Suwon District Court 2014Guhap51969 (2015.04.09)

Examination-corporation-2013-0060 ( October 14, 2014)

Whether the acquisition of real estate for profit-making business shall be deemed to have been used for proper purpose business purposes

Since acquisition of real estate for profit-making business with proper purpose business reserve funds cannot be deemed to have been used for proper purpose business, the disposition of non-deductible losses is legitimate.

Article 52 (Disstatement of Calculation)

Seoul High Court 2015Nu41526 (2015.08)

A school juristic person's lawsuit

○ Head of tax office

Suwon District Court Decision 2014Guhap51969 Decided October 09, 2015

July 21, 2015

September 8, 2015

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance is revoked, and the defendant from March 1, 2009 to September 3, 2010, against the plaintiff on September 3, 2013.

2. A judgment revoking the disposition of imposition of tax of KRW 2,219,494,350 (including additional tax of KRW 696,476,202) for the business year until December 28.

1. Quotation of judgment of the first instance;

The court's explanation about the instant case is based on the reasoning of the judgment of the court of first instance 3.B. 4).

The following 2 paragraphs at the end of the "Business Year (Judgment on the Third Claim) subject to inclusion in deductible expenses and not included in deductible expenses:

With the exception of adding the same content, the Administrative Litigation Act is the same as the part of the reasoning of the judgment of the court of first instance.

Article 8 (2) of this Act and the main sentence of Article 420 of the Civil Procedure Act shall be cited as it is.

2. Article 76(4) of the former Enforcement Rule of the Corporate Tax Act (amended by Presidential Decree No. 2009, Mar. 28, 2013; Presidential Decree No. 2009, Feb. 1, 2009; Presidential Decree No. 20094, Feb. 28, 2011; Presidential Decree No. 20090, Feb. 28, 2011; Presidential Decree No. 20135, Feb. 23, 2011; Presidential Decree No. 2020, Feb. 1, 2011>

If the plaintiff moves the funds of this case to the non-profit business accounting, it shall be for profit-making business.

Until the intent to use in acquiring substitute assets has not been finally determined, the old corporate tax;

Even if it can be included in deductible expenses pursuant to Article 76(4) of the Enforcement Rule of the Act, the old corporate tax

Article 3(5) and (1)1 of the Act shall not apply to non-profit corporations directly used for proper purpose business.

The disposal of fixed assets shall be subject to the imposition of corporate tax on the income of each business year.

In principle, if a non-profit corporation receives income, it is immediately taxed subject to the corporate tax.

Since it may interfere with the proper business, it may cause a trouble to the proper business, therefore, Article 29 (1) of the former Corporate Tax Act

Where reserve funds for proper business purposes are appropriated as losses to be disbursed to appropriate projects, etc., they shall be appropriated as losses.

The provision that "in deductible expenses for the pertinent business year" shall be included in the calculation of deductible expenses, and in case where the proper purpose business is all discontinued, and the proper purpose business is not used for the proper purpose business (limited to the unused balance) by the fifth anniversary after the end of the business year in which the proper purpose business is appropriated as deductible expenses, the proper purpose business reserve fund for proper purpose business shall be included in the gross income for the business year in which the pertinent cause occurs, and it shall be regulated that the proper purpose business reserve fund for proper purpose business is actually used for the proper purpose business by prescribing that the proper purpose business reserve fund for proper purpose business shall be actually used for the proper purpose business. In light of the purport of the above provision of the Corporate Tax Act and its Enforcement Decree, the plaintiff transferred the transferred funds to the temporary nonprofit business without any plan for expenditure for the proper purpose business during the business year 2009, and it becomes clear that it is no longer usable for the proper purpose business without any delay before the end of the business year 209, it shall be included in the gross income immediately in the business year 2009.

3. Conclusion

If so, the plaintiff's claim shall be dismissed due to the lack of reason, and this conclusion shall be delivered to the court of first instance.

Since the judgment is justifiable, the plaintiff's appeal is dismissed. It is so decided as per Disposition.