[1] Whether the regulation of parking fees under the Parking Lot Act constitutes a case where the use is prohibited or restricted under the Act and subordinate statutes that excludes non-business real estate (negative)

[2] Whether Article 43-2 (4) and (8) of the former Enforcement Decree of the Corporate Tax Act is invalid against this parent law (negative)

[3] Whether Article 30 subparagraph 1 of the former Enforcement Decree of the Corporate Tax Act is invalid against the parent law (negative)

[4] Whether the amount under Article 30 subparagraph 1 of the Enforcement Decree of the former Corporate Tax Act, which is a cost recognized by the government as not directly related to the corporation's business, should be included in deductible expenses (affirmative)

[1] When a corporation that runs a parking lot business installs and operates an off-road parking lot with permission from the competent authority under the former Parking Lot Act (amended by Act No. 4230 of Apr. 7, 1990) on its own land, it shall be subject to the local government ordinances under Article 14(2) of the Parking Lot Act (amended by Act No. 4230 of Apr. 7, 1990) and the management regulations under Article 15(2) and (1) of the same Act. Thus, in determining whether the real estate constitutes non-business real estate subject to non-business real estate subject to non-taxation under the Corporate Tax Act, it shall not be deemed as one of the cases where it is excluded from non-business real estate, and the real estate shall not be used under Article 18(4) or (4) of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Prime Minister No. 492 of Mar. 30, 1995).

[2] The purpose of Article 43-2 (4) and (8) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 13803, Dec. 31, 1992) provides that the amount calculated by multiplying the interest paid by a corporation in each business year by the ratio of the value of non-business real estate to the total amount of loans shall not be included in deductible expenses in calculating the income amount, whichever is larger, among the acquisition value of non-business real estate or the book value and standard market value as of the end of the pertinent business year, of non-business real estate as of the end of the pertinent business year, is to induce the disposal of non-business real estate ultimately by regulating the acquisition of non-business real estate as well as the possession of non-business real estate. Thus, this is to realize the purpose of the legislation of the mother law, and the content of the provision is not contrary to the principle of no taxation without the law or contrary

[3] Article 30 subparagraph 1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 13195, Dec. 31, 1990) provides that "the expenses, maintenance expenses, repair expenses, and deductible expenses related thereto arising from the acquisition and management of assets unrelated to such business as stipulated by Ordinance of the Ministry of Finance and Economy (property irrelevant to such business), and Article 30 subparagraph 1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14080, Dec. 31, 1993) provides that "the expenses, maintenance expenses, repair expenses, and related expenses arising from the acquisition and management of assets falling under Article 18-3 (1) 1 and 2 of the Corporate Tax Act shall be "the amount deemed not directly related to such business" under Article 16 subparagraph 7 of the Corporate Tax Act, and the above Enforcement Decree provides that "the expenses shall not be directly related to such business" under Article 16 subparagraph 7 of the same Act so that the government has no direct relation to such business".

[4] The amount under Article 30 subparagraph 1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 13195, Dec. 31, 1990; Presidential Decree No. 14080, Dec. 31, 1993; Presidential Decree No. 14080, Dec. 31, 1993), which is the cost acknowledged by the government as having no direct connection with the business of a juristic person, shall not be included in the calculation of losses, unless the total amount of the revenue gained by using real estate, such as the land for lease or parking lot business, falls short of a certain ratio of the real estate value, and thus, it shall not be included

[1] Article 18-3 (1) 1 of the former Corporate Tax Act (amended by Act No. 4664 of Dec. 31, 1993); Article 43-2 (1) and (4) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14468 of Dec. 31, 1994); Article 18 (4) 1 of the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Prime Minister No. 492 of Mar. 30, 1995) / [2] Article 18-3 (1) 1 of the former Corporate Tax Act (amended by Act No. 4664 of Dec. 31, 1993); Article 43-2 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 13803 of Dec. 31, 1992) / [3] Article 16 subparagraph 7 of the Corporate Tax Act and Article 138 subparagraph 130 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 13014.

[2] Supreme Court Decision 96Nu4862 delivered on February 28, 1997 (Gong1997Sang, 994)

Samyang Development Co., Ltd. (Attorneys Yang Chang-soo et al., Counsel for the defendant-appellant)

Head of tax office

Busan High Court Decision 95Gu1767 delivered on November 6, 1996

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

1. On the first ground for appeal

When a corporation that runs a parking lot business as its main business obtains permission from the competent authority under the former Parking Lot Act (amended by Act No. 4230 of Apr. 7, 1990) and establishes and operates an off-road parking lot on its own land, it shall be subject to the municipal ordinances of local governments under Article 14(2) of the Parking Lot Act (amended by Act No. 4230 of Apr. 7, 1990) and the management regulations under Article 15(2) and (1) of the same Act. Thus, in determining whether the real estate constitutes non-business real estate subject to non-business real estate subject to non-taxation as to the interest paid on borrowings under the Corporate Tax Act, the former Enforcement Rule of the Corporate Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 1835 of Dec. 22, 190) and Article 18(4)1 of the Enforcement Rule of the same Act (amended by Ordinance of the Prime Minister No. 492 of Mar. 30, 1995).

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of the legal principles as alleged in the grounds of appeal. The grounds of appeal on this point are not acceptable.

2. On the second ground for appeal

Upon examining the reasoning of the judgment below in light of the records, the court below is just in holding that the real estate of this case cannot be excluded from non-business real estate for reasons as stated in its holding, and there is no violation of the logical and empirical rules, and there is no violation of the law interpretation contrary to the logical and empirical rules. The grounds for appeal

3. On the third ground for appeal

The purpose of Article 43-2 (4) and (8) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 13803, Dec. 31, 1992) provides that the amount calculated by multiplying the interest paid by a corporation for each business year by the ratio of the value of non-business real estate to the total amount of loans shall not be included in the calculation of losses in calculating the income amount, whichever is larger, among the acquisition value of non-business real estate or the book value and standard market value as of the end of the business year, of non-business real estate as of the end of the business year, is to induce the corporation to dispose of non-business real estate ultimately by holding as well as the acquisition of non-business real estate. Thus, this purpose is to realize the purpose of the legislation of the mother law, and the contents of the provision are not contrary to the principle of no taxation without the law or contrary to the purport of the mother law in light of the form of the provision (see Supreme Court Decision 96Nu4862, Feb. 28, 1

The judgment below to the same purport is just and there is no error in the misapprehension of legal principles as otherwise alleged in the ground of appeal. The ground of appeal on this point cannot be accepted.

4. On the fourth ground for appeal

Article 30 subparagraph 1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 13195, Dec. 31, 1990) provides that "the expenses, maintenance expenses, repair expenses, and losses related thereto arising from the acquisition and management of assets not related to such business as prescribed by Ordinance of the Ministry of Finance and Economy (property not related to such business) shall be included in deductible expenses, and Article 30 subparagraph 1 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14080, Dec. 31, 1993) provides that "the expenses, maintenance expenses, repair expenses, and related expenses arising from the acquisition and management of assets falling under subparagraphs 1 and 2 of Article 18-3 (1) of the Corporate Tax Act (amended by Presidential Decree No. 13195, Dec. 31, 199) shall not be included in deductible expenses for each business year, and it shall not be deemed that the government has any direct relation to such business" under Article 16 subparagraph 7 of the Corporate Tax Act.

5. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the plaintiff-Appellant. It is so decided as per Disposition by the assent of all Justices who reviewed the appeal.

Justices Park Jong-chul (Presiding Justice)