The legality of a disposition to exclude temporary investment tax credit and the validity of the Addenda to the Enforcement Decree.

Since the Addenda of the Enforcement Decree forms part of the Enforcement Decree, it is necessary to apply the deduction of temporary investment tax for the taxable year to which the date of completion of agenda is included in the case where investment is not completed by the date of completion of agenda pursuant to the provisions of the Addenda.

Article 26 (Temporary Tax Credit for Investment

Daejeon High Court 2007Nu1451 ( November 29, 2007)

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 defendant shall revoke the disposition of imposition of KRW 147,338,770 as corporate tax for the plaintiff on March 2, 2006.

The court's explanation on this case is the same as the reasoning of the judgment of the court of first instance. Thus, the court of first instance is justified, and the plaintiff's appeal against this is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

[Cheongju District Court 2006Guhap2041 ( June 27, 2007)]

1. The plaintiff's claim is dismissed.

2. Litigation costs shall be borne by the plaintiff.

The Defendant’s disposition of imposition of KRW 147,338,770 of corporate tax for the year 2000 against the Plaintiff on March 2, 2006 is revoked.

1. Details of the disposition;

A. The plaintiff is a company that runs the business of manufacturing, selling, and exporting ston, coffee, and non- alcohol drinks, etc., and invests an amount equivalent to 2,191,791,386 won in total to increase dynasium (the amount invested in the business year 1999 is KRW 1,108,685,601) and the plaintiff filed a corporate tax return for the year 2000 around March 200, around 153,425,397 won (the amount equivalent to 7% of the above investment fund) equivalent to 7% of the above investment fund (the amount is 153,425,397 won (the amount is less than 2,191,791, X07, and less than 0.7 won) and the provisional tax amount is deducted under Article 26(1)6 of the Restriction of Special Taxation Act (amended by Act No. 6514, Aug. 14, 2014).

B. On the other hand, the Defendant decided that the temporary investment tax credit for KRW 1,141,485,601 out of the investment amount of KRW 2,191,791,386, which was deducted from the temporary investment tax of the corporate tax in 2000, was improper, and notified the Plaintiff of the revised report around October 2005. The Plaintiff reported the revised report only for KRW 32,800,000 among the amounts notified by the Defendant and the total amount of the investment amount of KRW 32,80,000 in the second half of 200.

C. Accordingly, on March 2, 2006, the Defendant issued the instant disposition of imposing corporate tax of KRW 147,338,770,770, including additional tax on non-paid KRW 77,607,92 (1,108,685,601, X01, and under), on the ground that the Plaintiff’s investment in the year 1999 is the amount of KRW 1,108,68,685,687,601, and the Plaintiff’s investment in the year 1999.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 3, 4, Eul evidence Nos. 1 and 2, the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

(1) The main text of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 16693, Jan. 10, 200; hereinafter referred to as the "Enforcement Decree prior to the amendment") provides that a taxpayer may choose during the taxable year in which an investment is made for each taxable year or investment is completed, while the main text of the same Article (Article 23) provides that where an investment is not completed as of December 31, 1999, a taxpayer may be entitled to a tax credit only from the corporate tax of 1999, without any possibility of choice. This provision is contrary to the principle of no taxation without law, and the provisions of the main and the main text are inconsistent with the principle of no taxation without law, and the amendment of the Enforcement Decree is generally related to the amendment of the Enforcement Decree, the timing of its implementation, and the period of its determination, which is the supplementary decree of the above Enforcement Decree, and it does not necessarily mean that an investment is unlawful for the Plaintiff to be excluded from a tax credit of 10 years from the corporate tax.

(2) Even if the Plaintiff cannot deduct the amount invested from the tax base of the business year 2000 to December 31, 199 as a temporary investment tax amount, the Plaintiff applied for a deduction of the total amount of investment including the amount invested until December 31, 1999 when filing a tax base for the business year 2000 business year. Thus, the instant disposition of imposition that held that the Plaintiff was unlawful on the ground that it filed an application for a deduction in filing a return of the business year 2000 business year tax base without filing an application for a deduction.

B. Relevant statutes

It is as shown in the attached Table related statutes.

C. Determination

(1) Judgment on the Plaintiff’s assertion that the Addenda of the Enforcement Decree before the amendment is null and void

(A) The Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 16693, Jan. 10, 200; hereinafter referred to as the "amended Enforcement Decree") provides that an amount invested by June 30, 200 shall be entitled to a temporary investment credit for the amount of the investment made on or after January 1, 200, and provides that the portion of the investment made on or after January 1, 200 shall also be applicable to the portion of the investment made on or after January 1, 200, which was in progress and which was commenced on or after January 1, 197. The former Enforcement Decree provides that the amount of the investment made on or after December 31, 199 shall be deemed to have been subject to a temporary investment credit for the amount of the investment made on or after December 31, 199, which was not completed on or after December 19, 199 as of 19.

