Scope of application of the Restriction on Reduction and Exemption of Transfer Income Tax on Land and Buildings transferred for relocation

Article 6 (2) 2 of the Income Tax Act, which provides for the requirements and methods of reduction and exemption of capital gains tax on the land and buildings for factories transferred for the purpose of relocation, and Article 18 of the Enforcement Decree of the same Act, provides for the benefit of reduction and exemption of income tax to the transferor of the site and building of the previous factory operated for the relocation of the factory so that the factory can continue to operate the factory even after the relocation of the factory, while preventing the benefit of reduction and exemption of income tax from abuse of the real estate speculation, the provision of reduction and exemption of capital gains tax in the Enforcement Decree of the same Act is not applicable only to the case where the acquisition of the site and building of the new factory for the purpose of real estate speculation.

Article 6 (2) of the Income Tax Act, Article 18 of the Enforcement Decree of the Income Tax Act

Supreme Court Decision 88Nu3369 Decided April 11, 1989

Plaintiff

Head of Seocho Tax Office

Seoul High Court Decision 89Gu208 delivered on July 18, 1989

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined (the supplementary appellate brief is not separately determined because it was submitted after it was not timely filed).

(1) Article 6 (2) 2 of the Income Tax Act, which provides for the requirements and methods of reduction and exemption of capital gains tax on land and buildings for factories transferred for the relocation purpose, and Article 18 of the Enforcement Decree of the same Act, provides for the benefit of reduction and exemption of income tax to the transferor of the previous factory site and building that had been operated for the relocation of the factory so that the factory can continue to operate the factory even after the relocation of the factory, while the purpose of legislation is to prevent the abuse of the benefits of reduction and exemption of income tax in real estate (see, e.g., Supreme Court Decision 88Nu3369, Apr. 11, 1989). Accordingly, there is no argument in the appeal that the provision of reduction and exemption of capital gains tax in the above Enforcement Decree only applies to the case where it is recognized that the new factory site and building have been acquired

(2) In addition, according to the records, the court below's decision that the plaintiff's failure to secure the site at the time of completion of the new factory of this case to secure outside 1,648 square meters less than the previous factory site area at the time of completion of construction of the new factory of this case is justified in its decision that it is inevitable in accordance with the restriction on permission for farmland diversion by the permission-granting agency, and there is no violation of the rules of evidence or incomplete deliberation, and therefore there is no illegality in

(3) 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 Park Yong-dong (Presiding Justice)