inclusion of Amount equivalent to Profit from Division Evaluation in Calculation of Losses)

(1) A corporation established through division or division in the case of a division (excluding a spin-off) meeting the following requirements:

Evaluation and acceptance of assets of divided corporation or counterpart corporation to a merger and division;

In the case of succession, among the value of the succeeded assets (limited to such assets as prescribed by the Presidential Decree), the value of such assets;

The amount equivalent to division evaluation marginal profit shall belong to the business which falls under the registration date of division.

In calculating the income amount of the year concerned, it may be included in deductible expenses.

1. A domestic corporation that has operated business continuously for not less than five years as of the registration date of the division;

be divided in accordance with this section.

Stockholders of a divided corporation or extinguished counterpart corporation to a division and merger shall be the corporation established by division or the division and merger.

The total cost of division received from a substitute method (the ratio under Article 44 (1) 2 in the case of a division and merger)

corporation or counterpart corporation to a division and merger, the shares are owned by the shareholders of the divided corporation or extinguished counterpart corporation to the division and merger

be allocated in proportion to the shares held.

3. A corporation established through division or a counterpart corporation to a merger through division by the end of the business year which includes the registration date.

It shall continue to operate the business succeeded by the divided corporation or extinguished counterpart corporation to a division and merger.

(4) In the application of paragraphs (1) and (2), the judgment board on the continuation or discontinuance of the succeeded business.

Matters necessary for the calculation of quasi, deductible expenses, or inclusion in gross income and methods thereof shall be prescribed by Presidential Decree.

shall be determined by the Regulations.

(1) former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 22184, Jun. 8, 2010)

Article 80 (Inclusion of Amount equivalent to Merger Evaluation Marginal Profit in Calculation of Losses)

(3) The company succeeded from a merged corporation before the end of the business year in which the merger is registered.

No one half or more of the value of fixed assets for business use shall be disposed of or used directly for the relevant business succeeded to;

In cases of conduct, it shall not fall under Article 44 (1) 3 of the Act. In such cases, it shall be succeeded.

a business (based on subdivisions under the Korean Standard Industrial Classification, and hereafter referred to as the "business" in this Article)

(C)in the case of two or more categories, each project shall be determined, and limited to the assets of a business division falling under the same subparagraph;

Paragraph (2) shall apply to the determination.

(6) The following subparagraphs shall be registered within three years from the commencement date of the business year following the business year in which the merger is registered:

Notwithstanding paragraph (5), Article 44 (2) of the Act shall apply to any of the following cases:

(d) Lump sum depreciation reserve fund or the balance of the advanced depreciation reserve fund in the business year in which the relevant cause occurs;

The amount shall be included in the gold. In such cases, if the succeeded project is two or more, it shall be judged by each project.

1. Where a merged corporation disposes of not less than 2/3 of the value of fixed business assets succeeded from a merged corporation;

(b) is not used directly for the succeeded business;

2. Where a business received by succession is suspended for 6 months or more or closed.

Article 83 (Inclusion of Amount from Transfer of Assets due to physical division in Calculation of Losses)

(4) The determination on the continuation or discontinuance of a business succeeded by a corporation established through division under Article 80 (3) and (6) and other relevant matters shall be made.

The application shall apply mutatis mutandis to the end.