Suwon District Court Decision 2014Guhap50461 ( October 17, 2015)

Early High Court Decision 2013J3164 ( October 22, 2013)

Whether reserve funds for proper business purposes are included in deductible expenses

Since the acquisition of real estate for profit is not used for proper purpose business, etc., the acquisition price of real estate shall be included in gross income.

Seoul High Court 2015Nu49032

School Foundation Dooo Private Teaching Institutes

o Head of the tax office

Dismissal

October 28, 2015

December 9, 2015

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked. The disposition of imposition of corporate tax of KRW 3,132,298,290 on March 1, 2011 to the Plaintiff on February 29, 2012, which the Defendant rendered to the Plaintiff on April 2, 2013, shall be revoked.

1. Quotation of judgment of the first instance;

이 법원이 이 사건에 관하여 설시할 이유는, 제1심 판결서 제2쪽 제6행의 '##-##'를 '△△△-△△'로, 제4쪽 제8행의 '신고에'를 '신고를'로, 제6쪽 제4행의 '여부과'를 '여부와'로, 제7쪽 제16행의 '분명하기 위하여'를 '분명하게 하기 위하여'로, 제9쪽 제13행의 '☆☆,☆☆☆,☆☆☆,☆☆☆원을 이를'을 '◇◇,◇◇◇,◇◇◇,◇◇◇원을'로 각 고치고, 아래 제2항에서 당심에서 원고가 새로이 하는 주장에 관한 판단을 추가하는 외에는 제1심 판결의 이유 기재와 같으므로, 행정소송법 제8조 제2항, 민사소송법 제420조 본문에 의하여 이를 그대로 인용한다.

2. Additional determination

A. The plaintiff's assertion

In the case of the plaintiff, since the account for profit-making business was kept separately, the land of this case is a nonprofit company.

In light of the fact that the latter part of Article 76 (4) of the Enforcement Rule of the Corporate Tax Act is deemed to have been paid to a nonprofit business even with assets transferred only to the accounts of the non-profit business, the land of this case, which belongs to the accounts of the non-profit business, naturally, shall be deemed to have been paid to the proper purpose business

B. Determination

The latter part of Article 76 (4) of the Enforcement Rule of the Corporate Tax Act provides that "where an educational foundation under the Private School Act transfers the assets belonging to the profit-making business accounting to the non-profit business accounting, it shall be deemed to have been paid to the non-profit business." However, this provision does not apply to cases where the accounts for profit-making business and the non-profit business accounting are not managed separately as the plaintiff. However, in light of the legislative intent of Article 29 of the Corporate Tax Act which compels the actual use of the reserves for profit-making business as soon as possible for the purpose of the proper purpose business, the latter part of Article 76 (4) of the Enforcement Rule of the Corporate Tax Act cannot be interpreted as a permanent exemption from the corporate tax by deeming

Therefore, the plaintiff's above assertion is without merit.

3. Conclusion

If so, the plaintiff's claim shall be dismissed as it is without merit, and the judgment of the court of first instance shall conclude this conclusion.

Since the plaintiff's appeal is legitimate, it is dismissed and it is so decided as per Disposition.

Judges of the presiding judge

Judges

Judges