A. The meaning of "where corporate tax is reduced or exempted under the Regulation of Tax Reduction and Exemption Act" under the proviso of Article 4 (1) 3 of the former Defense Tax Act (No. 3198, Dec. 28, 1979)

B. The purport of Article 2 (2) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3481 of Dec. 31, 1981)

(c) Where any tax-related Act is amended in the course of business year, the Acts and subordinate statutes on taxation basis;

A. "Cases where corporate tax is reduced or exempted under the Regulation of Tax Reduction and Exemption Act" in the proviso of Article 4 (1) 3 of the former Defense Tax Act (Act No. 3198 of Dec. 28, 1979) includes not only the Regulation of Tax Reduction and Exemption Act itself but also the cases of reduction and exemption or non-taxation under the provisions of the Corporate Tax Act as stipulated in Article 2 (1) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3481 of Dec. 31, 1981).

B. Article 2(2) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3481, Dec. 31, 1981) merely refers to the case of corporate tax, even if corporate tax is reduced or exempted under the said Act, treaties, and the Corporate Tax Act, the said provision does not necessarily mean that corporate tax or special surtax is reduced or exempted as a matter of course. Thus, the non-taxation of corporate tax special surtax under Article 59-3 of the former Corporate Tax Act (amended by Act No. 3099, Dec. 5, 1978) does not constitute the case of non-taxation or reduction under Article 4(1)3 proviso of the said Defense Tax Act (amended by Act No. 3198

(c) Corporate tax is imposed upon completion of the taxation requirement at the end of the business year, which is the taxable period, and the tax obligation is established at that time. When the tax law is revised during the business year, it shall be imposed under the law as at the end of the business year and the scope of the tax obligation shall be determined by the law as at

A. Article 4(1)3 of the former Defense Tax Act (Act No. 3198, Dec. 28, 1979); Article 2(1)2 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3481, Dec. 31, 1981); Articles 2(1) and 2(1) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 3481, Dec. 31, 1981); Article 59-3 of the former Corporate Tax Act (amended by Act No. 3099, Dec. 5, 1978); Article 4(1)3 of the former Defense Tax Act (amended by Act No. 3198, Dec. 28, 1979)

C. Supreme Court Decision 63Nu202 Decided July 14, 1964; Supreme Court Decision 64Nu93 Decided December 15, 1964

Attorney Hong-chul, Counsel for the plaintiff-appellant of the Gwandong School

Head of Namyang District Tax Office

Seoul High Court Decision 81Gu737 delivered on December 20, 1982

The part of the judgment below against the defendant is reversed, and that part of the case is remanded to the Seoul High Court.

The plaintiff's appeal is dismissed.

The costs of appeal on the dismissed appeal are assessed against the plaintiff.

1. We examine the grounds of appeal by the defendant litigation performer.

(1) According to the reasoning of the judgment below, the court below confirmed that the Plaintiff, a school juristic person, transferred each of the instant real estate owned by the Plaintiff to another person in the business year of 1979 and the business year of 1980, and determined that the above transfer income constitutes a non-taxable object of the special surtax under Article 59-2 of the Corporate Tax Act pursuant to Article 59-3 (1) 12 of the same Act, but is liable to pay the defense tax pursuant to Article 2 (2) of the Defense Tax Act, and that the tax rate is 20/100 of the calculated special surtax, which is non-taxable pursuant to the main sentence of Article 4 (1) 3 of the Defense Tax Act (amended by Act No. 3476 of Dec. 31, 1981; hereinafter the same applies) at the time, the Defendant applied the premium rate under the proviso of subparagraph 3 and imposed the defense tax by adding 50/100 to it.

