Article 15(1) of the former Foreign Capital Inducement Act (amended by Act No. 3691, Dec. 31, 1981); the scope of tax reduction or exemption for foreign-invested enterprises under Article 15(1)

The scope of tax reduction and exemption for foreign-capital invested companies pursuant to Article 15 (1) of the former Foreign Capital Inducement Act (amended by Act No. 3691 of Dec. 31, 1981) shall be limited to income resulting from business management in accordance with the contents of the approval of the head of the Economic Planning Agency in light of the legislative intent of

Article 15 (1) of the former Foreign Capital Inducement Act (amended by Act No. 3691 of Dec. 31, 1981)

Supreme Court Decision 80Nu578 Decided February 24, 1981

Law Firm Jinia Co., Ltd., Counsel for the defendant-appellant-appellee and three others

Head of Guro Tax Office

Seoul High Court Decision 83Gu829 delivered on December 21, 1984

The appeal is dismissed.

The costs of appeal shall be borne by the plaintiff.

The Plaintiff’s attorney’s ground of appeal is examined.

With respect to No. 1:

According to the facts established by the court below in this case, the plaintiff company is a foreign-invested enterprise registered with the Minister of Finance and Economy under the Foreign Capital Inducement Act of December 18, 1974 with the approval of foreign investment granted by the Minister of Foreign Investment and Capital Inducement Act (amended by Act No. 3691, Dec. 31, 1981). The plaintiff company's business purpose is manufacturing and selling sound equipment, etc., and the plaintiff company obtained the right to import specific goods within the export performance range by manufacturing and exporting sound equipment, and transferred the above import right to a third party. The defendant is excluded from the imposition of corporate tax and corporate tax for each business year from October 1, 1977 to September 30, 1978 and from October 1, 1978 to September 30, 1979 to September 30, 1989.

However, the scope of tax reduction and exemption for foreign-capital invested companies pursuant to Article 15 (1) of the former Foreign Capital Inducement Act is reasonable in light of the legislative intent of illegality (see Supreme Court Decision 80Nu578, Feb. 24, 1981). According to the records, when the Plaintiff Company registers as a foreign-capital invested company pursuant to Article 9 of the above Act, the business objectives and product names approved by the Minister of Finance and Economy are conditioned on exporting all of the above sound equipment, which are manufactured as sound equipment, such as vial, ampa, home-te-te-te-te-te-te-te-te-te-te-te-te-te-te-te-te-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-E-

With respect to the second ground:

In light of the records, it can be seen that the Defendant: (a) considered the income from the transfer of the Plaintiff Company’s above revenue rights as tax-free income pursuant to the original approval under Article 15(1) of the former Foreign Capital Inducement Act; and (b) has been reduced and exempted from corporate tax and defense tax for each corresponding taxable year; (c) however, it can be seen that the instant disposition has been additionally imposed according to the audit results conducted by the Board of Audit and Inspection that does not meet the requirements for reduction and exemption under the above Article 16 of the Act and Articles 10(1) and 10-3 of the Enforcement Decree of the same Act; and (d) it is evident that the instant disposition was not a disposition for additional collection in accordance with the requirements and procedures under Article 16 of the above Act and Articles 10(1) and 10-3 of the Enforcement Decree of the same Act, on the premise that the instant disposition was a disposition for additional

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Jeong Jong-tae (Presiding Justice)