(나) 개정 전 시행령의 부칙이 무효라는 원고의 주장에 대하여 살피건대, 부칙도 시행령의 일부를 이루는 것으로서 개정 전 시행령 제23조가 '투자가 이루어지는 각 과세연도 또는 당해 투자가 완료된 과세연도'에서 공제받을 수 있도록 하면서 '투자가 완료'되었다는 의미와 관련하여 부칙에서 '1999년 12월 31일 기준으로 투자가 완료되지 아니하는 경우 1999년 12월 31일까지 투자한 분에 대하여는 1999년 12월 31일 현재 투자가 완료된 것으로 본다'고 규정하여 '투자가 완료된 과세연도'라는 의미를 제한하고 있는바, 위 시행령 제23조에 의하면 원칙적으로 투자가 이루어진 과세연도 또는 투자가 완료된 과세연도를 선택하여 공제 신청할 수 있으나, 부칙에서 1999년 12월 31일까지 투자한 분에 한하여 실제 투자완료 과세연도가 아닌 1999년도에 투자가 완료된 것으로 의제하여 실제 투자완료 연도에는 받을 수 없도록 하였고, 2000년 이후 투자분에 대해서는 공제시점을 선택할 수 있도록 적용범위를 정한 것이므로 위 시행령 제23조 본문과 시행령 부칙의 내용이 조세법률주의에 반하거나 규정이 모호하다고 할 수 없고, 위 부칙의 내용은 본문의 적용범위를 분명히 하고 있는 것에 지나지 않는다. 또한, 조세특례제한법이 정하는 임시투자세액공제 제도는 일시적인 경기조절을 위한 것이므로 제도운영목적인 투자촉진 효과를 달성하기 위해서는 단시간 시행 후 종료되는 것이 원칙인바, 이에 조세특례제한법 시행령은 6개월을 단위로 하여 적용기간 별로 공제율, 공제대상 자산의 범위 등 임시투자세액공제와 관련된 규정을 개정하고 있고, 이에 그 일시적 시행의 측면을 강조하기 위하여 제도시행기간의 종료일을 투자완료의제일로 규정하는 경우가 많았던 점(조세감면규제법시행령(제15820호, 1998. 7. 1. 대통령령 제15820호로 개정된 것, 1998. 8. 10. 대통령령 제15860호로 개정된 것, 1998. 11. 16. 대통령령 제15932호로 개정된 것) 역시 제24조에서 1999년 6월 30일까지 투자한 금액에 대하여 '투자가 이루어지는 각 과세연도 또는 당해 투자가 완료된 과세연도'에서 임시투자세액공제를 받을 수 있도록 하면서 부칙에서는 1999년 6월 30일 기준으로 투자가 완료되지 아니하는 경우 1999년 6월 30일까지 투자한 분에 대하여는 1999년 6월 30일 현재 투자가 완료된 것으로 의제하는 규정을 두고 있었고, 조세특례제한법시행령(제17034호, 2000. 12. 29. 대통령령 제17034호로 개정된 것) 역시 제23조에서 2001년 6월 30일까지 투자한 금액에 대하여 '투자가 이루어지는 각 과세연도 또는 당해 투자가 완료된 과세연도'에서 임시투자세액공제를 받을 수 있도록 하면서 부칙에서는 2001년 6월 30일을 기준으로 투자가 완료되지 아니하는 경우 2001년 6월 30일까지 투자한 분에 대하여는 2001년 6월 30일 현재 투자가 완료된 것으로 의제하는 규정을 두고 있었으며, 그 후 2001. 6. 12.(대통령령 제17236호), 2001. 9. 29.(대통령령 제17367호), 2001. 12. 31.(대통령령 제17458호), 2002. 6. 25.(대통령령 제17633호), 2002. 12. 30.(대통령령 제17829호), 2003. 6. 30.(대통령령 제18030호), 2003. 12. 30.(대통령령 제18176호), 2004. 10. 5.(대통령령 제18557호), 2005. 2. 19.(대통령령 제18704호) 각 개정시 6개월 또는 1년을 단위로 하여 제도시행기간을 연장하면서 2003. 12. 30. 대통령령 제18176호로 개정된 조세특례제한법시행령을 제외하고 모두 본문에서는 '투자가 이루어지는 각 과세연도 또는 당해 투자가 완료된 과세연도'에서 임시투자세액공제를 받을 수 있도록 하면서 부칙에서는 각 제도시행기간종료일까지 투자가 완료되지 아니하는 경우 그 때까지 투자한 분에 대하여는 제도시행기간종료일 현재 투자가 완료된 것으로 의제하는 규정을 두고 있었고, 2006. 2. 9.(대통령령 제19329호) 개정시에는 본문에서 '투자가 이루어지는 각 과세연도'에서만 임시투자세액공제를 받도록 명시하였다)을 고려하면, 입법자로서는 위 제도가 일시적인 경기부양을 위하여 납세자에게 혜택을 주는 것으로서 그 제도시행종료일을 기준으로 투자가 완료되지 않았다고 하더라도 시행령 부칙에 의하여 투자가 완료된 것으로 의제하여 당해 투자가 이루어진 과세연도에 투자세액을 공제하도록 할 필요성도 있다고 보인다.