(2) However, according to Articles 2(1) and 4(1)3 of the above Defense Tax Act and each provision of Article 2(3) of the Enforcement Decree of the same Act, the defense tax rate borne by a taxpayer of corporate tax under the Corporate Tax Act (including special surtax; hereinafter the same shall apply) shall be 20/100 or 25/100 of the corporate tax amount as to the corporate tax amount calculated according to the classification of the income amount in each business year, but if corporate tax is reduced or exempted under the Regulation of Tax Reduction and Exemption Act, 50/100 of the tax amount so reduced or exempted shall be added to the corresponding tax rate. Thus, in light of the provisions of Article 2(1) of the above Defense Tax Act, it is clear that the above proviso includes not only the tax reduction or exemption regulation itself but also the case in which corporate tax is reduced or exempted under the provisions of the Corporate Tax Act as defined in Article 2(1) of the above Act.

Thus, in the case where special surtax is not imposed pursuant to Article 59-3 (1) 12 of the Corporate Tax Act as in the case of this case, the defense tax rate shall be the tax rate calculated by adding 50/100 to the prescribed tax rate under the proviso of Article 4 (1) 3 of the above Act.

However, according to Article 2 (2) of the Regulation of Tax Reduction and Exemption Act (amended by Act No. 3481 of Dec. 31, 1981), the income tax, corporate tax, value-added tax, special consumption tax, and liquor tax from among taxes reduced or exempted under this Act, treaties, and the Acts enumerated in each subparagraph of paragraph (1) shall not be included in the income tax and special surtax under Article 59-2 of the Corporate Tax Act, except as otherwise provided in this Act. However, in the case of corporate tax, it means that even if corporate tax is reduced or exempted under the above Act, treaties, and the Corporate Tax Act, the special surtax of corporate tax under Article 59-3 of the Corporate Tax Act shall not be considered as a non-taxation or reduction under the proviso of Article 4 (1) 3 of the said Defense Tax Act.

Ultimately, the court below's decision that the premium rate under the proviso of Article 4 (1) 3 of the above Defense Tax Act does not apply to the defense tax of this case is a misunderstanding of the interpretation of the law on the above defense tax rate, and it is reasonable to discuss this point.

2. We examine the Plaintiff’s attorney’s grounds of appeal.

Point 1,

The corporate tax is imposed upon the completion of the taxation requirement at the end of the business year, which is the taxable period, and the tax obligation is established at that time. When the tax law in the business year is revised, it is imposed by the law at the end of the business year and the scope of the tax obligation is determined by the law at the end of the business year (see Supreme Court Decision 64Nu930, Dec. 15, 1964

Therefore, Article 4(1)3 of the Addenda to the Defense Tax Act (amended by Act No. 3198, Dec. 28, 1979) which applies to this case provides that Article 4(3) of the same Act shall apply from the business year in which the first time is terminated after the enforcement of the above Act is naturally stipulated, and there is no room to regard it as a retroactive legislation in violation of the Constitution and the Framework Act on National Taxes, such as the theory of lawsuit.

No. 2 and Article 2 (2) of the above Defense Tax Act, which applies to this case, provides that a person who fails to impose corporate tax under the Regulation of Tax Reduction and Exemption Act (including the Acts listed in Article 2 of the same Act) or is subject to reduction and exemption or deduction shall be deemed a person liable for tax payment. Thus, the court below's decision to this purport is just and there is no error of law by misapprehending the legal principles of the tax equity under the Framework Act on National Taxes, such as the theory of lawsuit.

In addition, since the defense tax exemption provision of Article 3 (3) of the above defense tax law is imposed on income under the Income Tax Act, there is no room for applying it to capital gains as provided in Article 59-2 of the Corporate Tax Act. The court below's decision to the same purport is just and there is no ground for discussing this point.

Point 3,

As determined by the court below, as long as transfer gains accrue from the transfer of the real estate of this case, which is the basic property, this becomes the tax base of special surtax, and it cannot be deemed that transfer gains accrue from using the transfer amount as the site of a school building and the building cost of a school building, etc.

3. Therefore, the part of the judgment of the court below against the defendant is reversed, and that part of the case is remanded to the Seoul High Court, and the plaintiff's appeal is dismissed. The costs of appeal as to each part are assessed against the losing party. It is so decided as per Disposition by

Justices Lee Lee Sung-soo (Presiding Justice)