Whether the registration of incorporation of a limited company following the restructuring of a corporation is subject to Article 137 (1) 1 of the former Local Tax Act (negative)

Whether a registration of a corporation constitutes either Article 137(1) of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) or Article 137(1) of the former Local Tax Act ought to be determined based on the substance regardless of its name or form, regardless of the substance principle. The restructuring of a limited liability company under the Commercial Act to a limited liability company becomes a limited liability company by changing its organization while maintaining the identity of the corporate entity. Nevertheless, the registration of dissolution of a limited liability company and the registration of incorporation of a limited liability company are merely a means of newly establishing the registration record of a limited liability company, and are not due to dissolution of a limited liability company and establishment of a limited liability company. In addition, even if such restructuring has been made, a new investment is not made, which is the tax base of registration tax under Article 137(1)1 of the former Local Tax Act. In full view of these, the registration of incorporation of a limited liability company following the restructuring of a corporation cannot be deemed the subject of Article

Article 137 (1) 1 [see current Article 28 (1) 6 (a)] and 6 of the former Local Tax Act (wholly amended by Act No. 1021, Mar. 31, 2010) (see current Article 28 (1) 6 (f)] and Article 137 (1) 6 of the former Local Tax Act

Supreme Court Decision 94Nu11019 delivered on June 16, 1995 (Gong1995Ha, 2637) Supreme Court Decision 98Du6364 delivered on December 10, 1999 (Gong200Sang, 236)

Conven Wnn Anthromobex Limited (Attorneys Choi Jin-jin et al., Counsel for the defendant-appellant)

The petition head;

Daejeon High Court Decision 2009Nu2915 decided March 25, 2010

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

The grounds of appeal are examined.

Article 137(1) of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) provides that "where a corporation is registered, registration tax shall be paid according to the following classification." Under subparagraph 1, subparagraph 1 provides that "in the case of the establishment of a profit-making corporation, the tax base and tax rate of registration tax for each type of registration shall be determined according to subparagraphs 1 through 5, such as "4/1,000 of the paid amount of stocks or investment or the amount of investment other than cash in the case of the establishment of a profit-making corporation," and subparagraph 6 provides that "23,00 won per case of registration other than those under subparagraphs 1 through 5."

Whether any registration with respect to a juristic person falls under any subparagraph of Article 137(1) of the former Local Tax Act shall be determined by the substance in accordance with the substance principle, irrespective of its name or form (see Supreme Court Decisions 94Nu11019, Jun. 16, 1995; 98Du6364, Dec. 10, 199, etc.).

The restructuring of a limited liability company under the Commercial Act becomes a limited liability company by changing the organization while maintaining the identity of the corporate personality. Nevertheless, the registration record for dissolution of a limited liability company and the registration for incorporation of a limited liability company are merely a new establishment of a registered record for a limited liability company, not because the dissolution of a limited liability company and the establishment of a limited liability company are not due to the dissolution of a limited liability company and the establishment of a limited liability company. In addition, there is no new investment that is subject to the registration tax base under Article 137(1)1 Item 1 of the former Local Tax Act even if such restructuring has been made. In full view of these, the registration for incorporation of a limited liability company following the restructuring of a limited liability company

On December 23, 2008, the court below held that the part against the disposition of this case is unlawful on the ground that the registration of incorporation of a limited liability company, which the plaintiff changed from a stock company to a limited liability company, can not be subject to Article 137 (1) 1 of the former Local Tax Act, and can only be subject to Article 137 (1) 1, 2, or 2 through 5 of the same Act, since it is not subject to Article 137 (1) 1, 2, or 5 of the same Act. The judgment of the court below is just in accordance with the legal principles as seen earlier, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles as to the principle

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.

Justices Kim Yong-deok (Presiding Justice)