Seoul High Court 2011Nu27393 (Law No. 19, 2012)

Facilities generating effective energy, such as steam and hot water, using waste heat, process heat, and waste gas, fall under "facilities for energy use".

The facilities that generate effective energy, such as steam and hot water, using combustion heat, process heat, and waste gas, discharged from the equipment for the development of a master-water generation shall be considered as "facilities for the use of energy". Therefore, it is eligible for tax credit.

2012du1073, revocation of revocation of disposition of imposing corporate tax and refusal of request for rectification

AAA Development Corporation

Samsung Head of Samsung Tax Office

Seoul High Court Decision 2011Nu27393 Decided April 19, 2012

December 26, 2013

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Article 25-2 (1) of the former Restriction of Special Taxation Act (amended by Act No. 7322 of Dec. 31, 2004; hereinafter "the Restriction of Special Taxation Act") provides that where a national invests in the energy-saving facilities prescribed by the Presidential Decree not later than December 31, 2005, an amount equivalent to 7/100 of the investment amount shall be deducted from income tax or corporate tax. Article 22-2 (1) 1 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 18704 of Feb. 19, 2005; hereinafter "Enforcement Decree of the Restriction of Special Taxation Act") provides that the "facilities prescribed by the Ordinance of the Ministry of Finance and Economy such as energy-saving facilities under the Energy Utilization Rationalization Act" as one of the "energy-saving facilities prescribed by the Presidential Decree" under Article 25-2 (1) of the Restriction of Special Taxation Act (amended by the Ordinance of the Ministry of Finance and Economy No. 231 of Special Taxation Act).

Meanwhile, Article 21 of the former Enforcement Decree of the Energy Use Rationalization (amended by Presidential Decree No. 19540 of Jun. 22, 2006; hereinafter the same) provides that "The Government may provide financial and taxation support, the payment of subsidies, and other necessary support to investments in energy-saving facilities as prescribed by Presidential Decree, the manufacture, installation, and construction of energy-saving machinery and materials, and other projects for reducing greenhouse gas emissions through the rationalization of energy use, in order to facilitate efforts to rationalize the emission of greenhouse gases through the rationalization of energy use," and Article 19 (1) of the former Enforcement Decree of the Energy Use Rationalization (amended by Presidential Decree No. 19540 of Jun. 22, 2006; hereinafter the same) provides that "an investment in energy-saving facilities subject to support under Article 21 of the Act is an investment in facilities falling under any of the following subparagraphs, which the Minister of Commerce, Industry and Energy gives public notice in consultation with the Minister of Finance and Economy," and subparagraph 1 provides that "an investment in energy-saving facilities such as boiler and industrial use of energy facilities" and alternative facilities are replaced with Article 2.

In light of the language and text of these provisions, the amendment history, contents, and structure of the attached Table of this case in the legislative intent, it is difficult to view that the attached Table of this case stipulated the "energy generation and supply facilities" and "energy use facilities" as the subordinate part of the "facilities for the utilization of energy" of 1.0, and that it is difficult to view that the attached Table of this case excluded from the scope of "energy generating facilities using smoke and waste heat, etc." provided for in Article 25-2 (1) of the Restriction of Special Taxation Act, Article 22-2 (1) 1 of the Enforcement Decree of the Restriction of Special Taxation Act, Article 13-2 (2) 1 of the Enforcement Decree of the Restriction of Special Taxation Act, Article 13-2 (1) 2 of the Enforcement Decree of the Restriction of Special Taxation Act, and Article 13-2 (2) of the Enforcement Rule of the Restriction of Special Taxation Act.

2. The lower court determined that: (a) the instant facilities installed at a BB compound power plant are facilities belonging to the area of “industry producing a second-lane electricity by using heat generated from posters to a second-lane electricity; (b) the exhaust heat generated after the production of a first-lane electricity by using posters to a second-lane heat constitutes “waste heat” as provided in the instant Table; and (c) the instant attached Table separates the “facilities for the utilization of energy” into “energy generation and supply facilities” and “facilities for the use of energy”; (b) although the instant facilities meet the requirements of “energy generation and supply facilities” as provided in the instant attached Table, even if the instant facilities do not fall under “energy generation and supply facilities”; and (d) the facilities for the generation of electricity by driving the first facilities and posters to a second-lane electricity can be separated from the facilities and functions thereof, and thus, they constitute facilities for the use of energy under Article 12(1)2(b) of the Enforcement Decree of the Restriction of Special Taxation Act and Article 12(1)2(2)(b) of the Enforcement Decree of the Restriction of the Special Taxation Act.

In light of the relevant provisions, legal principles, and records as seen earlier, the judgment of the court below is just and acceptable, and there is no error in the misapprehension of legal principles as to the relevant Acts and subordinate statutes, such as the attached Table of this case, or in the misapprehension of the rules of evidence, misunderstanding of facts, omission of judgment, incomplete deliberation

Furthermore, in light of the language and purport of the relevant provisions, the provisions of Article 13-2 [Attachment Table 8-3] 1.b. (1) (a) (2) of the Enforcement Rule of the Restriction of Special Taxation Act stipulating "energy generating facilities using smoke heat, etc. as one of the objects of tax credit for investment shall not be deemed null and void beyond the scope of delegation under Article 25-2(1) of the Restriction of Special Taxation Act and Article 22-2(1)1 of the Enforcement Decree of the Restriction of Special Taxation Act. The allegation in the grounds of appeal on

3. 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.