Whether the accumulation of reserves for corporate rationalization under Article 16 of the former Regulation of Tax Reduction and Exemption Act is a requirement for corporate tax reduction and exemption, etc.

The reserve for business rationalization required by Article 16 of the former Regulation of Tax Reduction and Exemption Act is not a requirement to be implemented first to obtain corporate tax reduction or exemption or deduction pursuant to Article 4-8 of the same Act, but a requirement to be met at the time of disposal of profits for the business year by the person who has been reduced or exempted after receiving the reduction or deduction of corporate tax, and is merely a requirement to be exempted from additional collection equivalent to the amount of the reduced or deducted tax.

Articles 91 and 37 of the Regulation of Tax Reduction and Exemption Act, Article 16 of the former Regulation of Tax Reduction and Exemption Act (Act No. 2678 of December 19, 1974), Article 4-8 of the Regulation of Tax Reduction and Exemption Act

Supreme Court en banc Decision 79Nu403 Decided February 10, 1981

Samyang Livestock Development Co., Ltd., Counsel for the defendant-appellant

Head of the Do Tax Office

Seoul High Court Decision 82Gu40 decided August 24, 1982

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal are examined.

In light of the purport of Articles 16 and 17 of the former Regulation of Tax Reduction and Exemption Act which was enforced at the time of the imposition of this case, the reserve for corporate rationalization required by Article 16 of the same Act is not a requirement to be implemented first in order to obtain corporate tax reduction or exemption or deduction pursuant to Article 4-8 of the same Act, but a person who has received the reduction or exemption or deduction after obtaining the reduction or exemption of corporate tax, is a requirement after being performed at the time of disposal of profits in the business year in which the reduction or exemption or deduction has been made, and is merely a requirement to be exempted from the tax reduction or exemption or deduction (see Supreme Court Decision 79Nu403 delivered on February 10, 1981). Accordingly, the judgment of the court below is just in holding that the defendant's disposition (excluding the portion of additional tax) of the corporation that exempted the tax exemption on the ground that the plaintiff did not accumulate the reserve for corporate rationalization under Article 16 of the same Act and imposing the corporate tax on the defendant (excluding the portion of additional tax) is justified, and contrary to the above opinion that "the reduction or exemption or exemption of corporate tax" should be interpreted.

Therefore, the appeal is dismissed, and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Jeon Soo-hee (Presiding Justice)