Whether "fixed assets for business" under Article 40-2 (3) of the former Enforcement Decree of the Income Tax Act shall be interpreted as limited to rights to land, buildings and real estate (affirmative)

In light of the system of the relevant provisions of the law and the purport of the new establishment of Article 20-2 of the former Income Tax Act (amended by Act No. 6292 of Dec. 29, 2000), and the purport of the amendment of the relevant provisions of the law, "business rights transferred along with fixed assets for business excluding those subject to the taxation of temporary property income under Article 40-2 (3) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 16664 of Dec. 31, 199)" means business rights transferred along with fixed assets for business subject to the taxation of capital gains under Article 94 subparagraph 5 of the former Income Tax Act and Article 158 (1) 3 of the Enforcement Decree of the same Act.

Article 21 (1) 7 of the former Income Tax Act (amended by Act No. 5031 of Dec. 29, 1995), Article 20-2 (1) 2, Article 94 subparagraph 5 of the former Income Tax Act (amended by Act No. 6292 of Dec. 29, 2000), Article 158 (1) 3 of the former Income Tax Act (amended by Presidential Decree No. 14860 of Dec. 30, 1995) [Article 94 (1) 4 (a) of the current Income Tax Act] Article 158 (1) 4 (Article 94 (1) 4 (a) of the former Income Tax Act (amended by Presidential Decree No. 1664 of Dec. 31, 199), Article 40-2 (3), Article 158 (1) 3 (a) of the former Income Tax Act (amended by Presidential Decree No. 1664 of Dec. 31, 1999)

[Judgment of the court below]

Head of Namgu Tax Office

Daegu High Court Decision 2002Nu3189 delivered on June 13, 2003

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

We examine the grounds of appeal.

According to the reasoning of the judgment of the court below, Article 20-2 (1) 2 of the former Enforcement Decree of the Income Tax Act (amended by Act No. 6292 of Dec. 29, 200; hereinafter referred to as the "Act") provides that income generated from the transfer of property rights shall, in principle, be subject to taxation of temporary property income: Provided, That Article 94 subparagraph 5 of the Act and Article 158 (1) 3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 1664 of Dec. 31, 199; hereinafter referred to as the "Enforcement Decree") which provides that the income generated from the transfer of real property rights (excluding Article 94 subparagraph 1 and 2 of the Act) shall not be subject to taxation of transfer income tax, and Article 40-2 (1) 3 of the former Enforcement Decree of the Income Tax Act shall not be subject to taxation of transfer income tax and Article 90-2 (3) of the former Enforcement Decree of the Income Tax Act.

In light of the relevant legal provisions and records, the above recognition and decision of the court below is just, and there is no error in the misapprehension of legal principles as to "business rights transferred along with the fixed business assets excluded from taxable objects of temporary property income, as otherwise alleged in the ground of appeal."

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.

Justices Park Jae-chul (Presiding Justice)