[1] Where fixed assets are acquired at the time of enforcement of Article 124-6 of the Enforcement Decree of the Corporate Tax Act and transferred after their deletion, applicable provisions on exemption of special surtax

[2] The meaning of "the case of acquiring land, building, or machinery and apparatus directly used for business purposes" under the proviso of Article 124-6 (3) of the Enforcement Decree of the Corporate Tax Act

[1] Where fixed assets are already acquired pursuant to the former Enforcement Decree of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 12878 of Dec. 30, 1989) which was deleted by the former Enforcement Decree of the Corporate Tax Act at the time of enforcement of the Corporate Tax Act (amended by Presidential Decree No. 12878 of Dec. 30, 1989), the provisions of Article 124-6 of the former Enforcement Decree of the Corporate Tax Act are deleted by Presidential Decree No. 12878 of Dec. 30, 1989 and Article 55-11 of the former Enforcement Decree of the Enforcement Decree of the Corporate Tax Regulation Act (amended by Presidential Decree No. 13027 of Jun. 22, 1990) as to whether the provisions of Article 55-11 of the former Enforcement Decree of the Corporate Tax Regulation Act which was amended at the time of transfer of real estate shall not be applied to the above provisions of the Enforcement Decree of the Corporate Tax Act.

[2] The term "acquisition of land, building, or machinery and apparatus directly used for business purposes" under the proviso of Article 124-6 (3) of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 12878 of Dec. 30, 1989) refers to the acquisition of land, building, or machinery and apparatus directly used for business purposes in the future.

[1] Article 124-6 of the Enforcement Decree of the Corporate Tax Act (Elimination by Presidential Decree No. 12878 of Dec. 30, 1989), Article 9(2) of the Addenda to the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 13027 of Jun. 22, 1990 and Article 55-11 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 13545 of Dec. 31, 1991) / [2] Article 124-6(3) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 12878 of Dec. 30, 1989), Article 9(2) of the Addenda to the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 12878 of Dec. 30, 1989)

Gyeong-il Investment Finance Co., Ltd. (Attorney Lee Jong-soo, Counsel for the plaintiff-appellant)

Head of Daegu Tax Office

Daegu High Court Decision 94Gu1228 delivered on January 20, 1995

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

The defendant's grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Article 124-6 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 12878 of Dec. 30, 1989) provides that "land, etc. for business purposes transferred for the purpose of acquiring other fixed assets" in paragraph (1) provides that "land, etc. prescribed by Presidential Decree" shall not fall under subparagraphs 1 through 5 of Article 59-3 (2) of the Act. Paragraph (3) provides that "the provisions of Article 59-3 (2) 2 of the Act shall apply only where the land, building, or machinery is acquired within three years from the date of transfer of the land, etc. equivalent to the transfer value of the land, etc. and used directly for the business purposes of the relevant corporation: Provided, That the provisions of Article 59-3 (2) 2 of the former Enforcement Decree of the Corporate Tax Act provide that "where the land, building, or machinery, etc. was acquired for the purpose of acquiring other fixed assets for business purposes, it shall be transferred within two years from the date of its acquisition". The provisions of Article 26 of the former Enforcement Decree of Article 19.

Therefore, in cases where fixed assets are already acquired pursuant to Article 124-6 of the former Enforcement Decree of the Corporate Tax Act at the time of the enforcement of the former Enforcement Decree of the Corporate Tax Act, as to whether the income accrued from the transfer of land, etc. directly used for the business of the corporation is subject to the exemption of special surtax, the provisions of Article 124-6 of the former Enforcement Decree of the Corporate Tax Act are deleted by Presidential Decree No. 12878, Dec. 30, 1989, and at the same time, Article 5-11 of the former Enforcement Decree of the Corporate Tax Regulation Act was newly enacted by Presidential Decree No. 12881, Jun. 22, 1990 and the newly established provisions were enforced by Presidential Decree No. 13027, Jun. 22, 1990, even if Article 55-11 of the amended Enforcement Decree of the former Enforcement Decree of the Corporate Tax Regulation Act at the time of transfer of the real estate of this case, as long as the provisions of

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles, such as the theory of lawsuit. There is no ground for appeal.

2. Regarding ground of appeal No. 2

In full view of the provisions of the proviso of Article 124-6 (3) of the former Enforcement Decree of the Corporate Tax Act and Article 9 (2) of the Addenda above, in order to apply the provisions of the proviso of Article 124-6 (3), which are the special surtax exemption provisions on the land for business of a corporation, pursuant to Article 9 (2) of the Addenda above, the case of acquiring the land, building, or machinery directly used for business under the proviso of Article 124-6 (3) until December 31, 1989, which is the time when the Enforcement Decree of the Corporate Tax Act enters into force. However, the case of acquiring the land, building, or machinery directly used for business purposes refers to the case of acquiring the land, building, or machinery directly used for business purposes in the future. Thus, if a corporation acquired the land, building, or machinery directly used for business purposes until December 31, 1989, it shall not be subject to the exemption of special surtax pursuant to Article 9 (2) of the Addenda above.

However, according to the facts duly confirmed by the court below, the plaintiff company acquired the land for the new house in this case for the purpose of constructing a new building to be used as a new house between December 15, 1989 and December 23, 199. Thus, the plaintiff company's acquisition of the real estate in this case shall be determined by applying Article 124-6 of the former Enforcement Decree of the Corporate Tax Act as to whether the income accrued by the plaintiff company from the transfer of the real estate in this case is subject to the exemption of special surtax. As duly determined by the court below, if the plaintiff company transferred the real estate in this case on June 27, 1991, which was within two years from the time of the acquisition of the land for new house in this case, the special surtax on the income from the transfer of the remaining portion except for the leased portion among the real estate in this case shall be exempted

The judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles.

3. As to the third ground for appeal

Even if the disposition of this case does not violate the contents of the tax authority's reply to the plaintiff's questioning, such as the theory of lawsuit, the disposition of this case is unlawful, so long as the part of the real estate except the leased part is exempt from special surtax, so the disposition of this case is without merit.

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

Justices Shin Sung-sung (Presiding Justice)