The case holding that it constitutes "the succession of business, which is a ground for exclusion from collection of taxes deducted under the temporary tax credit system"

The case holding that the temporary tax credit system under the Regulation of Tax Reduction and Exemption Act is a system that induces an investment by deducting the investment tax amount of a company's investment in a facility investment where it is necessary for business depression, and the purpose of the above system cannot be achieved if the investment assets subject to tax credit are disposed of within a short period, and thus, if the business successor continues to operate the business with the investment assets due to the succession of the business, it does not impede the achievement of the purpose of the above system, and thus, it is exceptionally excluded from the object of additional collection on the ground that it purchases domestic transportation facilities and crushing facilities used directly for the mining industry by a domestic corporation which runs three business categories such as mine business, livestock business, and natural mineral manufacturing and selling business, and establishes them at the business site, and then obtains tax credit for the amount invested to acquire the above machinery and equipment under the Regulation of Tax Reduction and Exemption Act, and then establishes a third company to separate the part of the mining business for the purpose of management rationalization, enter into a contract with the above mining business, and the transfer company acquires the human, physical, and other rights and obligations related to the above business.

Articles 72(1) (see current Article 27(1)), 92 subparag. 2 (see current Article 124 subparag. 2) of the former Regulation of Tax Reduction and Exemption Act (Amended by Act No. 4285, Dec. 31, 1990); Article 57-2(1) (see current Article 24(1)), 65(6) (see current Article 108(6)) of the former Regulation of Tax Reduction and Exemption Act (Amended by Presidential Decree No. 13202, Dec. 31, 1990); Article 57-2(1) (see current Article 24(1));

Dongsansan Co., Ltd. (Law Firm Han-dong Law Office, Attorneys Yu-hee et al., Counsel for the defendant-appellant)

Head of Jeju Tax Office

Gwangju High Court Decision 95Gu438 delivered on February 14, 1997

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

Article 72(1) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4285, Dec. 31, 1990; hereinafter the same shall apply) and Article 57-2(1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 13202, Dec. 31, 1990; hereinafter the same shall apply) provide for an amount equivalent to 3/100 of the amount invested in the pertinent taxable year (10/100 in case of an investment by domestic equipment) with respect to an investment made by a national in order to newly acquire business machinery and equipment used directly for manufacturing or mining, it shall be deducted from income tax or corporate tax for the pertinent taxable year, while Article 92 subparag. 2 of the Regulation of Tax Reduction and Exemption Act and Article 65(6) of the Enforcement Decree of the same Act provide for an exception to the tax amount to be disposed of within five years prior to the expiration of the taxable year to which the date on which the investment was completed belongs.

According to the reasoning of the judgment below, since the plaintiff company was originally engaged in three business sections, such as mining industry, livestock industry, and natural mineral manufacturing and distribution industry, and it purchased domestic machinery and equipment directly used for mining industry around May 1990 and installed it in Pyeongtaek Mining Complex, which is the business site, and received tax credit for the amount invested in acquiring the machinery and equipment of this case from the corporate tax amount of 1990 business year and 192 business year under the above Regulation of Tax Reduction and Exemption Act. However, the court below determined that the plaintiff company continued to sell the land of this case to the non-party mining development company (hereinafter referred to as " Pyeongtaek Mining Business") on June 30, 190 after establishing a new mining business agreement with the non-party 3 business to separate the mining business area for the purpose of management rationalization, and that the non-party 9 company's new mining business and its new mining business had no other rights and duties to the non-party 9 company's new mining business area and its new mining business area had no other relation with the plaintiff 1's previous mining business.

In light of records, relevant Acts and subordinate statutes, and their purport, the above judgment of the court below is just and it is not appropriate to apply this case to the transfer of business that is exempt from value-added tax, which is related to the transfer of business that is exempt from value-added tax, and the judgment of the court below is not erroneous, such as misconception of facts, incomplete deliberation, misunderstanding of legal principles, and violation of precedents, as alleged in the grounds of appeal. Therefore, the grounds of appeal cannot be accepted.

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

Justices Lee Don-hee (Presiding Justice)