Ship Engineering Co., Ltd. (Law Firm Gyeong & Yang, Attorney Jeon Soo-soo, Counsel for the defendant-appellant)

Head of Bupyeong-gu Incheon Metropolitan City (Attorney Fixed-ro, Counsel for defendant-appellant)

May 22, 2008

1. The Defendant’s imposition of registration tax of KRW 101,942,460 as of November 10, 2006 against the Plaintiff, and the imposition of KRW 20,38,48,480 as of local education tax, and the imposition of acquisition tax of KRW 101,942,460 as of December 12, 2006, and special rural development tax of KRW 10,194,240 as of December 12, 2006, respectively.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On April 1, 2005, the Plaintiff was a corporation established for the purpose of engineering and technical research and development, manufacture of automobile parts, etc., and obtained a confirmation of preliminary venture business from the Administrator of the Small and Medium Business Administration on August 3, 2005, and on September 29, 2005, the Plaintiff acquired 6,674 square meters of land and 7,011.4 square meters of buildings located in Bupyeong-gu Incheon Metropolitan City, Bupyeong-gu, Incheon (hereinafter “instant real estate”). Accordingly, the Plaintiff was exempted from acquisition tax (including special rural development tax) and registration tax (including local education tax) as real estate acquired by the small and medium venture enterprise under Articles 6(2), 119(3)1, and 120(3) of the Restriction of Special Taxation Act within two years from the date of its establishment.

B. Since then, the Defendant was merely a preliminary venture business at the time when the Plaintiff acquired the instant real estate, and the preliminary venture business does not constitute a small and medium venture business under the Restriction of Special Taxation Act, and imposed and notified each of the remaining parts (other than the part directly used for a company-affiliated research institute among the instant real estate (land 4,747 square meters, building 4,97.14 square meters) on November 10, 2006, acquisition tax of 101,942,460 square meters, special rural development tax of 10,194,240 won, and special rural development tax of 101,94,240 won, and local education tax of 101,942,460 won, local education tax of 20,388,490 won, respectively (hereinafter “disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 3, 7, and 8, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff issued a preliminary venture business certificate from the Administrator of the Small and Medium Business Administration on August 3, 2005, and thereafter issued a venture business certificate on March 3, 2006. In light of the fact that the validity period of each of the above certificates is the same as from August 3, 2005 to August 2, 2007, and the lapse of six months without undergoing any separate procedure after confirmation as a preliminary venture business, it is reasonable to deem that the preliminary venture business also constitutes a venture business, and therefore, the “date of confirmation as a venture business” under the Restriction of Special Taxation Act should be deemed as the “date of confirmation as a venture business” as the “date of August 3, 2005,” and the acquisition tax and registration tax should be exempted for the instant real estate acquired within two years thereafter.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1) On July 4, 2005, the Plaintiff filed an application with the Administrator of the Small and Medium Business Administration for confirmation of venture business as a new technology company for the development technology of automobile parts. Accordingly, on August 3, 2005, the Administrator of the Incheon Local Small and Medium Business Administration issued a preliminary venture business confirmation certificate (No. 05172041-1-0150, preliminary venture business for confirmation type: preliminary venture business, valid period: August 3, 2005 to August 29, 2007) to the Plaintiff after the on-site inspection and qualification evaluation of the Incheon Local Headquarters of the Small and Medium Business Corporation. The Plaintiff acquired the instant real property as a business property on September 29, 2005.

(2) After six months from the date of confirmation of the preliminary venture business, the Plaintiff applied for re-issuance of the venture business confirmation certificate to the Administrator of the Incheon Regional Small and Medium Business Administration. On March 3, 2006, the Administrator of the Incheon Regional Small and Medium Business Administration re-issued the Plaintiff with the confirmation certificate of venture business (No. 05172032-1-0150, type of confirmation: new technology company, term of validity: August 3, 2005 to August 2, 2007).

[Ground of recognition] The non-contentious facts, Gap evidence Nos. 1, 2, 3, and 6; the result of fact-finding conducted by the head of the Incheon Small and Medium Business Corporation and the Administrator of the Small and Medium Business Administration of Incheon; the purport of the whole

D. Determination

Article 6 (2) of the former Restriction of Special Taxation Act (amended by Act No. 8138, Dec. 30, 2006; hereinafter "the Restriction of Special Taxation Act") provides that an enterprise confirmed as a venture business under Article 25 of the Act on Special Measures for the Promotion of Venture Businesses shall be "small and Medium Venture Businesses" within 2 years after its establishment, and the registration of the business property acquired by the small and medium venture business for its operation shall be exempted from registration tax, and since Article 119 (3) 1 of the same Act and Article 120 (3) of the same Act do not provide that the Plaintiff shall be issued a confirmation certificate of the preliminary venture business for 3 months after its establishment and re-issuance of the registration tax under Article 25 (3) of the former Act on Special Measures for the Promotion of Venture Businesses (amended by Act No. 7868, Mar. 3, 2006; hereinafter "the date of preliminary confirmation of the establishment and re-issuance of the new venture business is 6 months or less after its establishment."

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by admitting it.

[Attachment]

Judges Shin Young-ro (Presiding Judge)