(C) Therefore, we cannot accept the Plaintiff’s assertion that the instant disposition is inappropriate on the ground that the Addenda to the Enforcement Decree prior to the amendment is invalid because it is against or ambiguous to the principle of no taxation without law.

(2) The judgment on the plaintiff's assertion that the plaintiff lawfully applied for deduction of the amount invested until December 31, 1999

A person who intends to obtain a temporary tax credit for investment means that a person must submit a report of tax base along with a transfer of stocks, etc. for the taxable year subject to a tax credit must apply for a tax credit when filing a report of tax base for the taxable year subject to a tax credit. The plaintiff's application for a temporary tax credit for the amount invested until December 31, 1999 while filing a report of corporate tax for the business year of 2000 around March 200 shall be as mentioned above, and it shall not be the same as the application for a temporary tax credit for investment at the time of filing a report of corporate tax for the business year of 199, and therefore, the plaintiff shall not be accepted

3. Conclusion

Thus, the plaintiff's claim of this case is dismissed as it is without merit.

Related Acts and subordinate statutes

Restriction of Special Taxation

Article 26 (Temporary Tax Credit for Investment)

(1) Where the Government deems it necessary for business adjustment, a tax amount equivalent to an amount computed by multiplying an amount of money not exceeding 10/100 of an investment (excluding an investment in used goods) prescribed by the Presidential Decree by the rate prescribed by the Presidential Decree shall be deducted from the income tax (limited to the income tax on business income) or corporate tax for a taxable year prescribed by

(2) A national who intends to benefit from paragraph (1) shall apply for tax credit under the conditions as prescribed by the Presidential Decree.

Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 16693, Jan. 10, 200)

Article 23 (Temporary Tax Credit for Investment)

(1) For the purpose of Article 26 (1) of the Act, the term “amount of investment as prescribed by the Presidential Decree (excluding an investment made in second-hand goods)” means the amount of investment made by a national who runs mining, manufacturing, construction, wholesale, retail, telecommunications, research and development, industrial design service, packing and charging, package design, film production and distribution, radio broadcasting, television broadcasting, cable broadcasting, broadcast program production, engineering, data processing and computer operation-related business, logistics industry, tourist accommodation and international conference service registered with a tourism promotion business, waste disposal and wastewater treatment business as prescribed by the Ordinance of the Ministry of Finance and Economy by June 30, 200 to newly acquire facilities corresponding to business assets.

(2) "Rate prescribed by Presidential Decree" in Article 26 (1) of the Act means 7/100.

(3) For the purpose of Article 26 (1) of the Act, the term “taxable year prescribed by the Presidential Decree” means each taxable year in which an investment under paragraph (1) is made or the taxable year in which

(5) A person who intends to obtain tax credits pursuant to Article 26 (1) of the Act shall submit a report of tax base to the head of tax office having jurisdiction over the place of tax payment.

Addenda

The amended provisions of Article 23 (1) and (2) shall apply to the portion of investment commenced on or after January 1, 2000: Provided, That with respect to the portion of investment commenced on or after January 1, 2000, in which an investment is in progress as of January 1, 200, it shall also apply to the portion of investment commenced on or after January 1, 200, but the amount of investment shall be calculated by applying mutatis mutandis the provisions of Article 4 (3).

Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 16693 of Jan. 10, 200)

Article 23 (Temporary Tax Credit for Investment)

(1) For the purpose of Article 26 (1) of the Act, the term “amount of investment as prescribed by the Presidential Decree (excluding an investment made in second-hand goods)” means the amount of investment made by a national who runs mining, manufacturing, construction, wholesale, retail, telecommunications, research and development, industrial design service, packing and charging, fashion design, film production and distribution, radio broadcasting, television broadcasting, cable broadcasting, broadcast program production, engineering, data processing and computer operation-related business, logistics industry, tourist accommodation and international conference service registered under the Tourism Promotion Act, waste disposal and wastewater treatment business to newly acquire facilities falling under assets for business as prescribed by the Ordinance of the Ministry of Finance and Economy not later than December 31, 199.

(2) "Rate prescribed by Presidential Decree" in Article 26 (1) of the Act means 10/100.

(3) For the purpose of Article 26 (1) of the Act, the term “taxable year prescribed by the Presidential Decree” means each taxable year in which an investment under paragraph (1) is made or the taxable year in which

(5) A person who intends to obtain tax credits pursuant to Article 26 (1) of the Act shall submit a report of tax base to the head of tax office having jurisdiction over the place of tax payment.

Addenda

(2) In the application of the amended provisions of Article 23(1) (Special Cases concerning the Tax Credit for Investment where Investment is not completed) Article 23(3), with respect to the portion invested by December 31, 1999, where the investment is not completed as of December 31, 199, the provisions of Article 23(3) shall apply, deeming that such investment has been completed as of December 31, 199. In such cases, the provisions of Article 4(3) shall apply mutatis mutandis to the calculation of the amount of investment.