Requirements for a school foundation to be exempted from special surtax pursuant to Article 59-3 (2) 3 of the Corporate Tax Act

In order to be exempted from the special surtax on any income accruing from the transfer of the basic property owned by a school foundation established under the Private School Act for the purpose of using it for educational business, the application for exemption from the special surtax shall be submitted within the reporting period of the tax base, tax amount and tax amount as stipulated in Article 26 of the Corporate Tax Act.

Article 59-3 (2) 3, Article 59-3 (3) of the Corporate Tax Act, Article 124-8 (4) of the Enforcement Decree of the same Act

Attorney Park Young-chul et al., Counsel for the defendant-appellant

Head of the Do Tax Office

Seoul High Court Decision 88Gu6582 delivered on September 28, 1988

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

Article 59-3 (2) 3 of the Corporate Tax Act provides that any income accruing from the transfer of basic property owned by a school foundation established under the Private School Act for the purpose of using it for educational business shall be exempted from special surtax under the conditions as prescribed by the Presidential Decree. Paragraph (3) of the same Article provides that "the provisions of paragraph (2) shall apply only where an application is filed under the conditions as prescribed by the Presidential Decree." Article 124-8 (4) of the Enforcement Decree of the same Act provides that "a corporation which intends to be exempted from special surtax pursuant to Article 59-3 (2) 3 of the Act shall submit an application for exemption from special surtax as prescribed by the Ordinance of the Ministry of Finance and Economy along with the tax base return of corporate tax for the business year to which the transfer date belongs." In light of the purport of the above provision, if it intends to be exempted from special surtax on income accruing from the transfer of basic property owned by a school foundation established under the Private School Act for the purpose of using it for educational business, it shall submit an application for exemption from special surtax within the report period.

In the same purport, the court below recognized the fact that the plaintiff, a school juristic person established under the Private School Act, sold real estate to the non-party on January 24, 1984, which is the basic property owned by him, after the expiration of the tax base return period for the business year to which the above transfer date belongs under Article 26 of the Corporate Tax Act, the plaintiff submitted the application for the exemption of the above special surtax to the defendant only after June 22, 1988. Thus, it is proper to determine that the plaintiff cannot be exempted from the special surtax, and there is no error in the misapprehension of legal principles

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

Justices Song Man-man (Presiding Justice)