Daegu High Court 201Nu1864 (Law No. 13, 2012)

early 209Gu3975 ( December 31, 2010)

It is the first application of reduction or exemption under the Corporate Tax Act in the order of deduction reduction or exemption.

In the event that both a temporary tax credit subject to minimum tax and a foreign investment tax reduction or exemption are simultaneously applied, it is difficult to apply the tax reduction or exemption in the order of tax reduction or exemption in accordance with the Corporate Tax Act, and it is difficult to regard the provision of exclusion of tax reduction or exemption in the Restriction of Special Taxation Act as a separate provision in the order of tax reduction or exemption in accordance with

2012du4173 Disposition of revocation of imposition of corporate tax, etc.

XX Stock Company

Racing Head of the Tax Office

Daegu High Court Decision 2011Nu1864 Decided January 13, 2012

June 14, 2012

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

Article 132 (1) of the former Restriction of Special Taxation Act (amended by Act No. 7003 of Dec. 30, 2003; hereinafter referred to as the "former Restriction of Special Taxation Act") provides that in calculating corporate tax on income for each business year of a domestic corporation with respect to the minimum tax (referring to corporate tax for which no tax credit, etc. prescribed by the Presidential Decree has been granted), where the tax amount after the application of reduction, exemption, etc. prescribed in any of the following subparagraphs 1 and 2 falls short of the tax amount calculated by multiplying the tax base by 15/100 (12/100 in the case of a small or medium enterprise) in the event that the tax amount after the application of reduction, exemption, etc. under subparagraphs 1 and 2 is not included in the calculation of deductible expenses and income deduction under subparagraphs 1 and 2, Article 132 (1) of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 18176 of Dec. 30, 2003).

On the other hand, Article 59 (1) of the former Corporate Tax Act (amended by Act No. 7005 of Dec. 30, 2003; hereinafter the same) provides that "where the provisions on the reduction or exemption of corporate tax and the provisions on the tax credit are applied simultaneously in the application of the Act and other Acts, except as otherwise provided, the order of application shall be as follows." subparagraph 1 provides that "Tax reduction or exemption (including exemption) on the income for each business year, "tax credit for which carried forward is not recognized" in subparagraph 2, and subparagraph 3, "tax credit for which carried forward" is recognized. In this case, if there are both the tax credit accrued during the relevant business year and the tax credit carried forward, the tax credit carried forward shall be deducted first."

After finding facts as stated in its holding, the court below determined that ① the provisions of Article 132(1) of the former Restriction of Special Taxation Act and Article 126(2) of the Enforcement Decree of the former Enforcement Decree of the Restriction of Special Taxation stipulate the scope of reduction or exemption to which the minimum tax is to be applied in its language and text, ② the provisions of Article 132(1) of the former Restriction of Special Taxation Act do not directly express the order of application with the reduction or exemption to which the minimum tax is not applied, ② the provision of the former Restriction of Special Taxation Act provides for reduction or exemption to which the minimum tax is to be applied, rather than the order of application of the calculation of the amount of tax, and the provision of the former Restriction of Special Taxation Act Article 132(1) provides for the reduction or exemption to which the minimum tax is to be applied in calculating corporate tax, so it would be difficult to view that the plaintiff's application of the former Restriction of Special Taxation Act Article 132(1) of the Enforcement Decree of the Restriction of Special Taxation Act is unlawful on the ground that there is no change in order of reduction or exemption from the minimum tax.

In light of the above legal principles and records, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to Article 132 (1) of the former Restriction of Special Taxation Act 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.