Tax reduction or exemption in cases of capital increase under the proviso of Article 15 (1) of the Foreign Capital Inducement Act;

Where a foreign investor acquires stocks due to the increase of capital under the proviso of Article 15(1) of the Foreign Capital Inducement Act, it shall be interpreted that the portion shall be exempted from corporate tax for five years from the date of the first taxable period after the new increase of capital in spite of the details of the increase of capital, and 50/100 of tax amount shall be reduced for three years thereafter.

Article 15 of the Foreign Capital Inducement Act

[Defendant-Appellant] Defendant 1 and 3 others

The Director of the Korean Tax Office

Seoul High Court Decision 79Gu81 delivered on June 27, 1976

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal by the defendant ○○○○ is examined.

According to the reasoning of the original judgment, according to Article 15(1) of the Foreign Capital Inducement Act, the court below shall exempt foreign-invested enterprises from corporate tax for five years from the date of initial taxation period, and reduce 50/100 of the tax amount for three years from the expiration date of the above period, and the reduction or exemption shall be based on the ratio of stocks or shares owned by foreign-invested investors to the stocks or shares of the enterprise in accordance with the contents of the

However, in the case of a capital increase, tax reduction or exemption shall be limited to the capital increase, and in the case where a foreign investor acquires stocks due to a foreign investor's capital increase, the provisions of the proviso of the above Article shall be interpreted to the effect that the foreign investor shall be exempted from the total amount of corporate tax for 5 years from the date of the first taxable period after the capital increase, regardless of the period or ratio of tax reduction or exemption for the capital increase, and for 3 years thereafter, 50/100 of the tax amount shall be reduced. It shall be interpreted to the effect that there is no ground for different application of tax reduction or exemption according to the contents of the capital increase as alleged by the defendant, and Article 8-2 of the Enforcement Decree of the Foreign Capital Inducement Act which will be amended on March 4, 197 shall not be applied to this case. Accordingly, in the case where a foreign investor acquires stocks, the above provision shall be exempted from the total amount of corporate tax for 5 years from the date of the first taxable period after the capital increase, and it shall be interpreted to the effect that the above provision of 10/5 years from the original judgment.

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

Justices Lee Il-young (Presiding Justice)